Claim reserving for insurance contracts in line with the International Financial Reporting Standards 17:a new paid‑incurred chain approach to risk adjustments

This study considers the risk management of insurance policies in line with the implementation of the new International Financial Reporting Standards 17.It applies the paid-incurred chain method to model the future unpaid losses by combining the information channels of both the incurred claims and paid losses.We propose the recovery of the empirical distribution of the outstanding claims liabilities associated with a group of contracts via moment-based density approximation.We determine the risk measures and adjustments that are compliant with the new standard using the Monte–Carlo simulation method and approximated distributions.The historical data on the aggregate Ontario automobile insurance claims over a 15-year period are analyzed to examine the appropriateness and accuracy of our approach.

Evaluation of the Effects of Corporate Governance on Financial Reporting Quality

Corporate governance is designed to stimulate the investment environment and to create a stable financial situation in the capital markets by increasing the level of reliability,transparency,and accountability at the firm level.This study aims to examine whether corporate governance leads to higher quality financial reporting.This research has been performed using companies listed on Borsastanbul(BIST).For this purpose,two samples from the publicly held companies on BIST,which are included in the Corporate Governance Index and which are not included in this index,have been formed.Thus,we examined whether there is any difference between the financial reporting quality of the companies listed in Borsastanbul Corporate Governance Index and the financial reporting quality of the enterprises that are not included in this index.Since the quality of financial reporting is a multi-dimensional concept,it can be evaluated by different measurement methods focusing on different dimensions in the literature.One of these approaches used to measure the quality of financial reporting is the quality of earnings.The evaluation of the financial reporting quality of the enterprises included in the BIST Corporate Governance Index and the enterprises not included in the index were evaluated through different methods to compare two different samples in the context of the earnings quality approach.Panel data analysis was used to evaluate the financial reporting quality of the two samples by means of earnings quality methods.The data related to the models used in the assessment of financial reporting quality were obtained from the Public Disclosure Platform(KAP)and Equity RT database.The research covers 72 enterprises,36 of which are in the Corporate Governance Index and 36 of which are not in the Corporate Governance Index.

Effect of Corporate Governance Compositions on Financial Reporting Timeliness in Nigerian Deposit Money Banks

This study ascertained the effect of corporate governance compositions on timeliness of financial reporting in deposit money banks in Nigeria.Ex Post Facto research design was employed for this study.Purposive sampling was used to select eight(8)deposit money banks in Nigeria with international authorization.Data were extracted from annual reports and accounts of the sampled banks and analyzed with regression analysis.The results show that board size has a positive and significant effect on financial reporting timeliness deposit money banks in Nigeria,while audit committee independence has a positive but insignificant effect on financial reporting timeliness of deposit money banks in Nigeria.Therefore,on the basis of the findings and conclusions of the study,the study recommends among other things that the number of banks board of directors should play a vital role in how well it can oversee daily operations of the institution and monitor management.

A Corpus-based Contrastive Study of Conceptual Metaphor-A Case Study of English and Chinese Financial Reporting

Up to now there have been no contrastive studies of conceptual metaphor in English and Chinese economic field. In this paper, a corpus-based approach is adopted in comparing the conceptual metaphors in Chinese financial reporting (CFR) with those in English financial reporting (EFR). To make a contrastive study, this paper categorizes the conceptual metaphors identified in two corpora into two parts: same conceptual metaphors and different conceptual metaphors, and for the analysis of each conceptual metaphor, linguistic entity, frequency and percentage are taken as the three standards for comparison, which is analyzed with Concapp.

Using a novel ensemble learning framework to detect financial reporting misconduct

Our research focuses on detecting financial reporting misconduct and derives acomprehensive misconduct sample using AAERs and intentional restatements.We develop a novel ensemble learning method, Multi-LightGBM, for highlyimbalanced classification learning. We adopt a human-machine cooperationfeature selection method, which can mitigate the limitation of incompletetheories, enhance the model performance, and guide researchers to develop newtheories. We propose a cost-based measure, expected benefits of classification,to evaluate the economic performance of a model. The out-of-sample testsshow that Multi-LightGBM, coupled with the features we selected, outperformsother predictive models. The finding that introducing intentional materialrestatements into our predictive model does not reduce the effectiveness ofcapturing AAERs has important implications for research on AAERsdetection. Moreover, we can identify more misconduct firms with fewerresources by the misconduct sample relative to the standalone AAERs sample,which is quite beneficial for most model users.

Stock market liberalization and financial reporting quality

This study employs the Mainland-Hong Kong Stock Connect pilot program in China to investigate the influence of stock market liberalization on firm-level financial reporting quality(FRQ).First,through a staggered difference-indifference specification strategy,we find that eligible firms experience a significant improvement in FRQ,as measured by a composite proxy of accrual earnings management,real activities manipulation,and financial report restatement.Second,cross-sectional analyses suggest that the effect is stronger when firms are headquartered in regions with weaker institutional environments,characterized by lower judicial efficiency and less developed financial markets.We also show that the impact is more pronounced when firms face less external pressure and possess more effective corporate governance before stock market liberalization.Third,further evidence highlights that augmented FRQ is associated with a reduction in regulatory compliance costs,an improvement in stock price efficiency,and a mitigation of financing constraints.Collectively,we shed new light on the role of stock market liberalization in shaping firms’financial reporting behavior.

Does Financial Reporting Quality Affect Optimal Capital Structure？ Evidence from China

In this study, we investigate the association between financial reporting quality and a firm＇s deviation from its optimal capital structure. We find that a firm＇s deviation from its optimal capital structure is decreasing in financial reporting quality. The results suggest that high-quality financial reporting helps to reduce a firm＇s deviation from its optimal capital structure. In addition, we document that the relationship is intensified in non-SOEs, in which financial reporting quality plays a more crucial role. Furthermore, we find that bank connections diminish the role of financial reporting quality in optimal capital structure. Our results hold when we control for potential endogeneity in financial reporting quality and capital structure decisions. Our study contributes to both financial reporting quality and capital structure literature. We also contribute to the literature on informal contracts in organizational decision-making.

Sustainable strategy for corporate governance based on the sentiment analysis of financial reports with CSR

Focusing only on shareholders’financial return is not consistent with the concept of sustainable corporate governance.In contrast to financial performance,corporate social responsibility(CSR)is a non-financial performance index.Financial reports consist of both financial and non-financial disclosures.These disclosures help investors make decisions.This paper characterizes the interaction between the sentiment analysis of financial reports and CSR scores.The classification accuracy through SVM exceeds 86%.The empirical study shows that the financial report sentiment based on the PESTEL model,Porter’s Five Forces model,and Value Chain(Primary and Support Activities)significantly correlates to the CSR score.

Financial Development Report Released in New York

New York, USA, on 8 October 2009-The world’s largest economies took the biggest hit in the World Economic Forum’s second annual Financial Development Report released today.

Do investors care about auditor assignments?Evidence from last-minute changes to signing auditors

Against the background of China’s strengthening of finance and accounting supervision,this study examines the practice among listed companies of changing signing auditors at the last minute and explores whether Chinese investors can capture this information in a timely manner.We find that China’s capital market responds significantly negatively to these last-minute changes,implying that investors perceive a potential negative impact of this behavior.Crosssectional analyses suggest that the characteristics of the change event,recent corporate events,and accounting firm capability significantly affect the stock price response.Furthermore,in terms of the individual characteristics of signing auditors,external investors appear to comprehensively consider busyness level,industry experience,and the timing of the change to determine the causes and effects of the auditor change and make different market reactions accordingly.In addition,consistent with investor perceptions,we find that last-minute changes significantly impair the quality of financial statements,indicating that external investors’judgments based on information about changes in signing auditors are rational and effective.

How to improve IFRS for intangible assets?A milestone approach

This study focuses on the decreasing relevance of financial information associated with current financial reporting standards for intangible assets.We summarize and compare three approaches to improving financial reporting standards for internally generated intangibles—the recognition approach,the fair value approach and the disclosure approach,among which we focus on the recognition approach.We investigate the impact of current International Accounting Standard 38 on the R&D capitalization policies of the high-tech industry,particularly among medical device firms in China.We conclude that the current recognition criteria are so stringent that they disincentivize firms from capitalizing their R&D investments.A large variation exists in capitalization timing within the medical device industry.Accordingly,we propose the milestone approach to revising financial reporting standards for intangible assets.We suggest that determining the capitalization criteria for intangibles based on the R&D cycle and capitalization timing should be moved forward.

The Impact of IFRS Convergence on the Effectiveness of Accounting Information for Share Valuation： Evidence from the Mainland of China

This study examines whether the reconciliation amounts between IFRS and PRC GAAP provide additional incremental value-relevant information. More specifically, it investigates whether firms applying IFRS experience an increase in the quality of accounting information in the post-IFRS convergence period. Results show that IFRS convergence increases the values of balance-sheet items and enlarges variation across firms. Moreover, there is no difference in the explanatory power of value relevance of accounting information under IFRS and PRC GAAP for share prices and returns of A-shares. The incremental value relevance analysis suggests that the IFRS adjustments to earnings are value relevant, whereas the adjustments to book values are not. The IFRS adjustments to change in inventory are value relevant for predicting future operating cash flows. Finally, accounting quality improved in post-convergence period. These results are robust after controlling for the unique characteristics of Chinese firms.