This study provides a test of the market valuation impact of Securities and Exchange Commission (SEC) enforcement actions for foreign firms. I examine the SEC enforcement policy towards foreign firms under its jurisdiction. In contrast to Siegel (2005) who examines earlier years, I find that the SEC's current (post-2002) enforcement intensity is considerable and has increased dramatically by comparison. I construct a novel test using the burgeoning series SEC enforcement events as changes to the legal environment that circumvents the issues associated with firm-level exchange-listing events (e.g. self-selection and simultaneous changes to firm traits). The tests focus on stock returns of foreign firms not targeted by the SEC during event windows surrounding SEC announcements of enforcements against foreign firms. This isolates the effect of a changing enforcement environment. I find that when the SEC takes action against a foreign firm, non-target foreign firms experience positive stock returns. Returns are amplified for firms from weaker home legal environments, suggesting that the returns are due to a perceived increase in SEC scrutiny. Finally, consistent with the market adjusting to the new enforcement regime, the magnitude of non-target firm returns declines with each sequential SEC enforcement action. The overall results provide evidence that SEC oversight plays a significant role in increasing the value of foreign firms, which supports the legal bonding hypothesis discussed in prior literature.

This thesis empirically analyses corporate governance reforms in Saudi Arabia using a mixed-methods research design. Saudi Arabia has recently pursued corporate governance reforms; the establishment of the Capital Market Authority (CMA) in 2003 and the publication of the Saudi Corporate Governance Code (SCGC) in 2006 constitute a central part of these reforms. This study attempts to provide new insights by exploring the corporate governance reforms pursued. In particular, by using an integrated research design framework, the study seeks to: (i) examine the level of compliance with, and disclosure of, the governance provisions contained in the SCGC by Saudi listed firms; (ii) ascertain whether the introduction of the SCGC has helped improve corporate governance standards in the Saudi corporate context; (iii) investigate the factors affecting voluntary corporate governance disclosure among Saudi listed firms; (iv) examine the association between a number of individual corporate governance mechanisms (i.e., equilibrium-variable model) and financial performance in Saudi listed firms; (v) analyse the relationship between voluntary compliance with the SCGC and firm financial performance by employing a broad composite corporate governance index (i.e., compliance-index model); and (vi) explore the level of awareness and appreciation of good corporate governance practices among key internal and external stakeholders in Saudi Arabia. The first five objectives outlined above are examined using a quantitative methodology, whereas the sixth objective is investigated by employing a qualitative research design. Efforts have been made to achieve integration between the two different research designs by applying the Explanatory Sequential Design (two sequential stages) proposed by Creswell and Clark (2011) within a multi-theoretical framework that incorporates insights from agency, managerial signalling, stakeholder, stewardship and resource dependence theories. The decision to employ a mixed-methods research design is motivated by the relative lack of, and recent calls for, mixed-methods approaches in corporate governance research. The mixed-methods approach seeks to provide a more complete understanding of the effects of corporate governance reforms on corporate disclosure and performance. In addition to the quantitative analysis, semi-structured interviews were conducted with five different groups of key stakeholders. The interview data offers further scope to: (ii) explore the corporate governance reforms; (ii) examine the impact of such reforms on actual governance practices; and (iii) provide a unique opportunity to further understand and explain the quantitative findings. Through the quantitative approach, the study examined balanced panel data of 80 Saudi listed firms from 2004 to 2010. This generated a total of 560 firm-year observations that were collected manually from the sampled firms’ annual reports. First, the constructed Saudi Corporate Governance Index (SCGI) showed that the introduction of the SCGC has helped improve voluntary corporate governance disclosure among Saudi listed firms. Second, this study found that board size, audit firm size, the presence of a corporate governance committee, government ownership, institutional ownership and director ownership have a positive influence on the level of compliance with the SCGC. In contrast, the analysis showed that the proportion of independent directors and block ownership are negatively correlated with the level of voluntary corporate governance disclosure. Third, the findings obtained from the compliance-index model suggest that good corporate governance practices, proxied by the SCGI, are positively related to return on assets (ROA), but have no significant relationship with firm value, as measured by Tobin’s Q (Q-ratio). Similarly, the results from the equilibrium-variable model are by and large mixed. Whereas CEO duality, proportion of independent directors, board sub-committees and director ownership are positively related to ROA, board size is negatively associated with ROA. On the other hand, the proportion of independent directors, board size, frequency of board meetings and director ownership are positively related to firm value, while CEO duality and the presence of board sub-committees have no significant relationship with firm value. The results from the quantitative analysis are robust to controlling for a number of potential endogeneity problems. Finally, the findings obtained from the interview data generally suggest that the regulatory authorities and the CMA in particular need to further strengthen efforts to enhance the level of awareness and appreciation of good corporate governance practices among key internal and external stakeholders of corporate governance in Saudi Arabia.

This research aims to understand why Beyond Budgeting, a management accounting innovation, has not been widely adopted. The traditional budgeting process has been the dominant control mechanism for managing businesses for over 100 years. It has been much criticised over the years and the shortcomings have been extensively documented. There have been attempts to develop and improve the budgeting process or elements of it, with Beyond Budgeting being the most recent heavyweight solution put forward. Beyond Budgeting was announced as a CAM-I project in 1997 and presented at the end of the project as a general management model by Hope & Fraser in 2003. The proponents of Beyond Budgeting report significant benefits from implementing it but despite the criticisms of the traditional budget the adoption level of Beyond Budgeting has been low. During the literature review, theories relevant to the adoption of new management accounting innovations were identified and research questions were derived. The multiphase empirical research took a two phase approach. In the first phase, management accountants worldwide, accessed through the Chartered Institute of Management Accountants (CIMA), were surveyed using a web-based questionnaire which culminated in 185 replies. In the second phase, following the analysis of the questionnaires, semi structured interviews were conducted with 50 respondents who had signalled their willingness to participate. The interviews gave further depth to the research expanding into areas not covered by the survey. From the empirical research it was concluded that although adoption of the concept of Beyond Budgeting as a whole has been low, the constituent parts of Beyond Budgeting are being adopted more widely than previously believed, but often not using the term Beyond Budgeting and also by managers who have not heard of the term. Abandoning the traditional budget, a cornerstone to moving to the concept as a whole, has turned out to be one of the biggest hurdles to its wider dissemination. Regulatory and other stakeholder pressure obliges organisations to compile annual budgets added to which accountants and non-finance managers are comfortable with budgeting and understand it. This has led to certain Beyond Budgeting techniques being introduced while retaining the traditional budget. Practical recommendations to professional bodies for more effective dissemination of innovations in future and a summary of pitfalls hindering the implementation of management accounting innovations make up the contribution to practice. The research contributes to theory by adding to the body of literature on the adoption of Beyond Budgeting, comparing the results with the findings of prior research, underlining the continuing relevance of existing theories by using their explanatory power to underpin the findings, documenting additional insights not found in the literature and by proposing a theoretical framework to document factors preventing the adoption of management accounting innovations.

This study explores the value creation in relationship banking from the relationship managers' perspective. A grounded theory approach (Strauss and Corbin, 1998) is adopted that theory is derived from data, systematically gathered and analyzed throughout the research process. This study derives concepts and categories from primary data and identifies relationships among these theoretical elements. This study provides a comprehensive picture of relationship banking as a social phenomenon, and supplies some theoretical and managerial implications. Moreover, this study links the literature relevant to relationship banking from different disciplines. This is a new way of looking at the relationship banking phenomenon and relevant literature in an integrated manner. This study conducted research to investigate why the case banks establish long-term relationships with corporate customers? The case banks considered macro conditions including the advances in technology, financial deregulation, and business globalisation when they adopted relationship banking. The interviewees perceived that relationship banking was efficient for managing risk, effective for saving cost and necessary for cross-selling. Some intervening conditions including customer information and knowledge, customer needs and customer confidence also influence the development of relationship banking. This study investigated how the case banks establish and maintain these relationships and how they organise and motivate relationship managers? The case banks built a relationship orientated corporate culture, organised employees around customer relationships and employed customervalue based performance measurement and incentive-based reward system. The employees cooperated inside the organisation and communicated with their customers regularly, exchanged information and provided relationship transactions. This study also investigated how the case banks and corporate customers get benefits from relationship banking? The interviewees perceived that the corporate customers gained benefits including fund availability, product availability, service quality, in-time heir, and business platform. The case banks gained benefits including reduction of credit risk, increase in income, sustainable profit, customer satisfaction, employee satisfaction. The findings were integrated and linked to some banking, finance, organisation and marketing literature related to relationship banking phenomenon. The case banks increased internal service quality through employee relationship management and improved employee satisfaction. The interviewees perceived that the corporate customers received benefits in the corporate banking market by customer relationship management. The increased customer satisfaction resulted in customer retention and profit to the case banks. The case banks perceived that added shareholder wealth improved shareholder satisfaction. This study concluded that the case banks, which had more relationship banking competitive advantages and better relationship banking, related processing systems were expected to outperform the competing banks.

The main purpose of this thesis is to test whether the quality of earnings improves the usefulness of accounting information in the decision making process. This is particularly important because the Financial Accounting Standard Board (FASB) considers the usefulness of accounting information as the primary objective of financial statements (FASB, 1978). To achieve this purpse, the thesis examines two interrelated subjects. The first subject of the study "The qualitative characteristics of accounting earnings and stock return" (Chaoter 3) assesses the impact of earnings quality on stock returns as a representative for the usefulness of earnings information. The research also attempts to extend the concept of earnings quality and its constructs based on the primary qualitative characteristics of accounting information from the FASB's viewpoint. Therefore, the study defines earnings quality as the extent to which reported earnings capture both dimensions of the qualitative characteristics of accounting information, relevance and reliability. Eight earnings quality attributes are characterized as either 'relevance-based' or 'reliability-based' to capture earnings information quality. Moreover, associations between earnings quality attricutes and stock returns are considered to test whether earnings quality information is reflected in the investors' decision-making process. The result indicates that all earnings quality attributes but one are associated with the returns of stock in the predicted way; the exception is conservatism. This finding suggests that the earnings quality attributes make accounting information useful for decision making, which is consostent with the FASB's assertion. In addition, comparisons of incremental explanatory power show that relevance-based earnings quality attributes explain more of the stock returns variation than do reliability-based earnings quality attributes. The second subject of the thesis, 'The effect of earnings quality on the value-relevance of accounting information' (Chapter 4), aims to link earnings quality constructs with the equity valuation model by assessing their effect on the relative desirability between the value-relevance of earnings and book value of equity. In this respect, the study investigated whether earnings quality constructs, systematized in the first topic of this study, are reflected in the equity valuation prcoess. This is an important issue, as the incorporation of earnings quality attributes into equity valuation models may provide more realistic estimates of the firm's value. The study conducts factor analysis on eight earnings quality attributes to construct an index of each earnings quality dimension for each firm-year. The results indicate that in portfolios of firms with high quality earnings (HH), the value-relevance of earnings and book value are respectively higher and lower than in portfolios of firms with low quality earnings (LL). Moreover, the study finds that the ability of earnings and book value jointly to explain stock price is significatnly higher in firms with high quality earnings information compared to firms with low quality earnings information. This finding confirms that earnings quality constructs provide relevant information in the valuation process.

Microfinance Institutions (MFIs) play important roles in socio-economic development and poverty alleviation particularly in developing countries. It has however been argued that the focus of MFIs is changing from the traditional purely social to commercial (mission drift) and has been criticised for neglecting the welfare of citizens and grassroots accountability in favour of commercialisation and accountability to donors/shareholders. This mission drift has resulted in changes in the structure and practices of MFIs. The study has been designed to examine how the accounting and accountability practices of a MFI can change in response to changes in its mission. The study presents case evidence from a large MFI operating in Cameroon with data collected through semi-structured interviews, informal discussions and documents. The study traces the evolution of the organisation and its accounting and accountability practices. A theoretical framework of an interpretive nature is used which draws on institutional entrepreneurship theory in order to highlight the importance of actors in the change process. The findings suggest a mission drift and transformations over the years from a social to a commercial organisation with the change impacting significantly on its structure and accounting and accountability practices.

This thesis examines the strategy formulation of small and medium enterprises in Greece by measuring the two principal dimensions of the strategy formulation process, the normative/descriptive dimension and the individual/collective dimension. For the purposes of the thesis a theoretical model of strategy formulation is proposed and evaluated, drawing upon the principles of contingency theory which presumes that there is no exclusive approach to strategy formulation which applies likewise to all firms in all circumstances. According to contingency theory there are many variables or factors which predict and influence the decision of formulating a strategy. Furthermore, the thesis investigates the role of accounting information on the process of strategy formulation by examining the relationship between the adoption of a specific strategy formulation approach and the information sources that SMEs use, the extensiveness of accounting information usage and the perceived usefulness of accounting information to SME managers. Using a data-triangulation (semi-structured interviews and a questionnaire), the findings of the study show the following: First, organizational size, perceived environmental volatility, the level of technology and specific owner manager characteristics (experience and education) are all significant predictors of SMEs adoption of a specific strategy formulation approach. Second, accounting information usage is positively associated with the normative and collective strategy formulation approaches. More specific, SMEs which utilize a broad range of information sources, which engage in extensive accounting information utilization and which perceive accounting information as very useful are positively correlated with the normative and collective approaches of strategy formulation. Third, financial performance was found to have a positive relationship with the descriptive and individualistic approach to strategy, meaning that SME owner managers who employ emergent strategies without the collaboration and participation of others in the process tend to achieve higher levels of profitability. Fourth, significant differences were found between SMEs having a different ownership status (family and non-family SMEs) and belonging to different business sectors (retail, construction and service providing firms) in relation to strategy formulation approach.

This thesis investigates the factors that influence the magnitude of goodwill impairment losses as well as the value relevance of these losses using a sample of 2,466 companies, drawn from 17 countries in which IFRSs have been made mandatory for all their domestic listed companies. The study period is 2007-2013 and includes 14,898 firm-year observations. The results obtained from the Tobit regression analysis involving variables drawn from agency/positive accounting theory, Hofstede’s theory of culture, as well as different theoretical institutional models, reveal that goodwill-impairment amounts are not only driven by economic factors and managerial reporting incentives, but also by country-specific factors, such as cultural and institutional variables. The results also confirm that the strength of the equity market is still the single most influential factor contributing not only to differences in accounting practices but above all, to differences in institutional quality between countries. The results of a K-means cluster analysis reveal that there are two groups of countries, corresponding to strong equity-outsider and weaker equity-outsider clusters. By comparing the relative associations between goodwill-impairment amounts and economic factors and managerial reporting incentives across these two institutional clusters, estimation results reveal that firms in the strong equity-outsider cluster have recorded goodwill-impairment losses that are, on the one hand, strongly associated with economic factors, and on the other hand, weakly associated with managerial reporting incentives. Further analysis also showed that while results for the pooled sample did not indicate that goodwill impairment losses were value relevant this was not the case for firms in the strong equity-outsider cluster, which have recorded impairment losses that are, on average, more relevant and more timely than those recorded by firms in the weaker equity-outsider cluster.

This thesis is structured upon three studies. The first study investigates whether mandatory IFRS adoption improves accounting quality in Latin America. The findings show that in the post-adoption period: accrual earnings management practices are reduced, value relevance of accounting increases, and the delay in recognising bad news reduces. However, these improvements cannot be found in firms with high bankruptcy possibility and poorly performing firms. The second study focuses on whether the analysts’ information environment has improved since the IFRS adoption. The results show that the mandatory adoption of IFRS improves analysts’ information environment, even after controlling for the firm-level reporting incentives. The third study focuses on whether IFRS has affected the cost of equity and debt in Latin America. The findings show that the cost of equity and debt decreased significantly in the post-IFRS period. Overall, the results found can be attributed to IFRS as the institutional environment has not changed significantly around the years of the mandatory adoption of IFRS. Thus, IFRS can contribute to enhance the accounting quality of Latin American firms, and may help to develop the capital market and the development of these firms.

<p>The three essays focus on important facets of R&amp;D such as the impact of competition, regulation and the difficulties in measuring R&amp;D and the dollars to be allocated to R&amp;D by a firm. In the first essay, we investigate Aghion etal. (2005), model on the relationship between R&amp;D and competition. We identify limitations in previous empirical tests of the model. Further, R&amp;D appropriability plays no role in the model although literature assigns it a significant role. Our comprehensive tests reveal that the model does not fully explain the R&amp;D-competition relationship, and the results depend on the competition measure used. We investigate the role R&amp;D appropriability and confirm its significance. Hence the model needs refinements. This study enhances our knowledge of the role competition and R&amp;D appropriability play in enhancing R&amp;D and helps formulate policies that promote R&amp;D. </p><p> In the second essay, we analyze the changes in pharmaceutical firms' stock prices following the recall of Vioxx, Merck's blockbuster drug, apropos three theories based on government regulation, product liability, and firms' reputations. We conduct an event study of estimated abnormal share returns using a Fama-French 3 factor model under seemingly unrelated regression (SUR) estimation. Our investigations support government regulation theory and suggest that R&amp;D-intensive firms suffer maximum adverse returns. Adverse returns reflect anticipated regulatory changes in approvals for new drugs. Drug recall harms the industry and future availability of new drugs. Stable and fair drug approvals policy can help the industry flourish. </p><p> The third essay critically examines measurement of R&amp;D. R&amp;D capital and cited patents are used in the literature to measure R&amp;D intensity and investigate market returns for R&amp;D. The results are ambiguous. Previous literature suggests that patents are distinct from R&amp;D expenditure, and R&amp;D is influenced by competition. We suggest eight new measures based on the interplay between R&amp;D and competition. We empirically test these measures on pharmaceutical and computer software industries which have the highest R&amp;D intensities of all industries. The new measures are more significant than R&amp;D capital and offer further insights on R&amp;D in these industries. These measures help in capital allocation for R&amp;D at firm level which maximizes stock returns. </p>