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Research Collection School Of Accountancy

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Full-Text Articles in Business

Examining An Experiential Learning Approach To Prepare Students For The Volatile, Uncertain, Complex And Ambiguous (Vuca) Work Environment, Poh Sun Seow, Gary Pan, Su-Fen Grace Koh Dec 2018

Examining An Experiential Learning Approach To Prepare Students For The Volatile, Uncertain, Complex And Ambiguous (Vuca) Work Environment, Poh Sun Seow, Gary Pan, Su-Fen Grace Koh

Research Collection School Of Accountancy

Due to the constantlychanging work environment, there is a need for universities to produce studentswho can adapt in a volatile, uncertain, complex and ambiguous (VUCA) work environment.A university in Singapore introduced its UNIS-X experiential learning pedagogyto prepare her students with future work skills to cope with a VUCA work environment.The UNIS-X approach encompasses four principles (project-based learning;interdisciplinarity; close collaboration between faculty and external partners;and active mentoring) in a single course. The aim of this study is to examinethe effectiveness of the UNIS-X experiential learning pedagogy. Although theUNIS-X group has a higher improvement of problem-solving skills compared ...


Online Learning Tool On External Financing Needs, Yuanto Kusnadi Dec 2018

Online Learning Tool On External Financing Needs, Yuanto Kusnadi

Research Collection School Of Accountancy

In collaboration with colleagues at the Centre ofTeaching Excellence (CTE), I have developed an innovative online learningobject on External Financing Needs. This tool is designed to introduce a noveland refreshing way in teaching accounting and finance concepts to students andto create a more interactive learning experience in the classroom. The online learning tool is used in the two courses:Accounting for Entrepreneurs and Financial Management, to explain the relevantconcepts related to financial forecasting and financial planning. One unique feature about the learning object is that itprovides instantaneousfeedback to students as they can learn whether the numbers theyprovide are correct/wrong ...


Don's Column: Revised Conceptual Framework For Financial Reporting (Part 2), Pearl Hock-Neo Tan Nov 2018

Don's Column: Revised Conceptual Framework For Financial Reporting (Part 2), Pearl Hock-Neo Tan

Research Collection School Of Accountancy

Fresh Perspectives in Recognition, Measurement and Disclosures


Don's Column: Revised Conceptual Framework For Financial Reporting (Part 1), Pearl Hock-Neo Tan Oct 2018

Don's Column: Revised Conceptual Framework For Financial Reporting (Part 1), Pearl Hock-Neo Tan

Research Collection School Of Accountancy

In March 2018, the International Accounting Standards Board (IASB) issued the revised Conceptual Framework for Financial Reporting (CF 2018) after five years of deliberation since the Discussion Paper was first issued. CF 2018 is immediately applicable to the IASB and International Financial Reporting Standards (IFRS) Interpretations Committee.


Comments On Discussion Paper "Financial Instruments With Characteristics Of Equity" (Fice), Pearl Hock-Neo Tan Oct 2018

Comments On Discussion Paper "Financial Instruments With Characteristics Of Equity" (Fice), Pearl Hock-Neo Tan

Research Collection School Of Accountancy

Comments are given on the Discussion Paper issued by the International Accounting Standards Board in June 2018 on Financial Instruments with Characteristics of Equity. The comments are given in response to the Board's public invitation for feedback on the Discussion Paper. The comments convey the author's concerns about the Discussion Paper's proposals in the light of the conceptual framework of financial reporting and a fundamental understanding of what equity and liability is. The comments propose approaches that the Board may consider in its subsequent development of its proposals.


Don’S Column: Singapore Corporate Tax Rate: Is It Really A Flat Rate?, Teng Aun Khoo, Clement Tan Kai Guan Oct 2018

Don’S Column: Singapore Corporate Tax Rate: Is It Really A Flat Rate?, Teng Aun Khoo, Clement Tan Kai Guan

Research Collection School Of Accountancy

As there is only one corporate tax rate (CTR) in Singapore, it may appear that the Singapore CTR is a single flat rate, currently 17%. However, after taking into account the availability of the partial tax exemption (PTE)scheme, the start-up tax exemption (SUTE) scheme and the corporate income tax rebate (CITR) in Singapore, all of which have an effect of lowering a company’s tax payable, the seemingly flat Singapore CTR is not what it seems to be. Instead, it translates to various progressive tax rates for different tiers of normal chargeable income (NCI).


Zombie Board: Board Tenure And Firm Performance, Sterling Huang, Gilles Hilary Sep 2018

Zombie Board: Board Tenure And Firm Performance, Sterling Huang, Gilles Hilary

Research Collection School Of Accountancy

We show that board tenure exhibits an inverted U-shaped relation with firm value and accounting performance. The quality of corporate decisions, such as M&A, financial reporting quality, and CEO compensation, also has a quadratic relation with board tenure. Our results are consistent with the interpretation that directors’ on-the-job learning improves firm value up to a threshold, at which point entrenchment dominates and firm performance suffers. To address endogeneity concerns, we use a sample of firms in which an outside director suffered a sudden death, and find that sudden deaths that move board tenure away from (toward) the empirically observed ...


Societal Trust And Corporate Tax Avoidance, Kiat Bee Jimmy Lee, Chee Yeow Lim, Kiridaran Kanagaretnam, Gerry Lobo Sep 2018

Societal Trust And Corporate Tax Avoidance, Kiat Bee Jimmy Lee, Chee Yeow Lim, Kiridaran Kanagaretnam, Gerry Lobo

Research Collection School Of Accountancy

Using aninternational sample of firms from 25 countries and a country-level index forsocietal trust, we document that societal trust isnegatively associated with tax avoidance, even after controlling for other institutionaldeterminants, such as home country legal institutions and tax systemcharacteristics.We explore the effects of two country-level institutionalcharacteristics—strength of legalinstitutions and capital market pressure—on the relation between societal trust and taxavoidance. We find that the relationbetween trust and tax avoidance is less pronounced when legal institutions in a country are strongerand is more pronounced when capital market pressure is stronger. Finally, weexamine the relation between societal trust and tax ...


Director Tenure Diversity And Board Monitoring Effectiveness, Na Li, Aida Sijamic Wahid Sep 2018

Director Tenure Diversity And Board Monitoring Effectiveness, Na Li, Aida Sijamic Wahid

Research Collection School Of Accountancy

This study examines the impact of director tenure diversity on board effectiveness. We find that tenure-diverse boards exhibit significantly higher CEO performance-turnover sensitivity and that firms with tenure-diverse audit committees are less likely to experience accounting restatements. Furthermore, we document that tenure-diverse compensation committees also award less excess compensation and are less likely to overcompensate. Even though tenure-diverse boards seem to exhibit superior monitoring performance, there is limited evidence that their firms exhibit superior financial performance. The findings suggest that recent calls for board renewal, to the extent that it would increase tenure diversity rather than just decrease average board ...


Why Accountants Should Embrace Machine Learning?, Benjamin Huan Zhou Lee, Gary Pan, Poh Sun Seow Aug 2018

Why Accountants Should Embrace Machine Learning?, Benjamin Huan Zhou Lee, Gary Pan, Poh Sun Seow

Research Collection School Of Accountancy

AI and ML are enabling tools that take the tedious gruntwork out of accounting, freeing up professionals to provide valuable insights - as well as professional scepticism - which are sought-after services no machine can replicate.


Executive Compensation And Cash Contributions To Defined Benefit Pension Plans, Qiang Cheng, Laura Swenson Jul 2018

Executive Compensation And Cash Contributions To Defined Benefit Pension Plans, Qiang Cheng, Laura Swenson

Research Collection School Of Accountancy

Pension contribution has a significant impact on firm valuation, employee benefit, and the financial situation of the Pension Benefit Guaranty Corporation (PBGC). Using a comprehensive dataset of defined benefit pension (DB) plan contributions, we investigate economic and accounting determinants of pension contributions. We argue that a firm’s pension contribution decision reflects the trade-off between the benefit – reducing the pension liability, and the cost – reducing cash flows from operations and cash available for other purposes. With respect to economic determinants, we find that firms contribute more when funding status is low and when profitability, cash flows from operations and the ...


Do Independent Directors Tell The Truth, The Whole Truth, And Nothing But The Truth When They Resign?, Keren Bar-Hava, Sterling Huang, Benjamin Segal, Dan Segal Jul 2018

Do Independent Directors Tell The Truth, The Whole Truth, And Nothing But The Truth When They Resign?, Keren Bar-Hava, Sterling Huang, Benjamin Segal, Dan Segal

Research Collection School Of Accountancy

We examine the informativeness and credibility of independent directors’ stated resignation reasons. We posit that having access to private information, directors may resign in anticipation of weak future underperformance to limit damage to their reputation and further have an incentive to mask the reason for the resignation. Results show likelihood of resignation increases with director’s reputation and weak future firm performance. In addition, the evidence is consistent with directors obfuscating the reason for departure by providing benign and unverifiable resignation reasons. Investors seem aware of the disclosure incentives of departing directors and react negatively to such resignations. However, investors ...


Disclosure Of Pending Lawsuits And Bond Terms, Yun Lou Jul 2018

Disclosure Of Pending Lawsuits And Bond Terms, Yun Lou

Research Collection School Of Accountancy

I examine the effect of the disclosure of pendinglawsuits in 10-K/Q filings on the contractual terms of newly issued bonds. Ifind that firms’ decision to disclose pending lawsuits and the amount ofdisclosed information (i.e., the level of disclosure) have opposite effects.Specifically, firms that disclose a higher proportion of their pending lawsuitsface higher yields and are more likely to include default clauses pertaining tocourt judgments in the bond prospectuses. However, within the subsample offirms that disclose their lawsuits, I find that firms with a higher level of disclosureregarding their pending lawsuits are rewarded with lower yields. This evidencesuggests ...


Allocation Of Decision Rights Between The Parent Company And Its Subsidiaries, Yuanyuan Liu, Ting Luo, Heng Yue Jul 2018

Allocation Of Decision Rights Between The Parent Company And Its Subsidiaries, Yuanyuan Liu, Ting Luo, Heng Yue

Research Collection School Of Accountancy

This article examines the determinants of allocation of decision rights between the parent company and its subsidiaries, and the economic consequence of suboptimal power structure. Based on China’s unique double disclosure for the parent company and the whole group, we construct a decentralization index to measure how decision rights are allocated within the group companies. We find a more decentralized (centralized) power structure for the groups with more uncertain (certain) external environment and with poorer (better) internal information quality. We also show that the groups with suboptimal power structure have weaker future performance.


Discretionary Dissemination On Twitter, Richard M. Crowley, Wenli Huang, Hai Lu Jul 2018

Discretionary Dissemination On Twitter, Richard M. Crowley, Wenli Huang, Hai Lu

Research Collection School Of Accountancy

Examines a complete set of Tweets by S&P 1500 firms from 2012 through 2016 to examine firms’ strategic use of Twitter for voluntary disclosure around mandatory reporting events. We document an increase in financial tweet usage in daily and intraday settings around mandatory reporting events, concentrated around events with clear directions. We further find an increase in format usage (links, media) in financial tweets in similar settings, and document firms reaction to feedback on Twitter.


Voluntary Disclosure With Multiple Channels And Investor Sophistication, Richard M. Crowley Jul 2018

Voluntary Disclosure With Multiple Channels And Investor Sophistication, Richard M. Crowley

Research Collection School Of Accountancy

An analytical model of voluntary disclosure in which a manager can disclose through two channels with different ease of processing, and with two types of investors. The model shows that in the presence of a second channel, managers have an incentive to decrease disclosures that will be quickly processed by unsophisticated investors and to increase the disclosures that will be quickly processed by sophisticated investors. The model has implications for post Reg-FD market efficiency, as well as the efficiency of firms having multiple disclosure venues.


U.S. Firms On Foreign (Tax) Holidays, Travis K. Chow, Jeffrey L. Hoopes, Edward L. Maydew Jun 2018

U.S. Firms On Foreign (Tax) Holidays, Travis K. Chow, Jeffrey L. Hoopes, Edward L. Maydew

Research Collection School Of Accountancy

We undertake the first large-sample analysis of foreign tax holiday participation by U.S. firms. Tax holidays are temporary reductions of tax granted by governments, usually contingent on the firm making new operational investments in the country. We predict and find that firms are more likely to participate in foreign tax holidays if they are highly capital-intensive and have highly profitable foreign operations, and less likely to participate in foreign tax holidays if they are capital constrained and if the firm is headed by a short-term focused CEO. While foreign tax holidays reduce taxes on foreign income, we also find ...


Do Corporate Site Visits Impact Stock Prices?, Qiang Cheng, Fei Du, Brian Yutao Wang, Xin Wang Jun 2018

Do Corporate Site Visits Impact Stock Prices?, Qiang Cheng, Fei Du, Brian Yutao Wang, Xin Wang

Research Collection School Of Accountancy

We examine the stock price impact of corporate site visits using a unique dataset of site visits to listed firms in China. Our main findings are as follows. First, the market reaction around corporate site visits is statistically and economically significant and is stronger for group visits, visits conducted by mutual fund managers, visits covering accounting and finance topics, visits to firms with poor information environments, and visits to manufacturing firms. Second, the stock returns around site visits are positively associated with firms’ future performance. Third, the changes in visiting funds’ holdings are more predictive of firms’ future performance than ...


Individual Lawyers, The Sec Revolving Door, And Comment Letters, Michael Shen, Teck Meng Junior Tan Jun 2018

Individual Lawyers, The Sec Revolving Door, And Comment Letters, Michael Shen, Teck Meng Junior Tan

Research Collection School Of Accountancy

Government officials, advocacy groups, and the business press have raised concerns thatformer SEC employees may continue to influence the SEC after leaving the agency. Usinga hand-collected database of individual lawyers that represent firms in responding to SECcomment letters, we examine the impact of individual lawyers, and lawyers formerly employedby the SEC, on the comment letter process. We document significant differencesbetween lawyers and law firms in their clients’ resistance to SEC comment letters, and findthat firms that retain former SEC employees are larger, more profitable, and more likely tohave received a comment letter raising accounting issues. After matching on lawyer, commentletter ...


Rationale Behind State Aid Control Over Tax Incentives, Diheng Xu Jun 2018

Rationale Behind State Aid Control Over Tax Incentives, Diheng Xu

Research Collection School Of Accountancy

EU State aid draws international attention recent years due to its application to fiscal measures granted by Member States to multinational enterprises. It has triggered discussions on the reasonableness of applying State aid law to tax measures. This article aims to explore the fundamental rationale behind EU State aid and its application to tax incentives. By going back to basics, this article contributes to a clearer picture on reasons for the State aid control over tax incentives. Governments tend to use fiscal State aid measures to achieve policy goals and tax incentives could realize the goals since they do bring ...


What Does It Take To Become A Partner At A Big 4 Accounting Firm? Insights From Singapore’S Experience, Gary Pan, Poh Sun Seow, Yang Hoong Pang, Kwong Sin Leong Jun 2018

What Does It Take To Become A Partner At A Big 4 Accounting Firm? Insights From Singapore’S Experience, Gary Pan, Poh Sun Seow, Yang Hoong Pang, Kwong Sin Leong

Research Collection School Of Accountancy

Due to the shift in partner’s identity, there have been growing interests in understanding characteristics, skills and behaviours of accounting partners. Given that Big 4 Accounting firms are supposedly international accounting firms that are organized in similar structures, an interesting question of whether the same partner qualities can be applied in the Big 4 accounting firms for a non-western context such as Asia. As far as we know, no such study has been conducted in an Asian context. We argue this could be of great interest to the Big 4 Accounting firms as Asia is one of their fastest ...


Teaching Internal Control Using A Student-Generated Video Project, Poh Sun Seow, Gary Pan Jun 2018

Teaching Internal Control Using A Student-Generated Video Project, Poh Sun Seow, Gary Pan

Research Collection School Of Accountancy

Educators consider the video learning approach an effective method to deliver educational content as compared to the traditional method of books and written materials. This paper presents a project that involves student-generated videos to learn internal control in an undergraduate accounting information systems course. We believe that this video learning approach is an engaging way for students to be self-directed learners in learning internal control and complements the written materials in the textbook. The survey results show that most of the respondents viewed the learning experience of the video project positively. The results also indicate that the video project helps ...


Shareholder Litigation And Corporate Disclosure: Evidence From Derivative Lawsuits, Thomas Bourveau, Yun Lou, Rencheng Wang Jun 2018

Shareholder Litigation And Corporate Disclosure: Evidence From Derivative Lawsuits, Thomas Bourveau, Yun Lou, Rencheng Wang

Research Collection School Of Accountancy

Using the staggered adoption of universal demand (UD) laws in the United States, we study the effect of shareholder litigation risk on corporate disclosure. We find that disclosure significantly increases after UD laws make it more difficult to file derivative lawsuits. Specifically, firms issue more earnings forecasts and voluntary 8-K filings, and increase the length of management discussion and analysis (MD&A) in their 10-K filings. We further assess the direct and indirect channels through which UD laws affect firms' disclosure policies. We find that the effect of UD laws on corporate disclosure is driven by firms facing relatively higher ...


Accounting Choices And The Legal Environment: The Impact Of The Ex Post Loss Rule, Teck Meng Junior Tan Jun 2018

Accounting Choices And The Legal Environment: The Impact Of The Ex Post Loss Rule, Teck Meng Junior Tan

Research Collection School Of Accountancy

Using a landmark Supreme Court decision as a natural experiment, I examine the impact of a fundamental requirement in securities litigation, the ex post loss rule, on income-decreasing accounting choices. Dura Pharmaceuticals v. Broudo (2005) established that plaintiffs must show that the alleged misrepresentations caused an actual economic loss. The case resolved a circuit split, allowing me to identify a treatment jurisdiction affected by Dura, and control jurisdictions in which the rule was already the prevailing legal standard. Motivated by legal analyses suggesting that Dura incentivizes firms to delay negative corrections, I hypothesize and find that treatment firms in high-litigation ...


Cross-Country Differences In The Effect Of Political Connections On Stock Price Informativeness, Yuanto Kusnadi, Bin Srinidhi Jun 2018

Cross-Country Differences In The Effect Of Political Connections On Stock Price Informativeness, Yuanto Kusnadi, Bin Srinidhi

Research Collection School Of Accountancy

Using aninternational sample of firms from 28 countries, we document that there existsa negative relationship between political connections and the informativenessof stock price, as measured by idiosyncratic volatility (IV). This finding isrobust to alternative regression specifications, sub-samples analyses, andconcerns related to endogeneity. A more detailed analysis shows that out of thedifferent types of possible connections, the connectedness of the owners is theprimary driver of this result. Further, the negative association is onlysignificant for firms in countries characterized by low institutional quality(i.e. corrupted countries, countries with low access to external equitymarkets, and countries with low media penetration). There is ...


Debt Heterogeneity And Covenants, Yun Lou, Clemens A. Otto May 2018

Debt Heterogeneity And Covenants, Yun Lou, Clemens A. Otto

Research Collection School Of Accountancy

Coordination failure among owners of heterogeneous debt types increases distress costs. Covenants reduce expected distress costs by lowering the probability of liquidity shortages, increasing liquidation values, and incentivizing creditor monitoring. We predict and find that new debt contracts include more covenants when borrowers' existing debt structures are more heterogeneous. Our findings suggest that covenants are not only used to address creditor-shareholder conflicts but also to reduce the expected costs of coordination failure among creditors. Further, our results indicate a dynamic component missing from static debt structure models: Debt heterogeneity entails additional covenants (i.e., constraints) when raising future debt.


Effects Of Team-Skills Guidance On Accounting Students With Lone Wolf Tendencies, Jean Lin Seow, Premila Gowri-Shankar May 2018

Effects Of Team-Skills Guidance On Accounting Students With Lone Wolf Tendencies, Jean Lin Seow, Premila Gowri-Shankar

Research Collection School Of Accountancy

We investigate whether short-term in-class team-skills guidance impacts the perceptions of accounting students with lone wolf tendencies on team work, and peer evaluation systems adopted in team work. We find that students with greater lone wolf tendencies see fewer benefits from engaging in team work, believing this to result in a poorer learning experience and poorer team performance outcomes. They are also less flexible in thought and feel more incompetent working in teams, preferring to rely on self and to work on their own. Unlike students with lesser lone wolf tendencies, they are also less comfortable with peer evaluation systems ...


Are Disclosed Auditor Materiality Thresholds Informative Of Firms’ Earnings Quality? – Evidence From The Revised Isa 700 Audit Report, Beng Wee Goh, Kiat Bee Jimmy Lee, Na Li, Dan Li May 2018

Are Disclosed Auditor Materiality Thresholds Informative Of Firms’ Earnings Quality? – Evidence From The Revised Isa 700 Audit Report, Beng Wee Goh, Kiat Bee Jimmy Lee, Na Li, Dan Li

Research Collection School Of Accountancy

Under the Financial ReportingCouncil’s presumption that mandating new disclosure requirement in the auditreport would provide information useful to investors, we examine whether theauditor disclosed materiality threshold is associated with the firm’s earningsquality. We document that a lower threshold of materiality level is associatedwith a higher earnings quality, as measured by lower discretionary accruals,higher accruals quality, and less earnings smoothing. We also find someevidence that the negative association between auditor disclosed materialitythreshold and earnings quality is more pronounced when the auditor is moreindependent, when management’s incentive to manage earnings is higher, and whenthere is lower information uncertainty ...


How Does Tax Avoidance Affect Transparency?, Congcong Li, Mark Ma, Tom Omer, Kunpeng Sun May 2018

How Does Tax Avoidance Affect Transparency?, Congcong Li, Mark Ma, Tom Omer, Kunpeng Sun

Research Collection School Of Accountancy

This study examines how tax avoidance affects corporate transparency. Using a large sample ofU.S. firms from 1995 to 2016, we find a significant non-linear effect of tax avoidance ontransparency. That is, when a firm’s tax avoidance is low, an increase in tax avoidance improvestransparency; however, when a firm’s tax avoidance is high, an increase in tax avoidance decreasestransparency. These results are robust to using alternative measures of transparency and taxavoidance and in several additional tests. Overall, the findings suggest that the effect of taxavoidance on transparency depends on the aggressiveness of firms’ tax avoidance behavior. Ourstudy contributes ...


Examining Fifteen Years Of Ethics Research In The Journal Of Accountancy: 2002 To 2016, Clarence Goh Apr 2018

Examining Fifteen Years Of Ethics Research In The Journal Of Accountancy: 2002 To 2016, Clarence Goh

Research Collection School Of Accountancy

In the past fifteen years, ethics has come under the spotlight in the accounting profession. In this study, I examine ethics research in accounting by looking at publications in the Journal of Accountancy, a leading professional journal in accounting, over the period from 2002 to 2016. I found that 32 out of 4,851 (0.66%) articles published in the journal were ethics-focused. Further, I observed spikes in the percentage of ethics-focused articles in the years 2003 and 2009/2010, following key events such as the passing of SOX and the global financial crisis. I also perform content analysis of ...