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Full-Text Articles in Accounting

The Role Of Convex Equity Incentives In Managers’ Forecasting Decisions, Young Jun Cho, David Tsui, Holly I. Yang Apr 2021

The Role Of Convex Equity Incentives In Managers’ Forecasting Decisions, Young Jun Cho, David Tsui, Holly I. Yang

Research Collection School Of Accountancy

Prior literature suggests that voluntary disclosures of forward-looking information tend to lead to capital market benefits, but these disclosures may also result in negative capital market consequences if subsequent performance falls below expectations. We, therefore, hypothesize that convex equity incentives, which reward managers for stock price gains while limiting their exposure to losses, should promote greater voluntary forward-looking disclosure. Consistent with our hypothesis, we find a significantly positive association between equity incentive convexity and forecast issuance and frequency. We also find that the positive association is more pronounced for firms with higher sales volatility and managers with shorter tenure, in …


An Exploration Into Key Roles In Making Project-Based Learning Happen: Insights From A Case Study Of A University, Gary Pan, Poh Sun Seow, Shankararaman, Venky, Kevin Koh Apr 2021

An Exploration Into Key Roles In Making Project-Based Learning Happen: Insights From A Case Study Of A University, Gary Pan, Poh Sun Seow, Shankararaman, Venky, Kevin Koh

Research Collection School Of Accountancy

Purpose: One of the main obstacles facing project-based learning (PBL) adoption relates to a lack of understanding by teachers and students in the roles they are required to play in the learning process. This study aims to address this obstacle, so as to better promote regular adoption of PBL pedagogy in educational institutions. Design/methodology/approach: The strategy was to undertake an in-depth case study of PBL courses taught in UNI-X’s undergraduate curriculum. The case study approach is particularly appropriate for this exploratory study because it allows to capture the organizational dynamics of the phenomenon better and also its ability to explain …


Forensic Analytics Using Cluster Analysis: Detecting Anomalies In Data, Clarence Goh, Benjamin Lee, Gary Pan, Poh-Sun Seow Apr 2021

Forensic Analytics Using Cluster Analysis: Detecting Anomalies In Data, Clarence Goh, Benjamin Lee, Gary Pan, Poh-Sun Seow

Research Collection School Of Accountancy

Cluster analysis is a data analytics technique that can help forensic accountants effectively detect anomalies in complex financial datasets. This article provides a description of clustering analysis, discusses how it can be implemented to detect anomalies in data, and illustrates its use through a worked example using the Tableau software.


Happy Analysts, Ole-Kristian Hope, Congcong Li, An-Ping Lin, Maryjane Rabier Apr 2021

Happy Analysts, Ole-Kristian Hope, Congcong Li, An-Ping Lin, Maryjane Rabier

Research Collection School Of Accountancy

This paper is the first to investigate the role of work-life balance in financial analysts' performance and career advancement. Using a large sample of Glassdoor reviews by financial analysts, we find a significant non-linear relation between perceived work-life balance and analyst performance and analyst career advancement. Specifically, when perceived work-life balance is relatively low, an increase in work-life balance is associated with better analyst performance and career advancement; however, when perceived work-life balance is already high, a further increase in work-life balance is associated with worse analyst performance and career advancement.


Enhancing Cultural Intelligence And Digital Literacy In Accounting Education: Insights From A University’S Global Student Consulting Programme, Clarence Goh, Yuanto Kusnadi, Gary Pan, Poh Sun Seow Apr 2021

Enhancing Cultural Intelligence And Digital Literacy In Accounting Education: Insights From A University’S Global Student Consulting Programme, Clarence Goh, Yuanto Kusnadi, Gary Pan, Poh Sun Seow

Research Collection School Of Accountancy

Recent literature has advocated for the use of project based learning to engage students in active learning. This study examines how students’ learning of cultural intelligence and digital literacy are enhanced through an overseas project-based learning (PBL) programme at a Singapore University (UNIS), called the UNIS-XO pedagogy. Specifically, this study provides a framework through which students, faculty members, and industry partner can collaborate through consulting programs with the aim to provide feasible recommendations to the clients. Our findings suggest that an experiential PBL with an overseas client is an important learning experience through which students can strengthen their digital literacy …


Covid-19 Pandemic And Opportunities For Digitalisation Of Smes, Yuanto Kusnadi, Gary Pan Mar 2021

Covid-19 Pandemic And Opportunities For Digitalisation Of Smes, Yuanto Kusnadi, Gary Pan

Perspectives@SMU

The Covid-19 pandemic has brought about disruptions in all sectors of economy. With lockdown being implemented in most of the countries around the world, it has necessitated changes in the business models of SMEs. A glaring area of business opportunity focuses on online business. For instance, retailers who do not yet have an online presence or have not been paying much attention to conducting sales online were caught off-guard during the circuit breaker period which has resulted in decreased footfall and plummeting sales in most physical stores. Therefore, having an online retail presence has become critical for businesses, as they …


Partnership Management Can Enhance Universities’ Project-Based Learning, Clarence Goh, Gary Pan Mar 2021

Partnership Management Can Enhance Universities’ Project-Based Learning, Clarence Goh, Gary Pan

Research Collection School Of Accountancy

With project-based learning, students find cross-disciplinary solutions to realworld problems. Articulated goals and continuous feedback ensure this a win-win exercise for industry and academia.


Corporate In-House Tax Departments, Xia Chen, Qiang Cheng, Travis Chow, Yanju Liu Mar 2021

Corporate In-House Tax Departments, Xia Chen, Qiang Cheng, Travis Chow, Yanju Liu

Research Collection School Of Accountancy

In-house human capital tax investment is a significant input to a firm's tax decisions. Yet, due to the lack of data on corporate in-house tax departments, there is little empirical evidence on how tax departments are associated with tax planning and compliance outcomes. We expect the size of tax departments to be positively associated with the effectiveness of tax planning and compliance. Using hand-collected data on the number of corporate tax employees in S&P 1500 firms over the 2009–2014 period, we find that firms with larger tax departments are associated with lower and less volatile cash effective tax rates. Furthermore, …


Business Combinations Under Common Control (Part 1), Pearl Hock-Neo Tan, Chu Yeong Lim, Tracey Chunqi Zhang Mar 2021

Business Combinations Under Common Control (Part 1), Pearl Hock-Neo Tan, Chu Yeong Lim, Tracey Chunqi Zhang

Research Collection School Of Accountancy

In a business combination under common control (BCUCC) the same party (or parties) ultimately controls the combining entities both before and after the business combination and this control is not transitory. BCUCC is not governed by any International Financial Reporting Standard (IFRS) issued by the International Accounting Standards Board (IASB). The IASB is undertaking a research project in response to stakeholder feedback of the diversity in accounting practice and released a Discussion Paper (DP) in November 2020 that sets out the Board’s preliminary views on reporting requirements. Our paper contributes to the discussion by proposing a contextual approach in determining …


Do Innovative Firms Communicate More? Evidence From The Relation Between Patenting And Management Guidance, Sterling Huang, Jeffrey Ng, Tharindra Ranashinghe, Mingyue Zhang Feb 2021

Do Innovative Firms Communicate More? Evidence From The Relation Between Patenting And Management Guidance, Sterling Huang, Jeffrey Ng, Tharindra Ranashinghe, Mingyue Zhang

Research Collection School Of Accountancy

Successful innovations could induce more disclosure if the information asymmetry between the firm and its investors about post-innovation outcomes leads investors to demand more information. However, such innovations also likely entail greater proprietary cost concerns, which deter disclosure. This paper uses patent grants to examine the effect of innovation success on management guidance behavior. We find that more management guidance follows patent grants, suggesting that despite disclosure cost concerns, firms with successful innovations do respond to information demand. This association is stronger after enactment of Regulation Fair Disclosure and for firms with greater institutional investor ownership, further highlighting the role …


Mitigating Financial Fraud Risk With Data Analytics, Clarence Goh, Gary Pan Feb 2021

Mitigating Financial Fraud Risk With Data Analytics, Clarence Goh, Gary Pan

Research Collection School Of Accountancy

The risks associated with financial fraud that modern CFOs face today is particularly high. The same report examined Accounting and Auditing Enforcement Releases (AAERs) issued by the Securities and Exchange Commission (SEC) in the US from 2014 to 2019 and found that while the SEC frequently charged the person directly responsible for perpetuating the financial fraud, the CFO was among the most commonly charged employees. Data analytics techniques can play an important role in mitigating the risk of financial fraud for CFOs.


Cryptocurrency Framework, Pearl Hock-Neo Tan, Tracey Chunqi Zhang Feb 2021

Cryptocurrency Framework, Pearl Hock-Neo Tan, Tracey Chunqi Zhang

Research Collection School Of Accountancy

An interesting puzzle exists with respect to the accounting treatment of cryptocurrencies. The announcement in October 2020 that PayPal was launching its own cryptocurrency service suggests growing acceptability. However, there is no standard that deals with them specifically. We review the classification appropriateness for cryptocurrencies under IAS 2, IAS 7, IFRS 9, and IAS 38. There is a lack of a consensus on the accounting classification and measurement of cryptocurrencies. A framework is needed to classify cryptocurrencies by underlying attributes and to require the appropriate accounting treatment for each classification.


Examining The Phenomenon Of Rounding In Analysts’ Eps Forecasts: Evidence From Singapore, Clarence Goh Feb 2021

Examining The Phenomenon Of Rounding In Analysts’ Eps Forecasts: Evidence From Singapore, Clarence Goh

Research Collection School Of Accountancy

Prior studies have documented the phenomenon of rounding of analysts' earnings per share (EPS) forecasts in the USA. From the outset, it is unclear if analysts following Singapore firms also similarly engage in the rounding of their EPS forecasts. This study aims to investigate the extent to which analysts engage in rounding of EPS forecasts of firms listed on the Singapore Exchange.


Moral Hazard And The Market-Based Method: Does Using Renewable Energy Attributes In Emissions Reporting Affect Corporate Emissions Performance?, Francisco Ascui, Matthew Brander, Theodor Florian Cojoianu, Qian (Jan) Li Feb 2021

Moral Hazard And The Market-Based Method: Does Using Renewable Energy Attributes In Emissions Reporting Affect Corporate Emissions Performance?, Francisco Ascui, Matthew Brander, Theodor Florian Cojoianu, Qian (Jan) Li

Research Collection College of Integrative Studies

An increasingly widespread accounting practice for electricity (scope 2) emissions, known as the ‘market-based method’, is problematic as it allows companies to use purchased renewable energy attributes (REAs) to report lower emissions, which therefore no longer reflect the actual location-based electricity generation emissions resulting from the company's electricity consumption. Using REAs therefore may create a moral hazard, as companies using these arrangements are insulated from the consequences of their actions and may thus have less incentive to genuinely reduce their emissions. We construct a year-on-year matched sample of firms using/not using REAs (2,716 firms with 12,700 firm-year observations from 2006 …


Accounting Quality And Debt Concentration, Ningzhong Li, Yun Lou, Clemens A. Otto, Regina Wittenberg-Moerman Jan 2021

Accounting Quality And Debt Concentration, Ningzhong Li, Yun Lou, Clemens A. Otto, Regina Wittenberg-Moerman

Research Collection School Of Accountancy

We examine the relation between accounting quality and debt concentration in corporate capital structures (i.e., firms’ tendency to rely predominantly on only a few types of debt). Motivated by theoretical and empirical research that supports a strong link between debt concentration and creditors’ coordination costs and the importance of accounting quality in reducing these costs, we hypothesize that firms with higher accounting quality have less concentrated debt structures. Measuring accounting quality with a comprehensive index based on the occurrence of material internal control weaknesses, accounting restatements, SEC AAERs, and firms’ reliance on small auditors, we find that higher accounting quality …


How Do Accounting Practices Spread? An Examination Of Law Firm Networks And Stock Option Backdating, Patricia M. Dechow, Samuel T. Tan Jan 2021

How Do Accounting Practices Spread? An Examination Of Law Firm Networks And Stock Option Backdating, Patricia M. Dechow, Samuel T. Tan

Research Collection School Of Accountancy

We hypothesize that one way accounting practices spread is through law firm connections. We investigate this prediction by examining companies that avoided reporting compensation expense by engaging in stock option backdating. We hypothesize that executives engaged in backdating because they were desensitized to its inappropriateness when they learned through their legal counsel that other companies were engaging in this practice. We identify backdating companies through backdating-related restatements of earnings. Using network analysis, we find that backdating companies are highly connected with other backdating companies via shared law firms. Logistic regressions reveal that the odds of a company backdating are 53 …


How To Prepare Young Finance & Accounting Professionals For Digital Revolution, Clarence Goh, Gary Pan, Chi Kwan Yuen Dec 2020

How To Prepare Young Finance & Accounting Professionals For Digital Revolution, Clarence Goh, Gary Pan, Chi Kwan Yuen

Research Collection School Of Accountancy

Automation will alter the work of accountants in the coming years. However, accountants will always have a central role to play in business. In order to continue to thrive, the profession will need to position itself to capitalise on the opportunities that automation will bring. This involves identifying areas of work which computers cannot automate, and to focus on deepening contributions in these areas. This calls for a radical transformation of accounting education in order to equip accounting graduates with relevant work skills that will allow students to navigate a future workplace where computers and technology are the norm.


Contracting And Reporting Conservatism Around A Change In Fiduciary Duties, Daniel Bens, Sterling Huang, Liang Tan, Wan Wongsumwai Dec 2020

Contracting And Reporting Conservatism Around A Change In Fiduciary Duties, Daniel Bens, Sterling Huang, Liang Tan, Wan Wongsumwai

Research Collection School Of Accountancy

We exploit an influential 1991 Delaware court ruling to examine the impact of changes in managerial fiduciary duties on firms’ accounting and contracting choices. The ruling expanded directors’ fiduciary duties in favor of creditors and away from shareholders for a specific group of firms. Using a hand-collected sample of debt contracts around the ruling date, we find that, following the ruling, debt contracts of affected firms rely less on the use of income escalators (provisions in loan contracts which require changes in net worth to reflect losses in full, but only partially for gains and profits) and other conservative adjustments …


International Tax Competition And Foreign Direct Investment In The Asia-Pacific Region: A Panel Data Analysis, Chengwei Xu, Alfred M. Wu Dec 2020

International Tax Competition And Foreign Direct Investment In The Asia-Pacific Region: A Panel Data Analysis, Chengwei Xu, Alfred M. Wu

Research Collection School Of Accountancy

Purpose: The purpose of this study is to investigate how a country's competitive tax policy influences its inward foreign direct investments (FDI) in the Asia–Pacific region, even when given particular constraints (e.g., population, public governance, skilled labor, and so on) exist. Design/methodology/approach: The paper uses the system GMM estimation approach to test the hypothesis. Data on FDI, corporate income tax, and various confounding factors were drawn from Ernst and Young's worldwide corporate tax guide, the World Bank, and other sources to create a panel of 28 economies over the period 2000–2016. Findings: The present research confirms the negative association between …


Feedback On The International Accounting Standards Board Discussion Paper On Business Combinations—Disclosures, Goodwill And Impairment, Pearl Hock-Neo Tan Dec 2020

Feedback On The International Accounting Standards Board Discussion Paper On Business Combinations—Disclosures, Goodwill And Impairment, Pearl Hock-Neo Tan

Research Collection School Of Accountancy

No abstract provided.


Applying Visual Analytics To Fraud Detection Using Benford's Law, Clarence Goh Oct 2020

Applying Visual Analytics To Fraud Detection Using Benford's Law, Clarence Goh

Research Collection School Of Accountancy

Benford's law has been examined as a useful tool for detecting potential accounting fraud. In this article, I provide an introduction to Benford's law and examine how the first digit, second digit, and first-two digits tests in Benford's law can be employed to detect potential accounting fraud. In addition, I also highlight, through a worked example, how Tableau, a visual analytics tool, can be used to perform Benford's law's first-digit test to detect potential fraud.


Politically Connected Governments, Christine Cuny, Jungbae Kim, Mihir N. Mehta Sep 2020

Politically Connected Governments, Christine Cuny, Jungbae Kim, Mihir N. Mehta

Research Collection School Of Accountancy

This paper examines the consequences of powerful political connections for local governments. We find that governments located within the constituencies of, and thus connected to, powerful congressional members reduce their stewardship over public resources. Using plausibly exogenous declines in the power of congressional representation, we show that the effect is causal. To better understand why connected local governments can reduce stewardship, we study electoral characteristics. Our findings suggest that the increased resources that come with powerful congressional representation allow local‐government officials to reduce stewardship without material adverse effects on their reelection prospects. In sum, we provide evidence of a cost …


Gdp Growth Incentives And Earnings Management: Evidence From China, Xia Chen, Qiang Cheng, Ying Hao, Qiang Liu Sep 2020

Gdp Growth Incentives And Earnings Management: Evidence From China, Xia Chen, Qiang Cheng, Ying Hao, Qiang Liu

Research Collection School Of Accountancy

Using data from China, we examine whether and how the incentive to boost GDP growth at the government level affects earnings management at the firm level. We find that firms in provinces with GDP growth lower than the national level or the average of the adjacent provinces are more likely to engage in earnings management than firms in other provinces. Specifically, they are more likely to inflate revenues, overproduce, and delay asset impairment losses. The aggregate earnings management induced by GDP growth incentives accounts for about 0.5% of GDP. The results are stronger for local state-owned enterprises, in provinces with …


Should Non-Audit Service Prohibitions Be Further Strengthened In Singapore?, Clarence Goh, Gary Pan, Chi Kwan Yuen Sep 2020

Should Non-Audit Service Prohibitions Be Further Strengthened In Singapore?, Clarence Goh, Gary Pan, Chi Kwan Yuen

Research Collection School Of Accountancy

The Enron scandal, one of the largest accounting frauds seen over the last three decades, led the company to file for bankruptcy in 2001. The bankruptcy filing was the largest in American history at the time, with total losses estimated at US$74 billion.


Discretionary Dissemination On Twitter, Richard M. Crowley, Wenli Huang, Hai Lu Aug 2020

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

Research Collection School Of Accountancy

Using an unsupervised machine learning approach to analyze 12.8 million tweets posted by S&P 1500 firms from 2012 to 2016, we find that firms tweet more financial information around significantly negative or positive earnings announcements or accounting filings. Specifically, we observe a symmetric U-shaped relation between the number of financial tweets and the materiality of accounting information events. This relation is consistent with the theoretical prediction in Hummel et al. (2018) which assumes that managers are sensitive to their firm’s fundamental value. We document that this relation also holds for hyperlink usage in tweets about financial information around important events, …


The Effects Of Mifid Ii On Sell-Side Analysts, Buy-Side Analysts, And Firms, Bingxu Fang, Ole-Kristian Hope, Zhongwei Huang, Rucsandra Moldovan Aug 2020

The Effects Of Mifid Ii On Sell-Side Analysts, Buy-Side Analysts, And Firms, Bingxu Fang, Ole-Kristian Hope, Zhongwei Huang, Rucsandra Moldovan

Research Collection School Of Accountancy

This paper provides early but broad empirical evidence on MiFID II, which requires investment firms to unbundle investment research from other costs they charge to clients. Employing difference-in-differences matched-sample research designs with firm fixed effects, we find a decrease in the number of sell-side analysts covering European firms after MiFID II implementation, particularly for firms that are less important to the sell-side. However, research quality improves; specifically, individual analyst forecasts are more accurate and stock recommendations garner greater market reactions. In addition, sell-side analysts seem to cater more to the buy-side after MiFID II by providing industry recommendations along with …


Cross-Country Differences In The Effect Of Political Connections On Stock Price Informativeness, Yuanto Kusnadi, Bin Srinidhi Aug 2020

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

Research Collection School Of Accountancy

Using an international sample of firms from 28 countries, we document that there exists a negative relationship between political connections and the informativeness of stock price, as measured by idiosyncratic volatility (IV). This finding is robust to alternative regression specifications, sub-samples analyses, and concerns related to endogeneity. A more detailed analysis shows that out of the different types of possible connections, the connectedness of the owners is the primary driver of this result. Further, the negative association is only significant for firms in countries characterized by low institutional quality (corrupted countries, countries with low access to external equity markets, and …


Differences In The Reliability Of Fair Value Hierarchy Measurements: A Cross-Country Study, Chu Yeong Lim, Gary Pan, Kevin Ow Yong Aug 2020

Differences In The Reliability Of Fair Value Hierarchy Measurements: A Cross-Country Study, Chu Yeong Lim, Gary Pan, Kevin Ow Yong

Research Collection School Of Accountancy

Prior research suggests there are significant differences in how investors perceive the reliability of fair values. An unaddressed question in this stream of research is whether cross-country differences in institutional factors can mediate differences in reliability for the fair value hierarchy measurements. We contribute to the research on fair value accounting by examining the impact of institutional factors toward the perceived reliability of fair value measurements in an international context. Based on an international sample of banks across twenty different countries, we find that the probability of crash risk is lower among countries with better financial development infrastructure, greater level …


Insights Into Accounting Education In A Covid-19 World: Singapore, Themin Suwardy Aug 2020

Insights Into Accounting Education In A Covid-19 World: Singapore, Themin Suwardy

Research Collection School Of Accountancy

The author reported on COVID-19 in accounting education in Singapore. As part of this compilation of personal reflections from 66 contributors on the impact of, and responses to, COVID-19 in accounting education in 45 different countries around the world. It reveals a commonality of issues, and a variability in responses, many positive outcomes, including the creation of opportunities to realign learning and teaching strategies away from the comfort of traditional formats, but many more that are negative, primarily relating to the impact on faculty and student health and well-being, and the accompanying stress. It identifies issues that need to be …


Does Media Exposure Affect Financial Reporting Quality Through Auditors?, Steven F. Cahan, Chen Chen, Rencheng Wang Jul 2020

Does Media Exposure Affect Financial Reporting Quality Through Auditors?, Steven F. Cahan, Chen Chen, Rencheng Wang

Research Collection School Of Accountancy

We examine whether the media has an indirect corporate governance effect on financial reporting quality (FRQ) that operates through auditors. This occurs because greater media coverage can magnify an auditor's business risk by exposing the auditor to more potential litigation and reputation damage if an audit failure occurs. We use a path analysis to examine the direct and indirect channels of media corporate governance. We find a positive association between media coverage and FRQ that is mediated by audit fees, and the results are stronger for firms with greater incentives to engage in earnings manipulation. In contrast, we find no …