Categories
Accounting
  • 長文型監査報告書(Key Audit Matters) 導入に向けて --FSAパブコメに意見送付

    Source: Chie Mitsui
    Date Submitted: 18 Jun 2018
    Views: 23
    Downloads: 1
    Japan FSA had an announcement for amendment of the audit standard to disclose Key Audit Matters on the independent auditors report. For responding FSA's public consultation, investors, researcher, information provides, CPAs, company accounting managers, internal auditor are gathering together,  to discussed about this amendment of audit standard. This is the result of discussion.
  • AsianFA_The Effect of Shareholder Proposals on Accrual-based and Real Earnings Management

    Source: Jeffery Ng, Hong Wu, Weihuan Zhai, Jing Zhao
    Date Submitted: 06 Jun 2018
    Views: 29
    Downloads: 1
    Shareholder activism is an important source of corporate governance. In this study, we examine the effect of shareholder-sponsored governance proposals on earnings management. We find that on average both accrual-based and real earnings management diminish after the proposals are passed. There is, however, significant variation in the effects of different types of proposals. For those focusing on changing governance structures (e.g., board independence), we find reductions in both types of earnings management. However, for proposals aimed at improving financial reporting (auditor independence and clawback), we find that accrual-based earnings management decreases while real earnings management increases, suggesting a substitution effect after the accrual-based earnings management is constrained. Finally, for proposals that seek to link pay to performance, we find that both accrual-based and real earnings management increase, consistent with managerial incentives to boost performance. Overall, our study demonstrates that shareholder proposals to improve corporate governance can affect earnings management and that the effect can vary depending on the nature of the proposals.
  • AsianFA: Off-Balance Sheet Securitization, Bank Lending, and Corporate Innovation

    Source: Yiwei Dou, Zhaoxia Xu
    Date Submitted: 31 May 2018
    Views: 0
    Downloads: 0
    We investigate how corporate innovation is influenced by banks' off-balance sheet securitization. Exploiting a recent mandate that removes the off-balance sheet status of some securitized assets, we find a reduction in innovation for firms  borrowing from affected banks. The reduction is concentrated among firms whose banks experience more downward pressure on regulatory capital ratios and greater market discipline, and firms more dependent on external financing. Affected banks raised loan spreads and cut loan amounts after the mandate. The results suggest that off-balance sheet treatment of securitization has a real effect on firm innovation through bank lending.
  • AsianFA - How Does Media Affect Earnings Management? New Evidence from Commonality in News 

    Source: Chen Chen, Ngoc Tao, Thanh Huynh
    Date Submitted: 29 May 2018
    Views: 8
    Downloads: 2
    Building on the theoretical framework of Heinle and Verrecchia (2016), this paper empirically investigates whether and how commonality in news media can influence managers’ incentives to engage in earnings management. We find strong evidence that news commonality reduces managerial incentives to manage earnings. Employing a quasi-natural experiment, we provide plausibly causal evidence that the media can curb earnings management via reporting correlated news between a firm and other firms in the market. This effect is more pronounced among firms that are similar to each other and whose information environment is opaque. We further find that firms’ stocks with higher news commonality have smaller earnings response coefficients. These results together suggest that shareholders rely less on a firm’s earnings report when they can learn about the firm’s value using the information of other firms, thereby reducing the benefits for managers to engage in earnings management.
     
  • Better disclosure-how to judge material items on IFRS Financial Statements?

    Source: Chie Mitsui
    Date Submitted: 11 May 2018
    Views: 572
    Downloads: 15
    We have seen cases where information necessary for analysis are not disclosed in the breakdown of operating expenses, and a big number is disclosed, without its breakdown table in the footnote, as accounting item named "other“, in the IFRS financial statements.
    There is a disclosure option in expenses disclosure in IFRS, and companies think that they can choose one. By Function and By Nature, or their mixed, disclosed as one detailed table from the sum of SGA. In this case, it becomes difficult to understand detailed table, and "the other" becomes big number. We sent an opinion that threshold should be introducedto make disclosure more granular, and specific accounting items should be addedon IAS 1, to IASB before. 
    But this time, we discussed at the same time, some investors believe that most important disclosure should be focused on what is material for company, not threshold, not certain items.
  • Distributed ledgers and ICOs 

    Source: Maggie McGhee, Director, Professional Insights, ACCA
    Date Submitted: 10 May 2018
    Views: 201
    Downloads: 15
    Distributed ledgers and ICOs - presentation deck for ACCA - CFA Institute VIP Luncheon on 14 May 2018 which covers:

    - Using Distributed ledgers for the right reasons
    - Introduction of crytocurrencies and ICO activities over the past years
    - Risks for investors, regulators and the economies
    - Key considerations for the future



     
  • AsianFA - Disaggregated Sales and Stock Returns

    Source: Sumit Agarwal, Wenlan Qian, Xin Zou
    Date Submitted: 02 Apr 2018
    Views: 236
    Downloads: 6
    Using transaction-level credit card spending from a large US financial institution, we show that disaggregated sales provide accurate and persistent signals of customer demand relevant to a firm‘s stock pricing. After controlling for earnings and sales surprises, one inter-quintile increase in the adjusted customer spending during a firm‘s fiscal quarter leads to 0.3 (1.7) percentage points increase in the 3-day announcement (60-day post-earnings-announcement) CARs. The predictive power is stronger in firms with more sales from high-spending-capacity consumers or with more diversified consumer base. The adjusted customer spending also predicts future firm earnings and sales surprises.
  • 'AsianFA' Financial Flexibility Beyond Earnings Management: Do Pension Accounting Assumptions Create Shareholder Values?

    Source: Shingo Goto, Noriyoshi Yanase
    Date Submitted: 01 Apr 2018
    Views: 39
    Downloads: 4
    While firms often use pension return assumptions to manage earnings, they may also use high return assumptions to signal lower pension contributions to increase internal cash flows available for profitable investments. Benefits of such internal funding can overweigh forgone tax benefits. Our cross-sectional evidence suggests that pension return assumptions can exert real effects beyond earnings management, as they predict significant increases in operating cash flows, fixed capital investments, and R&D expenditures. The stock market places significant values on pension return assumptions beyond the valuation of management forecasts of earnings, especially among firms with low profitability or large pension underfunding.
  • How Data travel through the market?

    Source: Chie Mitsui
    Date Submitted: 23 Feb 2018
    Views: 1011
    Downloads: 37
    This is discussion for role and future of DATA from financial statement. 
    You may imagine that analysts read financial statements prepared by company, evaluate company’s value and compare with peer companies….BUT, in reality, financial statements are used in various ways. There are many quant analysts and passive investors using information as “data”, which is standardized in a database (DB), and they have become the majority of market participants globally. In such case, real time data distribution has important role on the impact on the stock price. Also, use of Artificial Intelligence (AI) in analysis and investment has become more common today. 
    First, financial statements have to be converted into “Data” and then the data can travel through the market. 
    We discussed how financial data are used, but from a different angle, and consider the role of future financial statements and accounting standards. 
  • IFA - Imputation of Missing Values in the Fundamental Data: Unleashing MICE Framework

    Source: Dr. Manish Kumar, Balasubramaniam Meghanadh, Lagesh Aravalath, Bhupesh Joshi, Raghunathan Sathiamoorthy
    Date Submitted: 05 Feb 2018
    Views: 0
    Downloads: 0
    Revolutionary developments in the field of big data analytics and machine learning algorithms have transformed the business strategies of industries such as Banking, Financial Services, Asset Management, and e-Commerce. The most common problems these firms face while utilizing data are errors, anomalies and missing values in their dataset. The major objective of the present study is to impute fundamental data that is missing in the financial statements under a multivariate framework. We use the ‘Multiple Imputation by Chained Equations’ (MICE) frame work to impute fundamental data by utilizing the interdependency among the variables and also complying with the accounting rules. Our proposed MICE framework utilizes the Expectation Maximization methodology in two stages with initial values based on predictive mean matching in the first stage and resolving financial constraints in the second stage to provide multiple solutions for a given line item. The MICE methodology is less time consuming relative to other techniques and allows us to implicitly enforce accounting constraints.
  • 会计基础设施助推“一带一路”

    Source: ACCA:钱毓益,
    Date Submitted: 27 Dec 2017
    Views: 276
    Downloads: 6
    2013 年,习近平主席在出访中亚和东南亚国家期间先后提出“ 丝绸之路经济带” 和“21 世纪海上丝绸之路” 的重大倡议,得到海内外广泛关注和积极响应。该倡议不仅为中国与沿线国家优势互补、互利共赢开辟了广阔的空间,也为中国外向型经济跨越式发展和深度参与全球经济治理提供了历史机遇。经过近四年的发展,“ 一带一路” 建设在政策沟通、设施联通、贸易畅通、资金融通、民心相通等方面都取得了丰硕成果。作为国际通用的商业语言,会计在“ 一带一路” 的发展过程中如何发挥基础设施的作用?基于此目的,由上海国家会计学院、ACCA 和德勤中国的专家组成“ 一带一路” 与会计基础设施课题组,研究会计基础设施如何助推“ 一带一路” 的国家战略。
     
    基础设施是指为社会生产和居民生活提供公共服务的物质工程设施,是用于保证国家或地区社会经济活动正常进行的公共服务系统。它是社会赖以生存发展的一般物质条件。基础设施包括交通、邮电、供水供电、商业服务、科研与技术服务、园林绿化、环境保护、文化教育、卫生事业等市政公用工程设施和公共生活服务设施等。它们是
    国民经济各项事业发展的基础。我们认为会计基础设施是指国际经济交往中,会计应充分发挥国际通用商业语言的作用,在金融合作、境外投融资、经贸往来等方面成为规划、决策、控制和评价的依据。政府可以根据会计报表的汇总信息进行有效的宏观调控,决定资源和利益的分配,使国家的经济健康、有序的发展。投资者可以了解国家和
    企业的财务状况,确定能否取得相应的投资回报。在现代社会中,经济越发展,对会计基础设施的要求越高;完善的会计基础设施对加速社会经济活动,促进国家间的经贸往来起着巨大的推动作用。
     
    会计基础设施是一个宏大的话题,“ 一带一路” 沿线国家的会计发展状况差异又很大,所以会计基础设施的概念和范畴都有待研究。作为初期研究成果,课题组首先研究沿线代表性国家的会计准则、税收风险和财会人才培养的经验和差异。首先,会计在资本市场上已经具有举足轻重的地位。会计通过对信息的收集、加工、总结,形成对经济决策和经济管理有效的信息系统,因此了解代表性国家的会计准则是非常重要的内容。其次,伴随着企业对外投资活动的愈发活跃,对
    外投资面临的税收风险也日益凸显,主要包括重复征税的风险、未充分享受税收协定待遇的风险、因转让定价和反避税问题导致的风险、海外并购标的企业的历史税收问题的风险和税收歧视等风险,如何规避和应对这些税收风险是企业走出国门的必修课。最后,无论是会计准则体系的协调与完善,还是税收风险的应对,都离不开国际化财会
    人才的培养,如何更好地培养具有全球化视野的专业财会人才,沿线国家是否有专门的机构或组织负责财会人才的培养、财会人才需要具备的能力有哪些、通过什么方式提升财会人才的胜任能力、不同国家的企业在培养模式上有哪些不同之处、有哪些经验值得互相借鉴等问题是各国、各企业非常关注的问题。关于代表性国家的选择,课题组
    借鉴了ACCA、上海证券交易所以及国家“ 一带一路” 信息中心等的研究成果,计算出的沿线国家的国别合作度指数分值,按照指数分值排名,确立了新加坡、马来西亚、阿联酋、波兰、捷克斯洛伐克、卡塔尔、匈牙利、泰国、越南、俄罗斯、印度尼西亚、哈萨克斯坦、印度和巴基斯坦等14 国作为首批研究对象。课题组采用调查问卷的方式,针对
    14 国的企业高管(包括本国企业和中资企业在这些国家的分支机构)于2017 年4 月到6 月之间进行了问卷调查分析。
     
  • Do Investors Price Accruals Quality? A Reexamination in the Implied Cost of Equity Capital

    Source: Lee-Seok Hwang, Seung-Yeon Lim
    Date Submitted: 20 Aug 2012
    Views: 54
    Downloads: 0
    This study investigates whether accruals quality (AQ) influences the expected returns of stock investors. We employ estimates of the implied cost of equity capital (ICOE) as the expected returns of stock investors because they are well specified ex ante without the need for noisy realized returns. Extending a current debate on AQ pricing, we control for several properties of analysts’ forecasts and find that AQ is positively and significantly related to ICOE.
  • Earnings Manipulation, Corporate Governance and Executive Stock Option Grants: Evidence from Taiwan

    Source: Ming-Cheng Wu, Yi-Ting Huang, Yi-Jing Chen
    Date Submitted: 20 Jun 2012
    Views: 179
    Downloads: 0
    Executive stock options (ESOs), serving as a compensation mechanism, are widely used in business administration. ESOs link managerial wealth to firm performance and shareholder wealth. The intrinsic value of ESOs is determined by the difference between the stock price and the strike price. Executives, as a result of self-interested incentives, would therefore manipulate firms’ reported earnings for influencing stock prices.
  • Relationship between Executive Stock Option Exercises and Earnings Management

    Source: Kyung Tae Lee, Sang Cheol Lee, Suhyeun Choi
    Date Submitted: 06 Dec 2011
    Views: 18
    Downloads: 0
    In this study we examine whether executives manage accounting earnings to maximize their own gains around stock option exercises. In particular, this study analyzes the effects of two factors, the value of exercised executive stock options and the change in the value of exercised executive stock options for a 1% change in the underlying stock price on the propensity of managers to engage in earnings management.
  • Post-Initial Public Offering Earnings Management Driven by Insider Selling Motives: Using KOSDAQ Initial Public Offerings

    Source: Youngsoon S. Cheon, Moonchul Kim, Munho Hwang
    Date Submitted: 17 Oct 2011
    Views: 0
    Downloads: 0
    This study examines whether initial public offering (IPO) managers overstate accruals before insider selling in order to gain profits from insider selling, and whether accrual inflations that are motivated by insider selling are pronounced when information asymmetry between managers and outsiders is high and managers have higher incentives to manage earnings.
  • Is Chief Executive Officer Power Bad?

    Source: E. Han Kim, Yao Lu
    Date Submitted: 15 Aug 2011
    Views: 24
    Downloads: 0
    This paper focuses on abnormal chief executive officer (CEO) structural power over top executives and examines its impacts on CEO pay for performance sensitivity and firm performance. We find that greater abnormal power is associated with weaker firm performance, but the relation is significant only when monitoring by external shareholders is weak.
  • Investor Perceptions of Earnings Processes and Post-announcement Drifts

    Source: Bong-Soo Lee, Oliver M. Rui
    Date Submitted: 15 Feb 2011
    Views: 122
    Downloads: 0
    In this paper, we generalize Bernard and Thomas’s [ Journal of Accounting and Economics 13 (1990), 305]“delayed response” hypothesis as an explanation of post-earnings-announcement drifts. By applying a modified version of Beveridge and Nelson’s technique of decomposing a time-series process of earnings into permanent and temporary components, we estimate the relative weight to proxy for investor perception on the temporary component of earnings.
  • Value Information of Corporate Decisions and Corporate Governance Practices

    Source: Hae-Young Byun, Lee-Seok Hwang, Woo-Jong Lee
    Date Submitted: 15 Feb 2011
    Views: 13
    Downloads: 0
    Extant published literature reveals that sound corporate governance practices enhance firm value. However, how it affects firm value remains largely unexplained. This paper addresses this question by providing a direct link between corporate governance practices and strategic corporate decisions, such as investment, financing, dividend policies, and cash holdings. Applying a unique dataset of firm-level corporate governance practices obtained from the Korea Corporate Governance Service in Fama and French’s ( The Journal of Finance , 53, 1998, 819) framework, corporate governance practices are expected to influence firm value by enhancing value implications of firm-level decisions.
  • Association Between Accounting Conservatism and Analysts’ Forecast Inefficiency

    Source: Jinhan Pae, Daniel B. Thornton
    Date Submitted: 22 Mar 2010
    Views: 0
    Downloads: 0
    We find that analysts’ earnings forecasts do not fully impound the implications of accounting conservatism. Forecast optimism is negatively associated with the magnitude of beginning-of-year balance sheet reserves (BSR), which are associated with conservative accounting in prior years. However, this result vanishes once we allow for the negative association, documented in several prior studies, between BSR and Basu’s asymmetric timeliness measure of conservatism [Journal of Accounting and Economics 24 (1997) 3].
  • The Information Content of Earning per Share and Social Contribution Value per Share in China

    Source: Teresa Chu,Yi Wang
    Date Submitted: 15 Dec 2017
    Views: 1169
    Downloads: 8
    This is a conference paper presented at the 2017 CSEAR North Asia Conference.
  • AFM - Mutual Funds and Affiliated Analyst Recommendations: Optimism or Information Sharing?

    Source: Kyoungwon Mo, Bobae Choi, Doowon Lee
    Date Submitted: 08 Dec 2017
    Views: 95
    Downloads: 1
    We question whether a new dimension of conflicts of interest exists for sell-side analysts due to a business group affiliation between asset management firms (AMFs) and brokerage firms. In family-controlled industrial conglomerates in Korea (chaebol), member firms keep close business ties and engage in mutual cross-debt guarantees with their fellow member firms. Interlocking ownership along with various business ties allows controlling families to exert substantial influences over all member firms of the same chaebol group. This study aims to investigate reporting incentives of affiliated analysts who are employed by a brokerage firm in a business group where the group holds both an AMF and a brokerage firm.
    In the US, mutual fund families have multiple distribution channels for their funds such as direct sales, fund supermarkets, or institutional sales. However, similar to European countries Korean fund management firms are heavily reliant on large banks, insurance companies or brokerage firms for their fund sales. Brokerage firms, therefore, are one of the most important marketing channel for mutual fund managers. In turn, mutual fund managers use brokerage service to trade, which makes them vital clients to brokerage firms. Ideally, fund managers should use brokerage firms which provide the most accurate research reports and the most competitive brokerage fees, while brokerage firms recommend the funds managed by the best performing AMFs. The problem is that the business groups in Korea are allowed to retain substantial ownership in both brokerage firms and AMFs, making those separate independent entities, by law, to be under influence of the same controlling families. This institutional structure restricts the chaebol member firms from following the ideal process in finding their business partners for brokerage services and fund distributions. However, both a brokerage firm and an AMF in the same business group can benefit by closely working with each other. First, brokerage firms can secure a steady stream of commissions from their affiliated AMFs. By commissioning a majority of the transactions to a fellow member firm, the AMF can also prevent their investment strategies from being leaked to other competitors in the market. Secondly, AMFs can secure a well-established distribution channel to promote their mutual funds. Employees in chaebol brokerage firms are also put under pressure to sell affiliated funds.
    In the presence of the group affiliation between a brokerage firm and an AMF, we conjecture two competing reporting incentives of affiliated analysts. On the one hand, to boost performance of affiliated fund management firm, analysts may give more optimistic opinions for affiliated stocks than other stocks. On the other hand, employees in the same chaebol can communicate more frequently via the internal media/portal services and through close business ties and employee movements between member firms. Therefore, affiliated analysts may utilize information advantages through the research pools provided by financial firms within the same chaebol and produce more accurate forecasts.
    By using analyst reports and the mutual fund holding data from July 1, 2000 to February 28, 2008, we calculate relative recommendations and forecast accuracy of affiliated and non-affiliated analysts. Our results show that more accurate and less biased earnings forecasts issued by the affiliated analysts on affiliated stocks, consistent with information sharing. However, affiliated analysts make more optimistic recommendations for affiliated stocks when the funding amounts on those stocks are high, when higher asset management fees are charged on the funds including those stocks and when those stocks are newly included to the affiliated fund.
    Our paper makes the following contributions to the extant literature. First, we investigate potential agency conflicts that analysts face caused by the business group affiliation between brokerage firms and AMFs. Our findings find that analysts become selectively optimistic to benefit affiliated mutual fund managers while maintain their reputation by providing more accurate forecasts for affiliated stocks in general. In addition, our findings contribute to the stream of literature on the investment strategies of mutual fund families. Mutual fund managers in US may face agency conflicts between their clients and mutual fund family that they belong to. The fund families are suspected to organize investment strategies across the member mutual funds to maximize the total group profit. Our study presents a special case where mutual fund managers strategically cooperate with affiliated analysts to maximize the total profits of their affiliated firms. Such tactical collaboration can also be used as window dressing purposes by mutual fund managers as we find the analyst recommendations are biased in favor of highly valuable stocks to affiliated fund managers.
     
  • Do Corporate Managers Manipulate Disclosure through Changing 10-K File Size?

    Source: Quan Gan, Buhui Qiu
    Date Submitted: 05 Dec 2017
    Views: 185
    Downloads: 0
    File size is a simple measure of disclosure document readability. This study shows that 10-K file size change has negative and robust cross-sectional stock return predictability. A hedge portfolio based on 10-K file size change generates an abnormal return spread of more than 3% per annum. 10-K file size change also has negative predictability on future cash flow news and the return predictability of 10-K file size change reflects mainly its information content on future cash flow news. Consistent with disclosure manipulation, the return predictability of 10-K file size change is found to be stronger for firms with positive file size changes, high information asymmetry, or low recent investor attention, and it derives from the discretionary component of file size change that reflects mainly managerial disclosure discretion. Overall, the findings strongly suggest that corporate managers engage in disclosure manipulation through changing 10-K file size.
  • The prevalence of global stock market inefficiencies gives rise to ample opportunities for stock picking

    Source: Chan Fook Leong, CFA
    Date Submitted: 19 Dec 2017
    Views: 1428
    Downloads: 0
    Media Release

    The prevalence of global stock market inefficiencies gives rise to ample opportunities for stock picking
     
    • Active management can yield alpha from inefficiencies in global equity markets particularly in the Asia Pacific region and in emerging markets 
    • These opportunities to generate excess risk-adjusted returns are in spite of trading costs 
    • There is a positive relation between transaction costs including the presence of short selling restrictions and alpha
     
    By Chan Fook Leong, CFA, for Asia-Pacific Research Exchange (ARX)
     
    Singapore, November 14. Professor Söhnke M. Bartram from University of Warwick highlighted the prevalence of global stock market inefficiencies over a lunch-time talk to a full house of CFA charter holders in the FTSE Room on the 9th floor of Capital Tower, Singapore.

    When there are deviations from fair value, stock picking can yield alpha. The mispricing in equities is prevalent globally, particularly in the Asia Pacific region and in emerging markets as uncovered by Professor’s Bartram research project using point-in-time accounting data from more than 25,000 stocks from 36 countries over a period of more than two decades.

    He and joint researcher, Mark Grinblatt, showed that the risk-adjusted returns are significantly larger in emerging than developed markets, suggesting that emerging markets are less efficient at incorporating material public information.

    Potential profits are also larger in the Asia Pacific region. Equity markets in Asia Pacific, the region with the largest alpha, experiences 26-50 basis point additional alpha compared to the Americas even after factoring in differences in the state of economic development.  

    In their research, fair value is determined using replicating portfolios instead of the more conventional discounted cash flow model or the structural asset pricing model where assumptions such as terminal growth and discount rates need to be determined. The replicating portfolio method is a simplistic non-discretionary approach as it relies on less assumptions to arrive at the fair value of a stock. Using international accounting data which is readily available to investors, firms with the same accounting metrics should have identical fair values.

    The replicating portfolios assign monthly fair values to more than 25,000 firms from 36 countries from 1993 to 2016. Thereafter, ordinary least square regression methods are employed to determine the most under- and over-priced stocks. Professor Bartram found that mispricing is greater in emerging markets and in the Asia Pacific region.

    The proxy of trading costs in this research are costs typically incurred by institutional investors. The study also shows that constructing a long-short portfolio still yields positive alpha in spite of trading costs from fees, commissions, and market impact. Moreover, simple adaptations of strategies that reduce turnover such as buy-and-hold strategy can improve alpha in emerging markets.

    Transaction costs which include trading and compliance costs also predict potential profitability – there is a positive relation between such costs and alpha even after controlling for variables such as the quality of a country’s information environment, its level of economic and financial development, and its regulatory framework. This implies that a hypothetical country with zero transaction costs will be devoid of alpha.  

    The other determinant of the level of alpha is the presence of short selling restrictions and other characteristics that might curb arbitrage activities. Limiting arbitrage activities impede the process of stocks reverting to fair value which in turn gives rise to mis-priced stocks.

    Stock market inefficiencies leads to presence of higher alpha in emerging markets and the Asia Pacific region compared to other parts of the world. The former two market or region represent the amongst highest transaction costs including the presence of the prohibition of short selling relative to others, and thereby leading to higher alphas waiting to be realized from picking these severely mis-priced stocks. Best of luck.
     
     
    The full research report can be downloaded from the Asia-Pacific Research Exchange (ARX) website (https://www.arx.cfa)
     
     
  • Predicting Credit Rating Changes Conditional on Economic Strength

    Source: Julia Sawici, Jun Zhou, Yonggan Zhao
    Date Submitted: 17 Nov 2017
    Views: 118
    Downloads: 0
    Predicting Credit Rating Changes Conditional on Economic Strength
    Julia Sawicki, Jun Zhou and Yonggan Zhao
     
    Extended Abstract 
     
    This paper addresses a fundamental credit analysis question: what is the probability that a firm's rating will be upgraded, downgraded or unchanged for a specific rating cohort and state of the economy? We develop a new structural model for predicting credit rating changes using both financial accounting variables and macroeconomic indicators. Economic strength (contraction / expansion) is predicted with a set of systematic factors in a Markov regime-switching model. Measures of firm-specific business and financial risk are used in a multinomial logistic regression model to estimate transition probabilities (upgrade, stay or downgrade) conditional on the predicted state of the economy. Tests of statistical differences in probabilities indicate that the likelihood of upgrade and downgrade are asymmetric across regimes; general probability of a downgrade during a recession is nearly twice the expansion downgrade probability; up-grade probabilities are relatively stable. 
     
    In addition to developing a sophisticated predictive model, our work sheds light on a major (and poorly-understood) concern related to broad economic ratings' determinants: the pro-cyclical nature of credit ratings. Ratings that are particularly harsh (lenient) in weak (strong) economic conditions can exacerbate tightening (loosening) of credit, contributing to volatility and uncertainty in financial markets. This potential destabilizing impact of ratings changes draws considerable attention of regulators and policy makers. Our estimates of upgrade and downgrade probabilities in expansions and recessions provide insight at the policy level and a valuable analytical tool for investors. 
     
    Our model is an important contribution to the literature. Research devoted to identifying the determinants of ratings has focussed primarily on entity-specific measures of operating performance and financial condition, such as profitability and leverage. While link between credit risk and macro-economic is clear (and empirical evidence points to the potential to improve ratings predictions by modelling systematic conditions), empirical work has proved wanting. The standard approach using linear regression analysis is not appropriate for predicting changes in credit ratings.[1] Our model captures macroeconomic states with regime-switching model that offers two important advantages: results are not specification dependent and the model is forward-looking in that ratings transitions are predicted contingent on a prediction about the state of the economy. Forward-looking investment decisions are based on future credit quality, including estimates of how likely a firm's rating will be upgraded or downgraded under various economic states. The ordered logistic regression analysis with the economic strength conducted in this paper provides this information. 
     
    Tests of statistical differences indicate that the transition probabilities in contractions are different from those in expansions. The nature of these differences largely depends upon whether the issue is investment or non-investment grade. In general, it is much easier for junk bonds to be upgraded than investment grade bonds, regardless of economic state. This is not the case with downgrades. Notwithstanding CCC and below, investment and non-investment grades share similar downgrade probabilities in expansion (ranging from 2 to 4 percent). The probability of being downgraded jumps for non-investment grade issues in contractions to a range of 5 to 11 percent. Comparing transition probabilities between states and within rating we find that investment grade issues tend to exhibit similar upgrade probabilities in both expansion and contraction, whereas downgrade probabilities are somewhat higher during contractions than during expansions. Regarding non-investment grade issues, it seems that the 'dogs' get a boost during expansions with a much higher probability of being upgraded. The differences become very pronounced as the rating falls (for, example CCC contraction upgrade probability of 3.8 percent triples to 14 percent in an expansion). The chance of a downgrade during contractions is much higher than in expansions, almost doubling in many cases. 
     
    While these tests provide strong evidence consistent with a procyclical nature of rating changes, an important question remains. Does the evidence point to harsher (more lenient) ratings criteria applied during weak (strong) economic conditions? Or is it indicative of permanent, rather than temporary, changes in firm-level creditworthiness? To develop some insight into this question, average changes in firm-level credit risk measures are calculated conditional on economic strength.  Preliminary analysis points towards evidence of distinct ratings criteria changes across regimes, consistent with procyclicality. This is an empirical question and the subject of further inquiry.
    By the very nature of the subjectivity involved in analyst-driven, forward-looking ratings, identifying the determinants of credit ratings will never be an exact science. However, our understanding credit ratings, in particular the factors that prompt rating changes, is vital to the well-functioning of capital markets. Our results provide insight into the stability of credit ratings. CRA publications and empirical evidence point to ratings that seek a balance between some continuum of stability (immunity from cycles) and accuracy (changing in response to changes in both firm and macroeconomic conditions). Can we be more precise in our understanding of where they might lie on a through-the-cycle and point-in-time continuum? In particular, to what extent does rating' determination reflect changes reflect the state of the maro-economy? This paper is a step towards answers to these questions which are of critical importance to financial markets, including investors, portfolio managers, corporations and regulators.  
     
     
    [1] Empirical modelling is particularly challenging because the parameters or functional forms are unstable, making it difficult to capture the complex nature of the interaction between the state of the economy and credit risk.  Figlewski et al (2013) demonstrate that results are extremely sensitive to model specification, choice of macro-variables, averages versus lagged versus contemporaneous, and time period. Estimating various specifications and they find
    that significance and macro-variable coefficient signs depend upon which variables are included in the model.
     
  • Different Faces of Understanding S&P BSE Sensex using valuation measures

    Source: Apoorva Ramani
    Date Submitted: 13 Nov 2017
    Views: 227
    Downloads: 15
    In India, investors often use to the BSE Sensex index to keep a track of market valuations. Most investors interpret the movement of Sensex in different ways using valuation measures. Price to earnings (P/E) and Price to book value (P/B) ratios are predominantly used to analyse the Sensex movement. When these ratios are used they in fact convey different stories about S&P BSE Sensex. These ratios help the investor to understand whether the market is undervalued or overvalued. The price to earnings ratio is calculated by taking the ratio of Market price of the stock to its Earnings per share (EPS). A high price to earnings ratio indicate that the investors are expecting high earnings growth in the future when compared to low P/E. The price to book value ratio is used to compare a stocks market value to book value. A low P/B ratio could indicate that the market/stock is undervalued. The growth of the equity market in India has been phenomenal in the present decade. Right from early nineties, the stock market witnessed heightened activity in terms of various bull and bear runs. One can identify and understand all the booms and busts of the equity market from the Sensex market. It has indeed emerged itself as one of the most prominent brands in the country.         
     
  • Jollibee Foods Corp. : The Champ of Fast Food

    Source: Louis Banzon
    Date Submitted: 18 Oct 2017
    Views: 185
    Downloads: 16

    Jollibee Foods Corp. gets a BUY recommendation based on the analysis of financial statements, information on quick –service market, well-known stock analysts forecasts, and significant events for the period 2006 to 2016 (up to 30 September 2016).

  • The importance of trust for inter-organizational relationships: A study of interbank market practices in a crisis

    Source: Alexander Rad
    Date Submitted: 28 Sep 2017
    Views: 547
    Downloads: 0
    The paper presents crisis contingent practices relevant for counterparty risk assessments in the interbank market.
  • Why excessive aggregation “Other operating expense” in P&L?

    Source: Chie Mitsui,
    Date Submitted: 25 Sep 2017
    Views: 808
    Downloads: 57
    To explore the issue of why the line item such as "Other operating expense", presented in the P&L and notes to the financial statements, is frequently a large amount, in the context of the rest of the items in the P&L, that is not accompanied by additional detail or disaggregation. This issue results in investors having a diminished ability to understand the financial performance of those companies that do not disclose this detail. We would like to discuss the issue of why companies fail to disaggregate these line items, and think about how disclosures could be improved. In addition, 
  • Global Market Inefficiencies

    Source: Sohnke M. Bartram, Mark Grinblatt
    Date Submitted: 22 Sep 2017
    Views: 898
    Downloads: 66
    Academic Research Paper
  • Cash Conversion Cycle and the Financial Performance of Philippine Firms

    Source: Francis Adrian H. Viernes
    Date Submitted: 11 Sep 2017
    Views: 544
    Downloads: 66
    This is the first documented study of the relationship of the Cash Conversion Cycle and the performance of Philippine firms, submitted as a graduate course requirement.
  • Mergers and acquisitions: how do you view their underlying substance?

    Source: Hong Kong Institute of Certified Public Accountants
    Date Submitted: 30 Aug 2017
    Views: 2779
    Downloads: 74
    Are you a shareholder or analyst with an interest in mergers and acquisitions? 
    The accounting standard-setters need your expertise. 

    We are aware that M&As are common and can take the form of group restructurings or third party acquisitions. There is usually no question that there is underlying substance to acquisitions with third parties - the transaction price typically represents the fair market value of the acquired business. But M&As within a group might arguably be different.

    The findings of this M&A survey will be published and will help us consider whether all M&As should be accounted and reported in the same way. 

    To participate, click on this link: http://survey.hkicpa.org.hk/index.php?sid=57118&lang=en, or download and email us the attached survey: outreachhk@hkicpa.org.hk
  • Companies in Asia Hold the Highest Levels of Cash

    Source: Andrew Stotz PhD, CFA
    Date Submitted: 19 Aug 2017
    Views: 317
    Downloads: 0
    In this short video, I review my latest research on the level of cash that companies have on their balance sheet. My main conclusion is that companies in Asia have the highest levels of cash compared to all other regions across the world.
    This finding is important for two reasons: First, to help us think about how much cash we should be forecasting when we are valuing companies and second, it helps us understand the underlying strength of the balance sheet of companies in Asia. 
  • The Belt and Road Initiative: Reshaping the global value chain

    Source: ACCA + SSE Research Team
    Date Submitted: 08 Aug 2017
    Views: 7643
    Downloads: 110

    The B&R research project was conceived in August 2016. It explores the opportunities and challenges for B&R countries (including China) in politics, economics, society and culture through desk research, roundtable conferences and workshops.

    This approach considers local experiences and international vision, historical achievements and future development.

    The report is divided into three areas:

    • Desk research - an exhaustive review of B&R-related policies 
    • Case studies - based on interviews with seven enterprises that are deeply engaged with B&R: China Communications Construction, Power China, Bank of China, Sany, Shanghai Electric, Conch Cement and Changjiang Electronics Technology
    • The third are explores the integration and innovation of B&R. These findings are based on roundtable and workshop discussion with those who are working close to the B&R Initiative.
  • Emerging from the shadows - The shadow economy to 2025 

    Source: Boon Yew Ng
    Date Submitted: 08 Aug 2017
    Views: 469
    Downloads: 2
    The shadow economy (SE) is expected to decline globally by 2025, from 23% of global GDP in 2011 to an estimated 21% in 2025, on the basis of a mathematical analysis of the factors behind the SE. But the decline is not uniform, and a number of countries, particularly emerging market economies, are expected to experience an increase in the SE as a percentage of GDP by 2025.

    Emerging from the shadows, the shadow economy to 2025 provides a comprehensive examination of the global SE. The report is divided into four sections: SE forecasts for 28 countries to 2025, key factors shaping the SE, the impact and management of the shadow economy and finally recommendations for the accountancy profession
  • Are the New Auditor's Report Insightful?

    Source: Hong Kong Institute of Certified Public Accountants, Standard Setting Department
    Date Submitted: 26 Jul 2017
    Views: 1444
    Downloads: 0
    The Standard Setting Department of the Hong Kong Institute of Certified Public Accountants is conducting a survey on the new auditor's report of listed entities. Feedback from users of financial statements is important for us to know whether the new requirement serves users' needs, and if not what could be improved. http://survey.hkicpa.org.hk/index.php?sid=55433&lang=en
     
    The survey is open until the end of August. For enquiries: outreachhk@hkicpa.org.hk>


    Background of the new auditor's report
    From financial year ends 15 December 2016 onwards, auditor's reports of listed entities are required to describe key audit matters (KAMs) to provide greater transparency about the audit that was performed. Communicating KAMs assists intended users of financial statements in understanding matters that were of most significance in the auditor's professional judgement; and understanding the entity and areas of significant management judgement.
  • Earnings Management and Dividend Policy: Empirical Evidence from Major Sectors of Pakistan  

    Source: Farhan Ahmed, Neha Advani, Muhammad Kashif
    Date Submitted: 17 Jul 2017
    Views: 1154
    Downloads: 21
    This paper means to inspect the regression between Price earning (P/E) ratio as a proxy of earning management and payout proportion that is dividend policy. This paper utilises multivariate analysis to examine the relationship between price-earnings ratio and dividend policy. Using 10 years annual data from 2006-2016, this paper delivers new confirmation demonstrating that when the return on equity is more prominent than the required rate of return, the P/E ratio and dividend payout ratio shows a negative relationship and positive convexity or vice versa.
  • Title: A Resolution to the Problem of Multiple IRR: A Modified Capital Amortization Schedule (MCAS) Method for Non-Normal Cash flow (NNCF) to Obtain a Unique IRR (July 11, 2017).

    Source: Kannapiran C. Arjunan
    Date Submitted: 12 Jul 2017
    Views: 164
    Downloads: 1

    Title: A Resolution to the Problem of Multiple IRR: A Modified Capital Amortization Schedule (MCAS) Method for Non-Normal Cash flow (NNCF) to Obtain a Unique IRR 

     

     
    The problem of multiple IRR remained unresolved for almost a century. This problem is associated only with some of the non-normal net cash flow (NNCF) that wrongly includes reinvestment income as income or benefit stream. The reinvestment income, which is not a benefit from the investment or project under analysis, causes the multiple IRR problem. This is often misinterpreted as problem of IRR but its neither a problem with IRR nor NPV. It is a problem associated with some NNCF data and the failure to update the discounted cash flow (DCF) or capital amortization schedule (CAS) methods to handle such problem.
    Using NNCF data, analyses are conducted with special emphasis on topics such as:


    a.      A modified CAS (MCAS) method that eliminates multiple IRR associated with NNCF data;
    b.      Multiple IRR problem and the Descartes rule of sign and Norstrom’s criteria;
    c.      A NNCF data with a unique IRR under DCF / CAS methods vs IRR by MCAS method;
    d.      Resolving the problem of multiple IRR by MCAS Method Versus MIRR; and
    e.      A critical review of the GIRR and AIRR Methods to Estimate NNCF.
    The salient findings of the present analysis are:
    a.      The MCAS method, presented in this paper, identifies and eliminates the reinvestment income associated with NNCF investments (with positive opening balance in one or more years in the CAS) from the benefit stream;
    b.      This new method overcomes the multiple IRR problem and leads to a unique and real IRR; The effectiveness of MCAS to handle the NNCF data is illustrated with numerical analysis;
    c.      The assumption of reinvestment at IRR or at hurdle rate in NPV are false assertions in the cases of normal NCF and some of the NNCFs. However, such reinvestment is evident only with NNCFs with positive opening balance in one or more years under the CAS.
    d.      The reinvestment income under the benefit stream causes multiple IRRs and multiple NPVs too. As NPV is a static point estimate (at hurdle rate) the multiple NPVs are not exposed. Without eliminating the reinvestment income, none of the criterions viz. NPV, IRR or MIRR, is useful as a decision criterion. Neither NPV or MIRR is a preferred criterion, under such circumstances, as recommended in some published works.
    e.      The MCAS method is appropriate for both normal NCF and NNCF as illustrated in this paper. CAS or DCF method is appropriate only for normal NCF investments.
    f.       Even when there is no multiple IRRs with some NNCFs under DCF/CAS method, the MCAS method estimated IRR or NPV, without reinvestment income, are different from that of the DCF/CAS estimated IRR and NPV. For a consistent estimate of IRR and NPV, the MCAS method is most appropriate both for NCF and NNCF investments.
    g.      The generalized IRR (GIRR) and the Average IRR (AIRR) are also not appropriate estimates for NNCF and they are not NCF consistent as discussed in this paper. The problem of multiple IRR associated with the popular cases of NCF investments used in GIRR and AIRR, are also resolved now.
    In conclusion, the MCAS method resolves the problem of multiple IRR and leads to a unique IRR that is real and NCF-consistent. Neither the NPV nor the MIRR could resolve the problem of multiple IRR.

  • Divestment from fossil fuel companies

    Source: Rachel Jackson, Gordon Hewitt
    Date Submitted: 30 Jun 2017
    Views: 1033
    Downloads: 8
    Climate scientists have been able to calculate a global carbon budget that details the amount of greenhouse gases that can be emitted while still allowing a reasonable chance of keeping within 2°C of warming – the threshold temperature increase above which there is likely to be dangerous climate change. In light of this, it is becoming untenable for policymakers and business leaders to ignore climate change. At present, global efforts to keep within this carbon budget are falling well short, and the current rate of decarbonisation shows that the carbon budget will have been exceeded by 2034. 

    Research has shown that the potential greenhouse gas emissions from use of the fossil fuel reserves held by the world’s largest 100 listed coal companies and the world’s largest 100 oil and gas companies also exceeds the global carbon budget. Such companies continue to explore for fossil fuel reserves, so the gap between the amount of fossil fuels available to burn and the amount that should be burned is set to increase. 

    These points highlight the disconnection between the scientific consensus on climate change and the response from policymakers and business leaders in the energy sector. In response to this disconnection, the fossil fuel divestment campaign aims to pressure governments – via legislation – to limit the amount of fossil fuels that can be extracted and used; pressure fossil fuel companies to shift to cleaner, less carbon-intensive forms of energy; and pressure governments to implement a ban on fossil fuel exploration and subsidies. This campaign is being spearheaded by 350.org, which focuses primarily on universities but is also gaining traction with religious and public sector asset owners and pension funds. 
  • Filling the information black hole: How are fossil fuel companies reporting on the stranded asset risk?

    Source: James Bonner
    Date Submitted: 30 Jun 2017
    Views: 1381
    Downloads: 4
    A new survey looks at how fossil fuel companies report on their stranded assets using integrated reporting (). Investors and regulators are becoming increasingly aware of the potential threat from ‘stranded assets’ to financial stability and to fossil fuel company market valuations. With this awareness comes the need for greater information to help investors and others understand these risks better and appreciate the extent to which companies are taking mitigation action. This new survey looks at how fossil fuel companies have been responding to this in their reporting.
  • Sustainability Matters

    Source: Rachel Jackson, Gordon Hewitt
    Date Submitted: 30 Jun 2017
    Views: 411
    Downloads: 2

    The topics have been selected on the basis of ACCA’s sustainability research to date and although for these purposes have been separated out, we acknowledge that these topics are interrelated. As the scope of ACCA’s research broadens over time, it is expected that additional topics will be added to this list.

    • sustainability reporting
    • integrated reporting
    • assurance of non-financial reporting and disclosures
    • climate change
    • natural capital
    • green economy.

    This paper serves as a reference for our key stakeholders, as well as a means of summarising the outcomes and conclusions of ACCA’s research activities. 

  • Operating? /non-Operating? Is current disclosure helpful for understanding companies?

    Source: Chie Mitsui
    Date Submitted: 26 Jun 2017
    Views: 279
    Downloads: 19
    Is current disclosure of Operating profit /expense helpful for understanding companies?
    We discussed how difficult to distinguish whether Operating / Non operating in financial statements recently with investors, information providers, accounting setters in Hong Kong. 
    It makes lower comparability and becomes barrier of understanding company value.
    We discussed several points of view to solve it and revealed that disclosure issues of IFRS are highly common among investors globally.
  • Evaluation of company’s value in acquisition & ideal disclosure

    Source: Chie Mitsui
    Date Submitted: 23 Jun 2017
    Views: 2613
    Downloads: 73
    "How investors analyse and what managements need to explain, when M&A happened?" We discussed this issues in Japan, with some accounting standard setters.  
    We have been discussing about comparability issue and line item classification issue from users’ point of view in the past workshops. At the last workshop (https://www.arx.cfa/up/post/3375/20170206_IFRSXBRLWS10_E.pdf) , we discussed on whether “share of profit/loss of associates” is “operating” or “investing” may differ by company or its business, focusing on the point that “What is really comparable? Does same account name mean same substance? Which is same in substance?”.

    The way of business for companies are changing nowadays, that we should focus on the point that more M&A is happening in place of building factory and hiring people in old times. So we focused on the point how investors should evaluate companies’ value in acquisition and what companies need to explain in our discussion.
  • The Impact of Reporting Frequency on the Information Quality of Share Price: Some Evidence from the Chinese State-Owned Enterprises

    Source: Yin Toa Lee
    Date Submitted: 31 May 2017
    Views: 2696
    Downloads: 16
    As a major global exchange, the Stock Exchange of Hong Kong (SEHK) only requires semi-annual reporting whereas other major exchanges require quarterly, including China. I argue against the traditional view that higher reporting frequency is necessarily more beneficial.  The decision on reporting frequency depends on how the information is being processed by the recipient traders and the results are not obvious.  Using a sample of Chinese companies dual-listed in both China A market and SEHK (AH shares) as the experimental group and Chinese companies listed on SEHK (H shares) only as the control group, I apply the diff-in-diff method to investigate the impacts of reporting frequency on stock information quality. The results suggest that after China A share market require quarterly financial reporting for all listed companies in 2002, the information asymmetry of the H tranche of AH stocks increases. Different from prior studies, the results suggest a negative association between stock information quality and financial reporting frequency. I argue that the increased information asymmetry in the H tranche is caused by the noise spilled over from the A tranche. I conduct multivariable GARCH tests and find evidence supporting this conjecture.
     
  • Valuation Insights - India Edition, May 2017

    Source: Varun Gupta
    Date Submitted: 09 May 2017
    Views: 2270
    Downloads: 0

    Valuation Insights is a quarterly e-newsletter that provides you with the latest news from Duff & Phelps and the trends and changes in valuation and accounting that could affect your business transactions in Asia.

    In this edition, our top stories cover the Financial Accounting Standards Board issuing an Accounting Standards Update, robust fair value measurement, the International Valuation Standards Council releasing the 2017 edition of its International Valuation Standards, and a recent Duff & Phelps study about fairness opinions.

    We will also look at important Duff & Phelps reports and articles, including a recorded forum presentation by Professor Damodaran and the Duff & Phelps Global Regulatory Outlook 2017.

  • Practitioner’s Brief: Behind Closed Doors - How Private In-House Meetings Move Public Markets

    Source: Robert Bowen, Shantanu Dutta, Songlian Tang, Pengcheng (Phil) Zhu
    Date Submitted: 02 Apr 2017
    Views: 869
    Downloads: 0
    WHAT’S THE INVESTMENT ISSUE?
    In this brief, we provide an investor’s-eye view of a piece of research that shines a floodlight on an inherently opaque subject—private meetings between senior management and investors. Both camps are presumed to know better than to share or receive anything that could be considered material non public information (MNPI). Nonetheless, the authors of this study point to some dubious trends associated with these sit-downs. The question of whether a falling tree makes noise in a forest devoid of hearing-enabled life forms has long held its own as a rudimentary philosophical riddle. But as a practical matter for debate, it’s not much of one, i.e., we’re pretty sure that in all likelihood, a tree crashing to the ground does make a sound. Now ponder this: If a private meeting between senior management and a fund manager takes place—and no one else is there to hear what’s said—are there consequences in the stock market? In other words, what is the point of these cozy sit-downs? Do the parties stand to benefit? Such meetings, of course, are routine and perfectly legal, provided the executives at the publicly traded company steer clear of disclosing any MNPI. The authors set out to ascertain, among other information, to what extent corporate insiders—who control the timing and content of meetings—trade on those meetings. “Overall, our results suggest that companies disclose material non-public information during these meetings and some participants trade on the information,” the authors state.

    HOW DO THE AUTHORS TACKLE THIS ISSUE?
    The question of whether the meetings lead to some competitively advantageous information being leaked, maybe inadvertently, under the camouflage of crafty syntax, or even brazenly, might have remained one of mankind’s eternal mysteries had it not been for the Shenzhen Stock Exchange (SZSE). In 2009, the SZSE became the first exchange to require listed companies to report dates of private meetings with investors. Since August 2012, the SZSE has also required summary notes of what was said during those meetings, creating a dataset of some 17,000 meeting reports that the quartet of authors mined to startling effect. The authors found highly suspicious trading patterns among company insiders timing transactions ahead of and in the wake of private meetings. Although only 20% of private meetings can be connected with disclosed insider-trading activities, it is worth underscoring that the trades, some USD12 billion over a 28-month sample period (August 2012–December 2014), represent nearly two-thirds of the value of all insider trading among SZSE-listed companies during that time. Interestingly, nearly three-fourths of listed companies held at least one private meeting per year; the average was around five meetings per year. Most meetings were hosted in the companies’ headquarters.

    WHAT ARE THE FINDINGS?
    The research shows a clear trend of abnormally positive stock returns starting approximately 22 days prior to the private meeting dates. In fact, the average stock price run-up translates into RMB73.1 million (or about USD11 million) per average firm in the sample. Call it the “meeting anticipation effect” whereby investors/insiders trade on the not-irrational belief that in-house meetings generally reveal positive information. Some insiders appear to be selling into what they anticipate to be herd buying, using the increased volatility to mask their offloads.

    WHAT ARE THE IMPLICATIONS FOR INVESTORS AND INVESTMENT PROFESSIONALS?
    Many large institutional investors will undoubtedly scoff at the implication that they are gaming the system—or being gamed—by participating in face-to face conversations with the leaders of the companies in which they are investing large sums. These fund managers will also point to proprietary research processes that emphasize sophisticated models and, using the authors’ term, a “mosaic” of skillfully assembled information. Companies that hold meetings, likewise, could just as easily frame these interactions as transparent corporate citizenry, as evidenced by the high “information quality” scores enjoyed by the majority of the companies that report private meetings. The pieces are thus firmly in place for the facilitation of reinforced feedback loops: Companies that hold meetings have more analysts covering them, and these analysts represent large funds whose trades are closely watched. Insiders, who have seen this movie before, are not blind to the ripple effects of a few well-placed dollops of promising insinuations or even flat-out MNPI utterances. That there is an opportunity, thanks to the SZSE and the authors, for a sophisticated fund manager to write an algorithm scouring the mere record that meetings took place in an effort to catch some window of upside could be seen as one logical outcropping of the findings here, although we can think of another. Regulators in a developed market such as the United States might also find it useful to require some record of private meetings. Fund managers in the United States spend USD1.4 billion a year for face time with executives. The investment pays off well for those fund managers who are invited to these meetings and who make profitable trades around the meeting dates. According to the authors, the information gained from private in-house meetings provides these fund managers, and their investors, with an additional competitive edge. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    Summarized by Rich Blake. Rich is a veteran financial journalist who has written for numerous media outlets, including Reuters, ABC News and Institutional Investor. The views expressed herein reflect those of the authors and do not represent the official views of CFA Institute or the authors’ employers.
  • Analyst Report - Best World International Ltd

    Source: Charles Phan Zhong Wei, Jeremy Liang Jinrong, Ai Xin
    Date Submitted: 27 Mar 2017
    Views: 340
    Downloads: 38
    Sell-side research report on Best World International Ltd. Initiate a Buy Call with upside of 47.7%. Includes: - detailed report of analysis - slide deck to pitch the stock recommendation - financial model with detailed accounting adjustments, performance analysis, forecasts and valuations
  • Late to File: The Costs of Delayed 10-Q and 10-K Company Filings

    Source: Temi Oyeniyi, CFA, Richard Tortoriello, Li Ma, CFA, Paul Fruin, CFA
    Date Submitted: 24 Mar 2017
    Views: 187
    Downloads: 1
    This is a Quantamental Research published by S&P Global Market Intelligence in November 2015.
  • APEI LBO Case Competition 2017 - LBO of AmorePacific Corporation

    Source: Charles Phan Zhong Wei, Chua Kian Chong, Chan Jun Hao, Sylvester Yeo Kai Ren
    Date Submitted: 20 Mar 2017
    Views: 578
    Downloads: 66
    Advisory for the AmorePacific Group's leveraged buyout of AmorePacific Corporation (target). The following key points are addressed: - Executive summary - Recent financial / operating performance of AmorePacific Group - Industry overview - Strategic alternatives to an LBO - Recommendations to restruture the combined firm - Deal structure and financing - Valuation summary - Returns Analysis - Risk(s) related to the deal
  • Way of disclosure in Principles-based Standards?How “operating activities”(Main business?should be presented?

    Source: chie mitsui
    Date Submitted: 09 Mar 2017
    Views: 231
    Downloads: 17
    Primary Financial Statements is quite important for investors to understand company business. However during company business model is changing and investor analysis is also changing, how presentation should describe "Operating Activities". Especially clasification of investment or business could become matter. We discussed this issues; what investor requires, how company thinks, and what accounting standards should be.
  • Corporate social responsibility and innovation in management accounting

    Source: Narisa Tianjing Dai , Artie Ng, Guliang Tang
    Date Submitted: 17 Feb 2017
    Views: 321
    Downloads: 6
    In recent years, there has been increased consensus that corporate social responsibility (CSR) is significant for the sustainable development of companies and society as a whole. CSR is increasingly incorporated into mission statements and prioritised in strategic configurations of modern organisations (Mersereau and Mottis 2011; Bennett and James 1998). According to a 2009 survey conducted on Fortune 500 firms, CSR is becoming an increasingly prominent and accepted part of the corporate strategy agenda. However, there is very little understanding of how different control mechanisms are adopted to operationalise strategic agendas related to CSR. Against this backdrop, this research examines the way in which companies embed CSR in their MCS in an attempt to align the behaviour of organisational participants with strategic objectives concerning sustainability in China.
  • What is the role of Balance Sheet? (Thinking toward Primary Financial Statement project)

    Source: Chie Mitsui
    Date Submitted: 30 Dec 2016
    Views: 492
    Downloads: 56
    We had a workshop to discuss about data usage issues of IFRS Financial statements with IASB, in Japan. CFA JAPAN working group is a core member, but open for other investors, analysts, information providers are also joining together. CPAs, IR/Financial department people too. We discuss about Balance Sheet issues especially focus on IFRS9. We sent some message to IASB in this workshop and share with other member of IASB after this workshop finished with this presentation.
  • AFM - Inside the “black box” of Private In-house Meetings: Implications for Fair Disclosure and Insider Trading Regulation

    Source: Robert Bowen, Shantanu Dutta, Songlian Tang, Pengcheng Zhu
    Date Submitted: 19 Nov 2016
    Views: 592
    Downloads: 38
    While corporate private in-house meetings between investors and management are common across the world, there are generally no detailed reporting requirements for these meetings. The Shenzhen Stock Exchange in China is an exception and thus provides a unique opportunity to look inside the ‘black box’ to examine the structure and consequences of private in-house meetings. We develop a unique large-scale hand-collected dataset by accessing over 17,000 private meeting reports over 2012-2014 and use reported meeting details to examine the consequences of private in-house meetings. We find that, on average: (i) the stock market anticipates positive news in these private meetings as there is a significant stock price run-up starting about 30 days before the meeting date, (ii) the market reacts strongly and positively around these meeting dates, and (iii) the market reacts again around the subsequent public disclosure of the meeting notes. Further, we find that company insiders engage in significant trading activities around these meeting dates, selling over $12 billion USD of their shares – almost 62% of the total value of all insider trades for Shenzhen-listed firms in our sample period. Most importantly, it appears that company insiders are able to time their transactions: they tend to sell more shares before negative news disclosures but hold off selling when there is positive news to be disclosed in the meeting. Overall, our results suggest that firms disclose material non-public information during these private meetings, and that at least some meeting participants and company insiders trade on this information before it is publicly available. Finally, it appears that disclosure of private meeting details can be beneficial for market participants who are unable to attend such meetings. We discuss implications of these findings for disclosure requirements in the other countries.
  • This is a test article

    Source: Joe Bloggs, Jane Doe
    Date Submitted: 18 Oct 2016
    Views: 248
    Downloads: 0
    Lorem ipsum dolor sit amet, consectetur adipiscing elit. Sed a nulla vitae purus rutrum aliquet. Donec eu vestibulum leo, non accumsan mi. Ut risus lacus, pellentesque id feugiat eget, mollis eget lorem. Aliquam commodo blandit est eget facilisis. Etiam erat est, bibendum at ipsum id, ornare dictum ipsum. Nam non nisi eget justo iaculis vulputate. Cras nec maximus risus. Nullam fermentum lacus at diam ultricies, a congue velit condimentum. Curabitur pellentesque turpis vulputate nunc porttitor, sed dictum enim hendrerit. Sed dignissim sapien eget mi viverra, placerat vestibulum risus pulvinar. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Morbi sit amet diam eget mauris aliquet scelerisque. In consectetur quis ipsum id condimentum. In fermentum orci vel odio ultricies, a maximus velit pharetra. Nullam consequat ante ipsum. Vivamus vestibulum turpis dignissim, sollicitudin tortor eget, fermentum sem. Donec malesuada nibh nec libero sollicitudin vestibulum. Etiam vitae faucibus lectus, sed mattis dui. Donec ac felis commodo, fringilla nisi sit amet, tincidunt justo. Curabitur eu leo nec mi tristique maximus.
  • Financial insight: challenges and opportunities

    Source: ACCA Global
    Date Submitted: 14 Oct 2016
    Views: 606
    Downloads: 6
    This report suggests ways the nance function can improve current approaches to business partnering. It proposes nine pragmatic actions to improve partnering practices anchored in three core component parts: creating the mandate, xing the information and deploying the talent.
  • Smart budgeting: integrating financial and strategic planning for outcomes

    Source: Claire Mansfield , Maia Beresforsd
    Date Submitted: 14 Oct 2016
    Views: 265
    Downloads: 1
    This report from the New Local Government Network (NLGN) in association with the ACCA and Mazars recommends radical changes to the way local government approaches the budgeting process.
  • Professional accountants - the future highlights

    Source: ACCA Global
    Date Submitted: 14 Oct 2016
    Views: 357
    Downloads: 0
    This global report gives an in-depth insight into the future of the profession - the drivers of change through to 2025, the demands on the profession and the skills that will be required to meet those changes and demands.
  • Professional accountants - the future

    Source: ACCA Global
    Date Submitted: 14 Oct 2016
    Views: 349
    Downloads: 1
    This global report gives an in-depth insight into the future of the profession - the drivers of change through to 2025, the demands on the profession and the skills that will be required to meet those changes and demands.
  • City ‘superwoman’ Nicola Horlick is challenging the established financial institutions with her biggest venture yet – a crowdfunding initiative to free up cash for SMEs

    Source: Sarah Perrin
    Date Submitted: 14 Oct 2016
    Views: 430
    Downloads: 0
    It is an AB magazine posted on ACCA Global website on 19 August 2016.
  • AFBC - Differences in the Reliability of Fair Value Hierarchy Measurements: A Cross-Country Study

    Source: Kevin Ow Yong,Chu Yeong Lim,Jeffrey Ng,Gary Pan
    Date Submitted: 25 Sep 2016
    Views: 491
    Downloads: 12
    Submission of conference paper to the 29th Australasian Finance and Banking Conference (AFBC) to be considered for the CFA Institute Research Awards available to papers presented at the conference.
  • AFBC - The Value Relevance of Regulatory Capital Components

    Source: Martien Lubberink, Roger Willett
    Date Submitted: 21 Sep 2016
    Views: 511
    Downloads: 12
    Our paper examines how investors value regulatory bank capital components, e,g. Tier 1 Hybrids, deduction of Goodwill, etc.
  • AFBC-Asset diversification and efficiency: Evidence from the Chinese banking sector

    Source: Kai Du, Andrew C. Worthington, Valentin Zelenyuk
    Date Submitted: 20 Sep 2016
    Views: 540
    Downloads: 12
    This paper investigates the impact of earning asset diversification on Chinese bank efficiency from 2006 to 2011. To do so, we adapt the Simar and Wilson (2007) (Journal of Econometrics) approach to panel data context so that approach allows for technology change over time. Regression results reveal that increasing the asset share of other earning assets (including securities and derivatives) is positively associated with bank efficiency. Decreasing the share of nonearning assets in total assets or increasing total equity has a similar impact. Our results also suggest that financial reforms currently being undertaken in China, including removing the regulatory requirement concerning the ratio of loans to deposits (a new draft amendment to the existing commercial banking law) and interest rate liberalization (a proposed draft amendment), are likely to induce a significant positive effect on bank efficiency in China.
  • Frontier Insights - The impact of Capital Gains Tax on Equity Valuations

    Source: Frontier Research
    Date Submitted: 13 Aug 2016
    Views: 511
    Downloads: 11
    This brief analysis looks at the theoretical and empirical impact the introduction of a capital gains tax on equity investments has on equity index values and investor sentiment.
  • Factors Affecting Preparers' and Auditors' Judgements about Materiality and Conciseness in Integrated Reporting

    Source: Ann Tarca, Lee Krug, Marvin Wee, Walter Aerts, Matthew Tilling, Penelope Pink
    Date Submitted: 12 Aug 2016
    Views: 468
    Downloads: 3
    This study explores the issues of materiality and conciseness in Integrated Reporting () from the perspectives of corporate report preparers, company auditors and users of reports.
  • Meeting Users’ Information Needs: The Use and Usefulness of Integrated Reporting

    Source: Prof. Richard Slack, Prof. David Campbell
    Date Submitted: 12 Aug 2016
    Views: 646
    Downloads: 10
    This report explores how providers of financial capital perceive integrated reporting () and its potential for providing decision-useful information, through interviews with senor capital market participants.
  • Creating Value through Governance - Towards a New Accountability - A consultation

    Source: Moxey, P., Berendt, A.
    Date Submitted: 10 Jun 2016
    Views: 664
    Downloads: 6
    This consultation paper forms part of ACCA’s investigation to examine whether existing governance and risk management frameworks are ‘fit for purpose’. It asks whether corporate governance in practice, is helping business to create value or whether something has gone wrong. This paper argues that corporate governance is about creating value and that governance codes should be evaluated on how well they facilitate the creation of value. It sets out how a framework of ‘performing, informing and holding to account’ can work.
  • Culture and Channeling Corporate Behaviour: Summary of findings

    Source: Moxey, P., Schu, P.
    Date Submitted: 10 Jun 2016
    Views: 657
    Downloads: 9
    Part of a series of four reports that aims to assist boards in preparing to assess their corporate culture and in understanding how it can influence either functional or dysfunctional behaviour.
  • SoMoClo Technologies: Transforming how and where business takes place

    Source: ACCA, IMA
    Date Submitted: 10 Jun 2016
    Views: 655
    Downloads: 6
    While social, mobile and cloud technologies (‘SoMoClo’) offer great opportunities to continue the automation of processes, SoMoClo should not be seen simply as more automation. Nor is it merely about ‘mobilising’ or ‘socialising’ existing processes and putting them in the cloud. Instead, SoMoClo provokes a revisiting and questioning of all processes, which may have evolved in response to constraints that no longer exist. SoMoClo will be a crucial driver to evolving the role of the finance professional.
  • Planning, Budgeting and Forecasting: An eye on the future

    Source: O'Mahony, J., Lyon, J.
    Date Submitted: 10 Jun 2016
    Views: 674
    Downloads: 12
    A global report (first of three) jointly commissioned by the ACCA and KPMG to evaluate how the Enterprise Performance Management capability within finance functions is providing the business with insightful profitability and cost analysis through appropriate people, processes and technology.
  • Profitability and Cost Analysis: An eye on value

    Source: O'Mahony, J., Lyon, J.
    Date Submitted: 10 Jun 2016
    Views: 652
    Downloads: 12
    A global report (last of three) jointly commissioned by the ACCA and KPMG to evaluate how the Enterprise Performance Management capability within finance functions is providing the business with insightful profitability and cost analysis through appropriate people, processes and technology.
  • Ending Late Payment: Part 3 - Reflection on the evidence

    Source: Schizas, M.
    Date Submitted: 10 Jun 2016
    Views: 616
    Downloads: 3
    This is the third of a series of three reports on the problem of late payment and how businesses and governments can work together to alleviate it. It summarises the ACCA’s findings on this important issue and is a call to action for governments, financial services firms, large corporates and small businesses.
  • Ending Late Payment: Part 2 - What works?

    Source: Schizas, M.
    Date Submitted: 10 Jun 2016
    Views: 645
    Downloads: 5
    This is the second of a series of three reports on the problem of late payment and how businesses and governments can work together to alleviate it. It brings together evidence from a wealth of ACCA-commissioned publications and other research as well as 36 case studies involving ACCA members around the world to help define good practice in both business and policy.
  • Ending Late Payment: Part 1 - Taking stock

    Source: Schizas, M.
    Date Submitted: 10 Jun 2016
    Views: 667
    Downloads: 3
    This is the first of a series of three reports on the problem of late payment and how businesses and governments can work together to alleviate it. It combines an extensive literature review with quantitative data from ACCA’s member surveys to correctly define late payment, trace its precise origins and document its impact on the global economy.
  • Tomorrow’s finance enterprise

    Source: ACCA, IMA
    Date Submitted: 10 Jun 2016
    Views: 488
    Downloads: 4
    In this report we ask a simple question: what are the key influences shaping the future role of the CFO and tomorrow’s finance enterprise? The report draws on all of our ongoing CFO-focused research and includes highlights of a 2014 survey of 1631 ACCA and IMA members around the world
  • Transformation challenges in finance

    Source: Kops, D., Lyon, J.
    Date Submitted: 10 Jun 2016
    Views: 359
    Downloads: 5
    This report draws on the expertise of senior finance executives from some of the world’s leading organisations to consider the challenges CFOs face by finance transformation. It suggests a number of good practices that organisations can follow in transforming their finance operations.
  • Increasing Gender Diversity to Boost Performance: A briefing for finance and HR leaders

    Source: ACCA
    Date Submitted: 10 Jun 2016
    Views: 679
    Downloads: 4
    This paper presents the value of gender diversity in business. It aims to help CFOs, senior finance professionals and HR professionals working alongside finance teams, to understand the value of gender diversity and make the business case for diversity to their peers.
  • Is finance function technology delivering on its promise?

    Source: Kops, A., Lyon, J.
    Date Submitted: 10 Jun 2016
    Views: 332
    Downloads: 4
    This report discusses the current use of technology in finance shared services and outsourcing. It considers the extent to which technology is changing the face of finance delivery and providing value for the organisation.
  • Finance Transformation Roles: Pathways to CFO

    Source: Lyon, J., Kops, D.
    Date Submitted: 10 Jun 2016
    Views: 386
    Downloads: 4
    This report asks a simple question: are finance shared service and transformation roles valuable in the career path to becoming a CFO?
  • China's Next 100 Global Giants

    Source: Hunag Q.H., Atherton, A., Zhan, G.
    Date Submitted: 09 Jun 2016
    Views: 446
    Downloads: 7
    A growing number of Chinese businesses are moving from dominance of domestic markets to global growth. This report identifies 100 emerging businesses that are not yet well known outside China but will be competing globally over the next three to five years.
  • Low Prices, High Expectations: Oil and Gas CFOs in Demand

    Source: ACCA
    Date Submitted: 09 Jun 2016
    Views: 1912
    Downloads: 18
    This report takes a closer look at how CFOs are tackling the big investment decisions: how they are adapting their funding strategies, how they balance short- and long-term priorities, and how they factor into their planning a range of shifting regulatory and market demands.
  • Natural capital and the accountancy profession: applying traditional skills to new thinking and practice

    Source: Jackson, R., Wilson, G., Herbertson, P., Adams, C., Gould, S.
    Date Submitted: 09 Jun 2016
    Views: 296
    Downloads: 4
    This paper focuses on the role that accountants are playing in the development of thinking, practice and frameworks for accounting for and reporting on natural capital by businesses.
  • CFOs and the C Suite: Leadership fit for the 21st Century

    Source: Michel, P., Lyon, J.
    Date Submitted: 09 Jun 2016
    Views: 525
    Downloads: 6
    An ACCA report considers the challenges facing executive leadership in today’s environment, and explores how the science of mindfulness can lead to more effective leadership in today’s finance function.
  • Innovation, Intangibles and Integrated Reporting: A pilot study of Malaysian SMEs

    Source: Brassell, M, Reid, B.
    Date Submitted: 09 Jun 2016
    Views: 477
    Downloads: 5
    This report presents the results of a pilot project, which tests the relevance of the Malaysian National Corporate Innovation Index to small and medium-sized enterprises.
  • Harnessing Potential: The Asia-Pacific alternative finance bench-marking report

    Source: Zhang, B., Deer, L., Wardrop, R., Grant, A., Garvey, K., Thorp, S., Ziegler, T., Kong, Y., Zheng, X.W., Huang, E., Burton, J., Chen, H.Y., Lui, A., Gray, Y.
    Date Submitted: 09 Jun 2016
    Views: 726
    Downloads: 12
    Online alternative finance is developing rapidly in the Asia-Pacific region. It is characterised by innovative financial instruments and channels that fall outside the traditional avenues of capital raising and financial intermediation. From reward-based crowdfunding to peer-to-peer consumer and business lending (i.e. marketplace lending), to invoice trading and equity-based crowdfunding, these online alternative finance activities are directly connecting lenders to consumer and small business borrowers, raising venture capital for start-ups, funding the creative industries and creating new ways for individuals and institutions to choose how and to whom money is distributed, lent and invested and invested.
  • Talent Equation: First Insights

    Source: ACCA
    Date Submitted: 09 Jun 2016
    Views: 287
    Downloads: 2
    Report formed the launch of a comprehensive research programme of finance talent management practices to assess and address the critical talent challenges that organisations – and their finance leaders – now face in ensuring that they attract, train and retain the next generation of finance professionals. The study draws on a wide range of quantitative and qualitative research activities, including global surveys, ‘deep-dive’ enterprise case studies, in-depth career profiling and insightful leadership interviews, to reveal the finance talent situation and identify the most relevant talent management trends and priorities.
  • The robots are coming? Implications for finance shared services

    Source: ACCA
    Date Submitted: 09 Jun 2016
    Views: 332
    Downloads: 4
    Report from the ACCA draws on the expertise the institution's finance transformation, shared services and outsourcing advisory group, bringing together a panel of leading industry experts to provide perspectives on the future of automation and specifically the use of robotic software in the finance function.
  • State of Non-Profit Finance Function

    Source: Hadjimichael, T.
    Date Submitted: 09 Jun 2016
    Views: 278
    Downloads: 3
    This ACCA report aims to define the non-profit finance function through the lens of both non-profit organisations and their stakeholders, and examine its role within the changing operating and funding landscape.
  • Governance for All: The implementation challenge for SMEs

    Source: ACCA
    Date Submitted: 09 Jun 2016
    Views: 299
    Downloads: 5
    This report aims to encourage understanding of what corporate governance means for SMEs. It draws extensively on material presented and discussed during a seminar organized by the Economic and Social Research Council (ESRC) and held in ACCA’s London offices on 19 November 2014 and incorporates the views of the ACCA Global Forum for SMEs.
  • Global Economic Conditions Survey Report: Q1, 2016

    Source: ACCA, IMA
    Date Submitted: 09 Jun 2016
    Views: 482
    Downloads: 8
    The Global Economic Conditions Survey (GECS) is one of the largest regular economic survey in the world in respect to respondents and the range of economic variables monitored. Its main indices are good predictors of such factors as GDP growth and daily trend deviations correlating with VIX (or ‘fear’ index), which measures expected stock price volatility. Fieldwork for the Q1 2016 GECS took place between 26 February and 15 March 2015, and attracted over 1,200 responses.
  • Global Economic Conditions Survey Report: Q4, 2015

    Source: ACCA, IMA
    Date Submitted: 09 Jun 2016
    Views: 391
    Downloads: 5
    The Global Economic Conditions Survey (GECS) is one of the largest regular economic survey in the world in respect to respondents and the range of economic variables monitored. Its main indices are good predictors of such factors as GDP growth and daily trend deviations correlating with VIX (or ‘fear’ index), which measures expected stock price volatility. Fieldwork for the Q1 2015 GECS took place between 27 November and 25 December 2015, and attracted over 2,500 responses.
  • Global Economic Conditions Survey Report: Q3, 2015

    Source: ACCA, IMA
    Date Submitted: 09 Jun 2016
    Views: 484
    Downloads: 4
    The Global Economic Conditions Survey (GECS) is one of the largest regular economic survey in the world in respect to respondents and the range of economic variables monitored. Its main indices are good predictors of such factors as GDP growth and daily trend deviations correlating with VIX (or ‘fear’ index), which measures expected stock price volatility. Fieldwork for the Q1 2015 GECS took place between 11 September and 22 September 2015, and attracted over 950 responses.
  • Global Economic Conditions Survey Report: Q2, 2015

    Source: ACCA, IMA
    Date Submitted: 09 Jun 2016
    Views: 283
    Downloads: 3
    The Global Economic Conditions Survey (GECS) is one of the largest regular economic survey in the world in respect to respondents and the range of economic variables monitored. Its main indices are good predictors of such factors as GDP growth and daily trend deviations correlating with VIX (or ‘fear’ index), which measures expected stock price volatility. Fieldwork for the Q2 2015 GECS took place between 29 May and 16 June 2015, and attracted over 950 responses.
  • Global Economic Conditions Survey Report: Q1, 2015

    Source: ACCA, IMA
    Date Submitted: 09 Jun 2016
    Views: 281
    Downloads: 3
    The Global Economic Conditions Survey (GECS) is one of the largest regular economic survey in the world in respect to respondents and the range of economic variables monitored. Its main indices are good predictors of such factors as GDP growth and daily trend deviations correlating with VIX (or ‘fear’ index), which measures expected stock price volatility. Fieldwork for the Q1 2015 GECS took place between 27 February and 17 March 2015, and attracted over 900 responses.
  • The Future of Audit

    Source: Jeffery, N. (Grant Thornton), Gambier, A. (ACCA)
    Date Submitted: 09 Jun 2016
    Views: 604
    Downloads: 8
    Report is a compilation of a series of roundtable discussions hosted by Grant Thorton and ACCA in seven nations globally into the impact on audit practices to rapid changes around the the world and the future impact on auditing.
  • The Data Revolution

    Source: ACCA, IMA
    Date Submitted: 09 Jun 2016
    Views: 622
    Downloads: 4
    A joint ACCA/ICA study and related report developed to draw attention to on-going radical changes in the role of data to the accounting and finance professions that would impact on practitioners moving forward.
  • Balancing Rules and Flexibility: A study of corporate governance requirements across 25 markets

    Source: KPMG (Singapore), ACCA
    Date Submitted: 09 Jun 2016
    Views: 3265
    Downloads: 33
    The objectives of the study were to: (a) Examine corporate governance (CG) requirements in terms of clarity and completeness of content, degree of enforceability and prevalence; (b) Identify common/basic CG requirements and emerging trends; (c) Raise awareness of the similarities and differences in CG requirements across markets, geographic regions, economic zones and pillars/themes of CG; and (d) Inform other industry research.
  • Performance Reporting: An eye on the facts

    Source: O'Mahony, J., Lyon, J.
    Date Submitted: 08 Jun 2016
    Views: 590
    Downloads: 5
    Performance Reporting at its best should enable a business to link its operational activity and decision making with the attainment of its strategy. It gives organisations the essential information to make more confident and effective decisions, focuses the attention of management on activities that truly matter, and provides a consistent view of actual performance across the business. A joint KPMG-ACCA report examines the form and nature of performance reporting, and how such reporting perceived by CFOs.
  • ResearchFrom Share Value to Shared Value: Exploring the Role of Accountants in Developing Integrated Reporting in Practice

    Source: Gibassier, D., Rodrigue, M., CPA, Arjalies, D.L.
    Date Submitted: 08 Jun 2016
    Views: 591
    Downloads: 4
    Joint IMA-ACCA report into integrated reporting (IR) aimed at developing greater practitioner involvement into IR matters.
  • Cybersecurity: Fighting Crime's Enfant Terrible

    Source: ACCA Global, IMA
    Date Submitted: 08 Jun 2016
    Views: 432
    Downloads: 3
    Report prepared by ACCA Global and IMA on the risks of cybersecurity. The purpose of the report is to review the cyber-threat landscape, discuss cybersecurity, future trends and areas of concern, and to highlight particular areas that are likely to have direct impact on the future of accountancy.
  • Mapping the Sustainability Reporting Landscape: Lost in the right direction

    Source: Lois Guthrie
    Date Submitted: 08 Jun 2016
    Views: 651
    Downloads: 5
    This report explores the changing corporate sustainability reporting landscape, outlines its components, addresses current challenges and proposes development opportunities. It provides a considered overview of the trends, levers and drivers influencing the reporting landscape. It also proposes ideas to prompt discussion among professionals involved in reporting who seek standardisation, rationalisation and order.