The thesis documents an ethnography of the finance department of a commercial subsidiary company of a renowned UK scientific research organisation. The ninemonth ethnography (which covers a one-year financial reporting cycle) addresses how accountants and non-accounting managers construct their company's earnings. Addressing issues in both internal management accounting (e.g. budgeting, performance evaluation, control) and external financial accounting (i.e. bookkeeping, monthly/year end accounts, auditing) the thesis focuses on how people: classify transactions and make professional judgements; use computer software for accounting; and prepare for and facilitate the auditing process. In tackling these questions, the thesis also addresses: accountancy training; the impact of people's affiliations to the accounting profession or other professions on their accounting and on their perceptions of financial statements; and other contingent/contextual factors that influence the choice of accounting method e.g. reward structure, management authority, time pressure, institutions. The research employs an 'ethnoaccountancy' approach which blends ethnographic practice and finitist theory (as developed by Barry Barnes and David Bloor). The motivation of this approach stemmed from the paucity of ethnographic studies of financial accounting (compared to management accounting research). A further motivation relates to the apparent gap between the academic curriculum (including orthodox academic research) and the experiences of practitioners - a gap which has led to accusations that writers of textbooks have given insufficient attention to societal issues; and that orthodox accounting research is of little relevance to accounting practice and is therefore largely ignored by practitioners. As advocated by the interdisciplinary research area, social studies of finance, the thesis finds that using social studies of science as a means to understand accounting, particularly the financial reporting process, a useful one. The thesis documents numerous examples of finitism in the definition and classification of accounting terms and of related epistemological issues: e.g. 'meaning is use', interpretation. As predicted by finitism, the meanings of terms (e.g. 'materiality', 'true and fair view') are not fixed: previous terms and acts of classification (e.g. 'asset', 'expense') are revisable; and the future applications of terms and classifications are open-ended and contingent upon the local circumstances and to previous applications e.g. upon new legislation and social expectations. Consequently, no act of accounting classification is ever indefeasibly correct. The analogy with scientific culture and Kuhnian paradigms (e.g. paradigm shifts, problem-solutions, exemplars) is strong: the accounting community's institutions and authority are central to the accounting process and to the 'truth and fairness' of accounting numbers; accounting training involves extensive use of ostensive learning and learning by doing; and both accountants and non-accounting managers have goals and interests that result in 'good enough' accounting and satisficing behaviour.

The harmonization of international accounting standards has been implemented by more than 120 countries throughout the world. Although these standards have been criticised for disregarding local values and accounting systems, the IFRS and IAS provide many more benefits including enhancing the quality and transparency of financial statements. Unlike previous standards, the revised IFASS 16 – 2007 offers two options, the cost or revaluation models for fixed asset measurement. Therefore, conflict of interests may arise due to these options. The cost model favours reliability of its value (completeness, neutrality and freedom from error characteristics) while the revaluation model provides relevant information (predictive value and confirmatory value characteristics) to the public. This study first proposed a conceptual model that can help Indonesian CFOs in deciding to revalue or not to revalue fixed assets using decision support criteria such as motives, effects, primary decision criteria, business outcomes and impacts. The research then applied stratified random sampling for data gathering over the period of 2008-2012. Three categories were used such as companies’ age (young, middle, and old), size (small, medium, and large), and nine IDX industry classifications. A deterministic model was then developed using nine variables which were broken down into 17 proxies. The natural logarithm scenario provided the highest prediction power The R2 of -2 Log likelihood, Nagelkerke, and Cox Snell were 57.69, 56.4, and 75.2 per cent consecutively. These scenarios also found the most significant variables among other scenarios with six proxies such as CMS, fixed asset intensity, DER, operating income, DER level, and export sales. Based on those significant proxies, this study concluded that companies’ internal benefits from asset revaluation decision making were more dominant than for external benefits. The internal benefits include four proxies (FAI, CMS, DER, and operating income) from three motives such as to gain efficiency/ economics, to reduce debt contracting costs, and to reduce political costs. The external benefits include two proxies (DER level and export sales) from motives such as to provide signals for stakeholders; and to reduce information asymmetry. The results found that as of 31st December 2012, only 2.83 per cent of the total 460 Indonesian PLCs applied revaluation model. This figure cited is lower than other countries who have applied IAS 16 earlier than Indonesia such as South Korea, New Zealand, and England and Wales. The research confirms that Indonesian PLCs are cautious in applying the revaluation model because historically, previous IFASS 16 – 1994 only allowed PLCs to apply the cost model only. Furthermore, the revaluation model incurs more costs paid such as for the appraisal fees, auditor fees, and tax agency costs. Furthermore, the having more PLCs applied the revaluation model, external parties such as investors, creditors and consumer. They will enjoy a lower company’s business risk. This circumstance can reduce their expected return and decrease the product and service prices.

This thesis includes three empirical chapters exploring how a sample of UK firms with different financial and non-financial characteristics adopt pension derisking strategies. These chapters address firms’ hedging needs, financial flexibility and governance, and treat the assets and liabilities of defined benefit (DB) pension plan as corporate assets and liabilities. Three pension de-risking strategies are considered: the reallocation of plan assets, the switch from DB to defined contribution (DC) plans, and the use of buy-ins and buy-outs. The first chapter of the thesis provides an introduction about the risks of DB pension plan and institutional background information. The second and third chapters examine how firms adjust their financial characteristics to target credit ratings in the period 2004-2013. The second chapter explores the influence of hedging needs on trade-off decisions between increasing cash holdings and reducing outstanding debt in order to achieve target credit ratings. Following Acharya, Almeida and Campello (2007), firms’ hedging needs are measured as the correlation between cash flows and future investment opportunties. Collectively, the findings suggest that firms’ hedging needs may correlate to decisions on capital structure and pension de-risking strategies. The third chapter focuses on how firms’ desire to maintain financial flexibility relates to capital structure decisions. It explores whether firms with different financial flexibility may affect trade-off decisions between increasing cash holdings and reducing debt in order to target credit ratings. Given that Byoun (2011) suggests that firms with different financial flexibility may make decision on capital structure differently, , the UK sample firms are categorised as developing firms with LFF, growth firms with MFF and mature firms with HFF. Dividend pay-out ratio is used as a proxy for financial flexibility (DeAngelo and DeAngelo, 2007). The results demonstrate that that a desire for the firm to maintain its financial flexibility relates to pension de-risking strategies used. Berger, Ofek and Yermack (1997) suggest that corporate governance affects a firm’s debt level. In this context, the fourth chapter of the thesis examines the relationship between corporate governance and capital structure using a sample of FTSE All-share firms for the period 2005-2014. The findings suggest that corporate governance measured by board size, independence and insider ownership are negatively related to debt level, while institutional ownership is positively related to debt level. This study further examines the relationship between corporate governance and pension de-risking strategies. The finding suggests that firms with large and more independent boards are more likely to invest their pension assets in bonds, whereas firms with higher institutional and insider ownership are more likely to invest their pension assets in equities. In addition, firms with more independent boards are more likely to retain their DB pension plans, while firms with greater institutional ownership are more likely to switch from DB to DC pension plans. Overall, pension de-risking strategies and capital structure are found to be related to corporate governance.

This study explores the factors affecting external audit quality in non-financial listed companies in Saudi Arabia (SA). In particular, it provides new insights by using an integrated research design framework. The study seeks to: (i) investigate the relationship between external audit quality and certain corporate governance characteristics in SA, namely, boards of directors, audit committees, and internal auditors, and (ii) find strategies that can be undertaken to enhance external audit quality in SA. Agency theory predicts that external auditors and corporate governance play a vital role in enhancing external audit quality. Ordinal Logistic regression was used to investigate the association between the variables. Semi-structured interviews and a questionnaire survey were implemented to attain a deeper understanding of the phenomena. To achieve the research goals, the researcher investigated the perceptions of boards of directors, audit committees, and internal auditors regarding external audit quality, using questionnaires, while the perceptions of external auditors were investigated by using interviews. Moreover, the ordinal logistic regression models were examined to test the hypotheses using a set of questionnaires. The decision to employ a mixed-methods research design was motivated by the recent calls for, and relative lack of, mixed-methods approaches in external audit quality research in general. Efforts were made to achieve integration between the two different research designs by applying the Convergent Parallel Design suggested by Creswell and Clark (2011). The researcher collected and analysed both quantitative (survey) and qualitative (interview) data separately, at the same time, and then combined the findings of the two approaches, which was achieved by merging the data and then comparing and contrasting the two sets of data and the results. The findings of the study showed that audit practice in SA was experiencing difficulties, because of the auditors’ lack of competence, their lack of training, lack of expertise and specialisation, lack of independence, and the length of tenure of the audit, all of which affected external audit quality. Regarding audit committees, there was a lack of knowledge and a lack of awareness of members’ responsibilities, a little time was taken to attend meetings and a lack of financial expertise. The findings relating to boards of directors showed that there were infrequent meetings, a lack of requesting speedy financial statements, and a low existence of personal relationships. With regard to internal auditors, the findings showed that there was a lack of education, and of independence. Additionally, corporate governance mechanisms in SA suffered from the absence of detailed regulations, non-implementation of the regulations, and a lack of control by regulators. Finally, the findings obtained from this study led to some suggestions to enhance the level of external audit quality and corporate governance practices in SA.

The study of outsourcing disclosure is a growing area of research, but all previous studies have focused on developed markets. This study bridges this gap in the literature, making a unique contribution to the knowledge of outsourcing disclosure practices in developing or emerging markets. It investigates the managerial determinants of outsourcing disclosure through formal channels in Saudi Arabia, the consequences of disclosure and non-disclosure for different stakeholder parties, and the disclosure practices used. Two research methods were used: 50 interviews with company managers, accountants and auditors; and content analysis of 985 annual reports of all 175 companies listed on the Saudi stock market, the Tadawul, over the six-year period from 2011 to 2016 inclusive. This twin approach enabled the research to fully explore the extent and trend of outsourcing disclosure in formal channels; the changes in practice over time; the types of outsourced activities disclosed; and the disclosure methods used. The study developed and employed an integrated theoretical framework based on six disclosure theories (agency theory, signalling theory, stakeholder theory, legitimacy theory, preparation costs theory and proprietary costs theory) to interpret the empirical findings. The study revealed significant variations in outsourcing disclosure practices in the Saudi market, and a fluctuating trend of disclosures. Saudi-listed companies were found to disclose three types of outsourced activities in their annual reports: internal auditing, information technology and customer services; and to not disclose two types: marketing activities and operational activities. The study found six managerial determinants of disclosure, and four of non-disclosure. It also identified the implications of disclosure and non-disclosure for managers, outsourced service providers, other stakeholders, and the company itself.

This study investigates how Balanced Scorecard (BSC) is implemented in practice and how affects an organisational financial performance. Drawing on the contingency theory, the study investigates the role of two main contingent variables (environmental uncertainty and business strategy) in shaping BSC implementation and financial effect. The study adopts a case study research with data collected from three Libyan for-profit manufacturing companies (CRM, NIF, and ISC). A total of 63 semi-structured interviews were conducted along with a documentary review and direct observation methods. The qualitative data was analysed using the descriptive analytic strategy, the theory-based pattern matching technique, and the cross-case analysis. The findings indicate that, in practice BSC is implemented in different ways respecting both the adoption and the implementation of its components. The study found that there are differences between BSC organisations in terms of what components are adopted into BSC implementation. Some BSC organisations implement BSC partially by adopting certain BSC components in the way that represents BSC as a multidimensional performance measurement system (PMS), which consists exclusively of financial and non-financial measures grouped into different perspectives. By contrast, other BSC organisations implement BSC fully by adopting all BSC conceptual components in the way that represents BSC as a strategic management system (SMS), which consists of BSC perspectives, BSC strategic objectives and measures, BSC cause and effect relationship, BSC targets, BSC processes of organisational alignment and learning. On the other hand, the study found that, although some BSC organisations can have similarities on the components adopted into BSC implementations, they have different ways for developing and using each of the adopted components. Some of these ways are consistent with those defined by BSC inventors, while the majority are significantly different. In respect of the financial effect of BSC; the findings show that BSC implementation has different effects on an organisational financial performance - non-existent and a positively high - while the positively high financial effect is associated with implementing BSC as a fully developed concept (BSC as SMS). Moreover, the study found that there is no role of the environmental uncertainty and business strategy in shaping the differences between BSC organisations in terms of what components are adopted into BSC implementation. Instead, the implementation of BSC that encompasses all the conceptual components of BSC (BSC as SMS) seems to fit the different values of each of those contingent variables. However, the two contingent variables appear to have an important role in determining the ways BSC components are developed and used, and hence, shaping the implementation of BSC and its financial effectiveness. The study contributes to filling a knowledge gap in BSC literature concerning BSC practical implementation and financial effect. It also contributes to the contingency theory by extending its application from focusing on investigating the adoption rate of BSC to investigating the implementation of BSC and its financial effect. Moreover, the study provides practitioners with guides that assist them with implementing BSC in the way fits their organisation’s level of environmental uncertainty and type of business strategy, therefore enhancing their organisation’s financial effectiveness.

This thesis investigates the firm-specific and country-level determinants of accruals-based earnings management and real activities-based earnings management of firms in the MENA region. In addition, this thesis examines whether earnings management techniques are used as substitutes or complements, and whether earnings management is efficient or opportunistic. A pooled cross-sectional regression is used to test a sample of 802 non-financial firms listed on the stock exchanges of Bahrain, Egypt, Jordan, Kuwait, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, and the United Arab Emirates over the period 1996-2014. Regarding the determinants of accruals-based earnings management, the results show that GDP growth, the country-level index variables, leverage, profitability, the operating cycle, Altman’s Z-Score, and earnings management flexibility are positively associated with discretionary accruals while firm size, growth opportunities, the dividend payout ratio, and asset tangibility are negatively associated with discretionary accruals. Further, industry membership is found to impact upon discretionary accruals. Regarding real earnings management, the results provide evidence that financial development is associated with lower levels of real earnings management, and provide strong evidence that GDP growth, IFRS adoption, firm size, and earnings management flexibility positively impact upon the overall degree of real earnings management. Further, there is weak evidence that free cash flows are positively associated with the degree of real earnings management. The results also provide strong evidence that the country-level index variables, leverage, profitability, asset tangibility, the operating cycle, and Altman’s Z-Score negatively impact upon the overall degree of real earnings management. There is weak evidence that higher dividend payout ratios are associated with lower levels of real earnings management, and weak evidence that higher growth opportunities are negatively associated with the degree of real earnings management. Further, industry membership is found to significantly impact upon the overall degree of real earnings management behaviour of firms in the MENA region. The results also provide strong evidence that firms use accruals-based and real activities-based earnings management techniques as complements rather than as substitutes. Regarding the efficient versus opportunistic earnings management model, the results provide evidence that earnings management in the MENA region tends toward being opportunistic rather than efficient.

An enduring problem facing microfinance institutions is access to funding. This study investigates the determinants of MFIs access to funding using a comprehensive measure of capital structure. The design of the study takes account three gaps in our current understanding of this topic. Firstly, despite the huge literature on MFIs corporate governance and the significant role of women on microfinance outcomes, it is perhaps surprising that no research has been conducted on the effect of board gender diversity on MFIs capital structure. Secondly, the role of standard firm-specific and institutional-specific factors in determining MFIs capital structure decision is unclear. Utilizing an alternative regression framework may provide a reliable analysis. Thirdly, our understanding of the composition of MFIs leverage is far from complete. The relationship between deposit liabilities and non-deposit liabilities have not yet been subject of investigation. In response to these three major issues, this study employs empirical research methods using panel data analysis technique. We find that female directors have significant positive influence on deposits and subsidies. Furthermore, the study also shows evidence of risk-taking attitude among female directors when MFIs have three or more of them on board. Secondly, we find that the effect of firm-specific factors on MFIs capital structure differ across countries, while prior studies assume equal impact of these determinants. We find that institutional-specific factors significantly explain the variation of MFIs leverage across countries. However, commercially related institutional factors does not affect MFIs access to subsidies. We also show that there is an indirect impact of institutional factors, as we report their significance effect through firm-specific factors. Finally, the study provides empirical evidence that deposits and borrowings are substitutes rather than complements, and that the degree of substitutability is more pronounced in MFIs operating in a developed financial sector, where the degree of information asymmetry is lower.

The prediction of stock market indices and issues/questions associated with such predictions, have been a challenge for several academics, business analysts and financial researchers for many years. In the main, these challenges have been addressed within developed economies; statistically using appropriately determined macroeconomic independent variables. However, much less attention has been directed to the use of such variables within developing economies. This sparse attention forms the research background (Chapter I) and provides partial justification for the research itself. Thus, the research comparatively focuses on both, certain developing and selected developed economies. The precise context of the research considers/compares the impact and potential/possible relationships of meaningfully selected macroeconomic variables, upon respective stock market indices of two sets of economies - BRICS (i.e. Brazil, Russia, India, China and South Africa) and five meaningfully selected developed economies (i.e. France, Germany, Japan, UK and US). Thus, a significant motivation for the research is to evaluate/test theoretical linkages and empirical relationships of selected macroeconomic variables, in terms of their predictive power vis a vis related stock market indices. The research then offers consequent policy implications/contributions. It is of benefit and significance to (inter alia) investors, who would welcome "early signals" when evaluating stock markets via relevant indices. In so doing, the research adds theoretical and empirical knowledge, with practical potential, to this domain. Finally, within its concluding chapter, the thesis also offers some suggestions for further research and future researchers. Against the above background, the research addresses ten individual, but related, objectives (Chapter II). These objectives range from an attempt to identify the directional and potentially causal relationship between sets of selected macroeconomic variables and relevant stock market indices (Objective 3), through to determining dynamic relationships across sets of comparable indices (Objective 10). The literature review (Chapter III) confirms the relative absence of relevant empirical literature within developing countries. However, related literature within developed economies does prevail. For instance, in terms of the U.S., Domian and Louton (1997) find evidence that stock price declines (and so of market indices) are associated with abrupt decreases in growth rates of industrial production and increases are comparably associated with mild increases in industrial production. Equally, in terms of Germany, France, United Kingdom, Sweden, Japan, Canada and United States, Longin and Solnik (1995) provide evidence in terms of the predictive power of macroeconomic variables related to stock prices (and by implication indices). Accordingly, the extant research literature reveals a gap. There appears to be no study that comparatively analyses the effects of the 2007-8 financial crisis between the BRICS and the five developed countries, selected for this analysis. Equally, in contrast to the present research, there appears to be no study that (as "dummy" variables) tests the effect of the US quantitative easing policy undertaken during the financial crisis, on the financial markets of BRICS and the five selected developed countries. And, therein lies some of the uniqueness and original contribution of this research. Saunders et al. (2016) who consider the construction of research with the six "layers" of their "Research Onion" influence the research design and methodology (Chapter IV). Thus, with explanations provided within the thesis, the research engages with five of these "layers" as follows: philosophy - positivist, approach - deductive, strategy - archival, choice of method - quantitative - but with qualitative elements. The research time-horizon is longitudinal, with, respectively, the same dependent (identified stock market indices) and independent (selected macroeconomic variables) research variables being considered and analysed over a significant period of time (January 2000 to December 2015). Thus, the research data are mainly stock market indices (dependent variables) and meaningfully identified macroeconomic features (independent variables - derived from a Keran diagram), over the research period. Equally, appropriately developed variables, intended to quantitatively capture the 2008 financial crisis and the US quantitative easing are also used as dummy variables within the independent variable data set. The research data itself and its analysis, and the dependent and independent variables are identified and rationalised within the thesis. And, in this context, the research draws on, and analyses, pre-existing quantitative data stored (mainly) in the Bloomberg repository - a public database. This public accessibility obviates ethical issues relating to the access, use and storage of the research data. The research mathematical/statistical procedures and analyses (Chapter V), mainly computed descriptive and inferential statistics, are developed and presented within the research, Firstly, in order to condition and/or quality control variables, appropriate pre-statistical operations (including Units Roots Tests, Correlations, Seasonal Adjustments and Log Transformations) are duly performed on quantitative data. Then, descriptive statistics (including mean, mode, median and standard deviation) are developed (primarily) in order to reveal and describe properties of the variables attached to the cases, and to be assured that the inferential statistical tests to be applied to them are, indeed, appropriate. Finally, appropriate inferential statistics are applied and determined as necessitated by individual and particular research objectives.

Compared to mergers and acquisitions (M&A), corporate divestitures receive only little attention by the public. Typically, information about big M&A deals dominates the business news; however, in recent years, corporate divestitures have become increasingly important as a means of corporate strategy. This development underlines the need for in-depth academic research in this field. Although there has been substantial research undertaken in the US and - to a lesser extent - recently also in Europe, the research about corporate divestitures has been widely neglected in Germany, Austria and Switzerland (the D-A-CH region). This thesis, which is part of the capital market studies, investigates the shareholder value effects of corporate selloffs and spinoffs for Austrian, Swiss and German publicly traded companies during the period from 2000 to 2014. The research applies event study methodology, which rests on the assumption of efficient capital markets in the semi-strong form, i.e. shareholder value effects are evaluated based on unexpected changes in the market value of the seller immediately at the divestiture announcement. Moreover, the research identifies several factors influencing shareholder value creation. These factors are related to the divestiture transaction itself and the characteristics of the parties involved in such transactions. The results confirm the findings of previous US and European studies and show that in the D-A-CH region corporate divestitures are creating shareholder value. The abnormal announcement returns in a two-day event window, including the day before the initial public announcement, as well as the actual day of the announcement, average 1.24% for selloffs and 1.92% for spinoffs. In addition, the research shows that the relative size of the transaction in particular, as well as an increase in the corporate focus through the transaction, the use of proceeds, the financial situation of the seller and the type of buyer, influence the magnitude of shareholder value creation. Corporate management should consider these factors prior to making decisions about divestitures.