scholarly journals Stock Price Contagion Effects of Low-Quality Audits at the Individual Audit Partner Level

2018 ◽  
Vol 38 (2) ◽  
pp. 151-178 ◽  
Author(s):  
Ferdinand A. Gul ◽  
Chee Yeow Lim ◽  
Kun Wang ◽  
Yanping Xu
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Personal Characteristics ◽  
Time Lapse ◽  
Share Price ◽  
Cross Sectional ◽  
Contagion Effects ◽  
Audit Firms ◽  
Stock Market Valuation ◽  
The Individual

SUMMARY We use Chinese audit partner data to show that partners associated with financial reporting fraud induce share price declines among non-fraudulent firms audited by the same audit partners. In cross-sectional analyses, we find that share price declines are more pronounced when low-quality partners (LQPs) failed to issue modified audit opinions during the period in question and when the LQPs were from one of the Top 10 audit firms. Additional analyses show that investors impose larger penalties on contagion firms when fraudulent firms are larger and the time lapse between sanction and fraud commitment is shorter. The personal characteristics of LQPs (except gender) do not cause a difference in market reaction to contagion firms. Overall, our results speak to the importance of audit partner identity to stock market valuation. JEL Classifications: M41; M42; M48.

scholarly journals Fundamentals of Stock Price in Nepalese commercial banks

2019 ◽  
Vol 4 ◽  
pp. 83-98
Author(s):  
Prem Prasad Silwal ◽  
Samrina Napit
Keyword(s):  
Commercial Banks ◽  
Stock Price ◽  
Stock Exchange ◽  
Market Price ◽  
Negative Relationship ◽  
Influential Factor ◽  
Share Price ◽  
Cross Sectional ◽  
Book Value ◽  
Price Earnings Ratio

The aim of this study is to ascertain the determinants of the stock market price in Nepalese commercial banks for the period of 2065/66 to 2074/75. It is based on pooled cross-sectional data of ten banks for 10 years whose stocks are listed in Nepal stock exchange. The study employed correlational and causal comparative research design and result reveals that book value per share, price earnings ratio, return on equity have positive relationship with stock price. Dividend yield has positive but minimum influence on the price of the stock whereas size has negative relationship and is statistically insignificant with stock price. Further, it reveals that book value per share is a most influential factor that determines stock price in Nepal.

Who commits? Who engages?

2018 ◽  
Vol 40 (1) ◽  
pp. 23-42 ◽  
Author(s):  
John Sutherland
Keyword(s):  
Design Methodology ◽  
Personal Characteristics ◽  
Series Data ◽  
Statistical Methodology ◽  
Cross Sectional ◽  
Data Set ◽  
Content Type ◽  
Ordered Logit Model ◽  
Survey Instruments ◽  
The Individual

Purpose The purpose of this paper is to address two questions: who commits? And who engages? For example, does an individual’s likelihood of committing/engaging vary with his/her age; or with the level of his/her qualifications; or with his/her occupation? Of what consequences are the characteristics of the workplace at which the individual is employed? Design/methodology/approach The investigation uses the Skills and Employment Surveys Series Data set to construct the indicators of commitment and engagement. Using an ordered-logit model and an OLS model, these indicators are analysed to identify their covariates. Findings Who commits and who engages depends upon the indicator used to measure the attitude/behaviour in question. Changing these indicators sometimes means that an individual no longer commits/engages. Further, even for the same indicator of commitment/engagement, who commits/engages varies across individuals. Research limitations/implications The indicators of commitment and engagement examined are derived from the responses in a pre-existing data set which has its origins in survey instruments which had quite comprehensive terms of reference. Owning to the cross-sectional nature of this data set and the statistical methodology applied, the statistical results are correlations between some possible indicators of commitment and engagement and some variables which denote the personal characteristics of individuals and the characteristics of the organisations with which they are employed. Causation cannot be inferred from these correlations. Originality/value Commitment and engagement are central to many models of the management of human resources. However, the likelihood that an individual commits and/or engages differs across the workforce has rarely been examined. This paper addresses this research lacuna using a data set which is rich in detail about an individual’s personal characteristics.

Placebo Tests of Conditional Conservatism

2015 ◽  
Vol 91 (2) ◽  
pp. 625-648 ◽  
Author(s):  
Panos N. Patatoukas ◽  
Jacob K. Thomas
Keyword(s):  
Time Series ◽  
Financial Reporting ◽  
Data Availability ◽  
Share Price ◽  
Higher Moments ◽  
Archival Studies ◽  
Cross Sectional ◽  
Asymmetric Timeliness ◽  
Conditional Conservatism ◽  
Measures Of Performance

ABSTRACT Basu (1997) proposes a measure of financial reporting conservatism based on asymmetry in the conditional earnings/returns relation. Patatoukas and Thomas (2011) show upward bias in this measure, because a placebo—lagged earnings—also exhibits similar asymmetry. Ball, Kothari, and Nikolaev (2013a) and Collins, Hribar, and Tian (2014) propose alternative explanations for the bias and offer revised measures to overcome the bias. However, we find that both revised measures remain substantially upward-biased. In particular, a placebo based on lagged share price mimics time-series and cross-sectional variation observed for the revised measures. More generally, we find biases in the asymmetric timeliness specification because earnings, accruals, and other measures of performance are often related to second and higher moments of the distribution of returns. In addition to suggesting that the asymmetric timeliness specification be used with caution, our study illustrates the useful role placebos can play in archival studies. Data Availability: Data are available from the sources identified in the text.

scholarly journals Rights Offering and Its Effect on Share Price Movement: A Study of Commercial Banks

2018 ◽  
Vol 11 (1) ◽  
pp. 1-13
Author(s):  
Hari Prasad Pathak ◽  
Sweta Gupta
Keyword(s):  
Commercial Banks ◽  
Stock Price ◽  
Banking Sector ◽  
Price Change ◽  
Share Price ◽  
Coefficient Of Determination ◽  
Price Movement ◽  
Announcement Date ◽  
The Individual ◽  
The Right

This paper examines the effect of rights share issue on share price movement in the banking sector covering the period 2007/08 to 2016/17. In order to find out the share price movement in different selected points of time, pre and post right issue and price relatives were calculated considering the price of 90 days before the right announcement date as the beginning index. Five different points of time were selected to observe the share price movements assuming the announcement date as the reference point of time. Stock price data were obtained from the website of NEPSE. The paper uses correlation coefficient to examine whether the overall market movement has any relationship with the individual share price change. Coefficient of determination is used to identify what proportion of the variation in the share price is explained by the event of right share issue. The result shows that right offering announcements have the signaling effect, but it is negative. The share price of Nepalese commercial banks decreases after the announcement of right in spite of the increase in the market index in the corresponding period. The results highlight the information asymmetry behavior which induces a negative change in share price after the rights announcements. The implication of the result is that investors can anticipate the nature of change in share price after rights issue announcements and develop strategic plans to improve the trading activity.

scholarly journals Impact of Dividend Policy on Share Price of Commercial Bank in Nepal

2018 ◽  
Vol 3 ◽  
pp. 107-122
Author(s):  
Raj Kumar Baral ◽  
Ajay Pradhan
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Stock Price ◽  
Dividend Policy ◽  
Positive Influence ◽  
Share Price ◽  
Rank Test ◽  
Cross Sectional ◽  
Signed Rank Test ◽  
The Impact

The purpose of this study is to examine the impact of dividend policy on the share price of commercial bank in Nepal. The study is based on pooled cross sectional data of 10 commercial banks. Banks were selected on the basis of their performance on stock market of Nepal, i.e. top gainers and top losers and data are collected from Nepalese commercial banks listed in NEPSE from the F/Y 2012/13 to F/Y 2016/17. The paper investigates the relationship between dividend announcement, EPS, P/E ratio, DPR, on stock price by using Descriptive Statistics, Correlation and Regression, ANOVA and Wilcoxon Signed Rank Test. The articles conclude that except DPR, the other factors like EPS, P/E ratio have positive relationship with stock price among them P/E is the strongest factor that affects the share price in case of top gainer commercial banks whereas EPS, P/E ratio and DPR have positive influence on stock price among them DPR is the strongest factor that affects the share price in case of top loser bank.

CEOs'/CFOs' Swearing by the Numbers: Does It Impact Share Price of the Firm?

2006 ◽  
Vol 81 (1) ◽  
pp. 1-27 ◽  
Author(s):  
Hsihui Chang ◽  
Jengfang Chen ◽  
Woody M. Liao ◽  
Birendra K. Mishra
Keyword(s):  
Information Asymmetry ◽  
Stock Price ◽  
Abnormal Returns ◽  
Financial Statements ◽  
Share Price ◽  
Revenue Recognition ◽  
Cross Sectional ◽  
Share Prices ◽  
The Impact ◽  
Bid Ask Spreads

We examine the impact on share prices of firms whose CEOs and CFOs certify their financial statements under oath, pursuant to the administrative order issued by the SEC on June 27, 2002. We hypothesize that (1) the certification provides assurance to investors by making disclosure more credible and by reducing information asymmetry between owners and management, and (2) the assurance value of certification is reflected in the stock price of the certifying company. Overall, the empirical results are consistent with our hypotheses. We observe, on average, positive abnormal returns for firms whose CEOs/CFOs certified their financial statements by August 14, 2002. Based on an analysis of bid-ask spreads, certifying firms experienced a significant decline in information asymmetry after certification. In cross-sectional analyses, we find abnormal returns are positively associated with firms that were under investigation, that used Andersen as their auditor, and that practiced aggressive revenue recognition.

Audit Quality Differences Among Auditors: The Case of Hong Kong

2015 ◽  
pp. 75-92 ◽  
Author(s):  
Tyrone M. Carlin ◽  
Finch Nigel ◽  
Tran Dung Manh
Keyword(s):  
Hong Kong ◽  
Financial Reporting ◽  
Audit Quality ◽  
Critical Role ◽  
Significant Proportion ◽  
Cross Sectional ◽  
Audit Firm ◽  
Goodwill Impairment ◽  
Financial Reporting Standards ◽  
Audit Firms

Audits play a critical role in satisfying the public interest in strengthening accountability and supporting confidence in financial reporting. Conventionally, audit quality is defined as a probability that financial statements are free from material misstatements. The existence of a positive relationship between audit firm size and audit quality has long been accepted in previous literature. This has resulted in numerous studies collecting evidence of differential audit quality relative to the size of audit firms, both large and small. Consequently, the conclusion has been asserted that larger audit firms produce a higher and more homogenous audit quality. The collapse of Arthur Andersen, however, has undermined the premise that large audit firms provide higher audit quality than smaller firms. This research investigates audit quality based on the extent of compliance levels with disclosure requirements pertaining to goodwill impairment of large listed Hong Kong firms in the third year transition to International Financial Reporting Standards (IFRS). The result found that audit firm identity appears to be a significant proportion of cross-sectional variation, in which compliance levels and disclosure quality varied considerably among auditors.

scholarly journals Reduced Form Estimation Of The Noise Trading Model

2011 ◽  
Vol 11 (1) ◽  
pp. 11
Author(s):  
S. Maheswaran ◽  
G. Balasubramanian ◽  
C.A. Yoonus
Keyword(s):  
Stock Price ◽  
Reduced Form ◽  
Specific Information ◽  
Information Share ◽  
Cross Sectional ◽  
Noise Trading ◽  
Trading Model ◽  
To Come ◽  
The Individual ◽  
Indian Stock Market

In this paper, we develop and implement the reduced form version of the Noise Trading Model in the Indian stock market, which we had proposed in an earlier paper. We show how to estimate the model without making any assumptions regarding the cross-sectional dependence that may exist among the individual stocks. This allows us to come up with precise estimates of the share of information versus noise in the opening stock price. To be specific, information accounts for 52% of the variance of the opening stock price and noise contributes to the rest. When we split the overall sample into weekend versus weekday, we find that the information share of the opening price is significantly higher after a weekend at 72% compared to 46% during the rest of the week.

Health Status of Senior Citizens: A Cross-sectional study

2020 ◽  
Vol 11 (01) ◽  
Author(s):  
Priyanka Beniwal ◽  
Chandrakala Singh
Keyword(s):  
Health Status ◽  
Senior Citizens ◽  
Total Sample ◽  
Cross Sectional Study ◽  
Age Group ◽  
Poor Health Status ◽  
Cross Sectional ◽  
Males And Females ◽  
The Individual ◽  
Average Health

Aging is a series of processes that begin with life and continue throughout the lifecycle. It represents the closing period in the lifespan, a time when the individual looks back on life, lives on past accomplishments and begins to finish off his life course. It represents the accumulation of changes in person over time. The study aims to investigate the health status of senior citizens. The present study was carried out in Hisar and Sirsa district of Haryana state. A total of 400 elderly equally representing both males and females of age group 65-70 years were selected randomly for the study. Modified inventory developed by Khan and Lal (2011) was used to assess health status of senior citizens. The results of the study elucidated that health status of senior citizens depicted that 54.25 per cent of the total respondents had average health status followed by good (25.25%) and poor health status (20.50%). The most common health problems reported by the senior citizens were joint pains, back pains, blood pressure, and chest pain etc. Gender wise comparison of total sample further pointed out that females were poor in their health against males.

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