青年会计学者联合发起会计领域NO.1高端自媒体

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CONTENT

1.Management's Materiality Criteria of Internal Control Weaknesses and Corporate Fraud: Evidence from China

XiWu; JunWang

2.Capital and Earnings Management: Evidence from Alternative Banking Business Models

Marwa Elnahass; Marwan Izzeldin; Gerald Steele

3.Real Earnings Management, Institutional Environment, and Future Operating Performance: An International Study

Haiyan Jiang; Ahsan Habib; Snow Wang

4.Analyst Coverage, Market Liquidity and Disclosure Quality: A Study of Fair-value Disclosures by European Real Estate Companies Under IAS 40 and IFRS 13

Stefan Sundgren; Juha Mäki; Antonio Somoza-López

ABSTRACT

1.Management's Materiality Criteria of Internal Control Weaknesses and Corporate Fraud: Evidence from China

XiWu; JunWang

Abstract: This paper investigates the determinants and consequence of Chinese listed companies' first-time decisions on materiality criteria for internal control weaknesses, which have been observable beginning from the 2011 annual report. Although pretax income is most commonly used as the benchmark for materiality, revenue is also used as a popular alternative. Revenue is more susceptible to manipulation, as it has a much larger financial amount than pretax income. We argue that unethical managers prefer not to disclose material weaknesses by manipulating the materiality criteria to justify non-disclosure of a potentially material weakness. Consistent with this opportunistic incentive, we find that when companies committed fraud in the previous year that remains undetected, their management is more likely to use revenue (rather than pretax income) as the first-time benchmark and to set a higher revenue-based materiality threshold as well. Moreover, once the materiality metrics are set, the first-time revenue-based materiality threshold is significantly and positively associated with subsequent incidence of corporate fraud, which suggests that setting deviant and loose materiality metrics leaves room for the management to engage in future misconduct.

Key words: Internal control weaknesses; Materiality criteria; Corporate fraud; China

2.Capital and Earnings Management: Evidence from Alternative Banking Business Models

Marwa Elnahass; Marwan Izzeldin; Gerald Steele

Abstract: This paper examines whether institutional characteristics distinguishing Islamic from conventional banks lead to distinctive capital and earnings management behavior through the use of loan loss provisions. In our sample countries, the two banking sectors operate under different regulatory frameworks: conventional banks currently apply the “incurred” loan loss model until 2018 whereas Islamic banks mandatorily adopt an “expected” loan loss model. Our results provide significant evidence of capital and earnings management practices via loan loss provisions in conventional banks. This finding is more prominent for large and loss-generating banks. By contrast, Islamic banks tend not to use loan loss provisions in either capital or earnings management, irrespective of the bank's size, earnings profile, or the structure of their loan loss model. This difference may be attributed to the constrained business model of Islamic banking, strict governance, and ethical orientation.

Key words: IFRS;Regulatory capital management;Earnings management;Expected loan losses;Incurred loan losses

3.Real Earnings Management, Institutional Environment, and Future Operating Performance: An International Study

Haiyan Jiang; Ahsan Habib; Snow Wang

Abstract: "This paper investigates the association between firms' engagement in real activities manipulation (hereafter REM) on future firm performance in an international setting, and whether the association is conditional upon country-level institutional factor. Our inquiry is motivated by a paucity of research on the consequences of REM in an international setting. Using a large sample over the period of 2001 to 2015, we find that current-period REM is positively associated with future performance: a finding that is consistent with Gunny (2010) in the US. Importantly, we find that the positive performance effect is driven by firms operating in countries with strong institutional environments. Finally, we find that future operating performance improves when REM is undertaken by firms in strong institutional environments only during a non-economic crisis period, but not during an economic crisis period. The paper adds to the existing REM literature by showing a non-monotonic effect of REM on future performance that is conditional on the strength of a country's institution. We also contribute to the accounting information and crisis literature by documenting a time-variant effect of REM on future performance.

Key words: Real earnings management; Institutional environment; Firm performance

4.Analyst Coverage, Market Liquidity and Disclosure Quality: A Study of Fair-value Disclosures by European Real Estate Companies Under IAS 40 and IFRS 13

Stefan Sundgren; Juha Mäki; Antonio Somoza-López

Abstract: Disclosures in notes have been criticized by practitioners for being unwieldy and contributing little to the quality of the financial information. This study presents evidence on the association between disclosure quality, analyst following and liquidity in the real estate sector. More specifically, we study the disclosure of the methods and significant assumptions applied in determining fair values of investment properties under IAS 40 and IFRS 13. We find that disclosure quality is significantly higher under IFRS 13. Furthermore, we show that the quality is associated with analyst following and bid-ask spreads. However, the improved disclosures following the adoption of IFRS 13 are not associated with any significant positive economic consequences. This result indicates that the revised disclosure requirements in IFRS 13 did not solve any market imperfections.

Key words: Disclosure quality; IAS 40; Analyst following; Market liquidity

本期编审人员

素材采编｜甘肃政法学院  在读会计硕士生 初立明

执行编辑丨 长江大学   在读会计硕士生  蒋安璇

审核编辑 | 某会计师事务所 万通

终审 | 西北师范大学大学 在读会计硕士生  杨阳

主编｜北京交通大学会计系博士生  水皮（李高波）

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