Purpose – The purpose of this paper is to investigate the association between corporate governance mechanisms and quality of forward-looking information in the Chinese stock market which presents a mandatory disclosure environment for forward-looking information. Design/methodology/approach – Using sales forecasts to proxy forward-looking information and using precision and accuracy to measure the quality of information disclosure, the authors investigate the impact of corporate governance attributes on the precision and accuracy of sales forecasts made by listed Chinese firms in their 2010 annual reports, using logistics and ordinary least squares regressions. Findings – The authors find good corporate governance has a positive and significant impact on the precision choice of sales forecasts disclosure. Firms with good corporate governance are more likely to disclose more precise sales forecasts than providing qualitative discussions on firms’ sales trend. In addition, good corporate governed firms are found more likely to provide precise non-financial information. The authors also find that good corporate governance is positively associated with making more conservative sales forecasts disclosure. However, the authors find no significant relationship between good corporate governance and smaller forecast error. Research limitations/implications – The study makes significant contributions to corporate disclosure literature. The authors investigate the determinants of the quality of forward-looking information in a mandatory disclosure regime while most forward-looking information disclosure literature have been conducted in a voluntary-based disclosure environment. The authors examine whether in a mandatory disclosure regime, corporate governance mechanisms can play a positive role in precision choices and accuracy of forward-looking information. Further, the study is the first to examine corporate governance and the quality of non-financial forward-looking information (sales target and production goal). The research findings therefore extend forward-looking information disclosure research from financial information to non-financial information. Practical implications – The empirical findings will provide regulators with evidence on the quality of forward-looking information in a mandatory disclosure regime and the influence of corporate governance on forward-looking disclosure. The properties of forward-looking information disclosure in China should be of interest to policy makers, investors and financial analysts in other international jurisdictions. Originality/value – The study investigates forward-looking information in a mandatory disclosure regime while most extant forward-looking information studies have been conducted in a voluntary disclosure environment. The study is the first to examine the quality of non-financial forward-looking information such as operational goals and plans, and to investigate the association between the quality of non-financial forward-looking information and corporate governance mechanisms. The research findings extend forward-looking information disclosure research from quantitative financial information to quantitative non-financial information.
This article is concerned with how information about time and position in a sequence is represented in short-term memory and expressed in the dynamics of serial recall. Temporal-distinctiveness theories of memory predict that isolating a list item in time will improve recall accuracy for that item. Although the majority of research in shortterm memory has failed to demonstrate a temporal isolation effect (TIE), there are occasions on which a TIE is observed. The disparity in results has been explained by assuming that participants can adaptively weight temporal and nontemporal information at retrieval, with differences between experiments promoting or discouraging reliance on time as a source of episodic information. A particular focus of the present study is the finding that the TIE is substantially observed in standard serial recall only when participants are instructed to group the list into minisequences. The findings of two experiments using instructed grouping replicated this effect but showed that it is attributable to a longer gap at the group boundary enhancing the positive effect of grouping on recall accuracy. These results show that the hierarchical representations usually associated with temporal grouping are also elicited by instructed grouping but that an additional and nonspecific benefit to recall obtains from lengthening the pause between groups. An additional role for time is identified in the timing of responses: The dynamics of input sequences tend to be mirrored in output sequences for ungrouped lists, whereas the primacy pattern in grouped lists is for a longer duration to speed access to the following group when that duration occurs at an instructed group boundary.
This article addresses a major concern about the use of particular accounting concepts, notably those of control and assets, for whole-of-government consolidated financial reporting. While whole-of-government consolidated financial reports may resemble the formats required by accounting standards and so provide a benchmark for comparative purposes, inherent weakness in the specification of underpinning concepts means that proper and full application of the consolidation methodology cannot be assumed. A study of the whole-of-government consolidated financial reports of the Commonwealth, state and territory governments of Australia revealed that significant assets, obligations and controlled entities have not been included.
This study investigates the association between the level of compliance of Australian listed companies with Australian corporate governance principles, in aggregate, and the level of discretionary accruals using the modified Jones model. It is hypothesised that higher levels of compliance would be associated with lower levels of discretionary accruals. Data from a random sample of 214 Australian listed companies for the years 2009 and 2010 were used to test the hypothesis. The results demonstrate a significant negative relationship indicating that companies with higher levels of compliance engage in lower levels of earnings management via discretionary accruals. AbstractThis study investigates the association between the level of compliance of Australian listed companies with Australian corporate governance principles, in aggregate, and the level of discretionary accruals using the modified Jones model. It is hypothesised that higher levels of compliance would be associated with lower levels of discretionary accruals. Data from a random sample of 214 Australian listed companies for the years 2009 and 2010 were used to test the hypothesis. The results demonstrate a significant negative relationship indicating that companies with higher levels of compliance engage in lower levels of earnings management via discretionary accruals. JEL Classification: M40
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