The Choice of Debt Source by UK Firms

Peer reviewed

An investigation into the potential adoption of international financial reporting standards in the United States: implications and implementation

International Financial Reporting Standards (IFRS) have been adopted by most of the G20 countries. Given the broad worldwide acceptance of IFRS and significance of attaining comparability to facilitate free flow of capital, the US standard setter, the Financial Accounting Standards Board (FASB) made a commitment to jointly work with the International Accounting Standards Board (IASB) to explore the possibilities of convergence of US Generally Accepted Accounting Principles (GAAP) with IFRS. In 2007, the US Securities and Exchange Commission (SEC) eliminated the requirement that foreign companies listed on the US stock exchanges reconcile their IFRS-based financial statements with the US GAAP. In the same year the US SEC issued a concept release to the public requesting comments on a proposal to allow US issuers to prepare financial statements in accordance with IFRS. Following these initiatives by the FASB and SEC, the aim of the present study is to investigate the implications of a potential full adoption of IFRS by the US. The present study details the challenges and benefits of adoption and outlines the steps required for a successful outcome of this process.

The influence of remuneration structures on financial reporting quality: evidence from Australia

This cross-sectional study investigates the influence of a company's remuneration structure on managers' opportunistic behaviour. The findings support the proposed hypothesis that a higher level of compliance with Remuneration Principle 8-ASX Corporate Governance Council) is associated with a lower level of earnings management. The findings support the efficient functioning of the ASX proposed remuneration structure. This cross-sectional study investigates the influence of remuneration structures on financial reporting quality, based on a sample of companies listed on the Australian Securities Exchange (ASX). Compliance with Remuneration Principle eight issued by ASX (providing recommendations on formation, operation and disclosure of remuneration committees) is expected to improve financial reporting quality represented by a decreased level of earnings management. This study expands the corporate governance literature by examining an under-researched mechanism to address the agency problem. Earnings management, as a consequence of the agency problem, is measured using the level of absolute discretionary accruals. In this study, we use the modified Jones model to measure the level of discretionary accruals and the existence of reduced earnings management. The study is conducted using a random sample of 214 firm-year observations selected from the ASX listed companies. Our findings show a higher level of compliance with the principle on remuneration is associated with lower levels of earnings management. The findings support the efficient functioning of the ASX-proposed remuneration structure in reducing earnings manipulations.

What is the value of corporate sponsorship in sports?

This paper investigates the stock market reaction to investor mood swings resulting from the Indian Premier League (IPL) cricket matches. We find that stocks listed on the Bombay Stock Exchange (BSE) that sponsor the IPL cricket are unaffected by the cricket matches. This finding is robust along two lines: (a) the effect is insignificant both statistically and economically which we demonstrate using a simple trading strategy; and (b) results hold across a wide range of portfolios. Our results, both statistical and trading strategy-based, suggest that the portfolios of companies that sponsor cricket in India are efficient. Our findings stand in sharp contrast to the evidence obtained by the broader sports literature suggesting that sports actually impact stock returns, driven principally by psychological factors.

Stock return predictability and determinants of predictability and profits

We examine stock return predictability for India and find strong evidence of sectoral return predictability over market return predictability. We show that mean-variance investors make statistically significant and economically meaningful profits by tracking financial ratios. For the first time in this literature, we examine the determinants of time-varying predictability and mean-variance profits. We show that both expected and unexpected shocks emanating from most financial ratios explain sectoral return predictability and profits. These are fresh contributions to the understanding of asset pricing.

Intraday return predictability, portfolio maximisation, and hedging

We examine whether intraday Chinese return predictability is linked to optimal portfolio holding and hedging. We find that: (1) S&P500 futures returns only predict Chinese spot market returns in up to 5-minute of trading with predictability disappearing at higher frequencies of trade; (2) the portfolio weight is maximised at the 5-minute trading frequency, when predictability is the strongest; and (3) when predictability is the strongest, significantly less shorting of the futures is required to minimise risk when a long position is taken in the Chinese market.

Exploring differences between smaller and large organizations' corporate governance of information technology

Corporate governance of information technology (CGIT) is targeted at maximizing IT investment to achieve business objectives and value. Yet there is little empirical evidence about organizations' attitudes to and use of CGIT to deliver such value, or the role of related policies, practices, frameworks and methodologies. This study explored the views of Chief Information Officers and executive managers of smaller and large, primarily Australian organizations, regarding governance of IT. Through a survey, we investigated their views regarding the perc eived relevance, influential drivers, challenges and perceived benefits from the use of CGIT. Regardless of organizational size, our findings demonstrate substantially the same benefits, influences and challenges. Further, besides the widely acknowledged importance of strategic alignment of business and IT, risk management was found to be significant both in influencing the decision to adopt CGIT and as a perceived key capability for delivering improved organizational performance and resource-based value. As such, the study contributes new knowledge related to delivering business value through governing IT.

Does Gender Matter? Women Business Angels and the Supply of Entrepreneurial Finance

There is a substantial literature on the relationship between gender and access to finance. However, most studies have been concerned with access to debt finance. More recently, the focus of this research has broadened to examine women and venture capital. This article extends the focus further by examining the role of women in the business angel market, which is more important than the formal venture capital market in terms of both the number of ventures supported and total capital flows. Based on a detailed analysis of business angels in the U.K., the study concludes that women investors who are active in the market differ from their male counterparts in only limited respects. Future research into women business angels, and the possible existence of gender differences, needs to be based on more fully elaborated standpoint epistemologies that focus on the experience of the woman angel investor per se, and center on the examination of the role of homophily, social capital, networking, and competition in investment behavior.

Employment risks from present credit and business liquidity conditions : hearings before the Subcommittee on Domestic Monetary Policy of the Committee on Banking, Finance, and Urban Affairs, House of Representatives, Ninety-seventh Congress, second session, May 26 and 27; and June 8 and 9, 1982.

Item 1013-A, 1013-B (microfiche)

Modern business. A series of eighteen texts, especially prepared for the Alexander Hamilton Institute course in accounts, finance and management.

Mode of access: Internet.

Modern business; the principles and practice of commerce, accounts and finance,

Mode of access: Internet.

Secondary market for commercial business loans : hearing before the Subcommittee on Economic Growth and Credit Formation of the Committee on Banking, Finance, and Urban Affairs, House of Representatives, One Hundred Third Congress, first session, March 9, 1993.

Mode of access: Internet.