Publication Search Results

Now showing 1 - 10 of 96

  • (2007) Bayley, Luke
    Accounting numbers are not only the products of peripheral economic events, but, by and large, can be consciously influenced from the effects of calculated business decisions and the selective applications of alternative reporting procedures. In academic parlance, the term accounting quality, or lack thereof, is often used to describe the extent to which these convoluting influences create a disparity between economic fundamentals and their numerical portrayal. This doctoral thesis speaks to three aspects of accounting quality; (i) Earnings Thresholds: A Re-Examination of the Role of Earnings Management, (ii) Earnings Manipulation and the Investigation of 'Red Flag' Accounting Ratios, and (iii) An Empirical Analysis of Standard and Poor's (S&Ps) Core Earnings metric. Each topic is outlined in a separate research paper.

  • (2007) Curtis, Asher
    I examine the extent to which accounting information is reflected in market prices at different points in time. The efficient market hypothesis implies that price always reflects (value-relevant) accounting information, based on the assumptions of rational investors and costless arbitrage. I examine the time-series relation between price and value in two studies which are motivated by potential shortcomings of these assumptions. First, there is significant debate regarding the rationality of equity investors during the late 1990s. I therefore contrast the historical time-series relation between price and value with that of the 1990s, and show that the historical tendency of price to converge towards value breaks down during this period. Second, I examine the impact of the lack of close substitutes - an arbitrage cost - on the time-series relation between price and value. I find some evidence of a positive association between this arbitrage cost and both the level and the duration of the disparity between price and value. My results provide empirical support for the hypothesis that price requires time to reflect (accounting) information and has implications for research that assumes that prices are measured without error.

  • (2019) Khoo, Eunice
    This thesis examines the role of reputation on a firm’s financial and non-financial outcomes through three studies. The first study examines whether the reputation incentives of busy audit committee members improve their effectiveness in monitoring the financial reporting process. I find that firms with a larger proportion of audit committee members where the membership is the most prominent are associated with higher financial reporting quality and more effective monitoring of internal control. Additional analyses reveal that my results are driven by audit committee members’ reputation incentives rather than independent non-audit committee members’ reputation incentives. I conclude that audit committee member reputation is a strong incentive for audit committee members, such that it influences their monitoring effectiveness over the financial reporting process. The second study explores whether the reputation incentive offered by a firm’s directorship has an impact on a firm’s CSR performance. I find that firms with a larger proportion of independent directors where the directorship is the most prominent are associated with better CSR performance. The positive effect of independent directors’ high reputation incentives on CSR performance is driven by better performance in CSR strengths rather than CSR concerns, and by better performance in both stakeholder CSR and third-party CSR. The effect is more pronounced in an environment where firms face less external pressure to perform CSR, and in firms with a less diverse board. Overall, my results suggest that independent directors have incentives to develop their reputation as a socially responsible director. The third study investigates the role of corporate reputation in enhancing the timeliness of external audits and earnings announcements. Changes in audit and financial reporting regulations have resulted in longer audit delay, leading to an increase in firms that announce earnings prior to audit completion, both of which have implications on the quality of financial information. I find that corporate reputation is negatively associated with audit report lag and the likelihood of firms announcing earnings after audit completion. I document important benefits in the form of timelier audits and earnings announcements derived from developing and maintaining a good corporate reputation.

  • (2019) Yang, Fan
    This thesis investigates issues regarding the application of fair value accounting to investment properties. The thesis documents two inter-related studies conducted in the context of accounting for investment properties around the adoption of IAS 40 Investment Property. The first study examines lobbying on exposure drafts regarding the application of fair value accounting to investment properties. I analyse comment letters received by both the IASC and the FASB in response to their exposure drafts, that is, E64 Investment Properties and Topic 973 Investment Property Entities, respectively. I first use a content analysis method to understand attitudes and concerns of interested parties with respect to accounting for investment properties at fair value. Results show that the reliability of fair values and the relevance of unrealised gains and losses are the primary concerns expressed by respondents. I then investigate underlying factors driving interested parties’ preferences. Results show that respondents’ preferences are highly associated with their functional roles in accounting practice, their industries, and their institutionalized accounting practices. Using a sample of European real estate firms, the second study utilises a number of different approaches to investigate the value relevance of historical cost and fair value accounting information for investment properties. Using both a balance sheet model and a returns model, I examine the value relevance of balance sheet and income statement information separately. Results consistently show that balance sheet amounts for investment properties measured at fair value are more value relevant than those measured at depreciated cost. However, results regarding the value relevance of income statement information are mixed. Although fair value-based earnings are relatively more value relevant than historical cost-based earnings, the incremental value relevance of earnings components differs significantly depending on the permissibility of asset revaluations of the sample firms’ domestic GAAP. In particular, realised earnings are incrementally value relevant only for firms whose domestic GAAP strictly require historical cost accounting, whereas unrealised earnings are incrementally value relevant only for firms whose domestic GAAP permit revaluations prior to IFRS. This finding reinforces the argument that economic, cultural, and social forces can impact the value relevance of fair value information at the country-level.

  • (2018) Emanuel, Carmel
    This thesis investigates the factors associated with the quantity of related party transaction disclosures by large publicly listed firms in the emerging markets of Brazil, Russia, India and South Africa (BRIS) using a checklist of disclosure requirements from IAS 24 Related Party Disclosures across three years; 2001, 2006 and 2014. Using four proxies of disclosure, each measuring a different aspect of disclosure, the thesis addresses whether disclosure level is associated with: IFRS adoption; across-time learning effects; audit committee; auditor type; foreign listing; outstanding capital market debt; and ownership concentration. Data are hand-collected from the English-language annual reports of 151 constant firms (453 firm-years) in each of the three sample years. The results suggest that the firm-specific factors examined influence each country’s compliance in different ways. Overall, the findings show that in Brazil and South Africa, the level of related party disclosure is positively associated with the mandatory adoption of IFRS. Across-time learning effect and the existence of outstanding capital market debt matters only in India. In Brazil, a higher level of related party disclosure is associated with the existence of an audit committee whereas in Russia, a positive association exists if firms are audited by a big 4 or 5 auditor. Ownership concentration, on the other hand, is associated with related party disclosure in Russia, India and South Africa. When all countries are combined and controlled for, IFRS adoption, learning effect and the existence of an audit committee are the only factors systematically related to related party disclosure