Open Access. Powered by Scholars. Published by Universities.®
- Discipline
-
- Accounting (352)
- Social and Behavioral Sciences (54)
- Business Law, Public Responsibility, and Ethics (53)
- Asian Studies (43)
- International and Area Studies (43)
-
- Finance and Financial Management (17)
- Human Resources Management (17)
- Portfolio and Security Analysis (11)
- Taxation (9)
- Communication (6)
- Technology and Innovation (6)
- Business and Corporate Communications (5)
- Law (4)
- Entrepreneurial and Small Business Operations (3)
- International Business (3)
- Social Media (3)
- Strategic Management Policy (3)
- Accounting Law (2)
- Economics (2)
- Gender, Race, Sexuality, and Ethnicity in Communication (2)
- Leadership Studies (2)
- Physical Sciences and Mathematics (2)
- Public Affairs, Public Policy and Public Administration (2)
- Arts and Humanities (1)
- Benefits and Compensation (1)
- Categorical Data Analysis (1)
- Critical and Cultural Studies (1)
- Economic Policy (1)
- Keyword
-
- Corporate governance (23)
- Audit quality (18)
- China (15)
- Voluntary disclosure (15)
- Tax avoidance (12)
-
- Management forecasts (11)
- Earnings management (10)
- Information environment (10)
- Singapore (10)
- Institutional investors (8)
- Executive compensation (7)
- Manufacturing (7)
- Altman Z-Score (6)
- Disclosure (6)
- Financial reporting quality (6)
- Audit fees (5)
- Auditor independence (5)
- Corporate Performance (5)
- Crash risk (5)
- Directors (5)
- Earnings guidance (5)
- Earnings quality (5)
- Family firms (5)
- Financial Health (5)
- Financial statements (5)
- IFRS (5)
- Information asymmetry (5)
- Insider trading (5)
- Litigation risk (5)
- Managerial incentives (5)
Articles 301 - 330 of 373
Full-Text Articles in Corporate Finance
Firm Structure And Corporate Cash Holdings, Venkat Subramaniam, Tony Tang, Heng Yue, Xin Zhou
Firm Structure And Corporate Cash Holdings, Venkat Subramaniam, Tony Tang, Heng Yue, Xin Zhou
Research Collection School Of Accountancy
We analyze whether the organizational structure of firms (i.e., whether a firm is diversified or focused) affects their cash holdings. Using Compustat firm level and segment-level data, we find that diversified firms hold significantly less cash than their focused counterparts. Our results are robust to industry adjustments at the segment level and to different factors previously found to be important determinants of cash holdings. Using time-series, cross-sectional, and additional robustness tests we are able to attribute the lower cash holdings among diversified firms to complementary growth opportunities across the different segments of these firms and the availability of active internal …
Corporate Tax Avoidance And Stock Price Crash Risk: Firm-Level Analysis, Jeong-Bon Kim, Yinghua Li, Liandong Zhang
Corporate Tax Avoidance And Stock Price Crash Risk: Firm-Level Analysis, Jeong-Bon Kim, Yinghua Li, Liandong Zhang
Research Collection School Of Accountancy
Using a large sample of U.S. firms for the period 1995-2008, we provide strong and robust evidence that corporate tax avoidance is positively associated with firm-specific stock price crash risk. This finding is consistent with the following view: Tax avoidance facilitates managerial rent extraction and bad news hoarding activities for extended periods by providing tools, masks, and justifications for these opportunistic behaviors. The hoarding and accumulation of bad news for extended periods lead to stock price crashes when the accumulated hidden bad news crosses a tipping point, and thus comes out all at once. Moreover, we show that the positive …
Internal Controls And Conditional Conservatism, Beng Wee Goh, Dan Li
Internal Controls And Conditional Conservatism, Beng Wee Goh, Dan Li
Research Collection School Of Accountancy
This study examines the relation between internal controls and conditional conservatism (“conservatism”), also referred to as timely loss recognition. Using a sample of firms that disclose material weaknesses (MWs) in internal controls under the Sarbanes-Oxley Act (SOX), we find a positive relation between internal control quality and conservatism. Specifically, firms with MWs exhibit lower conservatism than firms without such weaknesses. Further, firms that disclose MWs and subsequently remediate these weaknesses exhibit greater conservatism than firms that continue to have MWs. Overall, these results are consistent with strong internal controls acting as a mechanism that facilitates conservatism. Our study contributes to …
Equity Incentives And Earnings Management: Evidence From The Banking Industry, Qiang Cheng, Terry Warfield, Minlei Ye
Equity Incentives And Earnings Management: Evidence From The Banking Industry, Qiang Cheng, Terry Warfield, Minlei Ye
Research Collection School Of Accountancy
We examine the relationship between equity incentives and earnings management in the banking industry. By focusing on this regulated industry and using industry-specific earnings management proxies, we provide evidence on the impact of regulation on earnings management arising from chief executive officers' equity incentives. We find that bank managers with high equity incentives are more likely to manage earnings, but only when capital ratios are closer to the minimums required by regulators. This finding indicates that, in the banking industry, potential regulatory intervention induces, rather than mitigates, earnings management arising from equity incentives.
Do Management Eps Forecasts Allow Returns To Reflect Future Earnings? Implications For The Continuation Of Management’S Quarterly Earnings Guidance, Jong-Hag Choi, Linda Myers, Yoonseok Zang, Dave Ziebart
Do Management Eps Forecasts Allow Returns To Reflect Future Earnings? Implications For The Continuation Of Management’S Quarterly Earnings Guidance, Jong-Hag Choi, Linda Myers, Yoonseok Zang, Dave Ziebart
Research Collection School Of Accountancy
Using 18,253 firm-year observations from 1998 through 2003, we build on literature suggesting that more informative disclosures allow returns to better reflect future earnings, and test whether management earnings per share forecasts and their characteristics influence the future earnings response coefficient (FERC). We find that FERCs are greater for forecasting firms and when forecasts are more frequent or precise. We suggest that more frequent and more precise forecasts assist investors in better predicting future earnings. Importantly, we find that quarterly and short-term forecasts incrementally increase the association between returns and future earnings beyond annual and long-term forecasts; thus, even short-term, …
Internal Control Weakness And Bank Loan Contracting: Evidence From Sox Section 404 Disclosures, Jeong-Bon Kim, Byron Y. Song, Liandong Zhang
Internal Control Weakness And Bank Loan Contracting: Evidence From Sox Section 404 Disclosures, Jeong-Bon Kim, Byron Y. Song, Liandong Zhang
Research Collection School Of Accountancy
Using a sample of borrowing firms that disclosed internal control weaknesses (ICW) under Section 404 of the Sarbanes-Oxley Act, this study compares various features of loan contracts between firms with ICW and those without ICW. Our results show the following. First, the loan spread is higher for ICW firms than for non-ICW firms by about 28 basis points, after controlling for other known determinants of loan contract terms. Second, firms with more severe, company-level ICW pay significantly higher loan rates than those with less severe, account-level ICW. Third, lenders impose tighter nonprice terms on firms with ICW than on those …
Why 'Democracy' And 'Drifter' Firms Can Have Abnormal Returns: The Joint Importance Of Corporate Governance And Abnormal Accruals In Separating Winners From Losers, Koon Boon Kee
Research Collection School Of Accountancy
No abstract provided.
Why 'Democracy' And 'Drifter' Firms Can Have Abnormal Returns: The Joint Importance Of Corporate Governance And Abnormal Accruals In Separating Winners From Losers, Koon Boon Kee
Research Collection School Of Accountancy
No abstract provided.
Do Abnormally High Audit Fees Impair Audit Quality?, Jong-Hag Choi, Jeong-Bon Kim, Yoonseok Zang
Do Abnormally High Audit Fees Impair Audit Quality?, Jong-Hag Choi, Jeong-Bon Kim, Yoonseok Zang
Research Collection School Of Accountancy
This study examines whether and how audit quality proxied by the magnitude of absolute discretionary accruals is associated with abnormal audit fees, that is, the difference between actual audit fee and the expected, normal level of audit fee. The results of various regressions reveal that the association between the two is asymmetric, depending on the sign of the abnormal audit fee. For observations with negative abnormal audit fees, there is no significant association between audit quality and abnormal audit fee. In contrast, abnormal audit fees are negatively associated with audit quality for observations with positive abnormal audit fees. Our findings …
Auditor Reputation And Earnings Management: International Evidence From The Banking Industry, Kanagaretnam Kiridaran, Chee Yeow Lim, Gerald J. Lobo
Auditor Reputation And Earnings Management: International Evidence From The Banking Industry, Kanagaretnam Kiridaran, Chee Yeow Lim, Gerald J. Lobo
Research Collection School Of Accountancy
We examine the relation between auditor reputation and earnings management in banks using a sample of banks from 29 countries. In particular, we examine the implications of two aspects of auditor reputation, auditor type and auditor industry specialization, for earnings management in banks. We find that both auditor type and auditor industry specialization moderate benchmark-beating (loss-avoidance and just-meeting-or-beating prior year’s earnings) behavior in banks. In addition, we find that once auditor type and auditor industry specialization are included in the same tests, only auditor industry specialization has a significant impact on constraining benchmark-beating behavior. In separate tests related to income-increasing …
Does Auditor Tenure Improve Audit Quality? Moderating Effects Of Industry Specialization And Fee Dependence, Chee Yeow Lim, Hun-Tong Tan
Does Auditor Tenure Improve Audit Quality? Moderating Effects Of Industry Specialization And Fee Dependence, Chee Yeow Lim, Hun-Tong Tan
Research Collection School Of Accountancy
We investigate whether the relation between auditor tenure and audit quality is conditional on auditor specialization and fee dependence. Although prior studies have investigated the relation between extended auditor-client tenure and audit quality, none has examined how this relation is jointly influenced by both auditor specialization and fee dependence. Our main analyses, using accrual quality as a measure of audit quality, show that firms audited by specialists (vs. non-specialists) have relatively higher audit quality with extended auditor tenure, and that this relation is negatively moderated by auditors’ fee dependence on clients. These results are robust to sensitivity tests, and alternative …
Audit Fees: To Disclose Or Not To Disclose?, Teng Aun Khoo, Soo Chiat Hwang
Audit Fees: To Disclose Or Not To Disclose?, Teng Aun Khoo, Soo Chiat Hwang
Research Collection School Of Accountancy
The authors argue that the disclosure of audit fees can provide a more level playing field in Singapore, and would also be consistent with the other major capital markets in the world. Auditors' independence is the cornerstone of the auditing profession, because without auditor's independence investors would not be able to rely on the so-called "audited" financial statements. Currently in Singapore, audit-fee disclosure is not mandatory except for banks as stipulated by the Monetary Authority of Singapore (MAS).
The Roles That Forecast Surprise And Forecast Error Play In Determining Management Forecast Precision, Jong-Hag Choi, Linda A. Myers, Yoonseok Zang, David A. Ziebart
The Roles That Forecast Surprise And Forecast Error Play In Determining Management Forecast Precision, Jong-Hag Choi, Linda A. Myers, Yoonseok Zang, David A. Ziebart
Research Collection School Of Accountancy
Studying the determinants of management forecast precision is important because a better understanding of the factors affecting management’s choice of forecast precision can provide investors and other users with cues about the characteristics of the information contained in the forecasts. In addition, as regulators assess the regulation of voluntary management disclosures, they need to better understand how managers choose among forecast precision disclosure alternatives. Using 16,872 management earnings forecasts collected from 1995 through 2004, we provide strong evidence that forecast precision is negatively associated with the magnitude of the forecast surprise and that this negative association is stronger when the …
Corporate Philanthropic Giving, Advertising Intensity, And Industry Competition Level, Ran Zhang, Jigao Zhu, Heng Yue, Chunyan Zhu
Corporate Philanthropic Giving, Advertising Intensity, And Industry Competition Level, Ran Zhang, Jigao Zhu, Heng Yue, Chunyan Zhu
Research Collection School Of Accountancy
This article examines whether the likelihoodand amount of firm charitable giving in response tocatastrophic events are related to firm advertising intensity,and whether industry competition level moderatesthis relationship. Using data on Chinese firms’ philanthropicresponse to the 2008 Sichuan earthquake, we findthat firm advertising intensity is positively associated withboth the probability and the amount of corporate giving.The results also indicate that this positive advertisingintensity-philanthropic giving relationship is stronger incompetitive industries, and firms in competitive industriesare more likely to donate. This study thus provides evidencesuggesting that even in the wake of catastrophicevents, corporate philanthropic giving is strategic.
Direct And Indirect Effects Of Internal Control Weakness And External Audit Effort On Accruals Quality: Evidence From A Unique Canadian Regulatory Setting, Hai Lu, Gordon D Richardson, Steven Salterio
Direct And Indirect Effects Of Internal Control Weakness And External Audit Effort On Accruals Quality: Evidence From A Unique Canadian Regulatory Setting, Hai Lu, Gordon D Richardson, Steven Salterio
Research Collection School Of Accountancy
Public disclosure about effectiveness of internal control systems is subject to much controversy in Canada, resulting in Canadian disclosures being made in Management Discussion and Analysis (MD&A). These disclosures are provided to investors without a definition of the weaknesses to be reported, without implementation effectiveness testing, no direct management certification and no external audit of such disclosures. Though the cost of such SOX North disclosures are lower than in the U.S setting, the credibility of these disclosures is far from assured, posing an important empirical issue for regulators interested in the cost versus benefit trade-off of various disclosure regimes. We …
Audit Office Size, Audit Quality And Audit Pricing, Jong-Hag Choi, Francis Kim, Jeong-Bon Kim, Yoonseok Zang
Audit Office Size, Audit Quality And Audit Pricing, Jong-Hag Choi, Francis Kim, Jeong-Bon Kim, Yoonseok Zang
Research Collection School Of Accountancy
Using a large sample of U.S. audit client firms over the period 2000-2005, this paper investigates whether and how the size of a local practice office within an audit firm (henceforth, office size) is a significant, engagement-specific factor determining audit quality and audit fees over and beyond audit firm size at the national level and auditor industry leadership at the city or office level. For our empirical tests, audit quality is measured by unsigned abnormal accruals, and the office size is measured in two different ways: one based on the number of audit clients in each office and the other …
On The Relationship Between Analyst Reports And Corporate Disclosures: Exploring The Roles Of Information Discovery And Interpretation, Xia Chen, Qiang Cheng, Kin Lo
On The Relationship Between Analyst Reports And Corporate Disclosures: Exploring The Roles Of Information Discovery And Interpretation, Xia Chen, Qiang Cheng, Kin Lo
Research Collection School Of Accountancy
We examine the relationship between analyst research and corporate earnings announcements to explore the relative importance of information discovery versus interpretation of previously released information. Using equity market reaction to capture information content, we find that information discovery (interpretation) dominates in the week before (after) firms announce their earnings. In addition, we find that the interpretation role increases in importance with the difficulty of financial accounting information. Analysis of all weeks surrounding earnings announcements shows that the information discovery role is overall more important. We are able to reconcile this result with the opposite finding in Francis et al. (2002).
The Pricing Of Conservative Accounting And The Measurement Of Conservatism At The Firm-Year Level, Dan Segal, Jeffrey L. Callen, Ole-Kristian Hope
The Pricing Of Conservative Accounting And The Measurement Of Conservatism At The Firm-Year Level, Dan Segal, Jeffrey L. Callen, Ole-Kristian Hope
Research Collection School Of Accountancy
This paper analyzes the relation between equity prices and conditional conservatism and introduces a new measure of conservatism at the firm-year level. We show that the asymmetric properties of conservative accounting, the existence of non-accounting sources of information, and the properties of GAAP related to special items combine to generate a nonlinear relation between unexpected equity returns and earnings news (the shock to expected current and future earnings). Based on this model, we construct a conservatism ratio (CR) defined as the ratio of the current earnings shock to earnings news. CR measures the proportion of the total shock to expected …
Corporate Governance, Investor Protection, And Auditor Choice In Emerging Markets, Mahmud Hossain, Chee Yeow Lim, Patricia Mui Siang Tan
Corporate Governance, Investor Protection, And Auditor Choice In Emerging Markets, Mahmud Hossain, Chee Yeow Lim, Patricia Mui Siang Tan
Research Collection School Of Accountancy
In this study, we examine the effect of firm-level governance on the firm's choice of an external auditor. Further, we test how the relation between corporate governance and auditor choice may be affected by the strength of legal environment. The results show that firm-level governance scores are positively related to the firm's auditor choice. This association is strengthened by country-level legal protection. Specifically, the positive association between auditor choice and the firm-level governance scores is weaker (stronger) in a low (high) legal environment. These findings are robust after controlling for determinants that were found to be significant in earlier research. …
Moral Hazard, Firms’ Internal Governance And Management Earnings Forecasts, Jimmy Lee
Moral Hazard, Firms’ Internal Governance And Management Earnings Forecasts, Jimmy Lee
Research Collection School Of Accountancy
This paper investigates the role of management earnings forecasts in mitigating information asymmetry between investors andmanagers relating to moral hazard, and explains how earnings guidance facilitates monitoring. I demonstrate that firms that are more susceptible to moral hazard problems and more difficult to monitor are also more likely to issue annual earningsforecasts and they do so more frequently. In addition, I examine how firm internal governance drives forecasting decisions andshow that stronger board governance and managerial equity incentives are associated with higher likelihood and frequency of forecast issuance. Finally, I provide robust evidence that managerial equity incentives are associated with …
The Impact Of Earnings On The Pricing Of Credit Default Swaps, Dan Segal, Jeffrey L. Callen, Joshua Livnat
The Impact Of Earnings On The Pricing Of Credit Default Swaps, Dan Segal, Jeffrey L. Callen, Joshua Livnat
Research Collection School Of Accountancy
This study evaluates the impact of earnings on credit risk in the Credit Default Swap (CDS) market using levels, changes, and event study analyses. We find that earnings (cash flows, accruals) of reference firms are negatively and significantly correlated with the level of CDS premia, consistent with earnings (cash flows, accruals) conveying information about default risk. Based on the changes analysis, a 1 percent increase in ROA decreases CDS rates significantly by about 5 percent. We also find that (1) CDS premia are more highly correlated with below-median earnings than with above-median earnings and (2) CDS premia are more highly …
The Long-Term Effects Of Cross-Listing, Investor Recognition, And Ownership Structure On Valuation, Michael R. King, Dan Segal
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.
Audit Committees, Boards Of Directors, And Remediation Of Material Weaknesses In Internal Control, Beng Wee Goh
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 …
Disclosure Of Management Guidance In Conference Calls: Materiality, Determinants And Consequences, Benjamin Lansford, Jimmy Kiat Bee Lee, Jennifer W. Tucker
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
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
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 Association Between Institutional Ownership And Audit Properties, Soongsoo Han, Tony Kang, Lynn Reesc
The Association Between Institutional Ownership And Audit Properties, Soongsoo Han, Tony Kang, Lynn Reesc
Research Collection School Of Accountancy
In this study, we examine how institutional ownership affects the quality and riskiness of the financial statement audit. We hypothesize that institutional investors can influence corporate policy to employ governance mechanisms that reduce their monitoring costs. Our evidence shows that firms are more likely to hire a Big 4 auditor (our proxy for audit quality) when long-term institutional ownership is high, suggesting that long-term institutional investors view high quality audits as a viable means of improving corporate governance while reducing their direct monitoring costs. We find no association between auditor choice and short-term institutional ownership. Next, we find that auditors …
Asking Tougher Questions In Tough Times, Irving Low, Claudia Eio, See Liang Foo, Yang Hoong Pang, Kwong Sin Leong, John Joseph Williams
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.
Managerial Ownership And Firms' Information Environment, Soongsoo Han, Tony Kang, Gerald Lobo
Managerial Ownership And Firms' Information Environment, Soongsoo Han, Tony Kang, Gerald Lobo
Research Collection School Of Accountancy
We examine the relation between managerial stock ownership and the firm’s information environment. We focus on three dimensions of the information environment: total, public, and private information precision (Barron, Kim, Lim and Stevens 1998). Our results suggest that firms’ total and public information precision are positively related to managerial ownership. In contrast, there is no clear pattern in private information precision across different levels of managerial ownership. We also observe that managerial ownership has a greater impact on the firm’s public information environment after the implementation of Regulation Fair Disclosure, suggesting that the regulation was effective in improving the firms’ …
Profitability Analysis Of Chinese Listed Firms: 1992-2004, Jianjun Niu, Heng Yue, Guohua Jiang
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.