Singapore Management University School of Accountancy Research Paper Series最新文献

{"title":"The Role of Convex Equity Incentives in Managers’ Forecasting Decisions","authors":"Young Jun Cho, David Tsui, Holly I. Yang","doi":"10.2139/ssrn.3682412","DOIUrl":"https://doi.org/10.2139/ssrn.3682412","url":null,"abstract":"Prior literature suggests that voluntary disclosures of forward-looking information tend to lead to capital market benefits, but these disclosures may also result in negative capital market consequences if subsequent performance falls below expectations. We, therefore, hypothesize that convex equity incentives, which reward managers for stock price gains while limiting their exposure to losses, should promote greater voluntary forward-looking disclosure. Consistent with our hypothesis, we find a significantly positive association between equity incentive convexity and forecast issuance and frequency. We also find that the positive association is more pronounced for firms with higher sales volatility and managers with shorter tenure, in which cases managers are more concerned with missing their own forecasts. Our study suggests that the risks arising from providing voluntary disclosures are important considerations in managers’ disclosure decisions.","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117289017","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Informativeness of the Expanded Audit Report: Evidence from China","authors":"Beng Wee Goh, Dan Li, Muzhi Wang","doi":"10.2139/ssrn.3432107","DOIUrl":"https://doi.org/10.2139/ssrn.3432107","url":null,"abstract":"This study investigates whether the expanded audit report is informative to investors in the setting of an emerging economy. Using the recent staggered adoption of the expanded audit report for A+H and A share firms in China, we find robust evidence that abnormal trading volume and earnings response coefficients are higher, and stock price synchronicity are lower, in the post-adoption periods than in the pre-adoption periods. In additional tests, we find that the expanded audit report is more informative for non-State Owned Enterprises and for firms with higher information asymmetry. To the best of our knowledge, our study is the first to document systematic evidence that the expanded audit report is incrementally informative to investors in an emerging economy.","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"78 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131333506","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"What Does It Take to Become a Partner at a Big 4 Accounting Firm? Insights From Singapore’s Experience","authors":"Gary S. C. Pan, P. Seow, Yang Hoong Pang, K. S. Leong","doi":"10.5296/IJAFR.V8I2.13133","DOIUrl":"https://doi.org/10.5296/IJAFR.V8I2.13133","url":null,"abstract":"Due to the shift in partner’s identity, there have been growing interests in understanding characteristics, skills and behaviours of accounting partners. Given that Big 4 Accounting firms are supposedly international accounting firms that are organized in similar structures, an interesting question of whether the same partner qualities can be applied in the Big 4 accounting firms for a non-western context such as Asia. As far as we know, no such study has been conducted in an Asian context. We argue this could be of great interest to the Big 4 Accounting firms as Asia is one of their fastest growing regions and it is essential they have partners who are equipped with the right attributes to ride the waves of rapid growth. Accordingly, our research aims to identify the essential attributes of a partner in the Big 4 accounting firms in Singapore.Our data collection involved interviewing 24 partners and ‘partners-to-be’ from the Big 4 Accounting firms in Singapore. From the data, we identified a number of attributes of a partner. Essential attributes include technical expertise, strong client relationship, solid leadership skill, team management skill, a strong sense of integrity and ethics, and good business sense. There are a few ‘good to have’ attributes that include overseas exposure, being IT savvy and having ‘X’ factor. Our study also highlighted that nurturing partner attributes may involve a development process. Mechanisms within the partner development process include having senior partners to be mentor, imitate a role model, sense-making through leadership and wide exposure to clients.","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"129 4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115212863","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Cross-Country Differences in the Effect of Political Connections on Stock Price Informativeness","authors":"Yuanto Kusnadi, B. Srinidhi","doi":"10.2139/ssrn.3109232","DOIUrl":"https://doi.org/10.2139/ssrn.3109232","url":null,"abstract":"Abstract Using an international sample of firms from 28 countries, we document that there exists a negative relationship between political connections and the informativeness of stock price, as measured by idiosyncratic volatility (IV). This finding is robust to alternative regression specifications, sub-samples analyses, and concerns related to endogeneity. A more detailed analysis shows that out of the different types of possible connections, the connectedness of the owners is the primary driver of this result. Further, the negative association is only significant for firms in countries characterized by low institutional quality (corrupted countries, countries with low access to external equity markets, and countries with low media penetration). There is no evidence of any relation between political connections and stock price informativeness for firms in countries characterized by high institutional quality. Overall, our results show that although political connections exacerbate rent-seeking that weaken the firms’ information environment on average, the negative information consequences are compensated by the countries’ institutional quality.","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127579953","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Taxation and Pricing of Intangibles","authors":"A. Ross","doi":"10.2139/ssrn.2722836","DOIUrl":"https://doi.org/10.2139/ssrn.2722836","url":null,"abstract":"This research paper, by Alan Ross, was commissioned by the Singapore Tax Academy and SMU Centre of Excellence for Taxation. Alan was previously Head of Tax at PwC Singapore and held a number of leadership positions within PwC overseas prior to Singapore. He has over 30 years experience in International Tax and Transfer Pricing including major issues relating to the taxation of intangibles. The paper first addresses the importance of intangibles in terms of their massive contribution to corporate values in recent years. The relative ease of migrating ownership of intangibles from one jurisdiction to another, possibly lower tax jurisdiction, highlights the concern of many tax authorities. These authorities naturally want their fair share of taxes from the profits generated by such important value drivers where these are wholly or partly situated in their respective jurisdictions. This also explains the significant focus on intangibles in the OECD’s Base Erosion and Profit Shifting (BEPS) work. It should however be noted that this paper was issued shortly before the final BEPS papers were issued by the OECD in October 2015. While nothing fundamental should be changed as a result of the final OECD recommendations, the paper has not been updated for those. The paper focuses significantly on the issues raised by the BEPS project including addressing frameworks for analysing intangibles transactions, the importance of contractual terms and their consistency with actual conduct and functions and of course, the need to allocate intangible profits to those locations where the substantive value creating functions are undertaken. In this respect the so-called “DEMPE” functions are addressed (i.e. Development, Enhancement, Maintenance, Protection and Exploitation) and usefully illustrated by the author with practical real life examples detailing how the intangibles process can be mapped out to identify the truly important functions and risks, the range of values that might be attached to those and where they are carried out or in substance reside. Methodologies for pricing various intangibles transactions are explored in some depth including the availability (or lack thereof) of good third party comparables and the usefulness and limitations of publicly available databases in searching for the same. Comparable Profits methods and Profit Split methodologies are also discussed again noting the practical difficulties associated with applying such methods to unique intangibles. The pricing methods are usefully linked by the author to various methods for valuing intangibles as these should clearly be consistent with the pricing of individual intangible transactions and vice versa. The valuations section covers cost based, market based and income-based approaches to valuations, forecasting issues and discounted cash flow models including the use of Capital Asset Pricing Models (CAPM). The paper also explores some of the difficulties in valuing early stage technolog","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127674978","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Testing the Transparency Implications of Mandatory IFRS Adoption: The Spread/Maturity Relation of Credit Default Swaps","authors":"G. Bhat, Jeffrey L. Callen, D. Segal","doi":"10.2139/ssrn.2457725","DOIUrl":"https://doi.org/10.2139/ssrn.2457725","url":null,"abstract":"This study tests whether IFRS adoption increased accounting transparency based on model-driven hypotheses. Duffie and Lando (2001) show that changes to accounting transparency affect the spread/maturity relation of CDS instruments in very specific ways. Consistent with their model, we find that CDS spreads are lower across maturities following the adoption of IFRS, and the slope and concavity of the CDS spread/maturity relation are higher. These changes did not occur to the spread/maturity relation of a control sample of CDS instruments. Predicted changes apply more intensely to firms with low pre-IFRS transparency. Overall, this study provides strong evidence that IFRS adoption increased accounting transparency.","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127018825","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Strategic Informed Trading by Corporate Executives and Firm Value","authors":"Katherine Gunny, T. Zhang","doi":"10.2139/ssrn.1671542","DOIUrl":"https://doi.org/10.2139/ssrn.1671542","url":null,"abstract":"Proponents of insider trading argue that informed trading benefits shareholders and could have a positive effect on firm value, however opponents counter that insider trading could be detrimental to firm value. We measure the extent of strategic informed trading by the fraction of insider trades that are V-shaped purchases (defined as insider purchases that are preceded by negative abnormal returns and followed by positive abnormal returns) and Λ-shaped sales (defined as insider sales that are preceded by positive abnormal returns and followed by negative abnormal returns). Our strategic informed trading proxy is negatively associated with future earnings performance and Tobin’s Q, even after controlling for the direction of insider trading intensity. We adopt the view that there could be frictions that prevent the board from setting the level of informed trading at the optimal level at any given time. We find that our measure of strategic informed insider trading is positively related to restatements, another possible manifestation of agency problems resulting from the same frictions. Moreover, strategic informed trading declines significantly after announcements of earnings restatements, which are usually accompanied with significant corporate governance improvement. Overall our evidence indicates that the type of informed trading we identify represents suboptimal informed trading that is detrimental to firm value – consistent with the opponent view of informed trading.","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128028581","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"IAS 39 Reclassification Choice and Analyst Earnings Forecast Properties","authors":"C. Lim, C. Lim, Gerald J. Lobo","doi":"10.2139/ssrn.2160616","DOIUrl":"https://doi.org/10.2139/ssrn.2160616","url":null,"abstract":"In October 2008, the International Accounting Standards Board amended IAS 39 to allow banks to retroactively reclassify financial assets that previously were measured at fair value to amortized cost. By reclassifying financial assets, a bank can potentially avoid recognizing the unrealized fair value losses and thereby increase its income and regulatory capital during a market downturn. We examine the implications of the reclassification decision by banks for the properties of financial analyst earnings forecasts during 2008-2009, when economic conditions were highly volatile. We find that the reclassification choice during the financial crisis reduced analyst forecast accuracy and increased forecast dispersion. We also find that the observed decline in analyst forecasting ability is limited to the year of adoption when the economic environment was highly volatile.","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132933645","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Ownership Structure, Institutional Development, and Political Extraction: Evidence from China","authors":"Yuanto Kusnadi, Zhifeng Yang","doi":"10.2139/ssrn.1740184","DOIUrl":"https://doi.org/10.2139/ssrn.1740184","url":null,"abstract":"This paper examines how ownership structure and institutional development influence the liquidity management and investment policies of firms, in response to the threat of political extraction in China. First, we document evidence that firms controlled by private entrepreneurs hold less cash reserves than their state-owned counterparts. In addition, cash holdings (investments) is positively (negatively) related to the strength of economic institutions. The results are consistent with the hypothesis that managers of private firms and firms located in provinces with weaker institutions have incentives to protect their assets from being expropriated by politicians, through holding less cash (which are easier to extract) and pursuing more investments in fixed assets (which are harder to extract). Finally, we find that firms with close connections to politicians hoard cash reserves and display lower investments than their non- connected counterparts. This suggests that political connections mitigate the threat of political extraction for those connected firms. JEL classification: D23; H7; K0; P2","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129318659","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Unregulated Stock Markets in Second Life","authors":"R. Bloomfield, Young Jun Cho","doi":"10.4284/0038-4038-78.1.6","DOIUrl":"https://doi.org/10.4284/0038-4038-78.1.6","url":null,"abstract":"SLCapex is a stock exchange owned and operated by “residents” of the online virtual world Second Life. Despite its almost complete lack of regulation and legal protections against fraud or insider trading, issuers were able to raise approximately US$145,000 from investors, which grew to US$900,000 in market value before plummeting, resulting in overall investor returns of -71%. Investors in large issuances lost more than investors in small issuances, and small investors experienced more severe losses relative to large investors when more money was at stake, indicating that the market did a poor job of protecting investors from issuers and of providing a level playing field for investors. Theories from financial economics can explain the markets' poor performance in the absence of regulatory and legal institutions, but they cannot easily explain why issuers were able to raise capital in such a setting.","PeriodicalId":138031,"journal":{"name":"Singapore Management University School of Accountancy Research Paper Series","volume":"50 1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116568062","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}