世界経済・社会統計 = World development indicators

Earnings Management and Investor Protection: An International Comparison

The corporate information environment develops endogenously as a consequence of information asymmetries and agency problems between investors, entrepreneurs, and managers. We provide a framework for analyzing the three main decisions that shape the corporate information environment in a capital markets setting: (1) managers’ voluntary reporting and disclosure decisions, (2) reporting and disclosures mandated by regulators, and (3) reporting decisions by third-party intermediaries (analysts). We review current research on disclosure regulation, information intermediaries, and the determinants and economic consequences of corporate disclosure and financial reporting decisions. We conclude that in the last ten years, research has generated a number of useful insights. Despite this progress, we call for researchers to consider interdependencies between the various decisions that shape the corporate information environment and highlight changes in the economic financial environment that raise new and interesting issues for researchers to address.

The Financial Reporting Environment: Review of the Recent Literature

The financial reporting environment: Review of the recent literature

Bankruptcy prediction in banks and firms via statistical and intelligent techniques – A review

This paper presents an optimization model for maximizing the insurer’s underwriting profits in any particular line of insurance at a point in time. We propose the use of mathematical programming to maximize underwriting profits when the objective function is expressed as a nonlinear convex function subject to linear inequality constraints. The constraints are imposed on premiums, loss payments and resources allocated for underwriting and loss adjustment activities. Although basic global solution is not guaranteed, under a set of sufficient conditions global basic solution is identified. An alternative basic solution is obtained where maximization is done over an expression which contains both the expected value as well as the variance of profits. Several nonlinear algorithms are outlined for possible solutions.

A Single Period Model for Optimal Underwriting Profit

Motivated by the mixed findings in prior archival studies, this study conducts three experiments to examine the relationships among analysts’ intrinsic valuation estimates (V), stock recommendation...

Independence of Intrinsic Valuations and Stock Recommendations – Experimental Evidence from Equity Research Analysts and Investors

Our study examines the impact of the capital prospective payment system (CPPS), implemented by Medicare in 1991, on capital expenditures and cost-effective behavior of non-proprietary hospitals. As noted in the paper, we use audited financial statement data for a large national sample of hospitals. Univariate analyses demonstrate a statistically significant decline in capital expenditures in the years following the CPPS regulation without significant changes in relative aggregate operating expenses. These preliminary findings suggest that CPPS induces some cost-effective behavior by hospital managers. Ordinary least-squares (OLS) regressions indicate that capital expenditures before and after CPPS are differently affected by the changes in most explanatory variables. Further OLS regressions indicate that high-cost (low-cost) hospitals decrease (increase) capital expenditures following CPPS, once other factors are controlled for. Managerial accounting implications for hospitals include the effect of the regulation on capital budgeting decisions. Greater accounting disclosure may be necessary so that alternative modes of coping with the regulation can be discerned. Policymakers and regulators should also be aware that although reductions in capital expenditures may have favorable short-term effects of reducing health care costs, a potentially negative public health impact may result if capital expenditures continue to decrease.

The Impact of Medicare Capital Prospective Payment Regulation on Hospital Capital Expenditures

Publisher Summary This chapter examines the choice of auditors and underwriters by entrepreneurs prior to initial public offerings (IPOs). DFH predicted that entrepreneurs who face greater future cash flow risk will benefit from hiring a high-quality auditor, whereas TT predicted that they will benefit from hiring a low-quality auditor or underwriter. This chapter focuses on developing proxy tests to evaluate empirically the supply-side effect of risk, that is the impact of firm-specific risk on the incremental cost of hiring a high-quality auditor or underwriter, and partially examines the demand-side effect of risk. Recent empirical studies indicate that riskier entrepreneurs may benefit from hiring high-quality auditors, but these studies make no direct empirical examination of the supply-side effect. Regressions with slope dummies indicate that the incremental deflated cost of hiring a high-quality auditor or a prestigious underwriter increases as firm-specific risk increases. The supply-side and demand-side findings indicate that for high firm-specific risk, the incremental costs exceed the incremental benefits of hiring a high-quality auditor or underwriter.

Costs and benefits in the choice of the audit and underwriting quality in the IPO market: An empirical analysis of competing theories

Standard setters and professionals have asserted that the successful efforts (SE) accounting method procedure is superior to the full cost (FC) method. Recent studies suggest that the SE firms exhibit higher market-to-book coefficients (Harris and Ohlson 1987), higher coefficients on earnings change variables (Ayres and Raybum 1991), and greater pooled time-series and cross-sectional earnings response coefficients (Bandyopadhyay 1994) compared to FC firms. Previous studies primarily examine the controversy and the debate during a period of high oil prices and exploration activities which could affect their empirical results. This study reexamines the issue primarily during periods of low oil prices and declining exploration activities, to ascertain whether such different economic conditions affect the observed relationships in previous research. The research investigates whether the FC accounting method provides more or less accurate earnings predictions than the SE accounting method, an issue not examined in previous literature. The paper also examines a related issue of whether the earnings response coefficients (ERCs) derived by one method are greater than those based on the other accounting method. We find that forecast errors for FC firms are significantly smaller than those for SE firms for one-quarter through at least three-quarters ahead forecast horizons. The smaller forecast errors for FC firms are driven by the periods from 1986 through 1989 and 1991 through 1995, when oil prices and exploration activities were low, and by firms in the oil and gas extraction industry (SIC 13) or firms classified as independent type. The estimated coefficients for the variance of EPS (MSTD, a proxy for risk) suggest significant increases in forecast errors as the variance increase for FC and SE firms. However, while these estimated coefficients remain unchanged for SE firms, the change in the estimated slope coefficient of MSTD for FC firms is negative and statistically significant, during periods of declining prices and explorations. These results suggest that risk for FC firms has less impact on forecast errors than risk for SE firms during such periods. In addition, firm-specific ERCs of all FC firms are larger than those of all SE firms, and these statistically significant differences are robust for extraction firms, but not for other oil and gas firms, across ERC models. The results on ERCs contradict findings presented in previous studies. Implications for standards' setters and regulators are briefly discussed.

Ran Barniv

Papers

A Single Period Model for Optimal Underwriting Profit

Independence of Intrinsic Valuations and Stock Recommendations – Experimental Evidence from Equity Research Analysts and Investors

The Impact of Medicare Capital Prospective Payment Regulation on Hospital Capital Expenditures

Costs and benefits in the choice of the audit and underwriting quality in the IPO market: An empirical analysis of competing theories

Alternative Accounting Procedures, Forecast Accuracy, and Value-Relevance of Earnings in the Oil and Gas Industry