Ananda Mohan Pal

Bio: Ananda Mohan Pal is an academic researcher from University of Calcutta. The author has contributed to research in topics: Emissions trading & Financial statement analysis. The author has an hindex of 3, co-authored 6 publications receiving 62 citations.

Effects of the SEC's XBRL mandate on financial reporting comparability

Abstract: In 2009, the US Securities and Exchange Commission (SEC) made it mandatory for firms to file interactive data using XBRL along with their 10-K and 10-Q reports on EDGAR. There was an initial three-year phase-in period, with the first (last) phase covering the largest (smallest) firms in the US capital markets. We examine the implications of the SEC's XBRL mandate for financial statement comparability. Our results indicate that financial statement comparability declined in the initial years after the mandate. We also find that firms that use more company-specific extension taxonomies (companies are allowed to use their own taxonomies when the standard taxonomy provided by the Financial Accounting Standards Board (FASB) is inadequate) have lower financial statement comparability in the post-mandate years. Finally, we document that the level of discretion involved in measuring particular financial statement line items is related to the post-mandate change in comparability — we find that selling, general and administrative expense (SG&A) comparability declined after the mandate, while depreciation comparability did not change.

Efficient working capital management, financial constraints and firm value: a text-based analysis

Abstract: In this paper we examine the association between efficient working capital management and financial constraints for a sample of Australian firms. Using a text-based measure of financial constraints, we show that efficient working capital management is associated with lower financial constraints in firms in the next two to three years. Ours is the first study to use a text-based measure of financial constraints for Australian firms. We also show that the negative association between financial constraints and future share price is significantly weakened for firms with efficient working capital management, suggesting that such firms have higher market valuations despite being financially constrained. Finally, analysts seem take into account working capital management of firms when setting the one year ahead target price.

The joint information role of analysts’ cash flow and earnings forecasts

Abstract: We study whether the relative magnitudes of analysts’ cash flow and earnings forecasts convey information about the persistence and value relevance of reported earnings. We find that reported earnings are likely to be more (less) persistent and value relevant when analysts forecast relatively moderate (extreme) levels of operating cash flows, relative to earnings. We also find that the market’s response to a given earnings surprise is the strongest for moderate levels of cash flow forecasts relative to earnings. The joint information role of analysts’ cash flow and earnings forecasts persists even after controlling for the absolute accruals in the model.

Corporate Governance Compliance, Governance Structures, and Firm Performance

Abstract: The paper deals with the issue whether the adoption of CG practices is associated with the firm ownership and capital structure. The authors have developed a relative disclosure CG Index using twenty parameters emanating from published annual reports. The beneficial influence of CG compliance was found independent of firm ownership structure. The extent of debt in the capital structure of the firm was found to influence CG. PSUs were a significant force in the emerging CG regime. Results indicate that greater CG compliance is significantly associated with firm’s market capitalisation. Firm operating performance (measured by ROA) has a positive association with CG and there also exists an association between ROA, ownership structure variables and debt equity ratio.

CDM: A Study of a Sustainable Growth Opportunity for India

Abstract: Kyoto Protocol (1997) has designed three market-based “flexible mechanisms”: Emissions Trading (ET), Joint Implementation (JI) and the Clean Development Mechanism (CDM). The CDM projects are developed in developing countries, assisted with technology and finance from investors of the industrialized countries who in return would get carbon credits called CER - for the reductions of Green house gas emission and can use those credits to meet their Kyoto target. Alternatively, project developers may generate emission reduction for sale in the international market. Three stakeholders are involved in the process, the industrialized country governments and companies who have undertaken emission reduction target, the developing countries where the CDM projects are developed and the global environment. The global environmental damages would get reduced by emission reduction of the CDM projects, no matter where the project is located. The developing countries get sustainable production due to CDM projects and either finance and/or technology for development of CDM projects cash flows from sale of CER. The industrialized countries and the companies get the required CER at economic price or cost of investment.Up to 12-02-2007 a total 506 projects have already been registered and 99 projects are requesting registration and another 845 projects are in the pipeline. The expected green house gas reduction in units of tons of carbon or equivalent by 2012 is 1.8 billion with average annual emission reduction of 113 million of tCO2e. (tCO2e means one ton of carbon dioxide emission or equivalent) In 2005, 374 million tCO2e of Certified Emissions Reductions (CER), were transacted at a value of US$2.7 billion with an average price climbing over US$7.23 per CER. In the first three months of 2006, prices for projectbased emission reductions soared with an average reported price of US$11.45 per tCO2e for the 79 million tons transacted in the first three months of 2006 alone, corresponding to a value of nearly US$0.9 billion.Starting on 08-March-2005 till 12-Feb-2007 India has 164 registered projects with annual estimated emission reduction of 1.567 millions of tCO2e. Based on the risk adjusted conservative value of $6 only (offered by the World Bank) for the CER to be generated from the registered projects in India and taking the current rate of conversion of 1 USD for 44 ICU the potential monetary value of ‘Additionality’ in India comes to almost 4138 million rupees a year.In world ranking India is first in number of projects and third in annual volume of emission reduction. Out of 15 sectors only in 6 sectors CDM projects have been developed in India. Amongst 28 states of India only in 16 states in India CDM projects have been developed while other states and union territories are yet to open their account. Rajasthan shared 31% of total emission reduction.

Earnings Management underGerman GAAP versus IFRS

Abstract: Abstract This paper addresses the question whether voluntary adoption of International Financial Reporting Standards (IFRS) is associated with lower earnings management. Ball et al. (Journal of Accounting and Economics, 36(1–3), pp. 235–270, 2003) argue that adopting high quality standards might be a necessary condition for high quality information, but not necessarily a sufficient one. In Germany, a code-law country with low investor protection rights, a relatively large number of companies have chosen to voluntarily adopt IFRS prior to 2005. We investigate whether German companies that have adopted IFRS engage significantly less in earnings management compared to German companies reporting under German generally accepted accounting principles (GAAP), while controlling for other differences in earnings management incentives. Our sample, consisting of German listed companies, contains 636 firm-year observations relating to the period 1999–2001. Our results suggest that IFRS-adopters do not present different earnings management behavior compared to companies reporting under German GAAP. These findings contribute to the current debate on whether high quality standards are sufficient and effective in countries with weak investor protection rights. They indicate that voluntary adopters of IFRS in Germany cannot be associated with lower earnings management.

The changing technological environment and the future of behavioural research in accounting

Abstract: In an era where the pace of change continues to escalate, behavioural research provides an ongoing avenue for explaining the likely effects of emergent changes on decision-making by providers, users and assurers of accounting information, and for providing ex ante enlightenment for policy-makers. The purpose of this discussion is to identify contemporary changes affecting the accounting environment, discuss the potential impact to individual and organisational decision-making, and explore how behavioural research can be utilised to examine these changes. Specifically, this discussion focuses on the impact that technological changes have had on financial reporting, external auditing and managerial accounting, with an eye towards the potential for these changes to radically alter the future of accounting and auditing research.

Gender-diverse boards and properties of analyst earnings forecasts

Abstract: Using a sample of 2,200 US listed firm year observations (2001-2007)this study shows a positive (negative) relation between female participation in corporate boards and analysts' earnings forecast accuracy (dispersion), after controlling for earnings quality, corporate governance, audit quality, stock price informativeness and potential endogeneity. Our findings are important as they suggest that board diversity adds to the transparency and accuracy of financial reports such that earnings expectations are likely to be more accurate for these firms.