Forthcoming articles

International Journal of Accounting and Finance

International Journal of Accounting and Finance (IJAF)

These articles have been peer-reviewed and accepted for publication but are pending final changes, are not yet published and may not appear here in their final order of publication until they are assigned to issues. Therefore, the content conforms to our standards but the presentation (e.g. typesetting and proof-reading) is not necessarily up to the Inderscience standard. Additionally, titles, authors, abstracts and keywords may change before publication. Articles will not be published until the final proofs are validated by their authors.

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International Journal of Accounting and Finance (8 papers in press)

Regular Issues

  • Impression management using graphical resources in Brazilian company reports   Order a copy of this article
    by Keylla Silva, Fernanda Rodrigues, CESAR SILVA 
    Abstract: The aim of this study is to investigate the evidence of impression management in the form of selectivity or improved presentation in the graphs and charts used by companies. We analysed the reports of 180 Brazilian companies from the period between 1997 and 2014. The variables tested were: company size, profitability, age, variation in results, report size, and publication period. The results indicated that there is a significantly positive relationship between financial performance and the total amount of graphs and charts, graphs and charts with key financial information (net income, net revenue and dividends) and those improving or enhancing presentation. This is a sign of impression management in the reports analysed. We found a relationship with the companys age and that in the initial years of the analysis period the companies used fewer graphs and charts to disclose financial information in their reports.
    Keywords: management report; impression management; graphical resources; selectivity; improved presentation; enhancement; Brazil; key financial information; financial performance; manipulation.

  • Explaining the functional orientation of the budget: a survey of Swedish organisations   Order a copy of this article
    by Sven-Olof Collin, Timurs Umans, Kristian Lindqvist, Kristian Tjörnebrant 
    Abstract: The paper presents a congruence model where factors belonging to the environment, to the corporation, and to the management control system of the corporation are expected to influence the functional emphasis put on the budget, i.e. the functions of coordination, responsibility and evaluation. Through a test performed on 111 Swedish corporations, we find indications that the budget is very much alive; it appears to focus more on dealing with external situations than with internal characteristics; and it appears to be part of the formalisation of the organisation. We draw these conclusions based on our findings that suggest that the budget is being used mainly as a coordinative device, and less as an instrument for evaluating actions.
    Keywords: budget; Sweden; functional emphasis; congruence model.

  • Flipping activity in the Malaysian IPO market: a new explanation from the winners curse perspective   Order a copy of this article
    by Norliza Che Yahya, Ruzita Abdul Rahim, Rasidah Mohd Rashid 
    Abstract: This study examines the influence of the winners' curse phenomenon on flipping activity through a winners curse measurement proposed in Amihud et al. (2003). The study defines winners curse using allocation rate (ALLOCj), which is as the natural log of the reciprocal of investor demand or oversubscription ratio. In this view, the presence of winners curse in an IPO market leads to high flipping activities, indicating that new IPO subscribers are not willing to retain the allocated IPOs for the longer term. However, from another view, where high ALLOCj could also reflect IPOs with low demand, the immediate trading activity by the new subscribers is not possible, thus low flipping activities are produced. Using a sample of 381 IPOs issued in Bursa Malaysia from January 2000 until December 2013, cross-sectional multiple regression analyses results show that ALLOCj relates significantly and negatively to flipping activity. The significant relationship supports the view that uninformed investors are more likely to win big IPOs which are not demanded by the informed investors. Therefore, the lower demanded IPOs produce low flipping activities.
    Keywords: flipping activity; winners’ curse; initial public offerings; Malaysian IPO market.

  • Valuation of a risk-averse investor under incomplete information   Order a copy of this article
    by Kazuhiro Takino, Yoshikazu Ishinagi 
    Abstract: In this study, we provide a firm valuation rule under incomplete information. Incomplete information here means that investors have not been informed of the true expected return of business cash flows. We describe incomplete information using the filtering theory. We evaluate the firm value under incomplete information with a utility-based valuation rule. The utility-based rule reflects the risk aversion of investors in firm value. We also verify the relation between the quality of information and firm value using sensitivity analysis. This examination indirectly relates the quality of information and cost of capital for the firm. Furthermore, we examine the firm value using the Discount Cash Flow (DCF) method as an example of risk-neutral valuation approaches. By comparing the results of DCF valuation, we describe how a risk-averse investor evaluates the firm under the incomplete information environment.
    Keywords: valuation; utility indifference pricing; incomplete information.

  • Underpricing in public offers: Indian perspective for policy initiative   Order a copy of this article
    by Shailesh Rastogi 
    Abstract: IPO (Initial Public Offering) underpricing is a common practice all over the world. Several studies have attempted to identify the causes of or reasons behind underpricing and explain the phenomenon. The influence of the secondary market on underpricing in the primary market has been explained by Mauer and Senbet (1992). However, the explanation provided by Mauer and Senbet (1992) is not empirically supported by the findings of the present study, which considers an Indian context for the period 1998-2012. The three-pronged theory of secondary market influence on primary market - 1) incomplete spanning, 2) incomplete access, and 3) seasonality - is not supported in the Indian context. Moreover, findings of this paper have implications that go beyond the three-pronged theory to explain the influence of the secondary market on underpricing in the primary market. The paper recommends the use of behavioral finance to justify instances of underpricing in India.
    Keywords: primary market; stock market; market efficiency; investors; underpricing.

  • An examination of environmental disclosures of the most polluting companies in India   Order a copy of this article
    by G. Ezhilarasi 
    Abstract: The purpose of the study is to find the status of environmental disclosures of the most polluting companies in India. Environmental disclosures are measured by a checklist of items based on Global Reporting Initiative guidelines, as well as on environmental regulations prevailing in India. Disclosure scores are drawn individually by using content analysis of annual reports for a sample of the 130 most polluting companies in India for a period of eight years i.e. from 2009-10 to 2016-17. The extent of environmental disclosures of the most polluting companies in India is limited. But the year-wise movement shows an increasing trend, suggesting that disclosure practices have been improved over the study period especially after the inclusion of business responsibility reports. The overall result shows that the polluting companies in India are disclosing environmental information in their annual reports as a strategy to create a better social image among their stakeholders and also for competitive advantage. It is felt that for better environmental disclosures, Securities and Exchange Board of India (SEBI) should mandate all the listed companies to disclose detailed environmental information in their periodic report for enhancing the transparency and accountability of such disclosure.
    Keywords: environmental disclosures; content analysis; environmental disclosure index; Global Reporting Initiative; annual reports; business responsibility report.

  • Analysing business failure processes   Order a copy of this article
    by Inmaculada Jimeno Garcia, Rocio Flores Jimeno 
    Abstract: The purpose of this article is on detecting failure trajectories based on financial variables. We use a dynamic methodology to analyse financial failure. We wish to do this because our goal is to analyse how the economic and financial indicators can predict the risk of failure in a sample of companies. Using a sample of 132 companies that were declared bankrupt or dissolved, we depict the trajectories behavior of the companies on their path to failure. We analyse these trajectories to show if there is empirical evidence of the different processes of bankruptcy. We also study if the warning signs of failure are different in each of these trajectories. In conclusion, we will see that there are different failure trajectories. We can use these different trajectories to identify the indicators that warn of the risks of failure of the companies in the sample. Finally, we prove that the warning signs of failure dont occur in the same way or at the same time.
    Keywords: business failure; failure process; financial ratios; bankruptcy; insolvency; dissolution.

  • Determinants of efficiency and stability: evidence from private commercial banks in Bangladesh   Order a copy of this article
    by Mohammad Dulal Miah, Helal Uddin, Nazifa Nusrat Ahmed 
    Abstract: This research aims at examining the determinants of efficiency and stability of private commercial banks in Bangladesh. Data for this research is collected from 20 private commercial banks over the period of 2002 to 2013. Collected data are analysed using accounting ratios, Stochastic Frontier Analysis (SFA), and ordinary least squares (OLS) regression techniques. Analysis shows that stability and efficiency are positively related. Larger banks are less cost efficient than the smaller banks, which indicates the diseconomies of scale. Liquid asset has a negative influence on efficiency which implies that private commercial banks in Bangladesh are suffering from short-term funding shortage (shortage of operating capital). Results also indicate that highly capitalised banks are more stable. In addition, statutory reserve shows a positive impact on stability, which confirms the effectiveness of regulatory hypothesis.
    Keywords: efficiency; financial stability; commercial banks; Bangladesh; liquidity.