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Articles 811 - 840 of 918

Full-Text Articles in Accounting

The Long-Term Effects Of Cross-Listing, Investor Recognition, And Ownership Structure On Valuation, Michael R. King, Dan Segal Jun 2009

The Long-Term Effects Of Cross-Listing, Investor Recognition, And Ownership Structure On Valuation, Michael R. King, Dan Segal

Research Collection School Of Accountancy

We show that investor recognition and bonding associated with a U.S. cross-listing are distinct effects using a sample of Canadian firms. In contrast to the post-listing decline documented in the literature, we find that cross-listed firms with a single class of shares enjoy a permanent increase in valuation if they attract and maintain investor recognition over time. Valuations of firms that fail to widen their U.S. shareholder base return to pre-listing levels within two years. Cross-listed firms with dual-class shares exhibit a permanent increase in valuation regardless of the level of U.S. investor holdings, consistent with firm-level bonding.


The Many Faces Of An Income Statement, Themin Suwardy, Teng Aun Khoo Jun 2009

The Many Faces Of An Income Statement, Themin Suwardy, Teng Aun Khoo

Research Collection School Of Accountancy

When a company an- have no problem understandingnounces its financial the "nature" of this cost. However,results, most analysts if we were to allocate staff costs byand media coverage function, one would have to classitendto focus on its in- fy staff costs into all the functionscome statement, usually with of the entity, eg the wages of an emyear-on-yearor other periodic com- ployee working in the marketing deparisonsof performance.


Audit Committees, Boards Of Directors, And Remediation Of Material Weaknesses In Internal Control, Beng Wee Goh Jun 2009

Audit Committees, Boards Of Directors, And Remediation Of Material Weaknesses In Internal Control, Beng Wee Goh

Research Collection School Of Accountancy

The Sarbanes-Oxley Act (SOX) was passed in 2002 in response to a series ofaccounting improprieties at well-known companies such as Enron and WorldCom.One important aspect of SOX is the internal control requirements. SOX section302 requires that management evaluate the effectiveness of disclosure and controlprocedures, report results of the evaluation, and indicate any “significant changes”in internal controls since the last 10-K or 10-Q report (Securities and ExchangeCommission [SEC] 2002). In addition, SOX section 404 requires that manage-ment’s assessment of the effectiveness of internal control over financial reportingand auditors’ attestation on management’s assessment be included in firms’ 10-Kreports (SEC 2003a). The heightened …


An Elusive Search For The Holy Grail Via Japan’S Lost Decade, Knowledge@Smu May 2009

An Elusive Search For The Holy Grail Via Japan’S Lost Decade, Knowledge@Smu

Knowledge@SMU

Why did the Wall Street crash of October 1929 cause the global economy to decline and stagnate over a long time? Till today, macroeconomists are still trying to answer what Ben Bernanke describes as the “Holy Grail” – an enlightened understanding of what went wrong. Richard Koo, author of “The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession”, attempts an explanation with the “balance sheet recession” concept, based on his observations in Japan, where companies try to pay down their debt on time, if not earlier.


Disclosure Of Management Guidance In Conference Calls: Materiality, Determinants And Consequences, Benjamin Lansford, Jimmy Kiat Bee Lee, Jennifer W. Tucker May 2009

Disclosure Of Management Guidance In Conference Calls: Materiality, Determinants And Consequences, Benjamin Lansford, Jimmy Kiat Bee Lee, Jennifer W. Tucker

Research Collection School Of Accountancy

The SEC advises firms to release all material information in their earnings announcement press release before their corresponding conference call. Until May 2009, the NYSE went further by explicitly prohibiting the disclosure of new material information in a conference call. However, we document that the S&P 500 firms, including those that are NYSE-listed, disclose a non-trivial amount of management guidance exclusively in their conference calls. Firms in challenging forecasting environments rely more on the conference call, probably because the call enables managers to “flesh out” the guidance. In contrast, firms with relatively low investor visibility and high litigation risk rely …


Do Direct Cash Flow Disclosures Help Predict Future Operating Cash Flows And Earnings?, Steven F. Orpurt, Yoonseok Zang May 2009

Do Direct Cash Flow Disclosures Help Predict Future Operating Cash Flows And Earnings?, Steven F. Orpurt, Yoonseok Zang

Research Collection School Of Accountancy

Motivated by recent FASB, IASB, and CFA Institute comments, we explore the predictive value of direct method cash flow disclosures. A primary stated purpose of the direct method is to better forecast future performance. To examine this purpose, we first document that direct method line items, such as cash received from customers, are not reliably estimable using income statements and either balance sheets or indirect method statements of cash flows. When these estimation (articulation) errors are included in cash flows and earnings forecasting models, forecasting performance significantly improves. In addition, employing a future ERC (FERC) methodology, we find evidence suggesting …


Cue Usage In Financial Statement Fraud Risk Assessments: Effects Of Technical Knowledge And Decision Aid Use, Jean Lin Seow Mar 2009

Cue Usage In Financial Statement Fraud Risk Assessments: Effects Of Technical Knowledge And Decision Aid Use, Jean Lin Seow

Research Collection School Of Accountancy

This paper investigates the effects of technical knowledge and decision aid use on financial statement fraud risk assessments made by directors and students. More extreme fraud risk assessments are made when participants identify and process larger (smaller) numbers of diagnostic (non-diagnostic) factors, with technical knowledge driving diagnostic factor identification. Significant decision aid-technical knowledge effects are also found; decision aid use has a detrimental effect on high-knowledge directors while improving performance in inexperienced, low-knowledge students. These results suggest that although decision aids can afford gains in performance in inexperienced users, they can have unintended and/or paradoxical behavioural effects on experienced users.


The Impact Of The Options Backdating Scandal On Shareholders, Gennaro Bernile, Gregg Jarrell Mar 2009

The Impact Of The Options Backdating Scandal On Shareholders, Gennaro Bernile, Gregg Jarrell

Research Collection Lee Kong Chian School Of Business

The revelation that scores of firms engaged in the illegal manipulation of stock options’ grant dates (i.e. “backdating”) captured much public attention. The evidence indicates that the consequences stemming from management misconduct and misrepresentation are of first-order importance in this context as shareholders of firms accused of backdating experience large negative, statistically significant abnormal returns. Furthermore, shareholders’ losses are directly related to firms’ likely culpability and the magnitude of the resulting restatements, despite the limited cash flow implications. And, tellingly, the losses are attenuated when tainted management of less successful firms is more likely to be replaced and relatively many …


National Corporate Governance And Corruption Prevention, Soo Ping Lim Feb 2009

National Corporate Governance And Corruption Prevention, Soo Ping Lim

Research Collection School Of Accountancy

No abstract provided.


Managing Information Technology Project Escalation And De-Escalation: An Approach-Avoidance Perspective, Gary Pan, Shan Ling Pan, Michael Newman Feb 2009

Managing Information Technology Project Escalation And De-Escalation: An Approach-Avoidance Perspective, Gary Pan, Shan Ling Pan, Michael Newman

Research Collection School Of Accountancy

This paper presents an integrated theoretical process model for identifying , describing, and analyzing the complex escalation and de-escalation phenomena in software development projects. The approach-avoidance theory is used to integrate core elements of various escalation theories into a holistic, explanatory framework for the two phenomena. We use a process model to identify antecedent conditions, sequences of events, critical incidents, and outcomes over the course of a project. The analysis also operates at multiple levels: project, work, and environment. This highlights the recursive interactions between project, organizational work activities, and their contexts during the software project development process. By conceiving …


The Role Of Accounting Information In The Sentiment-Price Relation, Kun-Chih Chen Jan 2009

The Role Of Accounting Information In The Sentiment-Price Relation, Kun-Chih Chen

Research Collection School Of Accountancy

This study reconciles inconsistent evidence on the sentiment-price relation in prior studies by explicitly considering the effects of sentiment on both investor judgments and risk preferences. Using the uncertainty in accounting information, I am able to disentangle these two effects of sentiment and investigate the causes of the variations in the sentiment-price relation. The results show that, under low uncertainty, the effect of sentiment on risk preferences dominates in the sentiment-price relation, such that a negative effect of sentiment on price is observed. In contrast, under high uncertainty, the effect is less negative and, in fact, becomes positive. This suggests …


Asking Tougher Questions In Tough Times, Irving Low, Claudia Eio, See Liang Foo, Yang Hoong Pang, Kwong Sin Leong, John Joseph Williams Jan 2009

Asking Tougher Questions In Tough Times, Irving Low, Claudia Eio, See Liang Foo, Yang Hoong Pang, Kwong Sin Leong, John Joseph Williams

Research Collection School Of Accountancy

The recent wave of corporate governance disasters globally raises many eyebrows and burning questions whether audit committees (ACs) are doing the right things to effectively discharge their roles and responsibilities. To further test the integrity and reputation of the Singapore market as a listing gateway for foreign companies in turbulent times like these, the headlines are also reporting a spate of suspected and actual corporate fraud and scandals involving China-based, Singapore listed companies (commonly referred to as “S-chips”). Many angry investors and the public question whether ACs and independent directors are doing their jobs.


Financial Risk Management: Lessons From The Current Crisis ... So Far, Knowledge@Smu Dec 2008

Financial Risk Management: Lessons From The Current Crisis ... So Far, Knowledge@Smu

Knowledge@SMU

The current economic recovery looks long and difficult, and makes providing for an ageing population an even greater challenge. Will economies rebound to provide for the health care needs of retirees? At a conference organised in November 2008 by the Sim Kee Boon Institute’s newly launched Center for Silver Security at the Singapore Management University, Todd Groome of the International Monetary Fund spoke on how the ongoing financial crisis could shape retirement risk.


Profitability Analysis Of Chinese Listed Firms: 1992-2004, Jianjun Niu, Heng Yue, Guohua Jiang Dec 2008

Profitability Analysis Of Chinese Listed Firms: 1992-2004, Jianjun Niu, Heng Yue, Guohua Jiang

Research Collection School Of Accountancy

This research collects and analyses the profitability data of Chineselisted companies from 1992 to 2004. Results show that, on average, theprofitability of Chinese listed companies has declined over the period. Post-IPOearnings also exhibit a downward trend. A further analysis reveals that changes inlisted firms’ profitability ratio follow a strong mean reversion pattern.


Thierry Apoteker On The Threat Of Global Stagflation, Knowledge@Smu Nov 2008

Thierry Apoteker On The Threat Of Global Stagflation, Knowledge@Smu

Knowledge@SMU

Managing director Thierry Apoteker and his team at French company T-A-C (Thierry Apoteker Consulting) have correctly predicted many of the economic shocks that the world has seen in the past three months. In a recent presentation hosted by the International Trading Institute, Singapore Management University, Apoteker made a convincing case for worldwide inflation and recession, known as stagflation.


Fair-Value Accounting Provides Much Needed Transparency In Dislocated Markets, Knowledge@Smu Nov 2008

Fair-Value Accounting Provides Much Needed Transparency In Dislocated Markets, Knowledge@Smu

Knowledge@SMU

In the current global financial turmoil, more transparency is needed, not less, say Singapore Management University professor of accounting Andrew Lee and accounting lecturer Lim Chu Yeong. While some critics argue that fair-value accounting is partly to blame and should be suspended, in a recent commentary Lee and Lim made the case for fair-value accounting as having an important role to play in providing timely and relevant information to investors.


Retail Investors And Structured Products: A Case Of 'Buyer Beware'!, Knowledge@Smu Nov 2008

Retail Investors And Structured Products: A Case Of 'Buyer Beware'!, Knowledge@Smu

Knowledge@SMU

Across the globe, buyers of structured products linked to Lehman Brothers have seen their investments wiped out. In Singapore, the MAS (Monetary Authority of Singapore) has appointed an independent committee to oversee the review and resolution of customer complaints. Tan Chong Hui, professor of quantitative finance at Singapore Management University, has this advice especially for retail investors of structured products: caveat emptor or ‘buyer beware’.


Money Largely Accounts For Increased Unemployment During Stagflation, Shows A Recent Study, Knowledge@Smu Oct 2008

Money Largely Accounts For Increased Unemployment During Stagflation, Shows A Recent Study, Knowledge@Smu

Knowledge@SMU

Is there a relation between money, measured by inflation or interest rates, and unemployment? According to Aleksander Berensten, Guido Menzio and Randall Wright -- co-authors of a recent paper on “Inflation and Unemployment in the Long Run” -- there is a strong positive relation. Wright, who is professor of economics at Wharton, presented a seminar based on their paper at the Singapore Management University’s School of Economics.


Audit Profile: The Auditor-General's Office Of Singapore, Soo Ping Lim Oct 2008

Audit Profile: The Auditor-General's Office Of Singapore, Soo Ping Lim

Research Collection School Of Accountancy

No abstract provided.


Making Sense Of Fair-Value Accounting, Chu Yeong Lim, Tong Kin Andrew Lee Oct 2008

Making Sense Of Fair-Value Accounting, Chu Yeong Lim, Tong Kin Andrew Lee

Research Collection School Of Accountancy

No abstract provided.


Digital Storytelling Engages Tech-Savvy Accounting Students, Knowledge@Smu Sep 2008

Digital Storytelling Engages Tech-Savvy Accounting Students, Knowledge@Smu

Knowledge@SMU

Singapore has ambitions to become a global hub for `digital economy’ services. In September 2008, Singapore’s National Library Board, National Book Development Council and The Arts House are hosting the inaugural Asian Digital Storytelling Congress, Beyond Words 2008. Themin Suwardy, accountancy professor and associate dean at Singapore Management University, is one of the key speakers at the congress. His topic: Academic Learning through Digital Storytelling.


Analyst Coverage And The Cost Of Raising Equity Capital: Evidence From Underpricing Of Seasoned Equity Offerings, Robert M. Bowen, Xia Chen, Qiang Cheng Sep 2008

Analyst Coverage And The Cost Of Raising Equity Capital: Evidence From Underpricing Of Seasoned Equity Offerings, Robert M. Bowen, Xia Chen, Qiang Cheng

Research Collection School Of Accountancy

Theorists have long recognized that information asymmetry among investors adversely affects the cost of raising equity capital (e.g., Diamond and Verrecchia 1991). When there is information asymmetry, relatively uninformed investors are reluctant to trade because of higher potential loss from transacting with informed investors (e.g., Glosten and Milgrom 1985; Kyle 1985). To trade, uninformed investors demand compensation for the risks of trading with informed investors (O’Hara 2003). In the case of issuing new equity, firms must issue shares at a discount to overcome the reluctance of uninformed investors. Such discounting leads to smaller proceeds to the firm and a higher …


Earnings Restatements, Changes In Ceo Compensation, And Firm Performance, Qiang Cheng, David Farber Sep 2008

Earnings Restatements, Changes In Ceo Compensation, And Firm Performance, Qiang Cheng, David Farber

Research Collection School Of Accountancy

Prior research finds that earnings restatements are linked to CEOs' excessive option-based compensation and equity holdings. In this paper, we investigate whether firms that experience earnings restatements recontract with their CEOs to reduce their option-based compensation and if so, whether this leads to improved firm performance. Based on 289 restatement firms over the period 1997–2001, we find that the proportion of CEOs' compensation in the form of options declines significantly in the two years following the restatement. Furthermore, we document that this reduction is accompanied by a decrease in the riskiness of investments, as reflected in lower stock return volatility …


The Asian Banker: From Trade Journal To Industry Benchmark Setter, Knowledge@Smu Aug 2008

The Asian Banker: From Trade Journal To Industry Benchmark Setter, Knowledge@Smu

Knowledge@SMU

Emmanuel Daniel is founding president and editor-in-chief of The Asian Banker, one of the region’s leading consultancies in financial services research, benchmarking and intelligence. A trade publisher should provide leadership and not be a follower of the industry that it covers, believes Daniel, who spoke recently at a Masters Seminar on benchmarking and measuring IT performance in banks organised by the School of Information Systems, Singapore Management University.


Does Earnings Quality Affect Information Asymmetry: Evidence From Trading Costs, Nilabhra Bhattacharya, Hemang Desai, Kumar Venkataraman Aug 2008

Does Earnings Quality Affect Information Asymmetry: Evidence From Trading Costs, Nilabhra Bhattacharya, Hemang Desai, Kumar Venkataraman

Research Collection School Of Accountancy

The adverse consequences of poor earnings quality have been the subject of significant debate among academics, practitioners and regulators. However, the empirical evidence on pricing implications of earnings quality is sparse and controversial. We examine one potential consequence of poor earnings quality - its impact on information asymmetry. We document that poor earnings quality increases the adverse selection risk as manifested in trading costs and lowers liquidity in financial markets. Both innate and discretionary components of earnings quality contribute significantly to information asymmetry. Further, poor earnings quality exacerbates information asymmetry around earnings announcements, especially for firms where earnings represent the …


Herd Behaviour In Financial Markets: Do Traders Follow The Crowd Or Do Their Own Thing?, Knowledge@Smu Jul 2008

Herd Behaviour In Financial Markets: Do Traders Follow The Crowd Or Do Their Own Thing?, Knowledge@Smu

Knowledge@SMU

In financial markets, what part of a trader’s action is simply “following the crowd” or herding, and how much is based on the trader’s own information? Herding has been shown to decrease the stability and efficiency of markets, hence the interest in these behaviours. Marco Cipriani (Asian Division, IMF Institute) and Antonio Guarino (University College London) studied herd behaviour in a laboratory setting involving financial market professionals. Cipriani presented a co-authored IMF working paper on herd behaviour in financial markets at a recent seminar at the Singapore Management University. --------------------------------------------------------------------------------


Cross-Country Analysis Of Auditor Specialization Premium: Effect Of Legal, Extra-Legal And Political Environments, Sirinidhi Bin, M. Hossain, Chee Yeow Lim Jul 2008

Cross-Country Analysis Of Auditor Specialization Premium: Effect Of Legal, Extra-Legal And Political Environments, Sirinidhi Bin, M. Hossain, Chee Yeow Lim

Research Collection School Of Accountancy

Previous literature has provided mixed evidence of a premium in audit fee for industry-specialist auditors in US and other developed countries. In this cross-country study spanning twelve non-US countries, we provide evidence of such a premium in the international context, implying that specialist auditors provide a higher level of investor assurance than non-specialists. Further, we show that the average audit fee in countries with effective legal, extra-legal and political institutions is higher but the specialization premium is lower than in other countries. We interpret this finding as evidence that while effective institutions increase the demand for average level of audit …


Can Monetary Policy Help To Stabilise Asset Prices?, Knowledge@Smu Jun 2008

Can Monetary Policy Help To Stabilise Asset Prices?, Knowledge@Smu

Knowledge@SMU

Should central banks use monetary policy to stabilise asset prices, particularly home and equity prices? Stefan Gerlach, professor of monetary economics, Johann Wolfgang Goethe University of Frankfurt, points out that no central bank has had lowering home prices as one of its policy goals. Gerlach spoke recently at an Economics and Statistics Seminar at the Singapore Management University on how residential property and equity prices, inflation and economic activity responded to monetary policy shocks in 17 countries from 1986 to 2006.


A Survey Of Audit Committee Members Of Public Listed Companies In Singapore, Kwong Sin Leong, Themin Suwardy, Yang Hoong Pang Jun 2008

A Survey Of Audit Committee Members Of Public Listed Companies In Singapore, Kwong Sin Leong, Themin Suwardy, Yang Hoong Pang

Research Collection School Of Accountancy

This report summarises the results of the survey of audit committee members of public listed companies in Singapore commissionedby the Audit Committee Guidance Committee (ACGC). Funding for this project was provided by School of Accountancy, Singapore Management University. The sampling frame was locally-domiciled audit committee members of publicly listed companies in Singapore. A sample size of 711 would have been adequate to achieve a 95% confidence level, and a 3% confidence interval. The survey was sent out to 873 names and addresses provided by the Accounting and Corporate Regulatory of Singapore on 14 March2008, with a reminder on 4 April …


Audit Partner Tenure, Audit Firm Tenure, And Discretionary Accruals: Does Long Auditor Tenure Impair Earnings Quality?, Chih-Ying Chen, Chan-Jane Lin, Yu-Chen Lin Jun 2008

Audit Partner Tenure, Audit Firm Tenure, And Discretionary Accruals: Does Long Auditor Tenure Impair Earnings Quality?, Chih-Ying Chen, Chan-Jane Lin, Yu-Chen Lin

Research Collection School Of Accountancy

Mandatory audit partner relation has been adopted in some countries while audit firm rotation is still being debated in many places. Most of the extant research on the relation between auditor tenure and earnings quality provides evidence at the audit firm level. However, since audit firm tenure is correlated with partner tenure and audit firm rotation is more costly than partner rotation, it is important to know whether earnings quality is related to audit firm tenure, partner tenure, or both. We investigate this issue using a sample of Taiwanese companies for which the audit report must be signed by two …