Public Financial Reports Research Articles

Do Public Financial Statements Influence Private Equity and Venture Capital Financing?

ABSTRACT We study whether the availability of public audited financial statements influences the probability of private firms receiving private firm equity financing. Using a setting in the EU with plausibly exogenous variability in the extent to which private firms issue public financial reports, we find that private firms subject to public reporting requirements have a higher probability of obtaining private equity (PE) financing. In addition, we show that the increase in PE financing occurs in industries in which PE funds have prior experience. Last, we show that our findings also extend to other forms of private firm financing such as private firm acquisitions and venture capital. Our evidence highlights the importance of public financial statements in the decision-making of PE investors, an important and understudied segment of the private firm financing market. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M41; M2; G24; G34.

Leverage, earnings management and audit industry specialization: the case of Palestinian-listed companies

PurposeThis study explores the relationship between leverage and earnings management in the context of Palestinian-listed companies, while also investigating whether audit industry specialization influences this relationship.Design/methodology/approachThe data used in this study are extracted from public financial reports of 39 firms listed on Palestine Stock Exchange (PEX), spread across the service, insurance, industry and investment sectors, for the time period 2011–2022. A model is developed to test 4 hypotheses about the relationships between long-term and short-term debts, and earnings management, and then to examine the influence of audit industry specialization on these relationships.FindingsThe results depict a significant, negative relationship between long-term debt and earnings management. Whereas the association between short-term debt and earnings management is insignificant. Audit industry specialization is proven to have no influence on the relationships between the independent and the dependent variables. Results are robust for firms that changed their accounting policies and using different audit industry specialization proxies.Originality/valueThe association between leverage and earnings management is a significant research topic, given that previous research identifies credit ratings and debt covenant violations as key factors which motivate earnings management. This paper fills a substantial research gap by examining the relationship between the two variables in the context of Palestinian-listed firms, while emphasizing the distinction between long-term and short-term debts. It also highlights key relationships that have been neglected in this particular context, which adds to the body of literature. Furthermore, the research's findings provide a solid information base that is of great interest to accounting and auditing experts and that may be seriously evaluated to support and advance the PEX sector.

Financial Reporting and Employee Job Search

ABSTRACTWe investigate the effects of financial reporting on current employee job search, that is, whether firms' public financial reports cause their employees to reevaluate their jobs and consider leaving. We develop theory for why current employees use earnings announcements (EAs) to inform job search decisions, and empirically investigate job search based on employees' activity on a popular job market website. We find that job search by current employees increases significantly during EA weeks, especially when employees are more mobile and when their information frictions are greater. We also find that employees use EAs to update their expectations about their employers' economic prospects, consistent with learning, and some evidence that positive announcements elicit less search. Our paper contributes to the burgeoning labor and accounting literature by providing among the first evidence closely linking financial reports to employee learning and job search.

Impact of Audit Committee Characteristics on Dividend Yield of Jordanian Listed Financial Companies

The Audit Committee is responsible for overseeing the Board's corporate governance and oversight obligations, including the company's risk management system, internal control system, financial reporting, and internal and external audit tasks. The impact of Audit Committee features on Dividend Policy in financial companies listed on the Amman Stock Exchange was investigated in this study. Dividend Yield per Share was taken into account as part of Dividend Policy in the study, which was based on Jordanian financial enterprises' public financial reports. Multiple regression analysis was employed to examine the impact of AuditCommittee characteristics on DividendYield in Jordanian companies. The results indicated that AuditCommittee characteristics showed a significant effect on DividendYield per Share.

Credit Risk Assessments and Firm Value of Listed Commercial Banks in Kenya

Despite the various control measures put in place especially the CBK’s prudential laws to ensure that the performance of commercial banks in Kenya is ensured, most commercial banks have been collapsing in the recent past. It is in this light that the current study sought to ascertain the impact of bank liquidity, capital adequacy, asset quality and earnings on the firm value of listed Commercial banks in Kenya. Descriptive research design was employed on a population sample of eleven publicly listed retail banks. Secondary data was collected from CBK and other public financial reports over the 12-year period from 2009 to 2020. The collected data was analysed using1a multivariate panel regression1model to generate the relevant regression tests. The1study established that the capital adequacy has a marginal positive impact on the firm value while earning ability was found to have a statically insignificant positive effect on firm value among Kenyan commercial bank. The study findings indicated that liquidity was insignificantly and negatively correlated with firm value as asset quality had insignificant positive effect on firm value among Kenyan commercial bank. The study recommends that, managers of listed banks should embrace utilization of internally generated equity capital to ultimately promotes credit risk assessments as they maintain optimal levels of liquidity to maximize firm value and maintain high quality of assets as they sustained levels of earnings that boost output. This paper explained a credit risk rating concept that had not been examined in Kenya before.

The Development of Public Sector Accounting in Indonesia – A Bibliography Study

This study aims to provide an overview related to the development of public sector accounting research in Indonesia. The method used in this study is charting the field. Samples taken came from 11 journals in Indonesia and obtained 20 articles during 2010-2020. The results of this study indicate that the topic most widely used in public sector accounting research is the topic of agency performance and control systems. The topic of government agencies' performance in the public sector is the most researched topic because the government in Indonesia in managing public financial reports is still a special concern of the public. Meanwhile the least research topic is the topic of the accounting system.

Financial Reporting and Employee Job Search

We investigate the effects of financial reporting on current employee job search; i.e., whether firms' public financial reports cause their employees to reevaluate their jobs and consider leaving. We develop a simple model in which current employees use earnings announcements to inform job search decisions, and empirically measure job search based on employees' activity on a popular job market website. We find that job search by current employees increases significantly during earnings announcement weeks, especially when employees are more mobile and when within-firm information frictions are greater. We also find that employees use earnings announcements to update their expectations about their employers' economic prospects, consistent with learning. Our paper contributes to the burgeoning labor and accounting literature by providing among the first evidence closely linking financial reports to employee learning and job search.

PENERAPAN PROFILE MATCHING DALAM MENGANALISA LAPORAN KEUANGAN PERUSAHAAN BATU BARA YANG TERDAFTAR DI BURSA EFEK INDONESIA

Financial statements are an important instrument that is the duty of every company to publish them every year. The issuance of financial statements is useful for knowing the company's financial position. Especially companies that have gone public financial reports must be published publicly as a form of financial transparency to stakeholders. The issuance of these financial statements is useful for investors as consideration for investing in shares or withdrawing their shares in certain companies. Analyzing financial statements in general is done by ratio analysis, which is by looking at the company's financial ratios. But by adding the analysis method will enrich the results of the analysis of the company's financial statements. The addition of the analytical method is done by the profile matching method, which is to measure the ability of the company's financial ratios and rank them according to the company that has the best results.

Share Centralization, Investor Sentiment and Firm Performance

The purpose of this paper is to identify how internal corporate governance and external investor sentiment impacts the operating performance of the firm. The corporate governance mechanism affects the firm’s operating activities, and transfers its results to outside investors by public financial reports. Since the universal uninformed investors could only identify the firm’s net income instead of accrual earnings, this paper reflects the “visible” accounting number to represent investors’ received information differently from literatures. Sampling the Taiwanese listed companies from 2007 to 2014, I demonstrate variable definition, build regression models and examine them by full sample analysis and by grouping analysis. The results show three points contributed to professional and business field. The first is that both the higher investor sentiment and the larger shareholding percentage of the board are relevant to reported performance. In addition, because the investor sentiment is encouraged by firm’s net income, the managers should devote to better earnings for borrowing equity capital when the firm’s debt ratio is high. Finally, only in the situation that the enterprise faces low investor sentiment and little shareholding of the board is the shareholding percentage negative relationship to the operating performance. It infers that instead of informing the firm’s prospect to the outside investors, the board might hold on its share right inside of the firm.

The Appearance Process of the Relationship between Public Financial Reports and Local Government Bond Ratings

The Appearance Process of the Relationship between Public Financial Reports and Local Government Bond Ratings

CONSOLIDATED FINANCIAL STATEMENTS AS THE BASIS OF RELIABLE INFORMATION ON THE ACTIVITY OF INTEGRATED CORPORATE STRUCTURES OF UKRAINE

The research presents an algorithm for comparative analysis of the integrated corporate structure reporting including three stages. The proposed algorithm for comparative analysis has been tested on the example of the consolidated financial statements of sub-holding of the industrial and financial group, the financial statements of one of the main asset parent companies in Ukraine and a subsidiary of the sub-holding. It has been established that users cannot make proper conclusions and take decisions in a comprehensive way basing upon information provided in public financial reports.

Cash Flow Problems Can Kill Profitable Companies

Although the cash flow statement has been required in public financial reports since 1988 in the United States (and since 1994 according to International Financial Reporting Standards), these important cash flow data are still often overlooked in standard financial analyses. Accounting net income measures economic performance which does not necessarily match up with the timing of cash flow. Many profitable businesses have been killed by cash flow problems, often in the start-up phase. A business has three types of cash flows: operating, investing, and financing. A key measure of cash flow health is free cash flow, the amount of operating cash flow generated in excess of the cash needed for important spending such as for capital expenditures. Managers must pay particular attention to the difference in timing between when cash is collected from customers from the sale of inventory and when cash must be paid to suppliers for the purchase of that inventory. A significant discrepancy between those numbers indicates a potential cash flow problem. Managers and owners of a business that is burning through cash spend much of their time worrying about cash flow survival and are therefore distracted from making the tactical and strategic decisions important to the long-run success of their business.

Cash Flow Problems Can Kill Profitable Companies

Although the cash flow statement has been required in public financial reports since 1988 in the United States (and since 1994 according to International Financial Reporting Standards), these important cash flow data are still often overlooked in standard financial analyses. Accounting net income measures economic performance which does not necessarily match up with the timing of cash flow. Many profitable businesses have been killed by cash flow problems, often in the start-up phase. A business has three types of cash flows: operating, investing, and financing. A key measure of cash flow health is free cash flow, the amount of operating cash flow generated in excess of the cash needed for important spending such as for capital expenditures. Managers must pay particular attention to the difference in timing between when cash is collected from customers from the sale of inventory and when cash must be paid to suppliers for the purchase of that inventory. A significant discrepancy between those numbers indicates a potential cash flow problem. Managers and owners of a business that is burning through cash spend much of their time worrying about cash flow survival and are therefore distracted from making the tactical and strategic decisions important to the long-run success of their business.

Satisfaction gap in public sector financial reporting

Purpose– Public information disclosure is a manifestation of transparency and contributes to governance-by-disclosure. Also, better financial reporting can improve the credibility and integrity of public finances and contribute to a better management of public resources. A survey was carried out in Cyprus of users’ of public financial reports concerning an expectation gap about the types of information included in such reports (information needs expectation gap) as well as the quality of such information (information quality satisfaction gap). The paper aims to discuss these issues.Design/methodology/approach– Two focus groups of users and preparers of public financial reports were used to construct the questionnaire. Users of such reports, who belonged to all three categories of public sector financial reporting identified by IPSASB, were surveyed. The quantitative data obtained was analysed using SPSS and quadrant analysis to answer the research questions posed.Findings– Data from 101 respondents confirmed that each of the information needs identified in the IPSASB Consultation Paper (2008) was rated as being a significant information need. Data analysis also showed that both types of expectation gap exist, especially as far as local authority and semi-public organisations are concerned.Research limitations/implications– The response rate in the self-administered survey was admittedly rather low but it was not unexpected mainly due to the survey’s very specialised nature and the tendency by people in Cyprus not to critique public bodies.Practical implications– Deficient financial public sector reporting means the auditor general is not able to adequately express an opinion on public spending at the local government level. This, in turn, means taxpayers do not get the quality of services they pay for. At the same time, the lack of information transparency means corrupt practices are not eradicated. One answer to the problem would be legislating the content of public financial reports.Social implications– The lack of governance-by-public exposure means that services to the local community cost a lot more, due to corruption and inefficiency. In addition, it contributes to lowering market confidence and eventually contributes to financial crisis at the national level.Originality/value– The survey conducted was the first of its kind in Cyprus to investigate financial public sector reporting and document both manifestations of the expectation gap. In addition, information needs identified in the IPSASB Consultation Paper (2008) was rated as significantly needed and this is the first time it has been done in Eurozone member state and in a country facing a financial crisis.

A Comparative Study of Pattern for Anticipating Financial Crisis of SAF and Thai DA on Continuing the Activity of Companies Listed in Tehran Stock Exchange

Since the late 1960’s information and data of public financial reports were actively and effectively tested for anticipating the bankruptcy of company; which shows high importance of such information for different economic factors. Suppliers and financial institutes shall improve their idea in relation to credit value of a customer. Investment institutes are in search of methods for finding out acceptable investment risk. Accountants are interested in being aware of probability of assumption of continuity of activities of company. The government agents require a dependable distinguishing tool to support the bankrupt companies. Financial health of a company may assist to single beneficiaries including: customers, employees and managers. In this research through studying the probability of anticipating bankruptcy of 60 companies listed in stock exchange by using SAF and Thai DA method during one and two years before pausing their activity, we examine the 2 aforesaid methods. According to the results of research, SAF method in comparison to Thai DA method has better results and using the data of last year with higher exactness may anticipate the pause in activities of company.

Good Corporate Governance dan Manajemen Keuangan dalam Ekonomi Syariah

The Good Corporate Governance (GCG) facing challenges to Islamic banks nowadays not only in Indonesia but also in the entire world. GCG is necessary to the Islamic banks due to significance of the stakeholders trust towards Islamic banks its self. But in practice, the GCG could serve as an obligatory and formal instrument for delivering transparant public financial reports of the Islamic banks. In avoiding its shortage of application, Islamic finance management gives guide for encountering the formalistic condition of the GCG of the Islamic banks. For the GCG and the Islamic financial management both are very important, this paper discusses a likely convergence between both principle. Finally, the GCG has to be applied by guiding the Islamic financial management. The Islamic financial management is something to do with weather the religious normative assumptions and social economic ones.

Benchmarking Competitive Intelligence Activity

This paper reports on results drawn from a comprehensive database formed from public financial reports and a proprietary benchmarking survey conducted by a major competitive intelligence consulting firm. Our overall aim is to identify different circumstances in which knowledge development and knowledge protection have greater or lesser importance. Very little work has been done on a industry-wide (or wider) basis concerning intellectual capital and/or competitive intelligence activities in firms and how that may vary according to circumstances. The wider study and database are designed to better address such questions. In this study, we look at one piece of this overall research program, specifically how competitive intelligence activity varies in distinctive environments. Based on these results, as practitioners better understand their environments, they can make better decisions on the level and aggressiveness of their own CI operations as well as on protection and counterintelligence efforts. The results will also begin to move scholarly work in the field into these new areas of macro studies and strategic choices.

Good Corporate bagi Efektivitas Sistem Moral Perbankan Syariah

The good corporate governance (GCG) for islamic banks nowadays is necessary in the entire world. Thats due to significance of the stakeholders trust towards islamic banks its self GCG as codes of moralis not in the contrary with islamic principles. But in practice, the GCG could serve as an obligatory and formal instrument for delivering transparant public financial reports of the islamic banks. In its initial growth, serious research work over recent decades has shown that Islamic banking is not only feasible and viable, it is an efficient and productive way of financial intermediation. But the efficiency of the islamic banking enconter much barriers, though it applied the GCG for several constraints, such as corruption culture, double-book keeping, and power approach.

Governmental financial transparency in MERCOSUR member countries

In the last century, the MERCOSUR member countries have carried out reforms aimed at achieving better public financial information for governmental decision-taking. Important changes are currently taking place on the international public accounting scene, and the International Federation of Accountants (IFAC) has published International Public Sector Accounting Standards (IPSAS), by which it seeks to ensure that governmental financial reports include financial information of sufficient quality to support decision-making by different users, and at the same time to improve the comparability of the financial information presented by public sector bodies throughout the world. In this article, we examine the consistency of the information included by MERCOSUR member countries in their current year-end governmental public financial reports with the public financial reporting practices recommended by IFAC, in order to determine whether further efforts are needed to improve transparency and comparability. Points for practitioners The article may help government practitioners in MERCOSUR countries to become aware of the divergences which exist regarding the governmental financial information offered by each of the countries in MERCOSUR. Moreover, it could help to set up a common project of account reform which would take IPSAS as its model. This unified framework for accounting policies would increase the coherence of financial information and would establish a common measurement basis to assess the financial results of all of the MERCOSUR countries.

Is Bad News Good News? Corporate Governance and Accounting Quality

All public firms issue financial reports, but the quality of the reports differs across firms. This paper investigates the endogenous link between accounting quality, defined as timeliness in earning recognition, and corporate governance in a cross-country study based on 9 European countries. I hypothesize that firm in lower pyramidal layers supply less reporting quality due the ultimates owner's lower proportion of cash flow rights to control rights than what is general observed in independent firms. Results indicate that firms in lower pyramid layers are aggressive reporters of economic gains but slack reporters of economic losses and that the difference in reporting strategies is linked to ownership concentration. The paper provides new evidence that despite the standardization and harmonization of financial reporting requirements, the informational and contractual effectiveness of the public financial report is still influence by firm specific reporting incentives.