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Articles 1 - 15 of 15
Full-Text Articles in Business
Value Discount Of Business Groups Surrounding The Asian Financial Crisis: Evidence From Korean Chaebols, James Jinho Chang, Young Jun Cho, Won Kang, Hyun-Han Shin
Value Discount Of Business Groups Surrounding The Asian Financial Crisis: Evidence From Korean Chaebols, James Jinho Chang, Young Jun Cho, Won Kang, Hyun-Han Shin
Research Collection School Of Accountancy
We examine the effect of business group membership on firm value in each pre-and postcrisis Korea. Consistent with prior studies, results show that group affiliated chaebol firms suffer value discount relative to non-chaebol firms in the precrisis period. However, we also find that chaebol firms experience an improvement in firm value relative to non-chaebol firms after the financial crisis. These findings imply that the value discount of business groups reported in prior studies is not an inevitable consequence of diversification, but can be alleviated or overcome by structural reforms in business practices or economic conditions.
The Association Between Audit Fees And Auditors' Opinions On Internal Control Weakness Under Section 404 Of The Sox, Jong-Hag Choi, Jeong-Bon Kim, Soo Young Kwon, Yoonseok Zang
The Association Between Audit Fees And Auditors' Opinions On Internal Control Weakness Under Section 404 Of The Sox, Jong-Hag Choi, Jeong-Bon Kim, Soo Young Kwon, Yoonseok Zang
Research Collection School Of Accountancy
The Section 404 of Sarbanes-Oxley Act (SOX) requires top management toestablish, maintain, and regularly evaluate the effectiveness of the internal controlover financial reporting (ICOFR), and obtain an auditor’s attestation. In this paper, weidentify 232 firms that received “Ineffective” audit opinion on the effectiveness ofICOFR due to one or more material weakness in internal control (WIC). We examinethe association between audit fees and the WIC for pre- and post-SOX period. Wefind that highly levered clients with the WIC paid greater audit fees even in the preSOXperiod and continuously paid the high fees in post-SOX period, whereas theloss-making clients with WIC paid …
Monitoring: Which Institutions Matter?, Xia Chen, Jarrad Harford, Kai Li
Monitoring: Which Institutions Matter?, Xia Chen, Jarrad Harford, Kai Li
Research Collection School Of Accountancy
Within a cost–benefit framework, we hypothesize that independent institutions with long-term investments will specialize in monitoring and influencing efforts rather than trading. Other institutions will not monitor. Using acquisition decisions to reveal monitoring, we show that only concentrated holdings by independent long-term institutions are related to post-merger performance. Further, the presence of these institutions makes withdrawal of bad bids more likely. These institutions make long-term portfolio adjustments rather than trading for short-term gain and only sell in advance of very bad outcomes. Examining total institutional holdings or even concentrated holdings by other types of institutions masks important variation in the …
The Dynamics Of Implementing And Managing Modularity Of Organizational Routines During Capability Development: Insights From A Process Model, Shan Ling Pan, Gary Shan Chi Pan, Adela Chen, Ming Huei Hsieh
The Dynamics Of Implementing And Managing Modularity Of Organizational Routines During Capability Development: Insights From A Process Model, Shan Ling Pan, Gary Shan Chi Pan, Adela Chen, Ming Huei Hsieh
Research Collection School Of Accountancy
Past research using the resource-based view of a firm suggests that it is important to consider how firms develop, manage, and deploy resources and capabilities to influence the overall process of strategy formation and implementation. Relatively little research has been conducted in conceptualizing how firms implement and manage modularity of organizational routines during capability development. Yet, most companies would benefit from implementing modularity in organizational routines when competing in dynamic market conditions. Such implementations may require fundamental organizational reorientation that incurs significant coordination costs, and in some cases, such modularization attempts may fail, costing organizations significant amounts of valuable resources. …
Legal Systems And Earnings Quality: The Role Of Auditor Industry Specialization, Chee Yeow Lim, Soo Young Kwon, Patricia Mui Siang Tan
Legal Systems And Earnings Quality: The Role Of Auditor Industry Specialization, Chee Yeow Lim, Soo Young Kwon, Patricia Mui Siang Tan
Research Collection School Of Accountancy
This paper extends prior studies in auditor industry specialization to an international setting and examines if the impact of industry specialist auditors on earnings quality is dependent on the legal environments. Using data for 28 countries over 20 industries from 1993 to 2003, we find that clients of industry specialist auditors have lower discretionary current accruals and higher earnings response coefficients than clients of nonspecialist auditors. In addition, we find that the impact of auditor industry specialization on earnings quality increases as the legal environment weakens. Collectively, the results suggest that the benefits from engaging the services of industry specialist …
The Change In Corporate Transparency Of Korean Firms After The Asian Financial Crisis: An Analysis Using Analysts' Forecast Data, Jinho Chang, Young Jun Cho, Hyun-Han Shin
The Change In Corporate Transparency Of Korean Firms After The Asian Financial Crisis: An Analysis Using Analysts' Forecast Data, Jinho Chang, Young Jun Cho, Hyun-Han Shin
Research Collection School Of Accountancy
Using analysts' forecast error and forecast dispersion of firms covered by the I/B/E/S database, this study examines the change in information asymmetry of Korean firms around the financial crisis of 1997. Results show that the information asymmetry of Korean firms is lower after the financial crisis than before, implying that corporate transparency did, in effect, improve with the change in business environment. In addition, this study finds that chaebol firms have higher information asymmetry than non-chaebol firm, and also that the corporate transparency improvement of chaebol firms is not higher than that of non-chaebol firms in the post-crisis period despite …
Do Direct Cash Flow Disclosures Help Predict Future Operating Cash Flows And Earnings?, Steven Francis Orpurt, Yoonseok Zang
Do Direct Cash Flow Disclosures Help Predict Future Operating Cash Flows And Earnings?, Steven Francis Orpurt, Yoonseok Zang
Research Collection School Of Accountancy
Motivated by recent FASB, IASB and CFA Institute comments, we extend the scant literature on direct method cash flow disclosures by exploring their predictive ability. A primary stated purpose of the direct method is to better forecast future operating performance. To test this purpose, we use a FERC (future ERC) methodology, finding that firms voluntarily producing direct method statements reflect more information about future earnings in their current stock returns than other firms. Supporting our FERC analysis, we document that substantial articulation errors exist when direct method cash flow components are estimated from either indirect method cash flow statements or …
Are Us Family Firms Subject To Agency Problems? Evidence From Ceo Turnover And Firm Valuation, Xia Chen, Zhonglan Dai
Are Us Family Firms Subject To Agency Problems? Evidence From Ceo Turnover And Firm Valuation, Xia Chen, Zhonglan Dai
Research Collection School Of Accountancy
This paper investigates the impact of the founding family's presence in US public firms on the extent of agency problems related to CEO turnover decisions and on firm valuations after poor performance. In particular, we focus on three types of US public firms: family CEO firms, professional CEO family firms (family firms managed by a hired CEO outside the founding family), and non-family firms. We hypothesize that, the agency problem arising from the expropriation of small shareholders by large shareholders in family CEO firms and the agency problem arising from the separation of ownership and control in non-family firms, lead …
Exploring The Role That Forecast Surprise And Forecast Error Play In Determining Management Forecast Precision, Jong-Hag Choi, Linda Myers, Yoonseok Zang, David Ziebart
Exploring The Role That Forecast Surprise And Forecast Error Play In Determining Management Forecast Precision, Jong-Hag Choi, Linda Myers, Yoonseok Zang, David Ziebart
Research Collection School Of Accountancy
No abstract provided.
Auditor Locality, Audit Quality And Audit Pricing, Jong-Hag Choi, Jeong-Bon Kim, Aini Qiu, Yoonseok Zang
Auditor Locality, Audit Quality And Audit Pricing, Jong-Hag Choi, Jeong-Bon Kim, Aini Qiu, Yoonseok Zang
Research Collection School Of Accountancy
No abstract provided.
Bonding To The Improved Disclosure Environment In The Us: Firms Listing Choices And Their Capital Market Consequences, Ole-Kristian Hope, Tony Kang, Yoonseok Zang
Bonding To The Improved Disclosure Environment In The Us: Firms Listing Choices And Their Capital Market Consequences, Ole-Kristian Hope, Tony Kang, Yoonseok Zang
Research Collection School Of Accountancy
This paper examines whether the current reporting and disclosure requirements for foreign registrants in the United States affect foreign firms' decisions to list on a U.S. exchange. We find that while firms from a weak disclosure environment are more likely to cross-list and either trade over-the-counter or be placed privately among institutional investors, they are less likely to list on an exchange in which firms are required to comply with U.S. GAAP. This is consistent with the idea that the decrease in the potential private control benefits accruing to managers discourages them from listing on an organized exchange. We further …
Systematic Share Price Fluctuations After Bankruptcy Filings And The Investors Who Drive Them, Mark C. Dawkins, Nilabhra Bhattacharya, Linda Smith Bamber
Systematic Share Price Fluctuations After Bankruptcy Filings And The Investors Who Drive Them, Mark C. Dawkins, Nilabhra Bhattacharya, Linda Smith Bamber
Research Collection School Of Accountancy
Beginning in the 1990s, firms often continue to trade on the major national exchanges after Chapter 11 bankruptcy filings. For bankruptcies filed from 1993-2003, we find that the more negative the filing period price reaction, the more favorable the immediate post- filing returns, on average. This reversal is not attributable to bid-ask bounce, it holds after controlling for other factors associated with post-filing returns, and it appears more attributable to the activities of large traders than to small traders. Supplementary tests reveal that the pattern of post-filing returns differs significantly for bankruptcies filed in bull versus bear markets. Bankruptcies filed …
Who Trades On Pro Forma Earnings Information?, Nilabhra Bhattacharya, Erv Black, Ted Christensen, Rick Mergenthaler
Who Trades On Pro Forma Earnings Information?, Nilabhra Bhattacharya, Erv Black, Ted Christensen, Rick Mergenthaler
Research Collection School Of Accountancy
In recent years, many companies have emphasized adjusted‐GAAP earnings numbers in their quarterly press releases. While managers use different names to describe these nonstandard earnings metrics, the financial press frequently refers to them as “pro forma” earnings. Managers and other advocates of pro forma reporting argue that these disclosures provide a clearer picture of companies' core earnings. On the other hand, regulators, policymakers, and the financial press often allege that managers' pro forma earnings disclosures are opportunistic attempts to mislead investors. Recent evidence suggests that while many pro forma earnings disclosures are altruistically motivated, some may represent managers' attempts to …
Managing Stakeholders During It-Enabled Organizational Transformation: A Case Study Of E-Government In South Korea, Hyun Jeong Kim, Gary Pan, Shan Ling Pan
Managing Stakeholders During It-Enabled Organizational Transformation: A Case Study Of E-Government In South Korea, Hyun Jeong Kim, Gary Pan, Shan Ling Pan
Research Collection School Of Accountancy
The implementation of e-government is a burgeoning phenomenon across the globe. It improves and enhances the infrastructures and services provided to the citizens. However, a review of the IS literature reveals that research on the implementation of e-government is rather limited, which could be due to the general misconception of the public sectors as rigid and risk-averse establishments. The shortage of studies on e-government’s implementation presents a knowledge gap that needs to be plugged. This gap is significantly amplified by the increasing number of e-government initiatives being implemented by governments in recent years. This paper describes and analyzes South Korea’s …
Comprehensive Income, Future Earnings, And Market Mispricing, Jong-Hag Choi, Somnath Das, Yoonseok Zang
Comprehensive Income, Future Earnings, And Market Mispricing, Jong-Hag Choi, Somnath Das, Yoonseok Zang
Research Collection School Of Accountancy
No abstract provided.