Employee Expenses Research Articles

THE EFFECT OF TAX PLANNING, INTELLECTUAL CAPITAL, AND ACCOUNTING CONSERVATIONS ON EARNINGS MANAGEMENT (STUDY OF CONSUMER GOODS SECTOR COMPANIES LISTED ON THE INDONESIAN STOCK EXCHANGE 2019- 2022)

This study aims to determine the effect of tax planning, intellectual capital, and accounting conservatism on earnings management of consumer goods sector companies listed on the Indonesia Stock Exchange in 2019-2022. The research method uses multiple linear regression analysis with a quantitative approach. This study used a sample of 104 data with sampling using the purposive sampling technique. The measuring instrument used is Statistical Package for the Social Sciences (SPSS) version 25. The results showed that simultaneously tax planning, intellectual capital, and accounting conservatism had no effect on earnings management with a significance value of 0.460. The partial test results show that tax planning has a significant positive effect on earnings management with a significance value of 0.028 based on agency theory, where companies try to pay the minimum possible tax to the government so as not to reduce the profit earned in the current year. Intellectual capital has no effect on earnings management with a significance value of 0.730. This is because in the Value Added Intellectual Coefficient (VAIC), employee expenses are not counted as costs. Accounting conservatism has no effect on earnings management with a significance value of 0.704; this is due to the implementation of the International Financial Reporting Standards (IFRS) guidelines in Indonesia. The coefficient of determination shows a value of 0.024, indicating that the variables included in the model are able to influence earnings management by 2.4%.

Determinants of Financial Shortfalls in State-Owned Railway Systems: An Ardl Approach for Sri Lanka Railways

Sri Lanka Railways (SLR) has been experiencing a financial shortfall since the 1940s, characterised by operational expenditure exceeding total revenue. This study aimed to identify the critical determinants of the financial shortfall of Sri Lanka Railways (SLR) using an econometric approach. Employing a quantitative methodology, the study utilised secondary and manipulated data from 1977 to 2022 to examine the effects of four key variables: revenue shortfall from fare revisions (FRFR), subsidised season tickets (FRSS), freight transport volume (FTK), and total wage bill (WB), incorporating the general price level (CCPI) to account for inflation. The regression analysis, using the Auto Regressive Distributed Lag Model, identified a short-run relationship between the financial shortfall (LFS) and lagged variables, including the volume of rail freight transport (LFTK), total employee wage bill (LWB), and the general price level (LCCPI). A long-run relationship was found among revenue shortfall from fare revisions (LFRFR), LWB, LCCPI, and LFS. The findings highlight the significant impact of aligning railway fares with bus fares and managing employee expenses on SLR's financial shortfall. Additionally, the revenue shortfall from subsidised season tickets showed a significant relationship at a 10% significance level, both short-term and long-term. The study underscores the necessity of revising railway fares in line with bus fares to enhance revenue and ensure financial sustainability. Optimising employee-related costs through effective management and reviewing the subsidy structure for season tickets are also recommended. Furthermore, investment in capacity and facility development for freight transport is crucial for mitigating long-term financial shortfalls.

Impact of Bank-Specific Variables on Financial Performance of Joint Venture Banks in Nepal

Banks play an important role not only in the growth of the financial system but also in the development of the overall economy of a nation. Therefore, the determinants of bank performance have attracted the interest of academic research, bank management, and financial markets as well as of bank regulatory bodies. This paper examines the impact of bank-specific variables on the financial performance of joint venture banks in Nepal. The data are collected from the supervision report of Nepal Rastra Bank and annual reports of the sample banks for 10 years from the fiscal year 2009/10 to 2018/19. Based on the results of the Breusch-Pagan LM test and Hausman Test, fixed effects regression models are applied to examine the effects of bank-specific variables on the financial performance of Nepalese joint venture banks. The result shows that there is a significant positive impact of size and employee expenses on the performance of banks measured in terms of return on assets, return on equity and net interest margin. Management efficiency has also a positive impact on the performance of banks but it is significant only on net interest margin. Similarly, there is a significant negative impact of liquidity on return on equity and net interest margin and a significant negative impact of operating expenses on the net interest margin of the banks.

Programmable money: next-generation blockchain-based conditional payments

Conditional payments allow the transfer of money only when pre-defined rules hold. Example uses could include welfare payments, employee expenses, insurance payouts, or tied donations. Normally, conditions are checked manually in reimbursement or pre-approval/audit processes, either at accounts before funds are distributed, or using account records after distribution. Blockchain’s capabilities for smart contract and digital assets can be used to implement next-generation conditional payments, on a decentralized ledger. We conducted a project with an industry partner where we conceptualized, implemented, and evaluated a novel programmable money concept using blockchain. In the system, programmed policies are not attached to accounts, but instead to money itself. Policies here specify the conditions when money may be spent, and can be automatically checked by the money as it is spent. Policies can also define auxiliary actions to be taken as part of payment transactions, including side-payments. Policies can be dynamically added to and removed from money as it flows through an economy. These policies could be budget rules for tied funds, but could also enable new forms of “values-based money” that respect ethical or other rules which relate to societal values or social norms. We report on some of our experiences and insights regarding blockchain architecture, software engineering with blockchain, and blockchain-based programmable money. We also identify opportunities and open research questions in these areas.

Earnings Decomposition, Value Relevance and Predictability

Compared with net earnings, the components of earnings are more informative in companies whose components have different qualities of persistence and volatility. We examine the issue of whether net earnings together with their components have more information content than only net earnings. We construct a model to describe the effect of components volatility and their persistence through disaggregation of earnings value relevance and predictability. The analyses in our study are based on 600 firm-year observations in Tehran Stock Exchange (TSE) for the period 2005- 2019. Data are derived from RAHAVARD NOVIN Iranian software and firms' financial statements. The statistical tests for data analyses are the difference of means test (t-test) and regression analyses. The results of the current study indicate that as the persistence and volatility of selected components of earnings (sales, employee expenses, other selling, general and administrative expenses, and income taxes) increase, earnings disaggregation can improve earnings predictability. Furthermore, when the volatility of employee expenses increases, disaggregated earnings can improve earnings value relevance. As the value relevance of net earnings has been declined over the past decades, the results of the current study suggest that earnings disaggregation plays a major role in improving earnings value relevance and their predictability.

Antecedents of CSR disclosure in an emerging economy: evidence from the banking industry

PurposeThis study examines the factors which affect the adoption of corporate social responsibility (CSR) disclosure practices in line with Global Reporting Initiative (GRI) guidelines in Brazil's banking industry.Design/methodology/approachThe analysis comprised the deposits (demand and savings), fee income, employee expenses, regulatory capital (Basel ratio) and ownership structure of all Brazilian banks from 2006 to 2017. The sample totalled 1,613 firm-year observations. The authors used three binary regression models (logit, probit and complementary log-log) in order to choose the one that best fits the model proposed. The authors controlled for size, profitability, leverage and liquidity.FindingsThe main results show positive relationships between CSR reporting and both savings deposits and fee income. The authors also found that state-owned (foreign private-owned) banks have a positive (negative) relationship with probability of CSR disclosure. A negative relationship was found between CSR disclosure and regulatory capital, indicating that banks are more likely to publish GRI reports as they approach the minimum levels of the Basel ratio.Research limitations/implicationsSome banks may disclose CSR reports which do not adhere to the GRI guidelines; these were not captured in this study.Practical implicationsThe estimated model aids understanding of factors influencing CSR disclosure in the banking industry in an emerging economy, which may help bank regulators to adopt new approaches in their supervisory and regulatory roles.Originality/valueThis work is the first to document that both fee income and banks' regulatory capital are related to CSR disclosure. Furthermore, this study investigates the entire banking industry of a Latin American country over the longest and most up-to-date period the authors are aware of.

A Strategic Financial Management Evaluation of Private Hospitals’ Effectiveness and Efficiency for Sustainable Financing: A Research Study

Purpose: The purpose of the study is to evaluate the performance of private hospitals and identify conditions that secure sustainable financing of the sector. Design/Methodology/Approach: The Data Envelopment Analysis (DEA) was used as the main tool to measure efficiency and effectiveness among fifteen (15) major private hospitals in Greece. Audited financial statement data were analyzed as a basis for the assessment of their performance. An input oriented model was applied due to the fact that assets and employee expenses are more likely to be under the control of management in private hospitals, compared to revenues and CFFO. The latter were used as outputs that represent measures of effectiveness and efficiency respectively which secure sustainability. We opted for the Variable Return to Scale (VRS) version of DEA (in connection with the CRS one), since hospital are systems extremely depended on the human capital and the knowledge management, as a means of creating value and are characterized by non-linear dynamics. Findings: The great majority of the hospitals in the sample exhibit increasing and decreasing returns scale. Inefficiencies found to emanate from a non-optimal scale of the hospitals rather, than from management's lack of capability to transform inputs to outputs. Practical Implications: The study aspires to frame options and help management to make informed choices that promote sustainable development of the private sector, which are also applicable to the public one. It is essential for public authorities to judge the meaningful performance of the private hospitals, to administer accordingly the level of its subsidies through public insurance funds, the claw back and rebate policies in a period of fiscal austerity and act accordingly to attract or deter the inflow of scalable private funds in healthcare to promote human wellbeing. Originality/Value: Performance differences, can be leveraged to guide improvements in the operation of the private hospitals and reforms in the health care system.

Regulation of telework in Russia and foreign countries

The article analyzes the legislative approaches to the regulation of telework in Russia, the United States, and the countries of the European and Eurasian Economic Union (EAEU). The authors systematized the main issues of the Telework Enhancement Act, the Telework Framework Agreement, and the Labor Code of the Russian Federation and countries of the EAEU. The comparison made it possible to conclude that the norms of Russian labor law significantly lag behind European and American legislation. The regulation of telework in the Russian Federation consists of a certain framework, without a legal resolution of many important issues. The norms of the Labor Code of the Russian Federation are focused on procedural issues rather than on guarantees and compensation for employees. The authors investigated the level of labor guarantees for teleworkers in Russia and also carried out a comparison of social protection, which highlighted the reasons for the proliferation of “gray” employment schemes. The key problems of telework regulation in Russia are the absence of the obligation of the employer to compensate the employee for the costs of equipment and communication, reduced responsibility and duties of the employer in terms of labor protection, adherence to the work and rest regime, imperfection of the rules governing dismissal. In order to improve the Russian legislation, the possibilities of securing the preferential right of certain categories of individuals to enter into an agreement on teleworking, establishing the employer’s obligation to compensate employee expenses caused by teleworking are considered. The necessity for increasing the work on raising the level of the legal culture of citizens on the part of educational institutions and trade unions is justified. The regulation of telework in Russia needs to be gradually improved on the basis of an analysis of Russian law enforcement practices and foreign experience.

The Effects of PAD, DAU, and Employee Expenses on Capital Expenditures with Population Density as a Moderating Variable

The aims of this study are to analyze the effect of PAD, DAU, and employee expen ses on capital expenditure with population density as a moderating variable. The main theories are stewardship and resource dependency theory. The population is 35 districts/cities in Central Java in 2013-2017 . There are 175 unit s that chosen by saturated sampling method. There are 14 of outlier data. Thus , there are 161 unit of analysis. The analytical tools used are descriptive statistic, inferential analysis , and MRA. The r esults showed that PAD have positive and significant effect on the capital expenditure, DAU does not have significant effect on the capital expenditure, employee expenditure does not have negative and significant effect on the capital expenditure. Population density can moderate the effect of PAD on the capital expenditure. However, population density can not moderate the effect of DAU and employee expenses on the capital expenditure. The conclusions are PAD has a significant positive effect on the capital expenditure and employee expenses h ave a significant negative effect on the capital expenditure. It can be a reason that regional governments must increase PAD and reduce employe expenses for capital expenditure.

Human resources disclosure: an exploratory study of the quality in Qatar

PurposeThe purpose of this paper is to determine the quality of HR disclosure of companies listed in Qatari Exchange Market and identify factors that influence the level of this HR disclosure quality.Design/methodology/approachContent analysis of annual reports and sustainability reports of 12 companies from industrial and real estate sectors over the period 2013–2015 had been analyzed using the three-point scale (0–2, numerical disclosure 2, 1 for narrative form and 0 for not disclosed). This research employed also multiple regressions, in order to examine the impact of profitability and employee expenses on HR disclosure quality.FindingsThe results point out that HR disclosure quality level is very low among the sample companies. The ordinary least squares (OLS) regression analysis results indicate that the level of HR disclosure quality is associated with company’s employees expenses as a proportion of its total operating expenses, whereas profitability does not have a significant influence on its level of HR disclosure quality.Research limitations/implicationsThe current study has two important limitations. First, the sample of the study consists of only 12 leading Qatari industrial and real estate sectors firms listed on the Qatar Stock Exchange Market. Second, the study used an unweighted index which implies equal importance of the selected information items.Originality/valueThe study has bridged the literature gaps by offering empirical evidence and new insights on the HR disclosure quality in Qatar and the factors that affect, which have not been examined before.

Stickiness of employee expenses and implications for stock returns

This paper proposes a new measure for operating inflexibility based on firms’ downside stickiness of expenditures on employees. Firms are affected not only by labor unions, but also by human capital risks that influence firms’ expected stock returns. The contribution of the current study is to show, in general, that expenditures on employees affect firms’ operating inflexibility and thus account for higher stock returns. This may well be the first paper to conduct time-series predictability tests of market returns for market operating leverage, and to find a positive interaction in and out of sample.

Impact of Bank Specific and Macroeconomic Variables on the Performance of Commercial Banks of Nepal

This paper examines the impact of bank specific variables and macroeconomic variables on the performance of commercial banks of Nepal. The dependent variable is bank performance which has been specified in terms of ROA, ROE and NIM while the independent variables are capital adequacy ratio, asset quality, management efficiency, liquidity management, employee expenses, other operating expenses, credit risk, growth of gross domestic product and inflation. To test the impact of importance of bank specific and macro-economic variables on bank performance regression models have been estimated. The study reveals that management efficiency has a very strong and positive relationship with bank performance in Nepal. The macroeconomic variables are not significant and hence there is no evidence that external forces have impact over bank performance. The study showed that all the bank specific factors are found to be significant factors affecting the bank performance.

The drivers of profitability in the top 30 major airlines worldwide

Purpose The purpose of this study is to identify the impact of human and structural capital on profitability of major airlines and examine whether region, capital ownership and control and strategic alliance play a clustering effect on profitability. Design/methodology/approach Using information from the top 30 airlines worldwide, in particular human and structural capital proxies, a linear model is regressed. Test of hypotheses were performed towards the identification of the influence emerged from variables, such as region, capital ownership and control and strategic alliances, on intellectual capital drivers and profitability. Findings Turnover is driven by human and structural capital factors, namely: employee expenses and benefits; size of board of directors; intangible assets; codeshare agreements; and passenger traffic. Airlines profitability does not depend on region, capital ownership and control or strategic alliance in which the company is integrated. Research limitations/implications In spite of the limitations, we underline the range of time under analysis and the sample size. However, the current approach can be replicated over time and based in other rankings, structured on different metrics and approaches. Practical implications The empirical results provide both an understanding of how independent variables positively affect the performance of airlines and offer some explanation as to the relationship between key characteristics of firms and profitability. Originality/value The research adds value to the current literature by exploring the effects of new intellectual capital drivers on profitability of airlines firms. Focused on a sector that strongly contributes to improve the networking between nations, it provides a new and updated overview.

Effect of Employee Expenses on Usefulness of Accounting Information

In this study, the employee expenses model and earnings model are compared in order to determine whether or not putting the employee expenses in the earning predictability models and high relevance of accounting information to stock value, increases usefulness of accounting information. We use the term ‘earnings model’ to refer to the consideration of earnings alone, for determining earnings predictability as well as value relevance. The term ‘employee model’ refers to the consideration of earnings and employee expenses in determining earnings predictability as well as value relevance. In this study, the cost of employees’ salary, which is shown under the heading of General and administrative expenses in the income statement, is the only monetary information that is available for us and relevance value is determined through the effectiveness of the models in determining stock returns. After applying these limitation, companies which were active in Tehran Stock Exchange from2003 to 2012 were chosen as the target population. The results showed that compared to earnings model, the employee expenses model provides a better prediction of the earnings but it isn’t a better model for predicting the stock relevance (related to the return of the stock).

The Essence of Human Capital in a Building Company – Selected Aspects

The role and essence of human capital within the turbulent environment of construction companies on the Polish market is very often underestimated. The construction sector is seen as a field where the main advantage for the management board is the knowledge about the market, about its investors and prices whereas the aspect of human capital is considered as an executory force of assigned projects not as the force which builds competitiveness of the business. Simultaneously many businesses strive to change this approach, in order to gain market advantage and become more competitive for Investors, for example they highlight the role of human capital in the business approach.The main aim of this article is to present chosen aspects of human capital in an construction enterprise. The starting point for further analysis is the theoretical recognition of human capital, its role and the integral connection with the intellectual capital of an enterprise. Human capital constitutes inborn skills and acquired skills, thanks to which if adequately invested in can be developed and enriched. This places the people in a significant position within the economical definition of business activities in a company.The second part of the article presents an analysis of the Human Capital Efficiency (HCE) quotient measuring effectiveness based on the VAICTM (Value Added Intellectual Coefficient). Human capital (HC) with regard to the HCE index is connected to all employee expenses (salary and other provisions) however does not constitute intangible assets such as motivation, involvement as well as preventing deprecation and can be calculated as a company expense such as medical insurance. Thus a further analysis will be conducted with regard to:•Defining the factors in the dynamic scale•Analyzing the key factors used in human capital management using the dynamic scaleThe third part of the article is connected to the results of the conducted analysis on selected large polish construction company. A further analysis for the above mentioned dynamic factors will be connected to medium sized construction companies apart from the current analysis where these factors play an important role with regard to the development of the company.

An application of DEA method for ranking different Tehran municipality branches

Article history: Received 5 January 2014 Received in revised format 8 March 2014 Accepted 16 March 2014 Available online 18 March 2014 Measuring the performance of governmental organizations plays essential role on making strategic decisions. In this paper, we present an empirical investigation to measure the performance of 22 different branches of municipalities in city of Tehran, Iran. The proposed study uses data envelopment analysis (DEA) for measuring the relative efficiencies of various units. The proposed DEA uses fixed assets, employee expenses and total income as input and Green Space Development, Resumption and Waste, Development of Cultural Spaces as well as Improvement of Passages and highways are considered as the output of the model. The results indicate that 9 regions were operating efficiently and 14 regions were inefficient. © 2014 Growing Science Ltd. All rights reserved.

Earnings Predictability, Value Relevance, and Employee Expenses

Employees are an important firm resource and a source of intellectual capital; hence, they drive firm performance. Employee expenses capture information about employees and are one of the largest earnings components. We analyze whether this earnings component contributes incremental information content over and above that of earnings alone. Our results confirm the importance of employee expenses from an accounting perspective and show that they indeed add to the prediction of future firm performance. Analyses are based on a sample of 938 U.K. firms that mandatorily report employee expenses, resulting in 5039 observations within a time period ranging from 1999 to 2010. Results are consistent across industries, years, and different sample selections. We further provide evidence that there are underlying determinants that influence the incremental information content of employee expenses. Specifically, more persistent employee expenses are associated with higher earnings predictability and value relevance. For firms with a higher proportion of loss years, employee expenses contribute more strongly to the prediction of future performance. We interpret this finding to support the role of employees as a firm resource which can be allocated to more profitable activities in the case of loss years.

The Financial Related Analysis on Sales Management and Human Resources by Means of Bi Type Solutions

All companies need information in order to make decisions. There is usually too much data spread in the IT systems of the company, but transforming the data into information that can be analyzed in order to make decisions is a difficult process. Considering the demands imposed by the knowledge society, each organization strives to become an intelligent organization and, by the means of new and innovative Business Intelligence(BI) strategy, to gain a market competition advantage. The new BI era integrates information into the decision process through the means of decision services, relates business processes to business rules that may be changed at any time, and integrates BI benefits to capabilities provided by teamwork, cooperation, and business process management. In this article, the authors present a BI solution, implemented through QlikView Application, thanks to which it is possible to analyse the employee expenses and for management sales.

The efficiency of the Turkish banking system during 2000-2005

This study analyses the efficiency of the Turkish bank system over the period 2000-2005. The estimation showed that inefficiency decreases over the period under consideration and the analysis unambiguously indicates that the Turkish banking system has a large potential for improvement. The state banks appear to reduce their costs more comfortably than the private banks by using their size due to their low employee expenses and less expensive cost of borrowing. The restructuring programme appears to have transformed the state-banks into the more efficient and profitable institutions.

Discussion of “Fringe benefits and employee expenses: Tax planning and neutral tax policy”

Discussion of “Fringe benefits and employee expenses: Tax planning and neutral tax policy”