The Malcolm Baldrige Award was created in 1987 to curtail the US loss of market share to foreign producers and to encourage a focus on management of quality and customer satisfaction. However, since its inception there has been a long-running controversy on whether winning this award does enhance future financial performance and ultimately shareholders' wealth. Examines how Baldrige Award winners perform with respect to several accounting and financial metrics. Specifically, assesses Baldrige Award winners' financial performance relative to industry benchmarks and a control group of similar firms. The results suggest that award winners are superior financial performers and are valued higher by investors compared with similar sized firms and industry benchmarks. However, no evidence was found that winning the award causes changes in firm value in the award year and subsequent years. The results suggest that the Baldrige Award winners are examples of firms that stand out as performance leaders in their industries. Since one of the purposes of the award is to stimulate quality awareness among US firms, the Baldrige recipients may be construed as a conspicuous centerpiece of the US quality management movement.
This paper analyzes and proposes how several internal control frameworks can be integrated to achieve effective corporate information technology governance. The fundamental tenet of the current literature in this area is that neither a single framework nor non-integrated multiple frameworks would suffice in achieving effective information technology security and governance. Using the extant literature, a deductive approach, and focusing on three popularized internal control frameworks ERM, COSO, and COBIT5, we propose a framework that can help organizations effectively and efficiently achieve information technology governance through their interaction. An integrated framework is one that links the key control objectives to strategic business objectives and, in doing so, addresses IT governance principles at both a strategic and operational level, whilst aligning IT and business management understanding of the key risk areas that characterize the organization's goals (Goosen and Rudman, 2013). In addition, this fundamental alignment is expected to eliminate unnecessary controls and processes which in turn help improving IT governance. We expect firms seeking to adopt the proper IT governance to utilize the proposed integrated framework.
The Sarbanes-Oxley Act (S-O Act) of 2002 requires principal officers to certify under oath to the veracity of information contained in SEC filings and opine on the effectiveness of the internal control system. This study examines the determinants and contents of corporate voluntary disclosure of management's responsibilities during the five-year period preceding the SO Act. We predict that the voluntary disclosure of management's responsibilities for financial information signals certain incentives and characteristics of the reporting firm that are relevant to financial statement users and regulators. Consistent with our predictions, our findings reveal significant differences between issuing and nonissuing firms as to the effectiveness of an individual firm's internal control system, access to capital markets, audit committee characteristics, and ownership structure. An empirical analysis of the contents of these assertions also reveals different areas of emphasis and selectivity by management, which represents an informative link to existing disclosure mandates. The results of this study contribute to our knowledge of management's motivations for voluntary disclosure and lend credence to the mandatory certification requirements and related disclosure reforms established in the post-Enron era.
SYNOPSIS
European life insurers began disclosing embedded value information (EV) over a decade ago due to concerns with traditional local accounting standards. EV is an estimate of the present value of future net cash flows from in-force life insurance business. However, U.S.-based life insurers have yet to adopt this disclosure, although several surveys and empirical studies suggest that EV disclosure provides valuable information in assessing life insurers' performance.
This paper examines the incremental valuation effects of EV disclosure in the presence of U.S. GAAP. We utilize a sample of cross-listed life insurers as surrogates to assess the valuation effects of EV disclosures for U.S. life insurers. Our empirical results show a higher association between EV and stock market prices than those of traditional accounting metrics such as earnings or book value. The results also show that EV has incremental explanatory power beyond those of traditional U.S. GAAP accounting measures. Our findings provide vital input to FASB and IASB as they currently engage in a joint project to develop uniform globally acceptable, comparable accounting standards for life insurers.
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