Business Commons^™

Director Training And Financial Disclosure: Asian Insights, Qaiser Rafique Yasser, Abdullah Al Mamun, Marcus Rodrigs

Faculty of Business - Papers (Archive)

We provide evidence regarding the relationship between director training programs and improved financial reporting. Director Training Programs (DTP) help directors better understand the specific context in which a firm operates, including its operations and environment; awareness of business norms and values; standards of probity and accountability; and their fiduciary duties as an agent of investors. This study explores a recent requirement for director training and its effect on the quality of financial reporting for publicly listed companies in three eastern countries. This study examines the relationship between DTP and the quality of financial reporting of Australian, Malaysian and Pakistani publicly …

Corporate Governance And The Insolvency Risk Of Financial Institutions, Searat Ali, Jamshed Iqbal

Faculty of Business - Papers (Archive)

We investigate whether corporate governance is related to insolvency risk of financial institutions. Using a large sample of U.S. financial institutions over the 2005-2010 period, we find that corporate governance is positively related with insolvency risk of financial institutions as proxied by Merton's distance to default measure and credit default swap spread. We also find that "better" corporate governance increased insolvency risk relatively more for larger financial institutions and during the period of the global financial crisis. Our findings suggest that too-big-to fail and deposit insurance policies encourage excessive risk taking by financial institutions.

Who Responds To Financial Incentives For Weight Loss? Evidence From A Randomized Controlled Trial, Alfredo R. Paloyo, Arndt R. Reichert, Monika Reuss-Borst, Harald Tauchmann

Faculty of Business - Papers (Archive)

There is a paucity of evidence on the heterogeneous impacts of financial incentives on weight loss. Between March 2010 and January 2012, in a randomized controlled trial, we assigned 700 obese persons to three experimental arms. We test whether particular subgroups react differently to financial incentives for weight loss. Two treatment groups obtained a cash reward (€150 and €300 with 237 and 229 participants, respectively) for achieving an individually-assigned target weight within four months; the control group (234 participants) was not incentivized. Participants and administrators were not blinded to the intervention. We find that monetary rewards effectively induced obese individuals …

The Effect Of Financial Status On Earnings Quality Of Chinese-Listed Firms, Feng Li, Indra Abeysekera, Shiguang Ma

Faculty of Business - Papers (Archive)

This article investigates the relation between accounting-based earnings quality attributes and the financial status of Chinese companies listed in Shanghai and Shenzhen stock exchanges from 2005 to 2007 by classifying them as either "healthy" or "bankrupt" firms. The authors find that accruals quality, earnings predictability, and earnings smoothness are significantly different between healthy and bankrupt firms, but not earnings persistence. Additional analysis undertaken indicates that firm categories (healthy, financially distressed, and bankrupt) based on financial status does not indicate distinct differences in earnings quality attributes.

Dynamic Forecasts Of Financial Distress Of Australian Firms, Maria Kim, Graham Partington

Faculty of Business - Papers (Archive)

Dynamic forecasts of financial distress have received far less attention than static forecasts, particularly in Australia. This study, therefore, investigates dynamic probability forecasts for Australian firms. Novel features of the modelling are the use of time-varying variables in forecasts from a Cox model. Not only is this one of relatively few studies to apply dynamic variables in forecasting financial distress, but to the authors' knowledge it is the first to provide forecasts of survival probabilities using the Cox model with time-varying variables. Forecast accuracy is evaluated using receiver operating characteristics curves and the Brier Score. It was found that the …

Financial Accounting Reform: The Need For A 'Back To Basics' Approach For Profit Measurement And Wealth Measurement, John Ryan

Faculty of Business - Papers (Archive)

By recognising the dual purposes of financial accounting, and developing distinct theories to guide the preparation of financial reports, the apparent internal contradictions in accounting theory can be resolved. Property rights and measurement theory provide the basis for explaining transaction-based profit measurement and funds commitment, and for a statement of wealth measured using market prices. Property rights are recognised in The New Institutional Economics. Going beyond accepted accounting conventions, property rights provide the qualitative, empirical property giving meaning to accounting practice for profit measurement through the 1940s to 1960s. Examples of profit and of wealth measurement are included.

The Relationship Between Corporate Social Responsibility Disclosure And Financial Performance: Evidence From Thailand, Wisuttorn Jitaree, Sudhir C. Lodh, Shyam S. Bhati

Faculty of Business - Papers (Archive)

This study examines the relationship between corporate social responsibility (CSR) disclosure and financial performance in Thailand during the period 2009-2011. Four measures of financial performance were used based on data extracted from the annual reports of 232 firms listed on the Stock Exchange of Thailand. A CSR disclosure index was constructed to measure the extent and dimensions of CSR disclosure. Overall, the results from the empirical analysis provide some evidence of positive relationship between financial performance and CSR disclosure. This study adds further evidence to the literature on the relationship between the CSR and financial performance in an emerging country. …

Australian Banks Performance During The Global Financial Crisis: An Analysis On The Efficiency And Productivity, Shima Hassan Zadeh Forughi, Anura De Zoysa

Faculty of Business - Papers (Archive)

The banking industry plays a crucial role in the financial system and economic development of any country. Thus, the evaluation of its efficiency is of great importance. The present thesis analyses the impact of different phases of the recent banking crisis on Australian banks with a view to identifying problem areas in the banking sector and to provide directions for policy improvements.

A multiple-stage approach based on Data Envelopment Analysis (DEA) is utilized in this study to investigate the level of efficiency and productivity of the Australian banks over a 7 year period. This analysis consists of the following five …

The Effects Of Financial Crises On International Stock Market Volatility Transmission, Indika Karunanayake Athukoralalage, Abbas Valadkhani, Martin O'Brien

Faculty of Business - Papers (Archive)

With the integration of national economies through international trade and finance, the exploration of financial market interdependency has become profoundly important among market participants and scholars. Focusing on the Asian and global financial crises of 1997-98 and 2008-09 for Australia, Singapore, the UK, and the US, this paper examines the nature of such an interaction between stock market returns and their volatility. We use a multivariate generalised autoregressive conditional heteroskedasticity (MGARCH) model and weekly data (January 1992-June 2009). Based on the results obtained from the mean return equations, we could not find any significant impact on returns arising from the …

Financial Liberalization Index For Nepal, Min B Shrestha, Khorshed Chowdhury

Faculty of Business - Papers (Archive)

A financial liberalization index (FLI) for Nepal is constructed in order to show the degree or the level of financial liberalization at a particular time. FLI is calculated on the basis of principal components method following Demetriades and Luintel (1997), Bandiera, Caprio et al. (2000), Laeven (2003), and Laurenceson and Chai (2003). The index comprises eight policy components, viz, (1) interest rate deregulation (IRD), (2) removal of entry barriers (REB), (3) reduction in reserve requirement (RRR), (4) easing in credit control (ECC), (5) implementation of prudential rules (IPR), (6) stock market reform (SMR), (7) privatization of state-owned banks (PSB), and …