The effects of the Asian crisis, corporate governance and accounting system on the valuation of book value and earnings

Davis‐Friday, Paquita Y.; Eng, Li Li; Liu, Chao‐Shin

doi:10.1016/j.intacc.2005.12.002

Cited by 69 publications

(102 citation statements)

References 17 publications

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“…The results showed that value relevance of accounting data were lower after the devaluation of the bath. Also Davis-Friday et al (2006), examined the effect of financial crisis on the accounting data and corporate governance. They showed that the accounting system affect the extent of changes in the value relevance of book value resulting from the crisis.…”

Section: Background and Questions Researchmentioning

confidence: 99%

Value relevance of accounting data and financial crisis in Europe: an empirical analysis

Devalle

2012

ijafr

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This paper aims at verifying the relationship between book value and market value for a four years period (2006)(2007)(2008)(2009) in Europe, under IFRS. In particular, I used value relevance approach to measure whether net income or comprehensive income is more useful to understand the relationship between market data and financial data. Moreover, the paper analyzes the impact of financial crisis on the value relevance of accounting data. The examination period runs from a pre-crisis period (2006)(2007) to an in-crisis period (2008)(2009). Results shows that comprehensive income is more value relevant than net income. Furthermore, the financial crisis has a positive impact on value relevance.

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Section: Background and Questions Researchmentioning

confidence: 99%

Value relevance of accounting data and financial crisis in Europe: an empirical analysis

Devalle

2012

ijafr

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“…Therefore, many prior researchers have started to examine specific conditions or factors that can influence the relationship between accounting numbers and share price. These include the studies on the effects of accounting standard and regulation in specific industries (Chebaane & Othman 2014;Gulhan 2012;Agostino et al 2011;Horton & Serafeim 2010;Kadri et al 2009;Goodwin et al 2008;Lin & Chen 2005;Bartov et al 2005) and corporate governance (Cormier 2014;Jamaluddin et al 2009;Cools & van Praag 2007;Davis-Friday et al 2006).…”

Section: Ceo/md Succession and Value Relevance Of Accounting Numbersmentioning

confidence: 99%

“…The studies incorporated three factors, namely information asymmetry (Cormier 2014); quality of financial reporting (Jamaluddin et al 2009) and interactions across governance mechanisms (Davis-Friday et al 2006). While some researchers examined corporate governance mechanisms as a whole, there are studies that focused on a particular governance mechanism.…”

Section: Ceo/md Succession and Value Relevance Of Accounting Numbersmentioning

confidence: 99%

“…In terms of value relevance, previous studies showed that changes in the accounting standards (Chebaane & Othman 2014;Agostino, Drago & Silipo 2011;Clarkson, Hanna, Richardson & Thompson 2011;Kadri, Abdul Aziz & Ibrahim 2009;Goodwin, Ahmed & Heaney 2008;Bartov, Goldberg & Kim 2005); type of industry (Tan, Hassan & Embong 2014;El-Gazzar, Finn & Tang 2009;Nwaeze 1998) and corporate governance of the firm (Cormier 2014;Jamaluddin, Mastuki & Elmiza Ahmad 2009;Cools & van Praag 2007;Davis-Friday, Eng & Liu 2006) influence value relevance of accounting numbers (book value of equity & earnings). However, none of these studies examined the role of incoming CEOs/MDs on the value relevance of accounting numbers.…”

Section: Introductionmentioning

confidence: 99%

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Chief Executive Officer/ Managing Director Succession and Value Relevance of Accounting Numbers

Ahmad

Hassan

Jaffar

2016

AJAG

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“…Though effective governance as a control measure is supported by numerous archival research (e.g., Mueller, 2006, David-Friday et al, 2006, Gul & Tsui, 2001, La Porta et al, 1998, these studies mainly focus on the organisational structure, ex-ante monitoring (e.g., investors" protection law, board and audit committee independence, board size, CEO duality), and managerial interest alignment (e.g., managerial ownership, ownership concentration). In more recent development, managerial opportunistic incentives are getting more attention due to their association with the corporate financial scandals in recent years.…”

Section: Incentives Of Managerial Opportunismmentioning

confidence: 99%

The Impact of Managerial Opportunism on Earnings Reliability

Chang¹

2015

IJEF

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This study is motivated by the increasing incidences of corporate failures caused by fraudulent accounting and breaches in corporate governance and ethical conducts. For example, it is expected that managers will resort to activities that are not consistent with appropriate governance and ethics just to keep up with the market expectations to safeguard their position. This study investigates the impact of five managers" opportunistic incentives on the reliability of firms" reported earnings (namely free cash flow, abnormal capital expenditure, bonus plan, distress sign and leverage), controlled by six other widely implemented standard structural governance mechanisms. The earnings reliability tests are conducted using the balanced panel data analysis specification covering 323 sample firms with continuous accounting and corporate governance data of 15 years beginning 1993. Consistent with literature, the results reveal that firms" earnings reliability is significantly related to all managerial opportunism attributes, implying the adverse effect of these incentives on the usefulness of accounting information in assessing management"s stewardship. These findings suggest the need for a better management mechanism to integrate governance and effective enforcement of control requirements to mitigate managerial opportunism and hence uphold the quality of published accounting information.

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The effects of the Asian crisis, corporate governance and accounting system on the valuation of book value and earnings

Cited by 69 publications

References 17 publications

Value relevance of accounting data and financial crisis in Europe: an empirical analysis

Value relevance of accounting data and financial crisis in Europe: an empirical analysis

Chief Executive Officer/ Managing Director Succession and Value Relevance of Accounting Numbers

The Impact of Managerial Opportunism on Earnings Reliability

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