Compliance with international financial reporting standards (IFRS) and the value relevance of accounting information in emerging stock markets : evidence from Kuwait

Since the 1960s, the value relevance of accounting information has been an important topic in accounting research. The value relevance research provides evidence as to whether accounting numbers relate to corporate value in a predicted manner (Beaver, 2002). Such research is not only important for investors but also provides useful insights into accounting reporting effectiveness for standard setters and other users. Both the quality of accounting standards used and the effectiveness associated with implementing these standards are fundamental prerequisites for high value relevance (Hellstrom, 2006). However, while the literature comprehensively documents the value relevance of accounting information in developed markets, little attention has been given to emerging markets where the quality of accounting standards and their enforcement are questionable. Moreover, there is currently no known research that explores the association between level of compliance with International Financial Reporting Standards (IFRS) and the value relevance of accounting information. Motivated by the lack of research on the value relevance of accounting information in emerging markets and the unique institutional setting in Kuwait, this study has three objectives. First, it investigates the extent of compliance with IFRS with respect to firms listed on the Kuwait Stock Exchange (KSE). Second, it examines the value relevance of accounting information produced by KSE-listed firms over the 1995 to 2006 period. The third objective links the first two and explores the association between the level of compliance with IFRS and the value relevance of accounting information to market participants. Since it is among the first countries to adopt IFRS, Kuwait provides an ideal setting in which to explore these objectives. In addition, the Kuwaiti accounting environment provides an interesting regulatory context in which each KSE-listed firm is required to appoint at least two external auditors from separate auditing firms. Based on the research objectives, five research questions (RQs) are addressed. RQ1 and RQ2 aim to determine the extent to which KSE-listed firms comply with IFRS and factors contributing to variations in compliance levels. These factors include firm attributes (firm age, leverage, size, profitability, liquidity), the number of brand name (Big-4) auditing firms auditing a firm’s financial statements, and industry categorization. RQ3 and RQ4 address the value relevance of IFRS-based financial statements to investors. RQ5 addresses whether the level of compliance with IFRS contributes to the value relevance of accounting information provided to investors. Based on the potential improvement in value relevance from adopting and complying with IFRS, it is predicted that the higher the level of compliance with IFRS, the greater the value relevance of book values and earnings. The research design of the study consists of two parts. First, in accordance with prior disclosure research, the level of compliance with mandatory IFRS is examined using a disclosure index. Second, the value relevance of financial statement information, specifically, earnings and book value, is examined empirically using two valuation models: price and returns models. The combined empirical evidence that results from the application of both models provides comprehensive insights into value relevance of accounting information in an emerging market setting. Consistent with expectations, the results show the average level of compliance with IFRS mandatory disclosures for all KSE-listed firms in 2006 was 72.6 percent; thus, indicating KSE-listed firms generally did not fully comply with all requirements. Significant variations in the extent of compliance are observed among firms and across accounting standards. As predicted, older, highly leveraged, larger, and profitable KSE-listed firms are more likely to comply with IFRS required disclosures. Interestingly, significant differences in the level of compliance are observed across the three possible auditor combinations of two Big-4, two non-Big 4, and mixed audit firm types. The results for the price and returns models provide evidence that earnings and book values are significant factors in the valuation of KSE-listed firms during the 1995 to 2006 period. However, the results show that the value relevance of earnings and book values decreased significantly during that period, suggesting that investors rely less on financial statements, possibly due to the increase in the available non-financial statement sources. Notwithstanding this decline, a significant association is observed between the level of compliance with IFRS and the value relevance of earnings and book value to KSE investors. The findings make several important contributions. First, they raise concerns about the effectiveness of the regulatory body that oversees compliance with IFRS in Kuwait. Second, they challenge the effectiveness of the two-auditor requirement in promoting compliance with regulations as well as the associated cost-benefit of this requirement for firms. Third, they provide the first known empirical evidence linking the level of IFRS compliance with the value relevance of financial statement information. Finally, the findings are relevant for standard setters and for their current review of KSE regulations. In particular, they highlight the importance of establishing and maintaining adequate monitoring and enforcement mechanisms to ensure compliance with accounting standards. In addition, the finding that stricter compliance with IFRS improves the value relevance of accounting information highlights the importance of full compliance with IFRS and not just mere adoption.

Oxygen consumption and muscle activation patterns during constant load exercise

The collective purpose of these two studies was to determine a link between the V02 slow component and the muscle activation patterns that occur during cycling. Six, male subjects performed an incremental cycle ergometer exercise test to determine asub-TvENT (i.e. 80% of TvENT) and supra-TvENT (TvENT + 0.75*(V02 max - TvENT) work load. These two constant work loads were subsequently performed on either three or four occasions for 8 mins each, with V02 captured on a breath-by-breath basis for every test, and EMO of eight major leg muscles collected on one occasion. EMG was collected for the first 10 s of every 30 s period, except for the very first 10 s period. The V02 data was interpolated, time aligned, averaged and smoothed for both intensities. Three models were then fitted to the V02 data to determine the kinetics responses. One of these models was mono-exponential, while the other two were biexponential. A second time delay parameter was the only difference between the two bi-exponential models. An F-test was used to determine significance between the biexponential models using the residual sum of squares term for each model. EMO was integrated to obtain one value for each 10 s period, per muscle. The EMG data was analysed by a two-way repeated measures ANOV A. A correlation was also used to determine significance between V02 and IEMG. The V02 data during the sub-TvENT intensity was best described by a mono-exponential response. In contrast, during supra-TvENT exercise the two bi-exponential models best described the V02 data. The resultant F-test revealed no significant difference between the two models and therefore demonstrated that the slow component was not delayed relative to the onset of the primary component. Furthermore, only two parameters were deemed to be significantly different based upon the two models. This is in contrast to other findings. The EMG data, for most muscles, appeared to follow the same pattern as V02 during both intensities of exercise. On most occasions, the correlation coefficient demonstrated significance. Although some muscles demonstrated the same relative increase in IEMO based upon increases in intensity and duration, it cannot be assumed that these muscles increase their contribution to V02 in a similar fashion. Larger muscles with a higher percentage of type II muscle fibres would have a larger increase in V02 over the same increase in intensity.

Are you a mindful driver? A review of the potential explanatory value of mindfulness in predicting speeding behaviour

Mindfulness is a concept which has been widely used in studies on consciousness, but has recently been applied to the understanding of behaviours in other areas, including clinical psychology, meditation, physical activity, education and business. It has been suggested that mindfulness can also be applied to road safety, though this has not yet been researched. A standard definition of mindfulness is “paying attention in a particular way, on purpose in the present moment and non-judgemental to the unfolding of experience moment by moment” [1]. Scales have been developed to measure mindfulness; however, there are different views in the literature on the nature of the mindfulness construct. This paper reviews the issues raised in the literature and arrives at an operational definition of mindfulness considered relevant to road safety. It is further proposed that mindfulness is best construed as operating together with other psychosocial factors to influence road safety behaviours. The specific case of speeding behaviour is outlined, where the psychosocial variables in the Theory of Planned Behaviour (TPB) have been demonstrated to predict both intention to speed and actual speeding behaviour. A role is proposed for mindfulness in enhancing the explanatory and predictive powers of the TPB concerning speeding. The implications of mindfulness for speeding countermeasures are discussed and a program of future research is outlined.

Road safety messages tailored for young adults : Using the Internet and encouraging protective passenger behaviour

Young drivers are at higher risk of crashes than other drivers when carrying passengers. Graduated Driver Licensing has demonstrated effectiveness in reducing fatalities however there is considerable potential for additional strategies to complement the approach. A survey with 276 young adults (aged 17-25 years, 64% females) was conducted to examine the potential and importance of strategies that are delivered via the Internet and potential strategies for passengers. Strategies delivered via the Internet represent opportunity for widespread dissemination and greater reach to young people at times convenient to them. The current study found some significant differences between males and females with regard to ways the Internet is used to obtain road safety information and the components valued in trusted road safety sites. There were also significant differences between males and females on the kinds of strategies used as passengers to promote driver safety and the context in which it occurred, with females tending to take more proactive strategies than males. In sum, young people see value in Internet delivery for passenger safety information (80% agreed/ strongly agreed) and more than 90% thought it was important to intervene while a passenger of a risky driver. Thus tailoring Internet road safety strategies to young people may differ for males and females however there is considerable potential for a passenger focus in strategies aimed at reducing young driver crashes.

Systems-based accident analysis in the led outdoor activity domain : application and evaluation of a risk management framework

Safety-compromising accidents occur regularly in the led outdoor activity domain. Formal accident analysis is an accepted means of understanding such events and improving safety. Despite this, there remains no universally accepted framework for collecting and analysing accident data in the led outdoor activity domain. This article presents an application of Rasmussen's risk management framework to the analysis of the Lyme Bay sea canoeing incident. This involved the development of an Accimap, the outputs of which were used to evaluate seven predictions made by the framework. The Accimap output was also compared to an analysis using an existing model from the led outdoor activity domain. In conclusion, the Accimap output was found to be more comprehensive and supported all seven of the risk management framework's predictions, suggesting that it shows promise as a theoretically underpinned approach for analysing, and learning from, accidents in the led outdoor activity domain.