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Full-Text Articles in Business

Muddy Cloud With Silver Lining? Bring It On!, Themin Suwardy Dec 2012

Muddy Cloud With Silver Lining? Bring It On!, Themin Suwardy

Research Collection School Of Accountancy

No abstract provided.


Banks' Survival During The Financial Crisis: The Role Of Regulatory Reporting Quality, Jeffrey Ng, Tjomme O. Rusticus Dec 2012

Banks' Survival During The Financial Crisis: The Role Of Regulatory Reporting Quality, Jeffrey Ng, Tjomme O. Rusticus

Research Collection School Of Accountancy

In this paper, we investigate the effect of bank transparency before the crisis on bank stability during the financial crisis that erupted in 2008. Using a large sample of private and public commercial banks in the United States, we find that transparency enhances stability. We use two measures of transparency. We develop a new measure of financial reporting transparency based on loan loss provision estimation errors. We corroborate our findings using a second measure based on the incidence of accounting restatements. We show that lower transparency before the crisis is associated with higher non-performing loans and lower profitability at the …


Making Sense Of Other Comprehensive Income, Pearl Hock Neo Tan Nov 2012

Making Sense Of Other Comprehensive Income, Pearl Hock Neo Tan

Research Collection School Of Accountancy

SMU Associate Professor of Accounting (Practice) Pearl Tan commented on how other comprehensive income (OCI) is different from net income, and how SME managers and stakeholders may use the information on other comprehensive income to evaluate the business. She highlighted that it is important for owners and managers of SMEs to understand the components of OCI and commented on how it will affect reported equity and net assets. Stakeholders of an SME may also use the information on OCI to assess risks and to estimate future cash flows from the reported unrealised gains or losses.


Building The Cfo Function: Roles And Responsibilities, Andrew Lee, Tracey Zhang Nov 2012

Building The Cfo Function: Roles And Responsibilities, Andrew Lee, Tracey Zhang

Research Collection School Of Accountancy

In May 2012, the Singapore CFO Institute, in collaboration with the School of Accountancy at Singapore Management University (SMU), embarked on this study with the objective of achieving a better understanding of the CFO function in today’s modern corporation. The study aims to answer a fundamental question – what do CFOs actually do? We examined several facets to this question: the key roles and responsibilities of CFOs; how those responsibilities are structured; whether those roles have changed in importance over time; what roles occupy the most of the CFOs’ attention and time; and what factors are challenging or enhancing the …


Building The Cfo Function: Roles And Responsibilities, Andrew Lee Nov 2012

Building The Cfo Function: Roles And Responsibilities, Andrew Lee

Research Collection School Of Accountancy

No abstract provided.


Building The Cfo Function: Roles And Responsibilities, Chunqi (Tracey) Zhang, Tong Kin Andrew Lee Nov 2012

Building The Cfo Function: Roles And Responsibilities, Chunqi (Tracey) Zhang, Tong Kin Andrew Lee

Research Collection School Of Accountancy

No abstract provided.


Building The Cfo Function: Roles And Responsibilities, Andrew Lee, Chunqi (Tracey) Zhang Nov 2012

Building The Cfo Function: Roles And Responsibilities, Andrew Lee, Chunqi (Tracey) Zhang

Research Collection School Of Accountancy

No abstract provided.


Disclosure And Cost Of Equity Capital: An Analysis At The Market Level, Yan Li, Holly I-Hwa Yang Nov 2012

Disclosure And Cost Of Equity Capital: An Analysis At The Market Level, Yan Li, Holly I-Hwa Yang

Research Collection School Of Accountancy

This study examines whether disclosure reduces the market cost of capital. A stock’s implied cost of capital is defined as the expected return that equates its current price to the present value of its expected future free cash flows. We compute implied costs of capital for each firm and use their average as a measure of the market cost of capital. Using a sample of management forecasts issued between 1994 and 2010, we find that an increase in disclosure at the aggregate level results in a lower market cost of capital. This result is robust to alternative measures of disclosure …


Sgx Listing Rule 1207(10): Challenges And Opportunities For Caes, See Liang Foo Oct 2012

Sgx Listing Rule 1207(10): Challenges And Opportunities For Caes, See Liang Foo

Research Collection School Of Accountancy

No abstract provided.


Raising The Bar, Jiwei Wang Oct 2012

Raising The Bar, Jiwei Wang

Research Collection School Of Accountancy

No abstract provided.


The Triangular Relationship Between Audit Committee Characteristics, Audit Input And Financial Reporting Quality, Jae Bum Kim, Benjamin Segal, Dan Segal, Yoonseok Zang Oct 2012

The Triangular Relationship Between Audit Committee Characteristics, Audit Input And Financial Reporting Quality, Jae Bum Kim, Benjamin Segal, Dan Segal, Yoonseok Zang

Research Collection School Of Accountancy

Using the reforms to audit committees mandated by the Sarbanes-Oxley Act of 2002 and the difference-in-difference approach, we examine the impact of changes in audit committee attributes (financial expertise, size and independence) on the corporate commitment to audit assurance and on the likelihood of financial statement restatements. Firms that were directly affected by the reforms experienced a greater improvement in audit inputs (measured by audit fees and the appointment of an industry specialist auditor) and a larger decline in financial statements restatements relative to firms that had already been compliant. Importantly, we find that the decline in restatements is not …


The Effect Of Arthur Andersen's Demise On Clients' Audit Fees And Auditor Conservatism: International Evidence, Bin Srinidhi, Mahmud Hossain, Chee Yeow Lim Sep 2012

The Effect Of Arthur Andersen's Demise On Clients' Audit Fees And Auditor Conservatism: International Evidence, Bin Srinidhi, Mahmud Hossain, Chee Yeow Lim

Research Collection School Of Accountancy

Using samples from 12 non-U.S.A. countries, we find that following Arthur Andersen's failure in the United States of America, successor Big-N auditors charged an audit fee premium for ex-Andersen clients compared to existing clients and non-Andersen switch-ins. We show that this audit fee premium is not attributable to the Andersen switch-ins having lower prior earnings quality or lower bargaining power than non-Andersen switch-ins. We also show that ex-Andersen clients exhibit higher earnings quality after the switch than do ongoing clients and other switch-ins. These results suggest that the audit fee premium is attributable to auditor conservatism. Furthermore, we find that …


Do Analysts Understand The Valuation Implications Of Accounting Conservatism When Forecasting Target Prices?, Jae Bum Kim, Alexander Nekrasov, Pervin Shroff, Andreas Simon Sep 2012

Do Analysts Understand The Valuation Implications Of Accounting Conservatism When Forecasting Target Prices?, Jae Bum Kim, Alexander Nekrasov, Pervin Shroff, Andreas Simon

Research Collection School Of Accountancy

Conservatism in earnings does not have a direct impact on the present value of future cash flows. This paper examines whether financial analysts correctly undo the effect of accounting conservatism incorporated in their own earnings forecasts in arriving at their target price forecasts. Based on prior findings, we consider alternative valuation models/heuristics that may be used by analysts to estimate target prices, e.g. the forward P/E and the PEG ratio. Our evidence suggests that analysts fail to fully undo the effect of accounting conservatism embedded in their forecasts of earnings and earnings growth when estimating their target price forecasts. More …


The Impact Of Related Party Sales By Listed Chinese Firms On Earnings Informativeness And Analysts Forecasts, Jiwei Wang, Hongqi Yuan Sep 2012

The Impact Of Related Party Sales By Listed Chinese Firms On Earnings Informativeness And Analysts Forecasts, Jiwei Wang, Hongqi Yuan

Research Collection School Of Accountancy

Using a random sample of 140 of China's listed firms, we show an adverse impact of related party (RP) sales of goods and services on the usefulness of accounting earnings to investors and on the quality of earnings forecasts by financial analysts. Consistent with the contention that RP sales may violate the arm's-length assumption of regular transactions and consequently impair the representational faithfulness and verifiability of accounting data, we find that earnings of firms engaged in RP sales are at least 33% less informative after controlling for factors known to affect earnings informativeness. We also find that financial analysts are …


Mandatory Financial Reporting Environment And Voluntary Disclosure: Evidence From Mandatory Ifrs Adoption, Balakrishnan Karthik, Xi Li, Holly Yang Sep 2012

Mandatory Financial Reporting Environment And Voluntary Disclosure: Evidence From Mandatory Ifrs Adoption, Balakrishnan Karthik, Xi Li, Holly Yang

Research Collection School Of Accountancy

Using the mandatory adoption of International Financial Reporting Standards (IFRS) as an exogenous improvement to mandatory financial reporting, we document evidence supporting a complementary effect between mandatory and voluntary disclosures. We find that firms in countries that adopted IFRS in 2005 experience an increase in both the likelihood and frequency of management earnings forecasts relative to firms in countries that did not mandate IFRS. We also find that the increase in management forecasts is higher in countries where prior local GAAP are more different from IFRS or legal enforcement is stronger. Consistent with the confirmatory role of mandatory reporting, we …


Change Management: The People Dimension, Gary Pan Aug 2012

Change Management: The People Dimension, Gary Pan

Research Collection School Of Accountancy

Many accounting professionals believe it is important to raise productivity in the accounting sector. A recent survey conducted by the Institute of Management Accountants (2011), however, highlighted that raising productivity, while a very important topic, can be a daunting challenge. Therefore, the urgent issue facing the accounting sector is to address the critical concern of how accounting professionals can be more productive?


Productivity, Return-On-Capital And Stock Price Performance, Andrew Lee, Tracey Zhang Aug 2012

Productivity, Return-On-Capital And Stock Price Performance, Andrew Lee, Tracey Zhang

Research Collection School Of Accountancy

Productivity improvements in businesses are invariably championed as value-enhancing propositions. Whether the improvements are labour-related or asset-related, the value of a business is arguably enhanced when its employees are more productive, its assets are utilised more productively, and its operations are conducted more efficiently.


Measuring Reporting Conservatism Using The Dichev-Tang (2008) Model, Jimmy Kiat Bee Lee Aug 2012

Measuring Reporting Conservatism Using The Dichev-Tang (2008) Model, Jimmy Kiat Bee Lee

Research Collection School Of Accountancy

This paper provides a critical evaluation of an alternative measure of reporting conservatism introduced by Dichev and Tang (2008). Although there is substantial interest in research on accounting conservatism, there is no consensus among researchers on the most appropriate measure of conservatism in empirical studies. Dichev and Tang (2008) introduce a new measure of conservatism, which they believe to be a 'natural and practical measure of conservatism (p. 1441).' However, the econometric properties of this measure have not been fully evaluated, and previous studies have not provided evidence of this measure’s construct validity. Based on a parsimonious model of conservatism, …


Helping Hands, Gary Pan Aug 2012

Helping Hands, Gary Pan

Research Collection School Of Accountancy

With economic uncertainty prevailing in recent years, Singapore is being confronted with the challenges of managing growing aging population, acute land and labour constraints and rising business operating costs. If left unchecked, these challenges may threaten Singapore’s economic well-being and consequently its status as a global and financial hub. To address these challenges, many believe productivity-driven growth can deliver sustainable and inclusive economic development and improve Singapore’s standard of living over time. The National Productivity and Continuing Education Council (NPCEC), set up to spur Singapore to step up its efforts to boost skills and enterprise productivity, has identified the accountancy …


Cloud Computing: A Paradigm Shift, Poh Sun Seow Aug 2012

Cloud Computing: A Paradigm Shift, Poh Sun Seow

Research Collection School Of Accountancy

Research has shown that investment in IT is a key driver of productivity improvement in the accountancy sector. IT enables accounting firms to increase their productivity by automating tasks and enhancing collaboration within the firm and with their clients. Cloud computing has generated much interest from the business and IT communities these days as an emerging technology to increase productivity.


Do Analysts Understand The Valuation Implications Of Accounting Conservatism When Forecasting Target Prices?, Jae Bum Kim, Alexander Nekrasov, Pervin K. Shroff, Andreas Simon Aug 2012

Do Analysts Understand The Valuation Implications Of Accounting Conservatism When Forecasting Target Prices?, Jae Bum Kim, Alexander Nekrasov, Pervin K. Shroff, Andreas Simon

Research Collection School Of Accountancy

Conservatism in earnings does not have a direct impact on the present value of future cash flows. This paper examines whether financial analysts correctly undo the effect of accounting conservatism incorporated in their own earnings forecasts in arriving at their target price forecasts. Based on prior findings, we consider alternative valuation models/heuristics that may be used by analysts to estimate target prices, e.g. the forward P/E and the PEG ratio. Our evidence suggests that analysts fail to fully undo the effect of accounting conservatism embedded in their forecasts of earnings and earnings growth when estimating their target price forecasts. More …


Banking On Productivity, Chu Yeong Lim Aug 2012

Banking On Productivity, Chu Yeong Lim

Research Collection School Of Accountancy

Streamlining processes and improving productivity in the accounting function has been identified as the single most important challenge in a survey of the Institute of Management Accountants (IMA) members conducted in 2011. This is despite the majority of members indicating that they have achieved significant long term productivity improvements. Some of the other challenges identified by the interviewees include managing change in a global environment, implementing an enterprise resource planning system and connecting finance to front office. Automation and investing in data analysis/ business intelligence tools are some of the tools used by the interviewees to improve productivity (IMA, 2011). …


Productivity Measurements For Accounting Functions, Themin Suwardy Aug 2012

Productivity Measurements For Accounting Functions, Themin Suwardy

Research Collection School Of Accountancy

The finance department is under pressure to enhance its own value contribution to the business, deliver high quality information and maintain effective controls. It is subject to the same continuing internal demands to reduce the cost of its own operations. To be more effi cient, be more productive. But many finance departments are in a quandary. They are unsure how to demonstrate whether they are delivering real value to the business and to what extent they meet best practice standards for world-class finance departments.


Accounting And Productivity: Answering The Big Questions, Gary Pan, Themin Suwardy Aug 2012

Accounting And Productivity: Answering The Big Questions, Gary Pan, Themin Suwardy

Research Collection School Of Accountancy

No abstract provided.


The Role Of A Non-Executive Director In Smes, Jiwei Wang Aug 2012

The Role Of A Non-Executive Director In Smes, Jiwei Wang

Research Collection School Of Accountancy

There are not many SMEs in Singapore which employ independent non-executive directors. SMU Associate Professor of Accounting Wang Jiwei advised that there are immense benefits that a non-executive director can bring to an SME as its business grows. These include the credibility that the person can bring to the management team, including the important and useful contacts, as well as different skill sets and experiences. “Understand your needs and then identify the right type of experienced individuals who possess the necessary expertise or business networks. There is a high possibility that your ‘perfect' non-executive director may be someone you already …


The Role Of A Non-Executive Director In Smes, Jiwei Wang Aug 2012

The Role Of A Non-Executive Director In Smes, Jiwei Wang

Research Collection School Of Accountancy

There are not many SMEs in Singapore which employ independent non-executive directors. SMU Associate Professor of Accounting Wang Jiwei advised that there are immense benefits that a non-executive director can bring to an SME as its business grows. These include the credibility that the person can bring to the management team, including the important and useful contacts, as well as different skill sets and experiences. “Understand your needs and then identify the right type of experienced individuals who possess the necessary expertise or business networks. There is a high possibility that your ‘perfect' non-executive director may be someone you already …


Executive Compensation And Regulation Imposed Governance: Evidence From The California Non-Profit Integrity Act (2004), Tharindra Ranasinghe, S. Khumawala, S. Mishra, S. Dhole Jul 2012

Executive Compensation And Regulation Imposed Governance: Evidence From The California Non-Profit Integrity Act (2004), Tharindra Ranasinghe, S. Khumawala, S. Mishra, S. Dhole

Research Collection School Of Accountancy

No abstract provided.


Maximising Tax-Related Cashflows For Smes, Teng Aun Khoo Jun 2012

Maximising Tax-Related Cashflows For Smes, Teng Aun Khoo

Research Collection School Of Accountancy

SMU Associate Professor of Accounting Khoo Teng Aun compared the two options available to an SME not in a tax-paying position – cash payout (CP) or the Productivity and Innovation Credit (PIC) deduction/allowance – and concluded that whether the company should claim CP when it is incurring losses would depend on, among other considerations, its expected profitability in future years.


Do Your Homework Before Joining A Board, Themin Suwardy Jun 2012

Do Your Homework Before Joining A Board, Themin Suwardy

Research Collection School Of Accountancy

No abstract provided.


Disciplinary Effect Of Internal Control Provisions Of Sox On Corporate Governance Structures, Beng Wee Goh Jun 2012

Disciplinary Effect Of Internal Control Provisions Of Sox On Corporate Governance Structures, Beng Wee Goh

Research Collection School Of Accountancy

This study examines whether the internal control provisions under the Sarbanes–Oxley Act (SOX) have a disciplining effect on the governance structures of firms. We find that audit committee members and outside directors of firms that disclose material weaknesses (MWs) under Section 302 of SOX are more likely to leave the firms compared to their counterparts in a matched sample of control firms without such weaknesses, and they lose more outside directorships than their counterparts in the control firms. These results are consistent with the notion that the labor market imposes reputational penalties for internal control failures. Although the MW firms …