Thesis (Ph.D.)--RAND Graduate School, 2007. / Includes bibliographical references.

Since the global financial crisis of 2008, attracting investment in a public company has not been a simple task (Krzus, 2011). Public trust in organisations was lost as a result of the crisis, owing to the lingering economic uncertainties that prevailed (Krzus, 2011). Through the full disclosure of all aspects that affect the operations of an entity, investors will be assisted in making an informed decision prior to making an investment in a publicly traded company (Singh, Wei, & Kaur, 2012). Integrated reporting provides investors with the necessary details, by making full disclosure of all aspects that affect the operations of an entity, including both financial and non-financial information, in a single report. Such information will enable investors to make a more informed assessment of the future prospects of the organisation in which they intend to invest (Singh et al., 2012). The purpose of this research effort, therefore, was to determine the relevance of integrated reporting to professional investors when making investment decisions, focusing specifically on JSE-listed construction companies. Grounded theory was used as a research design method. Grounded theory summarises data collected from empirical sources into categories. The data collected were based on the subjective perceptions of the participants in response to investigative interview questions. The researcher focused on a single context, namely an investment made by professional investors in JSE-listed construction companies within the Durban metropolitan in KZN. Non-probability, purposive sampling was used as the findings were not generalised to the entire population but were limited to the opinions and perceptions of professional investors in the Durban metropolitan area. The research effort resulted in valuable insight into how integrated reporting can be a useful decision-making tool for professional investors when undertaking investment in listed construction companies, in an attempt to attract investment in the sector. The researcher experienced a lack of responses from professional investors within the industry who were contacted for interviews. This lack of response could be considered to be a limitation in validating the outcome of the study. “Investors and integrated reporting” was identified as a theme that is material to the current state and potential future development of integrated reporting. Accordingly, this theme was used as a basis for this research effort that will enhance companies’ awareness of the benefits of compiling integrated reports as a tool to attract investors. This will assist in obtaining finance that can be used to develop and grow organisations.

M.Comm. (Accounting) / The emphasis given to narrative disclosure in corporate reporting, both in South Africa and internationally, has greatly increased in recent years. A major example of this was the issuance of The Conceptual Framework for Financial Reporting (hereafter Conceptual Framework 2010) by the International Accounting Standards Board (hereafter IASB) in 2010. The Conceptual Framework was developed using the objective of financial reporting as a foundation (IASB, 2010a: par-OB1). In 2010, the IASB issued an International Financial Reporting Standard (hereafter IFRS) Practice Statement known as ‘Management Commentary – A framework for presentation’ (hereafter IFRS Practice Statement on Management Commentary). The IFRS Practice statement on Management Commentary defines management commentary as “a narrative report that provides a context within which to interpret the financial position, financial performance and cash flows of an entity. It also provides management with an opportunity to explain its objectives and its strategies for achieving those objectives” (IASB, 2010b: par-IN3).

The objectives of this study are to determine the effect on certain financial statement relationships of using the equity method to account for subsidiaries in lieu of consolidation and to gather evidence to suggest whether or not bond rating agencies take into consideration these effects in rating corporate bonds. Sixty manufacturing companies listed in COMPUSTAT as having a subsidiary accounted for by the equity method compose the experimental group. The remaining manufacturing companies in COMPUSTAT compose the control group. Computation of eight variables from COMPUSTAT provided data from the companies' original financial statements. Consolidating the subsidiaries of the experimental companies using annual 10-K data made it possible to recompute the same eight variables with these subsidiaries consolidated into the parents' statements. Comparison of the variables for the companies before and after consolidation revealed that five of the eight variables were substantially different and that the differences were statistically significant. Horrigan's multiple regression bond rating model provided indirect evidence to examine which method (equity or consolidation) bond raters use in their rating process. The model is a surrogate for the rating process. Use of the model necessitated calculation of two sets of regression coefficients—one using data in which subsidiaries were accounted for by the equity method and a second when the subsidiaries are consolidated. A derivation sample drawn randomly from both the experimental and control groups provided the data for computation of the coefficients. Comparison of predictions using the two sets of coefficients and validation sample company data revealed that the consolidated method data generated predictions in greater agreement with Moody's bond ratings than did the equity method data. The N-probit technique indicated that the predictions of Horrigan's model are not biased. The research suggests that bond raters find data based on consolidation of subsidiaries more important in their analyses than data based on the equity method. This suggests that the FASB should modify generally accepted accounting principles with regard to the equity method of accounting for unconsolidated, majority-owned subsidiaries.

A research report submitted to the SCHOOL OF ACCOUNTING Faculty of commerce, law and management University of the Witwatersrand In partial fulfilment of the requirements for the degree of Master of Commerce / This study assesses the ability of Jansen, Ramnath & Yohn (2012) diagnostic, which is based on the relationship between the change in the asset turnover ratio and profit margin ratio, to distinguish between those firms suspected of manipulating reported financial figures by means of earnings management (EM) and firms that have not attempted earnings management. The study aims to determine whether, as suggested by Jansen et al (2012), the change in the asset turnover ratio and profit margin ratio as well as the direction of the change, can potentially indicate EM. In addition, the study aims to determine whether this new, simplistic diagnostic is incrementally useful to discretionary accruals in identifying EM. The sample of suspected EM firms was obtained from a study conducted by Rabin & Negash (2012), using kernel density estimation (Lahr, 2014). The results of this research suggest that Jansen et al.’s (2012) diagnostic is a useful indicator for identifying firms that might have manipulated reported financial figures through the use of earnings management. The study however shows that, due to weaknesses in either the diagnostic, in that it is limited in its ability to identify EM through sales, or in the method used to obtain the sample, this diagnostic is not incrementally useful to discretionary accruals models in identifying EM. Instead it should be used in conjunction with other models. / MT2017

This dissertation is an empirical investigation of security excess returns associated with the announcement of corporate spinoffs. Spinoff excess returns exist, but the sources of these returns are not clear. Varying levels of disaggregated accounting information result from spinoffs. The purpose of this dissertation is to relate these information levels to spinoff excess returns. A sample of 79 voluntary spinoffs from 1980 to 1987 is categorized according to levels of disaggregated accounting information. Analyses of the security returns for the entire sample and for the subsamples formed by information levels are performed. Additionally, the importance of the size of the spinoff and the combined impact of spinoff size and information levels are investigated. Daily excess returns from the CRSP Excess Returns File are the source of the dependent variable measure. Although the market reaction to spinoffs has been studied previously I the reaction to spinoffs from 1980 to 1987 has not been studied in detail. The key findings and implications of the empirical investigation include: 1. Spinoff announcements do result in significant excess returns. This is a confirmation of similar findings from earlier investigations. 2. The size of the spinoff has a significant relationship to the announcement return. This is also a confirmation of results from earlier spinoff studies. 3. Levels of disaggregated accounting information are not significantly related to spinoff announcement returns. Another possible source of spinoff excess returns has been investigated. 4. Levels of disaggregated accounting information are related to the dispersion of spinoff announcement returns. The value of accounting information in a new setting is known. 5. Interaction between spinoff size and information levels is related to spinoff announcement returns. A qualification of the effect of size on spinoff excess returns is demonstrated. 6. Levels of disaggregated accounting information are related to spinoff postannouncement returns. This finding suggests postannouncement drift and a topic for further research. / Ph. D.

The latest foreign currency translation standard, Statement of Financial Accounting Standard No. 52 (SFAS 52), promulgated in December of 1981, was issued in response to harsh criticisms of its predecessor, Statement of Financial Accounting Standard No. 8 (SFAS 8). Large foreign currency translation gains and losses, resulting from the use of the temporal translation method, were required to be reported in net income under the al1—inclusive income concept mandated by SFAS 8. In contrast, SFAS 52 adopted the functional currency approach whereby companies whose functional currency is the local currency are required to use the current rate method, generally resulting in only minor translation gains and losses that are required to be reported in a separate component of stockholders' equity. This study compares seven specific financial attributes between 83 Fortune 500 companies electing a December 31, 1981, compliance and 103 Fortune 500 companies not opting for a 1981 adoption. Univariate t—tests on each attribute indicate the strongest difference between the two groups is in the foreign currency translation gains and losses for 1981. The multivariate Hotelling T2 test simultaneously compared differences in the seven attributes for the two groups. Test results indicate the two groups of companies are different. Since the "yo-yo" effect on earnings was an often cited reason for opposing SFAS 8, differences in the volatility in reported earnings between the two groups for the five-year period covered by SFAS 8 (1976-1980) were examined using three different measures. The overall conclusion was that companies adopting the standard early did not have more volatility in earnings than the other group during the period that SFAS 8 was in effect. Security price reactions to the early adoption were also investigated. Surprisingly, a strong market reaction was indicated. Significant differences between the cumulative average residuals (CARs) for the two groups began two weeks prior to year-end and continued for five months. The CARs for the group that adopted SFAS 52 early generally performed better than expected whereas the residuals for the companies that continued to report under the temporal method were worse than expected. / Ph. D.

Thesis (Ph. D.)--University of Hawaii at Manoa, 2004. / Includes bibliographical references (leaves 123-128). / Also available by subscription via World Wide Web / x, 128 leaves, bound ill. 29 cm

Thesis (MAcc (Accountancy))--University of Stellenbosch, 2005. / The fact that investors increasingly invest in companies from another country than the investor himself and the consequential globalisation of capital markets, resulted in the European Parliament and Council (EP) accepting Regulation No. 1606/2002 during 2002. The consequence of the regulation was that uniform accounting standards had to be implemented throughout the European Union (EU). The accounting standards that were accepted, are the International Financial Reporting Standards (IFRS) (previously known as International Accounting Standards (IAS)). The regulation further determined that the effective date of this required compliance with IFRS was 1 January 2005. At the time when the regulation was accepted, most companies that were listed on the JSE Securities Exchange of South Africa (JSE) still prepared their financial statements in accordance with South African Statements of Generally Accepted Accounting Practice (South African SGAAP). The implication of the acceptance of the regulation by the EP was that in the event that a company was not only listed on the JSE but also on a stock exchange in the EU, the financial statements of that company would have to be prepared in accordance with IFRS. In this study two groups of companies were selected for evaluation. The one group consists of companies with a primary listing on the JSE and a secondary listing in the EU (first group) and the other group has a primary listing in the United Kingdom (UK) and thus the EU, with a secondary listing on the JSE (second group). The purpose of the study is to identify the implications of the acceptance of abovementioned regulation on the financial reporting of the selected companies. Firstly, a study was made of the differences between the Generally Accepted Accounting Practice of the United Kingdom (UK GAAP) and IFRS. The reason for this largely relates to the fact that there are still substantial differences between these two sets of accounting standards. No such study was conducted in respect of differences between South African SGAAP and IFRS as South African SGAAP was completely replaced by IFRS during 2004 and hence no differences exist any more. The only exception relates to the 500 series of standards that are unique to South Africa. There are, however, only two issued standards in this series and hence no further attention was paid to that. Hereafter the 2002 financial statements of all the selected companies were evaluated by measuring it against an IFRS disclosure checklist for 2002. The purpose was to identify the extent to which the selected companies comply with IFRS by focusing on the areas with regards to which they do not comply with IFRS. It was found that the companies of the first group largely fail to comply with IFRS in respect of matters of disclosure, whilst the second group of companies sometimes also, in their application of recognition requirements and measurement guidelines, used different practices to those suggested by IFRS. This was largely attributable to the fact that there are substantial differences between UK GAAP and IFRS, whilst South African SGAAP and IFRS already were very similar until recently. Consequently, questionnaires were sent to interested selected companies in which they could give feedback on their level of awareness and perceptions of the required transition to IFRS by 2005 as well as the procedures that they have followed or will follow in their process of transition to IFRS. Fourthly the 2003 financial reports of the selected companies were evaluated for compliance with IFRS by measuring it against the IFRS disclosure checklist that would be applicable on their 2004 financial periods. This was done in order to determine whether the selected companies showed any progress in their level of compliance with IFRS. This process also identified which IFRS, which were issued during 2003/2004, will be applicable on the 2004 or later financial periods of the selected companies, as these are further areas that will demand the attention of the selected companies in their process of becoming IFRS compliant. It was found that all selected companies showed rather little progress in their level of IFRS compliance. It is however concerning that even though South African SGAAP were previously very narrowly aligned with IFRS, the companies of the first group still fail to comply with fairly simple disclosure requirements. It would thus appear that they do not take the process of transition to IFRS serious enough. The fact that the second group of companies also did not make much progress can still be justified by the fact that UK GAAP were not aligned closer to IFRS during 2003 and most of the selected companies were still busy with the planning process for the transition to IFRS. It is expected that the financial statements of these companies will display substantial progress in their 2004 financial periods. Finally the compliance mechanisms were studied in order to determine which processes are in place to ensure that companies will indeed comply with IFRS. This study was done in respect of the EU, the UK and South Africa. All three these regions either already have or will have bodies in the near future that will have the task of evaluating the financial statements of listed companies for IFRS compliance. The conclusion is however that as a result of the negative consequences of noncompliance with IFRS sufficient factors do exist that will motivate companies to fully comply with IFRS. In addition, the listing requirements of the JSE has changed and financial reporting in accordance with IFRS is now a requirement.

This study investigates reputational penalties for two main types of corporate scandals in China: accounting scandal vs. corruption. Compared with U.S. firms that experienced an average of 41% drop in firm value if accounting scandal was disclosed, I find that accounting scandals are less destructive to firm value in a relationship-based economy such as China. However, while pure accounting scandals are relatively innocuous in China, I find that corruption charges against the firms' senior executives have serious consequences. I explore several explanations for such difference in market reaction to the two types of scandals, including political network effect, accounting write-off effect, corporate governance effect, incentive effect, and executive turnover effect. My empirical evidence provides consistent support to the political relationship explanation which indicates that the damaged social and political networks and the ability to contract caused by the corruption charges would have a more negative impact on firms' operations and performances. Although my results do not fully eliminate all the other alternative explanations, they are likely to be a less important reason for the stronger reputation penalties for corruption charges than accounting scandals in China. / Zhang, Fang. / Adviser: T.J. Wang. / Source: Dissertation Abstracts International, Volume: 72-11, Section: A, page: . / Thesis (Ph.D.)--Chinese University of Hong Kong, 2009. / Includes bibliographical references (leaves 60-61). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [201-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstract also in Chinese.