Determinants of Financial Reporting Quality： An In-Depth Study o f Firm Structure

This paper examines the effects of firm structure on the financial reporting quality of Nigerian-quoted manufacturing firms by using assets, the leverage, the share dispersion, and the residuals of the modified Edward Bell Ohlson （EBO） model as proxies of firm structure and the financial reporting quality respectively. The data are extracted from 12 sample firms representing 50% （as the population of the study） of all the quoted manufacturing companies in Nigeria. A multiple regression is used as a tool of analysis for the study. The result reveals a strongly positive relationship between the firm structure and the financial reporting quality of the quoted manufacturing firms in Nigeria. Therefore, it is recommended among others that the regulators should enforce more on the financial statement disclosure and transparency among companies quoted on the Nigerian Stock Exchange （NSE）, in order to ensure a higher quality of the financial reporting

Characteristics of the Ownership Structure of Chinese Listed Companies and Its Effect on Financial Reports Quality

Ownership structure is brand-new to the reform of Chinese state-owned enterprises, and also a problem that urgently need to study. Because the reform wasn＇t entire, the ownership structure of Chinese listed companies looks freakish. That is to say, the ownership is highly concentrated in the state, who has just no tangible rights to control the business, which results in ＂insider control＂, ＂owner absence＂, ＂duality of manager and chairman＂, and so on. At the same time, such an ownership structure is unavoidable to supply inducement to the people who has relative benefits in it, and it eventually affects the quality of their financial reports. This paper empirically studies the ownership structure of Chinese listed companies and their characteristics in the actual situation, and finally puts forward some suggestions on how to improve the quality of the financial reports from the ownership structure 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.

A Conceptually-Based Empirical Analysis on Quality Differences Between UK Annual Reports and US 10-K Reports

The International Accounting Standards Board （IASB） and the Financial Accounting Standards Board （FASB） stress the importance of high-quality ＇financial reports. From a scientific point of view, however, major methodological drawbacks can arise when trying to arrive at a comprehensive assessment and evaluation of the decision usefulness of financial reports. In this conceptually-based exploratory study, the authors construct a 33-item index aimed at operationalizing decision usefulness in terms of the fundamental and enhancing qualitative characteristics laid out in the conceptual framework （CF） of the IASB （2010）. Using a matched-pairs sample design, which includes 70 UK annual reports and 70 US 10-K reports for 2010, the results of test-retest and inter-rater reliability tests show that these multiple items, which were based on items used in previous research, can be measured in a reliable manner. At the same time, the results of an exploratory factor analysis indicate that the IASB qualitative characteristics cannot be measured separately when the 33-item index is applied. At an aggregate level, the results of paired-sample t-tests reveal that UK reports score on average higher than US 10-K reports, which suggests that the overall quality of UK reports is better. The findings of this study add to the existing literature on the empirical evaluation of the effects of international accounting standards, showing that, as compared with 10-K reports, UK annual reports provide more information on topics such as corporate social responsibility （CSR）, corporate governance, and annual bonus schemes. On the other hand, US reports outperform UK reports with respect to the content of fair value information, cash flow statements, off-balance financing, and audit reporting.

Audit Committees： How They Affect Financial Reporting in Nigerian Companies

This study examines whether audit committees are associated with improved financial reporting quality for a sample of Nigerian listed companies prior to and after a corporate governance code mandated new regulations for audit committees in 2003. Using a sample of 70 companies listed on the Nigerian Stock Exchange, this study uses archival data in the form of companies＇ annual reports to measure the association between audit committees and improved financial reporting quality. Dechew and Dichev （2002）＇s model was used to measure earnings as a proxy for financial reporting quality. The results indicate that formation of audit committees was positively associated with improved financial reporting quality. It was also found that audit committees having an independent chair and audit committee expertise were positively associated with financial reporting quality. Other audit committee characteristics examined were found to be insignificantly related to financial reporting quality.

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.

IAS/IFRS and financial reporting quality:Lessons from the European experience

This paper discusses the effects of the adoption of IAS/IFRS in Europe on the quality of financial reporting.In doing so,it adopts the perspective of stock market investors and focuses on value-relevance research.The adoption of IAS/IFRS in Europe is an example of accounting standardization among countries with different institutional frameworks and enforcement rules.This allows investigating whether,and to what extent,accounting regulation per se can affect the quality of financial reporting and leads to convergence in financial reporting.This is a key issue for standard setting purposes as IAS/IFRS have been adopted in very diverse countries all over the world,and many others are likely to adopt them in the near future.

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.