Financial reporting under economic policy uncertainty

Ozili, Peterson K

doi:10.1108/jfra-08-2020-0242

Cited by 8 publications

(8 citation statements)

References 78 publications

(97 reference statements)

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“…Therefore, an increase in EU level significantly affects the relation between CEO reputation and AEQ. These results are in line with those in Hejranijamil et al (2020), Hu et al (2020) and Ozili (2021). H6b is supported.…”

Section: Correlation Analysissupporting

confidence: 90%

“…this, the IFRS do not explicitly provide management with a comprehensive framework for making accounting estimates under rising levels of environmental uncertainty (Ozili, 2021). Currently, most accounting regulatory bodies do not provide an explanation or definition of the term "accounting estimate".…”

Section: Accounting Regulations Quality and Accounting Estimates Qualitymentioning

confidence: 99%

“…EU also has a significant effect on the operational risk, earnings volatility and AEQ of an enterprise. The uncertainty inherent in accounting information is reduced when accounting standards give managers enough flexibility to exercise discretion and acknowledge certain events in financial statements (Ozili, 2021). Therefore, in the circumstance of a rise in the level of EU, CEOs who have a strong reputation could be more likely to enhance AEQ (Hu et al, 2020).…”

Section: 3mentioning

confidence: 99%

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The Impact of Environmental Uncertainty on the Relationship between Standards Quality, Accounting Estations Quality and Share Prices: An Empirical Study

ضیف¹

2023

مجلة البحوث المحاسبیة

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This study investigates the impact of environmental uncertainty (EU) on the relation between standards quality and accounting estimations quality (AEQ) and explores the impact of the interaction between EU and AEQ on stock prices. The study uses the quality of accounting regulations and the quality of the application of financial reporting standards as proxies of the quality of standards. The study also uses both auditing quality and chief executive officer (CEO) reputation as proxies for financial reporting standards application quality, and discretionary accrual as a proxy for AEQ. Data were collected from 107 companies registered on the Saudi Arabia Stock Exchange over seven years (from 2015 to 2021) and provides four empirical findings. First, AEQ was not significantly affected by the adoption of international standards (International Financial and Reporting Standards and International Auditing and Assurance Standards) instead of Saudi accounting and auditing standards. Second, there was a significant and direct association between audit quality and AEQ. On the other hand, the reputation of the CEO did not have a significant effect on AEQ. Third, in response to increasing EU, the reputation of the CEO and audit quality had a significant effect on enhancing AEQ. Finally, the interaction between the intensity of EU and AEQ was reflected in a firm's share price.

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Section: Correlation Analysissupporting

confidence: 90%

Section: Accounting Regulations Quality and Accounting Estimates Qualitymentioning

confidence: 99%

Section: 3mentioning

confidence: 99%

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The Impact of Environmental Uncertainty on the Relationship between Standards Quality, Accounting Estations Quality and Share Prices: An Empirical Study

ضیف¹

2023

مجلة البحوث المحاسبیة

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“…The key explanatory variable of this study is the EPU index, which is a widely used measure in prior studies (Liu et al ., 2021; Ozili, 2021; Tran, 2021). Baker et al .…”

Section: Methodsmentioning

confidence: 99%

Impact of economic policy uncertainty on financial flexibility before and during the COVID-19 pandemic

Dalwai

2023

JABES

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PurposeThis study examines the influence of economic policy uncertainty on financial flexibility before and during the coronavirus disease 2019 (COVID-19) pandemic. Few prior studies have examined this association specifically for debt and cash flexibility.Design/methodology/approachUsing quarterly data from 2016 to 2022, 1014 observations were collected from the S&P Capital IQ database for listed tourism companies in India. The pre-pandemic period is defined as 2016 Q1 to 2020 Q1, whereas the pandemic period is from 2020 Q2 to 2022 Q3. The data are analysed using ordinary least squares, probit, logit and difference-in-difference (DID) estimation.FindingsThe evidence of this study suggests a negative association of economic policy uncertainty with debt flexibility during the COVID-19 pandemic. The findings also suggest that COVID-19 induced economic policy uncertainty results in high cash flexibility. This meets the expectations for the crisis period, as firms are likely to hold more cash and less debt capacity to manage their operations. The results are robust for various estimation techniques.Research limitations/implicationsThis study is limited to one emerging country and is specific to one non-financial sector. Future research could extend to more emerging countries and include other non-financial sector companies.Practical implicationsThe findings of this research are useful for tourism sector managers as they can effectively manage their cash and debt flexibility during crisis periods. They will need to prioritise cash flexibility over debt flexibility to manage operations effectively. Policymakers need to provide clear and stable economic policies to help firms manage their debt levels during a crisis.Originality/valueTo the best of the author's knowledge, no existing studies have investigated the influence of economic policy uncertainty on the financial flexibility of tourism companies before and during the COVID-19 pandemic. Furthermore, this study establishes a novel set of critical determinants, such as economic policy uncertainty.

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“…Danisman et al (2020) investigate the effect of economic policy uncertainty on US banks' loan loss provisions, and find that US banks increase their loan loss provisions in times of higher economic policy uncertainty. Ozili (2021c) show that high economic policy uncertainty will transmit fewer new information to firms which can motivate managers to influence accounting numbers in the direction of the desired financial reporting outcome.…”

Section: Empirical Evidencementioning

confidence: 99%

Sources of Economic Policy Uncertainty in Nigeria: Implications for Africa

Ozili¹

2022

Managing Risk and Decision Making in Times of Economic Distress, Part A

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This paper identifies the sources of economic policy uncertainty in Nigeria and draw implications for Africa. The paper finds that economic policy uncertainty in Nigeria has many sources which are interlinked such as: unexpected and sudden central bank intervention; change in government policy after elections; political interference in economic policy making; fall in global oil price, oil price shocks and uncertain government response; recession and unethical public policy and practices.

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Financial reporting under economic policy uncertainty

Cited by 8 publications

References 78 publications

The Impact of Environmental Uncertainty on the Relationship between Standards Quality, Accounting Estations Quality and Share Prices: An Empirical Study

The Impact of Environmental Uncertainty on the Relationship between Standards Quality, Accounting Estations Quality and Share Prices: An Empirical Study

Impact of economic policy uncertainty on financial flexibility before and during the COVID-19 pandemic

Sources of Economic Policy Uncertainty in Nigeria: Implications for Africa

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