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- Corporate governance (2)
- Derivatives (2)
- Hedging (2)
- Information environment (2)
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- Insider trading laws (2)
- Managerial learning (2)
- Real earnings management (2)
- Substitution effect (2)
- Accounting (1)
- Accounting scandals (1)
- Active independent directors (1)
- Agency costs (1)
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- Analyst coverage (1)
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- Archival accounting research (1)
- Asset-backed securities (1)
- Audit committee (1)
- Audit quality (1)
- Auditing (1)
- Bank opacity (1)
- Benford’s law (1)
- Blockchain (1)
- Business and Corporate (1)
- Buyback Motivations (1)
- Buybacks (1)
- CEO Trustworthiness (1)
- CFO gaps (1)
- CFO turnovers (1)
Articles 1 - 30 of 36
Full-Text Articles in Business
Understanding Sentiment Through Context, Richard M.Crowley, M.H. Franco Wong
Understanding Sentiment Through Context, Richard M.Crowley, M.H. Franco Wong
Research Collection School Of Accountancy
We examine whether empirical results using text-based sentiment of U.S. annual reports depend on the underlying context, within documents, from which sentiment is measured. We construct a clause-level measure of context, showing that sentiment is driven by many different contexts and that positive and negative sentiment are driven by different contexts. We then construct context-level sentiment measures and examine whether sentiment works as expected at the context-level across four prediction problems. Our results demonstrate that document-level sentiment exhibits significant noise in prediction and suggest that document-level aggregation of sentiment leads to missed empirical nuances. The contexts driving sentiment results vary …
The Effectiveness Of Using Python Programming Approach In Teaching Ffnancial Analytics, Clarence Goh, Yuanto Kusnadi, Gary Pan
The Effectiveness Of Using Python Programming Approach In Teaching Ffnancial Analytics, Clarence Goh, Yuanto Kusnadi, Gary Pan
Research Collection School Of Accountancy
This study presents a learning method and challenges regarding implementing a Python programming approach in teaching financial analytics to graduate accounting students. The advent of Big Data, as well as related applications and technologies, has significantly changed the process and practice of accounting. This has led to essential changes in the construction and teaching content of accounting education. While there have been several studies examining how data analytics is embedded in the accounting curriculum, the majority of the teaching cases in accounting focus on analysis and communication with Excel as the principal tool, with very few covering the necessary steps …
Using An Online Bidding Game To Teach Costing In Management Accounting, Poh Sun Seow, Suay Peng Wong
Using An Online Bidding Game To Teach Costing In Management Accounting, Poh Sun Seow, Suay Peng Wong
Research Collection School Of Accountancy
This paper describes an online multi-player game (Bidding Game), which was developed to reinforce the understanding of cost behavior and cost concepts taught in an introductory management accounting undergraduate course. The Bidding Game was motivated by the aim to facilitate active learning as students apply the theories that they have learnt in a fun and interactive manner. The survey results suggest that the game significantly improves students’ perceived knowledge of the costing topic. Students also agreed that the game enhanced their learning and that they had a positive experience playing the game.
The Past, Present, And Future Of China-Related Accounting Research, Qiang Cheng, Luzi Hail, Gwen Yu
The Past, Present, And Future Of China-Related Accounting Research, Qiang Cheng, Luzi Hail, Gwen Yu
Research Collection School Of Accountancy
This discussion makes several observations regarding the past 25 years of China-related accounting research reviewed in Lennox and Wu (2022). First, we discuss factors of supply and demand that led to the rise of China-related studies and how this growth has contributed to the internationalization of accounting research. We note that the taxonomy of the literature by geographic region rather than topic or methodology is unusual and makes it difficult to formulate a common framework that would help organize the many contributions. Next, we distill distinct patterns in authorship, choice of topics, and asserted contributions of China-related studies. Studies are …
Governance, Risk And Compliance (Grc) In Digital Transformation: Investor Views, Clarence Goh, Yuanto Kusnadi, Gary Pan, Poh Sun Seow
Governance, Risk And Compliance (Grc) In Digital Transformation: Investor Views, Clarence Goh, Yuanto Kusnadi, Gary Pan, Poh Sun Seow
Research Collection School Of Accountancy
Companies are embracing digital transformation to enhance their competitiveness. Existing studies show that it is important for companies to manage the governance, risk, and compliance (GRC) aspects of their digital transformation initiatives. While companies are increasingly understanding the importance of the role of GRC in digital transformation, it is unclear from the investors’ views. Thus, this study examines whether investors are placing importance on the role of GRC in digital transformation for their investment decisions. The results show that investors care about the GRC aspects of digital transformation initiatives undertaken by companies. The findings of this study are consistent with …
Making Virtual Project-Based Learning Work During The Covid-19 Pandemic, Yuanto Kusnadi, Gary Pan, Shankararaman, Venky
Making Virtual Project-Based Learning Work During The Covid-19 Pandemic, Yuanto Kusnadi, Gary Pan, Shankararaman, Venky
Research Collection School Of Accountancy
Project-based learning is an increasingly popular pedagogical approach in university education shown to be effective in fostering problem-solving, analytical, design thinking and teamwork skills. The COVID-19 pandemic has led to universities pivoting from project-based learning (PBL) in the classroom to a virtual learning environment. By examining local student consulting courses conducted virtually in a Singapore University (UNIS) during the COVID-19 pandemic, this study aims to address the knowledge gap in the PBL literature by identifying the roles played by digital literacy - in utilising the digital tools that support virtual learning, in a virtual learning environment. The study also serves …
Cfo Gaps: Determinants And Impact On The Corporate Information Environment, Xia Chen, Na Li, An-Ping Lin
Cfo Gaps: Determinants And Impact On The Corporate Information Environment, Xia Chen, Na Li, An-Ping Lin
Research Collection School Of Accountancy
A CFO gap arises when the CFO position is left vacant for a period between the departure of the old CFO and the appointment of a new CFO. We find that CFO gaps are fairly common; over the sample period 2004–2016, approximately one-third of CFO turnovers are associated with a CFO gap, lasting on average two quarters and two months. CFO gaps are more likely for firms that face more labor market search frictions and with financial reporting and performance issues, and are less likely for firms with succession plans and with greater growth opportunities. While CFO gaps are not …
Insider Trading Restrictions And Real Earnings Management: International Evidence, Jiwei Wang, Yuanto Kusnadi, Jiwei Wang, Yujie Wang
Insider Trading Restrictions And Real Earnings Management: International Evidence, Jiwei Wang, Yuanto Kusnadi, Jiwei Wang, Yujie Wang
Research Collection School Of Accountancy
We examine the implications of insider trading restrictions on firms’ real activities earnings management in an international setting. Using a sample of 28 countries over the period from 1992 to 2007, we find evidence that is supportive of the substitution hypothesis, in that managers have incentives to substitute accruals earnings management for real activities earnings management. This effect is found to be more pronounced for firms in countries with more restrictive insider trading regulation. Our result is robust to alternative measures of real activities earnings man- agement and insider trading restrictions, alternative sub-samples, alternative regression specifi- cations, and controlling for …
Insider Trading Restrictions And Real Activities Earnings Management: International Evidence, Yuanto Kusnadi, Yuanto Kusnadi, Jiwei Wang, Yujie Wang
Insider Trading Restrictions And Real Activities Earnings Management: International Evidence, Yuanto Kusnadi, Yuanto Kusnadi, Jiwei Wang, Yujie Wang
Research Collection School Of Accountancy
We examine the implications of insider trading restrictions on firms’ real activities earnings management in an international setting. Using a sample of 28 countries over the period from 1992 to 2007, we find evidence that is supportive of the substitution hypothesis, in that managers have incentives to substitute accruals earnings management for real activities earnings management. This effect is found to be more pronounced for firms in countries with more restrictive insider trading regulation. Our result is robust to alternative measures of real activities earnings management and insider trading restrictions, alternative sub-samples, alternative regression specifications, and controlling for endogeneity. In …
Trusting The Stock Market: Further Evidence From Ipos Around The World, Kiridaran Kanagaretnam, Kiat Bee Jimmy Lee, Chee Yeow Lim, Gerald J. Lobo
Trusting The Stock Market: Further Evidence From Ipos Around The World, Kiridaran Kanagaretnam, Kiat Bee Jimmy Lee, Chee Yeow Lim, Gerald J. Lobo
Research Collection School Of Accountancy
Using an international sample of IPO firms from 36 countries and a country-level index for societal trust, we find strong evidence that societal trust is negatively associated with the degree of IPO underpricing. In cross-sectional analyses, we find that the effect of societal trust in reducing IPO underpricing is more pronounced when the information environment is less transparent, when the stock market environment is less robust, and when legal institutions are weaker, settings where the effect of trust is likely to be more salient. Our study contributes to and extends the literature by providing strong evidence that an informal institution …
Uncovering The Value Of Blockchain Applications In The World Of Finance, Qiang Cheng
Uncovering The Value Of Blockchain Applications In The World Of Finance, Qiang Cheng
Research Collection School Of Accountancy
This article discusses the benefits of using blockchain in the context of asset-backed security (ABS) issuance: reducing information asymmetry between issuers and investors, reducing yield spread of ABS, disciplining credit rating agencies, increasing the quality of underlying assets, and reducing issuers’ risk exposure. Such benefits should apply to other blockchain applications in the world of finance.
Strategic Disclosure And Debt Covenant Violation, Thomas Bourveau, Derrald Stice, Rencheng Wang
Strategic Disclosure And Debt Covenant Violation, Thomas Bourveau, Derrald Stice, Rencheng Wang
Research Collection School Of Accountancy
This study examines how managers change their forecasting behavior as a debt covenant violation approaches. Using a sample of firms that disclose a debt covenant violation (DCV) in their financial statements, we find that management forecasts are more optimistic in the period leading up to a DCV, and this result is not driven by managers’ unintentional forecast bias. Additionally, we find that managers who are more optimistic in their forecasts also take on more risk and increase dividend payouts before violations, consistent with managers strategically using earnings forecasts to justify their activities favorable to shareholders but likely to be curtailed …
Do Analysts’ Eps Forecasts Obey Benford’S Law? An Empirical Analysis, Clarence Goh
Do Analysts’ Eps Forecasts Obey Benford’S Law? An Empirical Analysis, Clarence Goh
Research Collection School Of Accountancy
Benford’s law gives the expected frequencies of digits in tabulated data. In this study, I investigate the extent to which a sample of analysts’ earnings per share (EPS) forecasts obey Benford’s law. I conduct Benford’s law’s second digit and last-two digits tests on a sample of analyst EPS forecasts of S&P 500 firms from 1998 to 2018. Overall, I find that analysts’ EPS forecasts obey Benford’s law’s second digit test but do not obey the last-two digits test. These findings suggest that while analysts do not engage in number invention, they do engage in rounding when making EPS forecasts.
The Effects Of Csr Reputation And Csr Crisis Response Strategy On Investor Judgments, Clarence Goh
The Effects Of Csr Reputation And Csr Crisis Response Strategy On Investor Judgments, Clarence Goh
Research Collection School Of Accountancy
I use a controlled experiment to examine, in the context of CSR crises, whether investors’ investment judgments are influenced by a firm’s CSR reputation and CSR crisis response strategy. I find that for good CSR reputation firms, the use of a rebuild or deny crisis response strategy does not lead to improvements in investment judgments. However, for bad CSR reputation firms, the use of a deny response strategy leads to improvements in investment judgments while the use of a rebuild strategy does not.
Cross-Industry Information Sharing Among Colleagues And Analyst Research, Allen Huang, An-Ping Lin, Amy Y. Zang
Cross-Industry Information Sharing Among Colleagues And Analyst Research, Allen Huang, An-Ping Lin, Amy Y. Zang
Research Collection School Of Accountancy
We identify a specific organizational resource in brokerage housesdinformation sharing among analyst colleagues who cover economically related industries along a supply chain. After controlling for brokerage selection effects, we show evidence consistent with the benefit of this resource to analyst research performance. Specifically, we find that analysts whose colleagues cover more economically connected industries have better research performance, especially when their colleagues produce higher-quality research. We further show that colleagues' coverage of downstream (upstream) industries is positively related to the accuracy of only analysts' revenue (expense) forecasts and that analysts and their highly connected colleagues tend to issue earnings forecast …
Accounting Scandals And Implications For Directors: Lessons From Enron, Pearl Hock-Neo Tan, Gillian Yeo
Accounting Scandals And Implications For Directors: Lessons From Enron, Pearl Hock-Neo Tan, Gillian Yeo
Research Collection School Of Accountancy
We analyze the Enron case to identify the risk factors that potentially led to its collapse and specific issues relating to its aggressive accounting and high-light the lessons for independent directors. In Enron, the interactions between external stimuli, strategies, corporate culture, and risk exposures possibly created an explosive situation that eventually led to its demise. Much of the post-Enron reforms have been directed towards regulating the roles and responsibilities of executive directors and auditors. However, the role of independent directors has received relatively lesser attention. Independent directors should analyze the risks of their companies and understand the pressures that arise …
Contracting With Controllable Risk, Christopher S. Armstrong, Stephen A. Glaeser, Sterling Huang
Contracting With Controllable Risk, Christopher S. Armstrong, Stephen A. Glaeser, Sterling Huang
Research Collection School Of Accountancy
We examine how executives' ability to control their firms' exposure to risk affects the design of their incentive-compensation contracts. Our natural experimental evidence shows that exchange-traded weather derivatives allow executives to control their firms' exposure to weather risk. Once these derivatives became available, those executives who use them to hedge experience relative reductions in their total compensation and equity incentives. The decline in compensation is consistent with a reduction in the risk premium that executives receive for exposure to weather risk. The decline in equity incentives is consistent with the relation between risk and incentives shifting in a complementary direction …
Managerial Trustworthiness And Buybacks, Sterling Huang, Kaisa Snellman, Theo Vermaelen
Managerial Trustworthiness And Buybacks, Sterling Huang, Kaisa Snellman, Theo Vermaelen
Research Collection School Of Accountancy
CEO trustworthiness is positively related to long-term excess returns after buyback announcements. When the CEO is trustworthy, statements that the stock is undervalued are more credible. CEO trustworthiness is initially measured by the extent to which people in the county where the company headquarters is located trust each other. Further, the positive impact of trustworthiness on excess returns is higher when the CEO has been a long-term resident of a high-trust county, and correspondingly, trustworthy CEOs are less likely to be accused of financial misreporting. Our conclusions are confirmed when we use alternative measures of trustworthiness such as employee trust …
Short Interest And Corporate Investment: Evidence From Supply Chain Partners, Xia Chen, Guojin Gong, Shuqing Luo
Short Interest And Corporate Investment: Evidence From Supply Chain Partners, Xia Chen, Guojin Gong, Shuqing Luo
Research Collection School Of Accountancy
Short interest contains valuable information about a firm’s business fundamentals. We investigate whether such information affects business partners’ real investment decisions in the supply-chain setting. We predict and find that a supplier’s future investments (including inventory, R&D, and tangible asset investments) decrease with its customer’s current short interest. This negative relation is stronger when the supplier faces greater difficulty in assessing its customer’s business fundamentals and when short interest is more likely to indicate longlasting deterioration in the customer’s fundamentals. Additional analysis does not support the alternative explanation that the supplier adjusts investments in response to unfavorable information obtained via …
Disclosure Regulation: Past, Present, And Future, S.P. Kothari, Liandong Zhang
Disclosure Regulation: Past, Present, And Future, S.P. Kothari, Liandong Zhang
Research Collection School Of Accountancy
This monograph provides an overview of the theories of disclosure regulation and recent developments in the disclosure regulation literature. We organize our discussion around three basic questions. First, why do we need to regulate corporate disclosure in the financial market? Second, which theories explain the current state of disclosure regulation? Third, what are the economic consequences of disclosure regulation? In exploring the third question, we discuss several examples of disclosure regulation related to information production, dissemination, and presentation. Then, we provide an overview of the current debate on mandating environmental, social and governance (ESG) disclosure and reporting. Finally, we conclude …
Active Independent Directors And Earnings Quality, Yuanto Kusnadi, Bin Srinidhi
Active Independent Directors And Earnings Quality, Yuanto Kusnadi, Bin Srinidhi
Research Collection School Of Accountancy
We examine the relationship between active independent directors and earnings quality for U.S. firms. We construct measures that proxy for activeness of independent directors and find that the proportion of active independent directors is under half on average. Our finding shows that earnings quality increases with the percentage of active independent directors on the board. Once the active independent directors are separated out, the other independent directors do not have any effect on earnings quality. This finding supports the hypothesis that the activeness of independent directors is incrementally significant over just the proportion of independent directors for the quality of …
Short Sellers And Insider Trading Profitability: A Natural Experiment, Xia Chen, Qiang Cheng, Ting Luo, Heng Yue
Short Sellers And Insider Trading Profitability: A Natural Experiment, Xia Chen, Qiang Cheng, Ting Luo, Heng Yue
Research Collection School Of Accountancy
We examine the impact of short sellers on insider trading profitability using a natural experiment of a pilot program which relaxed short-selling constraints for randomly selected pilot stocks. We find that pilot firms experienced a significant decrease in insider trading profitability during the pilot program. The results are more pronounced for the pilot firms with poor information quality, and for the pilot firms without corporate restrictions on insider trading. Our evidence suggests that short sellers serve an important market disciplinary role by reducing insider trading profitability.
5 Ways To Turn The Pandemic Into An Opportunity For E-Commerce Disruption, Yuanto Kusnadi, Gary Pan
5 Ways To Turn The Pandemic Into An Opportunity For E-Commerce Disruption, Yuanto Kusnadi, Gary Pan
Research Collection School Of Accountancy
It is safe to say that the COVID-19 pandemic had upended life as we knew it. Schools embraced blended learning, brick-and-mortar businesses were shuttered, and mask wearing whilst at indoor venues remains the order of the day. Amid the chaos, one bright spot is the opportunity for e-commerce entrepreneurs to disrupt traditional businesses.
Developing Future-Ready Talent Through ‘Real-World’ Digital Projects, Gary Pan, Benjamin Huan Zhou Lee, Yuanto Kusnadi
Developing Future-Ready Talent Through ‘Real-World’ Digital Projects, Gary Pan, Benjamin Huan Zhou Lee, Yuanto Kusnadi
Research Collection School Of Accountancy
A close collaboration between university and industry partners through ‘real-world’ digital projects could help develop future-ready accountants
Regulatory Interventions In Response To Noncompliance With Mandatory Derivatives Disclosure Rules, Neil Bhattacharya, Hye Sun Chang, Raluca Chiorean
Regulatory Interventions In Response To Noncompliance With Mandatory Derivatives Disclosure Rules, Neil Bhattacharya, Hye Sun Chang, Raluca Chiorean
Research Collection School Of Accountancy
We investigate regulatory actions in response to violations of mandatory derivatives disclosure rules (SFAS 161) and the outcomes of these regulatory interventions using a hand-collected sample of derivatives disclosures. Derivatives are used by nearly two-thirds of U.S. nonfinancial firms, and they are one of the most complex types of financial contracts. Consequently, inadequate derivatives disclosures could pose significant challenges to financial statement users in assessing the risk and financial health of enterprises. First, we document that firms with high proprietary and agency costs are less likely to comply with SFAS 161. Next, by examining derivatives-related SEC comment letters, we further …
The Politics Of Bank Opacity, Heng Yue, Liandong Zhang, Qinlin Zhong
The Politics Of Bank Opacity, Heng Yue, Liandong Zhang, Qinlin Zhong
Research Collection School Of Accountancy
The distribution of power in the political system shapes the financial reporting opacity of banks. Specifically, banks located in states with senators on the Senate Banking Committee (BC senators) have greater abnormal loan loss provisions than banks in other states. The result is stronger for larger banks and banks with higher risk. In addition, BC senators have a negative effect on the likelihood of banks in their home states receiving enforcement actions, and, more importantly, this effect is stronger for more opaque banks. These findings suggest that politicians, regulators, and banks use opaque financial reporting to facilitate regulatory forbearance. Moreover, …
Institutional Cross-Ownership Of Peer Firms And Investment Sensitivity To Stock Price, Young Jun Cho, Holly I. Yang
Institutional Cross-Ownership Of Peer Firms And Investment Sensitivity To Stock Price, Young Jun Cho, Holly I. Yang
Research Collection School Of Accountancy
Theory suggests that stock price guides managers in corporate decisions as managers learn from price. We reason that cross-ownership lowers information processing costs and increases industry specialization, improving revelatory price efficiency (Bond, Edmans, and Goldstein 2012). Consistent with our expectations, we find that a firm’s investment-q sensitivity increases as its cross-ownership increases, suggesting that cross-ownership facilitates managerial learning from price and thus investment efficiency. We strengthen the causal inference by conducting a difference-in-differences analysis using financial institution mergers as an identification strategy. We also find that the increase in the investment-q sensitivity associated with cross-ownership is more pronounced for firms …
Major Government Customers And Loan Contract Terms, Daniel A. Cohen, Bin Li, Ningzhong Li, Yun Lou
Major Government Customers And Loan Contract Terms, Daniel A. Cohen, Bin Li, Ningzhong Li, Yun Lou
Research Collection School Of Accountancy
We examine the relation between the presence of U.S. government as a major customer and a supplier firm’s loan contract terms, using major corporate customers as a benchmark. We find that firms with major government customers are associated with fewer covenants and a lower likelihood of having performance pricing provisions in their loan contracts. In contrast, we do not find such associations for firms with major corporate customers. Further, we find no evidence that the existence of major government customers is related to the supplier firm’s loan spread, security, or maturity. We conjecture that lenders benefit from the stricter monitoring …
Insider Sales Under The Threat Of Short Sellers: New Hypothesis And New Tests, Kemin Wang, Rencheng Wang, K. C. John Wei, Bohui Zhang, Yi Zhou
Insider Sales Under The Threat Of Short Sellers: New Hypothesis And New Tests, Kemin Wang, Rencheng Wang, K. C. John Wei, Bohui Zhang, Yi Zhou
Research Collection School Of Accountancy
Using the Regulation SHO program as a quasi-experiment, we document that the threat of short selling has a negative effect on the volume of opportunistic insider selling and a positive effect on its profitability for each transaction. These effects are stronger among firms with higher litigation risk, greater media coverage, and executives who have more of their firms' stock-related holdings. We further find robust evidence when we extend the analyses to short selling deregulations in the Chinese and Hong Kong stock exchanges. Overall, our findings suggest that short sellers play a disciplinary role in opportunistic insider selling.
Analysts' Site Visits And Corporate Innovation, Qiang Cheng, Yutao Wang, Holly I. Yang, Zheyuan Zhang
Analysts' Site Visits And Corporate Innovation, Qiang Cheng, Yutao Wang, Holly I. Yang, Zheyuan Zhang
Research Collection School Of Accountancy
While prior studies examine whether analyst coverage affects corporate innovation, there is little research on the mechanism through which financial analysts affect corporate innovation. In this paper, we examine whether and how analysts’ questions about innovation affect corporate innovation activities and outcomes. Using a sample of corporate site visits in China, we find that when analysts ask questions about innovation during site visits, the firms invest more in research and development and file more patent applications in the future. This association is stronger when analysts have a greater information and monitoring role. In addition, consistent with knowledge diffusion between firms, …