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An Investigation of the Effect of Audit Partner’s Disclosure on Earnings Management for Egyptian Companies
Mohamed Khamis Zaytoun,
Mohamed Mahmoud Elhousy
Issue:
Volume 11, Issue 1, January 2023
Pages:
1-11
Received:
8 December 2022
Accepted:
29 December 2022
Published:
10 January 2023
Abstract: International Auditing and Assurance Standards Board (IAASB), Public Company Accounting Oversight Board (PCAOB) and European Union (EU) have made significant efforts to restore the credibility, information, accuracy, and independence of the audit report by requiring disclosure of the audit partner's name and/or the audit partner's signature on the audit report. This research aims to study and examine the relationship between the audit partner's voluntary disclosure and earnings management. In precise, examine whether the audit partner's disclosure leads to lower level of earnings management. The research has also aimed for examining the impact of the audit partner quality on the aforementioned relationship, using a sample from the companies listed in the Egyptian Stock Exchange for the period starting from 2014 to 2018. The results indicated that: (1) there is a statistically significant negative effect for the audit partner disclosure on the absolute value of earnings management proxied by Miller Ratio; which in turn means that the audit partner disclosure increases the earnings quality. (2) There is no effect for the audit partner quality proxied by his industrial specialization on the relationship between audit partner disclosure and the earnings quality. The findings of this research have important consequences for regulators in determining whether the actual effects of a disclosure requirement are as expected, for investors in reducing costs of obtaining information, and for audit committees in making better decisions when hiring auditors.
Abstract: International Auditing and Assurance Standards Board (IAASB), Public Company Accounting Oversight Board (PCAOB) and European Union (EU) have made significant efforts to restore the credibility, information, accuracy, and independence of the audit report by requiring disclosure of the audit partner's name and/or the audit partner's signature on the ...
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Financial Structure, Firm Size and Financial Growth of Non-Financial Firms Listed at the Nairobi Securities Exchange
David Haritone Shikumo,
Oluoch Oluoch,
Joshua Matanda Wepukhulu
Issue:
Volume 11, Issue 1, January 2023
Pages:
12-25
Received:
23 December 2022
Accepted:
16 January 2023
Published:
30 January 2023
Abstract: A significant number of the non-financial firms listed at the Nairobi Securities Exchange (NSE) have been experiencing declining financial performance and financial growth, which deter investors from investing in such firms. Hence, the study aimed at establishing the effect of financial structure on the financial growth of non-financial firms listed at the NSE. The study was guided by the Modigliani-Miller theory, Agency Theory, Pecking Order Theory, Trade-off Theory, Market Timing Theory, and Theory of Growth of the Firm. An explanatory research design was adopted. The study’s target population comprised 45 non-financial firms listed at the NSE for a period of ten years, from 2008 to 2017. The panel model revealed that short-term debt, long-term debt, retained earnings, and share capital explain 61.36% of variations in financial growth as measured by growth in earnings per share and 65.57% of variations in financial growth as measured by growth in market capitalization. Short-term debt has a positive and significant effect on financial growth as measured by growth in earnings per share (β=0.024095, p=0.013) and growth in market capitalization (β=0.028529, p=0.006). Long-term debt has a positive and significant effect on financial growth as measured by growth in earnings per share (β=0.864088, p=0.000) and growth in market capitalization (β=0.958656, p=0.000). Retained earnings have a positive and significant effect on financial growth as measured by growth in earnings per share (β=0.951749, p=0.015) and growth in market capitalization (β=0.043784, p=0.004). Further, share capital has a positive and significant effect on financial growth as measured by growth in earnings per share (β=0.007016, p=0.000) and growth in market capitalization (β=0.09635, p=0.001). Firm size significantly intervenes in the effect of financial structure on the financial growth of non-financial firms listed at the NSE measured using growth in earnings per share. However, Firm size does not intervene in the effect of financial structure on the financial growth of non-financial firms listed at the NSE measured using growth in market capitalization. The study concludes that short-term debt, long-term debt, retained earnings, and share capital positively influence financial growth as measured by both growth in earnings per share and growth in market capitalization. The study recommends that the management of non-financial firms listed at the NSE to balance financing a firm using debt and equity. The study also recommends that the management of non-financial firms listed at NSE to encourage its shareholders to re-invest back their earnings rather than consuming them as dividends. Financial structure varies significantly depending on the sector in which a firm operates. There is a need to conduct a comparison study to establish the effect of financial structure on the financial growth of non-financial firms versus financial firms listed at the NSE. The comparison study will tell which form of financing is appropriate for non-financial firms and which one is appropriate for financial firms.
Abstract: A significant number of the non-financial firms listed at the Nairobi Securities Exchange (NSE) have been experiencing declining financial performance and financial growth, which deter investors from investing in such firms. Hence, the study aimed at establishing the effect of financial structure on the financial growth of non-financial firms liste...
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Research on Impact of Internet Corporate Social Responsibility on Corporate Financial Performance Based on Linear Regression Model
Liangcan Liu,
Hang Ren,
Tianhui Chen,
Jia Chen
Issue:
Volume 11, Issue 1, January 2023
Pages:
26-31
Received:
14 January 2023
Accepted:
2 February 2023
Published:
14 February 2023
Abstract: Since China was fully connected to the Internet, the local Internet has continued to grow along with its economic strength, and Internet companies such as artificial intelligence, e-commerce, big data, block chain and electronic payment have risen rapidly. In the process of development, Internet enterprises realize the importance of social responsibility and take the initiative to shoulder social responsibility, and make a lot of contributions to the society. The relationship between social responsibility and the financial performance of Internet companies has always been the focus of academic and research discussions. Based on the linear regression model, innovation capability was introduced to explore the boundary conditions between social responsibility and the financial performance of the companies. An empirical study was conducted using a research sample of listed Internet companies in China from 2018 to 2020. The results show that (1) social responsibility of the Internet corporate has a positive effect on short-term financial performance, (2) Internet corporate social responsibility has a positive effect on the long-term financial performance of enterprises, (3) innovation capability weakens the impact of Internet corporate social responsibility on short-term financial performance, and (4) the influence of innovation capability on the long-term financial performance of Internet companies in social responsibility. The research conclusion provides Internet enterprises with social responsibility strategies and evaluation of long-term and short-term financial performance.
Abstract: Since China was fully connected to the Internet, the local Internet has continued to grow along with its economic strength, and Internet companies such as artificial intelligence, e-commerce, big data, block chain and electronic payment have risen rapidly. In the process of development, Internet enterprises realize the importance of social responsi...
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Firm Size Moderate Relationship Between Capital Structure and Profitability with Dividend Policy: An Empirical Evidence from Indonesian Data
Issue:
Volume 11, Issue 1, January 2023
Pages:
32-37
Received:
4 August 2021
Accepted:
1 March 2023
Published:
16 March 2023
Abstract: This study aims to determine effect of capital structure and profitability on dividend policy by including firm size as a moderating variable. The samples in this study were 26 companies from 65 Basic Industrial and Chemical Manufacturing Sector Companies listed on the Indonesia Stock Exchange in 2011-2019, which were determined by purposive technique. The results showed that firm size is a variable that determines the strengthening and weakening of the relationship of capital structure with dividend policy also between profitability with dividend policy. Increasing firm size or increasing company assets do not provide incentives to increase the level of company profitability as measured by return on equity. Likewise, an increase in company assets does not provide incentives to increase dividend ratios, as an estimate of an increase in company income due to increased production capacity and company sales capacity. The larger firm size provides an incentive to increase the debt ratio because of the increasing need for funding to increase its investment in long-term assets. An increase in company size is also an indication for an increase in dividend ratios due to the estimated increase in company profits due to increased company revenue. Therefore, the determinants of capital structure and dividend policy in emerging markets such as the Indonesian market share the same set of suggested factors with the developed markets.
Abstract: This study aims to determine effect of capital structure and profitability on dividend policy by including firm size as a moderating variable. The samples in this study were 26 companies from 65 Basic Industrial and Chemical Manufacturing Sector Companies listed on the Indonesia Stock Exchange in 2011-2019, which were determined by purposive techni...
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