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on Accounting and Auditing |
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Issue of 2016‒10‒09
four papers chosen by |
| By: | MARYAM AHMED JIBRIL (KADUNA STATE UNIVERSITY); MODIBBO ABUBAKAR (FEDERAL UNIVERSITY BIRNIN KEBBI) |
| Abstract: | National accounting differences has been responsible for increasing information asymmetry, increasing cost of investments, reducing understandability as a results of incomparable information, which are sum up as investor home bias. IFRS is aimed at improving reporting quality, increasing financial statement comparability within and across countries, which is expected to reduce information asymmetry among capital market participants, and facilitate cross-border cash flows, especially in terms of foreign equity investments. However, the opponents of accounting harmonization maintain that the characteristics of accounting problems, history, culture and institutional frameworks in a country determine the form and content of accounting standards, and thus, uniform standards could not lead to any positive benefits. This argument has led to different empirical researches on the economic consequences of uniform accounting standards. This study examined how the adoption of IFRS affects corporate financing in the deposit money banks in Nigeria during the period (2009-2014). The purpose is to investigate whether or not firm’s financing decisions in Nigeria have significantly improved after the adoption of IFRS. The study employed expiremental/correlational research design in a sample of 15 banks. Panel regression technique of data analysis was adopted and the study found that IFRSs have significantly improved financing in terms of equity and debt financing during the period. We conclude that there are possibilities that the adoption of IFRS in Nigeria potentially minimized information asymmetry and that corporate financing could be improved if IFRSs are carefully implemented. We recommend among others that, accounting regulators in Nigeria should increase efforts towards educating firms and investors about IFRSs, so as to enhancing corporate financing in Nigeria. |
| Keywords: | Debt; Leverage; Equity; Returns; Financing |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:4206880&r=acc |
| By: | Haring, Magdalena; Niemann, Rainer; Rünger, Silke |
| Abstract: | In this paper we analyze the effect of investor level taxes, firm-specific ownership structure and firm-specific payout policy on firms' capital structure choice. Our analysis is based on data for 10,983 firms from 13 Central and Eastern European (CEE) countries over the time period 2002-2012. Our results show a significant impact of the net tax benefit of debt on the debt ratio of firms. Ignoring firm heterogeneity, an increase in the net tax benefit of debt by 10 percentage points leads to an increase in the debt ratio of 2.49 percentage points. Taking into account investor-level taxation and firm heterogenity, an increase in the net tax benefit of debt of 10 percentage points leads to an increase in the debt ratio of only 1.27 percentage points, if the firm's largest individual domestic owner has more than 50% of the shares. If all individual domestic owners together have more than 50% of the shares, an increase in the net tax benefit of debt of 10 percentage points leads to a negligible increase in the debt ratio of 0.05 percentage points. |
| JEL: | G32 H24 H25 H32 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:210&r=acc |
| By: | MODIBBO ABUBAKAR (FEDERAL UNIVERSITY BIRNIN KEBBI) |
| Abstract: | Nigerian banking industry has in recent times suffered different degrees of financial malfeasances which rendered many banks distress and bankrupt. This is in spite of the regulatory mechanisms put in place to monitor and control the operations of the banks. Investigations by regulators and researchers to determine the possible causes of the problem are still going on. One of the factors identified is managerial unethical practices which affect the quality of corporate reporting adversely. However, despite an extensive studies on accrual-based earnings management in the banking industry, there has been none or limited research examining whether the audit quality and corporate governance mechanisms constraint real earnings management of banks in Nigeria. This paper examined the effect of audit quality and corporate governance on real earnings management of banks in Nigeria. The paper examined two real earnings management activities; revenue manipulation to alter cash flows from operations and manipulation of discretionary expenses to smooth earnings. Correlation research design was adopted using a cross-section of 15 banks for a period of 10 years (2004-2013). Generalized Least Squares (GLS) technique of analysis was used and the study found an insignificant negative relationship between Big4 auditor and real earnings management (revenue and discretionary expenses manipulation); and positive relationship between joint audit and real earnings management. The results show that governance mechanisms (board independence and board size) have significant positive effect on cash flows manipulation, while audit committee (size, independence and financial knowledge) has a significant negative effect on cash flows manipulations during the period. Overall, the results indicate a significant relationship between aggregate real earnings management and the audit quality measures and governance mechanisms. The study recommends among others that regulators and policy makers in the Nigerian banking industry should consider real and accrual earnings management when making policy to mitigate unethical practices. |
| Keywords: | Earnings Quality; Earnings Management; Corporate Governance; Financial Reporting Quality |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:4206739&r=acc |
| By: | Gow, Ian D. (Harvard University); Larcker, David F. (Stanford University); Reiss, Peter C. (Stanford University) |
| Abstract: | This paper examines the approaches accounting researchers use to draw causal inferences using observational (or non-experimental) data. The vast majority of accounting research papers draw causal inferences notwithstanding the well-known difficulties in doing so. While some recent papers seek to use quasi-experimental methods to improve causal inferences, these methods also make strong assumptions that are not always fully appreciated. We believe that accounting research would benefit from: more in-depth descriptive research, including a greater focus on the study of causal mechanisms (or causal pathways); increased emphasis on structural modeling of the phenomena of interest. We argue these changes offer a practical path forward for rigorous accounting research. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3393&r=acc |