Does causally linking nonfinancial measures influence investors' use of management’s disclosures of nonfinancial information?

2020 ◽  
Author(s):  
Lei Dong ◽  
Bernard Wong‐On‐Wing
Keyword(s):  
Nonfinancial Information ◽  
Nonfinancial Measures

Nonfinancial Information and Accounting: A Reconsideration of Benefits and Challenges

2009 ◽  
Vol 23 (3) ◽  
pp. 307-325 ◽  
Author(s):  
Joan Luft
Keyword(s):  
Measurement Error ◽  
Measurement Errors ◽  
Negative Impact ◽  
Firm Valuation ◽  
Nonfinancial Information ◽  
Nonfinancial Measures ◽  
Nonfinancial Performance ◽  
Significant Negative Impact ◽  
Portfolio Approach ◽  
Widespread Interest

SYNOPSIS: Recent years have seen widespread interest in supplementing or replacing accounting information with nonfinancial information (NFI) in a variety of uses such as incentive compensation, prediction of costs and profits, and firm valuation. The joint use of NFI and accounting has had mixed results, however. Research has documented benefits to such use but has also documented significant challenges. This commentary summarizes research that addresses two particularly important challenges in using combinations of accounting and NFI: measuring nonfinancial performance accurately and weighting measures appropriately when multiple accounting and nonfinancial measures are used together. These challenges are related, in that the nature and magnitude of measurement error helps to determine appropriate weights on multiple measures. Two common themes appear in strategies for dealing successfully with these challenges. The first is that matching information properties to decision types can limit the need for costly or infeasible improvements in measurement. Measurement errors that have significant negative impact on some decisions can be innocuous when the information is used for other decisions. The second theme is a portfolio approach to measurement error: the negative decision effects of error in individual measures can be significantly mitigated by well-chosen combinations of NFI and accounting measures.

scholarly journals Identification and Analysis of Nonfinancial Measures That Affect Investment Decisions Using the Delphi Method

2012 ◽  
Vol 2 (2) ◽  
pp. 238
Author(s):  
Mohammad Reza Abbaszadeh ◽  
Tahereh Mehrabankhou
Keyword(s):  
Supply And Demand ◽  
Corporate Disclosure ◽  
Investment Climate ◽  
Nonfinancial Information ◽  
Corporate Reporting ◽  
Nonfinancial Measures ◽  
Regulatory Approach ◽  
Types Of Information ◽  
Industry Sectors ◽  
Study Offer

Though advocates argue that nonfinancial information forms or should form an increasingly important part of investor decision-making, relatively little research has been done to analyze the nonfinancial information currently available or to determine how investors value specific types of nonfinancial information. This study has examined both the availability of specific types of nonfinancial data, as well as the extent to which retail and professional investorvalue nonfinancial information. We focused on nine types of information,each of which has received considerable attention from academics and advocates in recent years. We reviewed corporate disclosure practices of several companies across different industry sectors; we conducted surveys with academics that had Fields of accounting and economics and investment managers from public of Iran as professional investors. The goal of our research was to better assess both the supply and demand of nonfinancial reporting in the current investment climate. We believe that the results of this study offer academics, investors, corporations and regulators a clearer picture both of investor desires for nonfinancial information and the ways in which various forms of reporting are used. The results can inform choices about which regulatory approach might be best applied to nonfinancial reporting. They can also support corporate and investor efforts to supplement that regime with voluntary corporate reporting on specific nonfinancial information types.

scholarly journals Valuing Peace: The Effects of Financial Market Exposure on Votes and Political Attitudes

Econometrica ◽  
2019 ◽  
Vol 87 (5) ◽  
pp. 1561-1588 ◽  
Author(s):  
Saumitra Jha ◽  
Moses Shayo
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Political Attitudes ◽  
Peace Process ◽  
Superior Performance ◽  
Financial Assets ◽  
Material Incentive ◽  
Nonfinancial Information ◽  
Political Messages ◽  
Economic Risks

Can participation in financial markets lead individuals to reevaluate the costs of conflict, change their political attitudes, and even their votes? Prior to the 2015 Israeli elections, we randomly assigned Palestinian and Israeli financial assets to likely voters and incentivized them to actively trade for up to 7 weeks. No political messages or nonfinancial information were included. The treatment systematically shifted vote choices toward parties more supportive of the peace process. This effect is not due to a direct material incentive to vote a particular way. Rather, the treatment reduces opposition to concessions for peace and changes awareness of the broader economic risks of conflict. While participants who were assigned Palestinian assets are more likely to associate their assets' performance with peace, they are less engaged in the experiment. Combined with the superior performance of Israeli stocks during the study period, the ultimate effects of Israeli and Palestinian assets are similar.

scholarly journals The Moderating Effect of Procedural Justice on the Effectiveness of the Balanced Scorecard in Improving Managerial Performance through Organizational Commitment

2010 ◽  
Vol 12 (3) ◽  
pp. 415
Author(s):  
Supriyadi Supriyadi
Keyword(s):  
Organizational Commitment ◽  
Procedural Justice ◽  
Balanced Scorecard ◽  
Moderating Effect ◽  
Managerial Performance ◽  
Financial Measures ◽  
The Balanced Scorecard ◽  
Nonfinancial Measures ◽  
The Impact ◽  
The Relationship

This study extends prior studies on the effectiveness of theBalanced Scorecard (BSC) to improve managerial performancedone by Lau and Mosser (2008) and Lau and Sholihin (2005).Specifically, the study empirically tests the moderating effects ofprocedural justice on the relationship between the financial andnonfinancial dimensions of BSC and managerial performance. Italso tests the impact of organizational commitment on performance.Based on survey data from 76 respondents, the results indicate thatperceived procedural justice in the use financial and nonfinancialdimensions of the BSC is associated with managers’ organizationalcommitment. It further finds that organizational commitment ispositively related to performance. The study extends the literatureby providing empirical evidence about the moderating effect ofprocedural justice on the relationship between the financial andnonfinancial dimensions of BSC and organizational commitment.Keywords: balanced scorecard; organizational commitment; financial measures;managerial performance; moderating effect; nonfinancial measures;procedural justice

scholarly journals Audit of Non-financial Information

2020 ◽  
Vol 7 (4) ◽  
pp. 71-80
Author(s):  
R. G. Kaspina ◽  
N. O. Samoilova
Keyword(s):  
Research Problem ◽  
Practical Experience ◽  
Financial Information ◽  
Practical Significance ◽  
Practical Implementation ◽  
Problem Analysis ◽  
Nonfinancial Information ◽  
Current Trends ◽  
Financial Audit ◽  
Definition Of

The article is devoted to the practical implementation of auditing tasks in relation to non-financial information in Russia. The increased need to develop this area of auditing services is related to both the increased interest of users in the nonfinancial information in itself, and the need to improve its reliability. The methodological base of the research includes a set of scientific techniques and research methods such as theoretical analysis of the literature on the research problem, analysis of regulatory sources, a method of comparison, as well as the use of practical experience in providing auditing services in relation to non-financial information. The study of current trends in the publication and certification of nonfinancial statements in Russia and abroad, considers the main approaches to the definition of “non-financial audit” and the most widespread methodological approaches to its implementation, as well as reviews the practice of performing tasks to confirm non-financial information and identifies the main problems of their implementation. The theoretical and practical significance of the research is to justify the need to develop tools for providing auditing services in relation to non-financial information, as well as the proposed solutions to the identified problems of practical implementation of tasks.

scholarly journals Disclosure and Audit Implications of Nonfinancial Measures: A Teaching Case

2018 ◽  
Vol 12 (1) ◽  
pp. I1-I13 ◽  
Author(s):  
Matthew L. Hoag ◽  
Gabriel D. Saucedo
Keyword(s):  
Financial Statements ◽  
Risk Assessments ◽  
Microsoft Excel ◽  
Teaching Case ◽  
Fraud Risk ◽  
Nonfinancial Measures ◽  
Analytical Procedures ◽  
Fraud Risk Assessments ◽  
Substantive Analytical Procedures

SUMMARY This case introduces students to nonfinancial measures (NFMs) and encourages thoughtful consideration and discourse surrounding their reporting and use by managers and auditors. NFMs are commonly reported by companies to provide increased transparency of operations and to more effectively describe performance. External parties such as analysts and auditors make use of NFMs in performing valuation assessments, fraud risk assessments, and substantive analytical procedures. In completing this case, students will be exposed to actual NFMs disclosed in SEC filings and employ Microsoft Excel knowledge to perform foundational analytical procedures. Students will also analyze how these NFMs link to the financial statements, as well as reflect upon the implications of NFMs for both internal and external users.

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