To supplement earnings reported under generally accepted accounting principles (GAAP), public companies often voluntarily report alternative measures of earnings called non-GAAP earnings (NGE). These companies assert that NGE exclude the effect of non-recurring transactions, thereby helping users of financial information to better assess the company's past performance and prospects. Because NGE measures are not well defined, managers can exploit the inherent discretion in calculating NGE to mislead users. Prior studies provide arguments and evidence on the informative as well as opportunistic use of NGE. However, the studies have examined the characteristics and informativeness of NGE with a focus on U.S. companies. The results of studies that consider the NGE disclosure by U.S. companies may not be generalizable to the cross-listed companies because foreign financial reporting standards are different from the U.S. GAAP. Further, prior studies report a difference in earnings quality of U.S. firms and cross-listed firms, which can also result in a difference in the informativeness of their NGE. To fill this gap in literature, I examine whether the informativeness of NGE of cross-listed companies is different from that of U.S. companies. This study contributes to the debate on the informativeness of NGE. It provides evidence that in general, NGE are equally informative for U.S. and foreign companies but foreign companies are more opportunistic in excluding recurring items from NGE. The results of this study are of potential interest to investors, regulators, and academics who are interested in and interact with cross-listed companies.

Business Management / D. B. L.

Thesis (MBA)--Stellenbosch University, 1992. / ENGLISH ABSTRACT: According to AC201 of the Institute of Chartered Accountants additional depreciation should be calculated. To date only a few listed industrial RSA companies have published such amounts. Such additional depreciation amounts therefore had to be estimated. Since 1980 the Graduate School of Business of the University of Stellenbosch has estimated the average age of fixed assets by using the following formula: Accumulated depreciation: Depreciation as per most recent income statement. The above formula resulted in incorrect estimates of the average ages of fixed assets. It was thus decided to follow another method. In this study project (one of three), additional depreciation of fixed assets will no longer be estimated by means of an average age (or average acquisition date). It was decided to calculate an investment profile for fixed assets. Annually the cost price of fixed assets was divided into different year-layers which were obtained from the cash flow statements. The replacement cost for each year-layer was annually determined by means of the Production Price Index. The sum of the different year- layers resulted in the total replacement cost. Additional depreciation now becomes the difference between replacement cost and original cost, divided by the life of the fixed asset. Only a handful of listed South African industrial companies calculate depreciation on land and buildings. To enable comparison with other companies, this study project concentrated on fixed assets other than land and buildings. Depreciation of fixed assets and new fixed assets acquired, are seldomly split between land and buildings on the one hand, and other fixed assets on the other hand. As a result various amounts had to be split between the above two components. A number of practical problems emerged. Especially revaluation of fixed assets and subsidiaries bought and subsidiaries sold, created many problems. The amount of revaluation of fixed assets is normally given as a net amount, whereas the revaluation of the debit was required. Not enough information on specific assets when a subsidiary is bought or sold was supplied in the cash flow statement (and its forerunner the Statement of Source and Application of Funds). If information on fixed assets acquired was given, such information normally indicated book values, whereas cost prices were required. These three study projects resulted in an expansion of the original project. A much more detailed study had to be undertaken on revaluation. Furthermore, a complete reconciliation of both the accumulated depreciation and cost prices of other fixed assets must be done. / AFRIKAANSE OPSOMMING: Addisionele waardevermindering behoort volgens RE201 van die Instituut van Geoktrooieerde Rekenmeesters bereken te word. Slegs 'n aantal industriële maatskappye in die RSA het hieraan gehoor gegee. Gevolglik moes die syfer vir die res van die industriële maatskappye beraam word. Sedert 1980 is die gemiddelde ouderdom van vaste bates deur die Nagraadse Bestuurskool van die Universiteit van Stellenbosch beraam aan die hand van die formule: Geakkumuleerde waardevermindering: Waardevermindering van die mees onlangse inkomstestaat. Die gebruik van hierdie formule het gelei tot foutiewe skattings van die gemiddelde ouderdom van vaste bates. Gevolglik is besluit om 'n ander metode te gebruik. In hierdie werkstuk (wat een van drie uitmaak) word addisionele waardevermindering van vaste bates nie meer bereken aan die hand van 'n gemiddelde ouderdom (of gemiddelde aanskafdatum) nie en 'n investeringsprofiel van vaste bates word daargestel. Die kosprys van vaste bates word dan jaarliks in verskillende jaarlae verdeel wat elk uit die kontantvloeistaat verkry is. Vir elke jaar word die jaarlaag se vervangingswaarde aan die hand van die Produksieprysindeks bereken . Die totaal van al die verskillende jaarlae word gesommeer om by die totale vervangingswaarde uit te kom. Addisionele waardevermindering raak dan die verskil tussen vervangingswaarde en oorspronklike kosprys, gedeel deur die leeftyd van die vaste bates. Aangesien slegs 'n klein persentasie van Suid-Afrikaanse genoteerde industriële maatskappye waardevermindering op grand en geboue afskryf, is slegs aandag geskenk aan ander vaste bates as grond en geboue ten einde onderlinge vergelykings tussen maatskappye te vergemaklik. Aangesien syfers vir waardevermindering van vaste bates en nuwe vaste bates gekoop heel dikwels nie onderskeid tref tussen grond en geboue aan die een kant, en ander vaste bates aan die ander kant nie, moes heelwat bedrae tussen die twee genoemde komponente geallokeer word. Heelwat praktiese probleme is ervaar. Veral herwaardasies van vaste bates en filiale gekoop en filiale verkoop het baie probleme veroorsaak. Die omvang van herwaardasies is gewoonlik 'n netto syfer terwyI die herwaardasie van die debiet benodig was. Verder was die inligting soos verskaf in die kontantvloeistaat (en voor dit die Staat van Bron en Aanwending van Fondse) dikwels onvolledig as dit kom by die verskaffing van besonderhede van watter items by die kosprys of verkoopprys van die filiaal ingesluit is. Waar inligting weI verskaf is ten opsigte van vaste bates, was dit gewoonlik slegs ten opsigte van boekwaardes, terwyl die kosprys van vaste bates verkry, inderdaad nodig was. Hierdie drie werkstukke het daartoe gelei dat die aanvanklike projek aansienlik uitgebrei moes word . Nie aIleen moet daar 'n baie meer omvattende ondersoek na herwaardasies gedoen word nie, maar ook 'n volledige rekonsiliasie van die jaarlikse geakkumuleerde waardevermindering. Hierbenewens moet die rekonsiliasie van die kosprys van vaste bates oak onderneem word.

Prior to Statement of Financial Accounting Standards No.121 (SFAS No.121): Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of, managers had substantial discretion concerning the amount and timing of reporting writedowns of long-lived assets. Moreover, the frequency and dollar amount of asset writedown announcements that led to a large “surprise” caused the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) to consider the need for a new standard to guide the recording of impairment of long-lived assets. This study has two primary objectives. First, it investigates the effects of SFAS No.121 on asset impairment reporting, examining whether SFAS No.121 reduces the magnitude and restricts the timing of reporting asset writedowns. Second, the study compares the information content (surprise element) of the asset impairment loss announcement as measured by cumulative abnormal returns (CAR) before and after the issuance of SFAS No.121. The findings provide support for the hypothesis that the FASB's new accounting standard does not affect the magnitude of asset writedown losses. The findings also provide support for the hypothesis that SFAS No. 121 does not affect the management choice of the timing for reporting asset writedowns. In addition, the findings suggest that the market evaluates the asset writedown losses after the issuance of SFAS No. 121 as good news for “big bath” firms, while, for “income smoothing” firms, the market does not respond to the announcements of asset writedown losses either before or after the issuance of SFAS No. 121. The findings also suggest that, for “big bath” firms, the market perceives the announcement of asset impairment losses after the adoption of SFAS No. 121 as more credible relative to that before its issuance. This could be because the practice of reporting asset writedowns after the issuance of SFAS No. 121 is under the FASB's authoritative guidance, which brings consistency and comparability in asset impairment reporting.

Business Management / D. B. L.

Thesis (M.Com. (Accountancy))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Accounting, 2016. / The mode of reporting performance by firms has shifted radically in recent years from a set of audited annual financial statements, to the inclusion of integrated and sustainability reports. This move has been particularly important for South African listed firms, which are required to prepare integrated reports (and therefore sustainability reports) due to the revision of the Johannesburg Stock Exchange (JSE) listing requirements. Although there are no specific accounting standards at present particularly for sustainability reports, certain reporting frameworks, such as the Global Reporting Initiative (GRI) guidelines, have influenced and become leaders in such reporting. The value relevance of the quality of sustainability reports is the focus of this study. This research report tests whether report quality as measured by the GRI reporting categories is value relevant for JSE listed companies, whether better reporting companies achieve better long term performance over the period 2007 to 2015. Value relevance is measured using a 4 tiered portfolio construction technique, which uses the GRI reporting categories to define comparative investment portfolios. The results indicate that GRI firms with the highest report qualities underperformed significantly when compared to the market, with the exception of the C report firms, which showed some level of outperformance in the later portfolio years. Interestingly, the portfolio of firms using frameworks other than the GRI outperformed all of the categories of GRI framework firms, as well as the market. The results for the GRI category firms therefore contradict some of the previous research on the value relevance of sustainability reporting which used different measurement proxies for quality, while the non GRI reporting firm results find similar conclusions. This research report therefore concludes that the GRI framework implementation is relatively low in a South African context, and that the GRI report categories do not provide a measure of report quality for the purpose of measuring value relevance, and rather measure the breadth of reporting. This is partly due to the early stage of development of sustainability reporting within South Africa, as well as the lack of a mandatory assured reporting framework such as the GRI, resulting in many firms preferring not to use the globally favoured GRI framework. It appears that most firms are tailoring the various frameworks available to their needs rather than using a consistent framework, which results in reports not being based on the same framework, and therefore not being comparable, even on a high level indicator basis. This highlights the need for revisions to be introduced in the King IV report which will hopefully assist in formalising the leading sustainability framework, and therefore standardising sustainability reporting, together with providing a linkage to the Code for Responsible Investing in South Africa, which requires investors to integrate their investment decisions with sustainability considerations. / MT2017

In this study, I investigate the effect of auditor-provided tax services (ATS) on firms’ levels of book-tax differences and investors’ mispricing of book-tax differences. The joint provision of audit and tax services has been a controversial issue among regulators and academic researchers. Evidence on whether ATS improve or impair the overall accounting quality is inconclusive as a result of the specific testing circumstances involved in different studies. Book-tax differences capture managers’ earnings management and/or tax avoidance intended to maximize reported financial income and to minimize tax expense. Therefore, my first research question investigates whether ATS improve or impair audit quality by examining the relation between ATS and firms’ levels of book-tax differences. My results show that ATS are negatively related to book-tax differences, suggesting that ATS improve the overall audit quality and reduce aggressive financial and/or tax reporting. My second research question examines whether the improved earnings quality for firms acquiring ATS leads to reduced mispricing of book-tax differences among investors. Recent studies document that despite the rich information about firms’ future earnings contained in book-tax differences, investors process such information inefficiently, leading to systematic pricing errors among firms with large book-tax differences. My empirical evidence indicates that ATS mitigate such mispricing, with pricing errors being lower among firms acquiring ATS compared with firms without ATS. Collectively, these results support the notion that ATS improve audit quality through knowledge spillover. Moreover, the improved earnings quality among firms acquiring ATS in turn helps reduce investors’ mispricing of book-tax differences.

Thesis (M.COM. (Accounting)) -- University of Limpopo, 2017 / Corporate environmental investments have traditionally been deemed to be an unnecessary cost to companies because of perceived or no significant return on investment. However, recent literature is highlighting financial benefits accruing from environmental investments. This study investigates the relationship between corporate environmental investment and shareholder value. The study uses the stakeholder and legitimacy theory to define the company‟s engagement with its external society and environment. From that perspective, the study examines the effect of corporate environmental investment on carbon emissions, hazardous solid waste disposal and company share price. Panel data multiple regression was used to investigate the relationship between the variables under study. Findings show a significant positive relationship between investment in carbon emissions and share price while there is an insignificant negative relationship between investment in hazardous solid waste and share price. The study contributes to the notion that reducing the environmental footprint generates positive shareholder gains by bringing new evidence from the South African mining industry. Further studies can be performed with company profitability as a measure of financial performance and further in a different sector such as manufacturing.

The main purpose of this study is to examine the need to modify the theory of accounting to ensure a standardised and comparable approach when accounting and reporting on intellectual capital. A literature review is used to describe intellectual capital categories and how to measure, recognise and report these assets in the financial statements on an entity. Financial reporting operates around strict requirements that are statement of financial position biased posing significant challenges in recognising and disclosing intellectual capital. The study also uses content analysis of corporate annual reports of the top 40 companies listed on the JSE Ltd in 2009 to determine the extent of intellectual capital reporting by these companies. Measuring and recognising intellectual capital in financial reporting is not limited by the requirements in respect of statutory disclosures, discretionary and contextual disclosures are recommended. Results of the content analysis show that companies use these discretionary and contextual disclosures to communicate information on intellectual capital. / Financial Accounting / M. Com. (Accounting)

by Lan Yat Si, Wong Tai Chun, Mark. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1999. / Includes bibliographical references (leaves 35-37). / ABSTRACT --- p.iii / TABLE OF CONTENTS --- p.iv / LIST OF TABLES --- p.vi / ACKNOWLEDGEMENTS --- p.vii / Chapter / Chapter I. --- INTRODUCTION --- p.1 / Chapter 1.1 --- Research Problem --- p.1 / Chapter 1.2 --- Overview --- p.2 / Chapter 1.3 --- Different Perspectives Explanation --- p.2 / Chapter 1.4 --- Earnings Management Explanation --- p.3 / Chapter 1.4.1 --- Big-bath Hypothesis --- p.3 / Chapter 1.4.2 --- Blaming Hypothesis --- p.3 / Chapter 1.5 --- Difference between Big-bath and Blaming Hypotheses --- p.4 / Chapter 1.6 --- Motivation and Potential Contributions of Study --- p.4 / Chapter 1.7 --- Chapter Summary --- p.5 / Chapter II. --- THEORETICAL FRAMEWORK / Chapter 2.1 --- Earnings Management --- p.6 / Chapter 2.1.1 --- Definition --- p.6 / Chapter 2.1.2 --- Overview --- p.6 / Chapter 2.1.3 --- Motivations --- p.7 / Chapter 2.1.4 --- Patterns of Earnings Management --- p.8 / Chapter 2.2 --- Executive Succession --- p.9 / Chapter 2.3 --- Accounting Change --- p.10 / Chapter 2.3.1 --- Definition --- p.10 / Chapter 2.3.2 --- Accounting Policies --- p.10 / Chapter 2.3.3 --- Accounting Bases --- p.11 / Chapter 2.3.4 --- Accounting Estimates --- p.11 / Chapter 2.3.5 --- Disclosure Requirements --- p.11 / Chapter 2.3.6 --- Discretionary Changes --- p.12 / Chapter 2.4 --- Summary of Related Empirical Research --- p.12 / Chapter 2.4.1 --- Copeland and Moore (1972) --- p.13 / Chapter 2.4.2 --- Moore (1973) --- p.13 / Chapter 2.4.3 --- Strong and Meyer (1987) --- p.14 / Chapter 2.4.4 --- DeAngelo(1988) --- p.14 / Chapter 2.4.5 --- Elliot and Shaw (1988) --- p.15 / Chapter 2.4.6 --- Lilien et al (1988) --- p.15 / Chapter 2.4.7 --- Chen and Lee (1990) --- p.16 / Chapter 2.4.8 --- La Salle (1990) --- p.16 / Chapter 2.4.9 --- Walsh et al (1991) --- p.16 / Chapter 2.4.10 --- La Salle et al. (1993) --- p.17 / Chapter 2.5 --- Chapter Summary --- p.17 / Chapter III. --- RESEARCH HYPOTHESIS AND METHODOLOGY / Chapter 3.1 --- Development of Hypothesis --- p.18 / Chapter 3.2 --- Sample --- p.20 / Chapter 3.3 --- CEO Change and the Likelihood of Accounting Change --- p.21 / Chapter 3.4 --- CEO Change and the Directional Effect on Earnings --- p.22 / Chapter 3.5 --- Statistical Test and Employed --- p.22 / Chapter 3.6 --- Chapter Summary --- p.22 / Chapter IV. --- RESEARCH FINDINGS / Chapter 4.1 --- Officer Titles for CEOs --- p.23 / Chapter 4.2 --- Accounting Changes --- p.24 / Chapter 4.3 --- Income Effect on Accounting Changes --- p.24 / Chapter 4.4 --- CEO Change and Accounting Change --- p.25 / Chapter 4.5 --- CEO Change with Positive and Negative Accounting Changes --- p.27 / Chapter 4.6 --- Chapter Summary --- p.28 / Chapter V. --- SUMMARY AND CONCLUSION / Chapter 5.1 --- Summary of Key Findings --- p.29 / Chapter 5.2 --- Implications and Discussion --- p.30 / Chapter 5.3 --- Concluding Summary --- p.31 / APPENDIX --- p.32 / BIBIOGRAPHY --- p.35