Can the FASB Regain Its Mojo? Ciesielski, Jack T.
Accounting horizons,
06/2022, Volume:
36, Issue:
2
Journal Article
Peer reviewed
Open access
SYNOPSIS
In recent years, the FASB has concerned itself with simplification of accounting standards, rather than prioritizing the improvement of financial reporting for the benefit of investors. ...While companies grow more complex and larger, and place more investments in intangible assets, financial reporting has not kept pace. This is making financial statements less relevant than ever. In its nearly 50-year history, FASB has responded well to the needs of investors when circumstances demanded an effective response. This was evidenced by its relatively speedy, experimental approach to inflation accounting in the late 1970s. Contrast that to its slow-motion response on intangible asset recognition and disclosures, a project languishing over 20 years. FASB's agenda has become clogged as the board devotes more of its attention and resources to the Private Company Council's needs. An open question: can the FASB regain its former intense focus on investor needs and put aside simplification efforts?
This study reviews research on human resource management (HRM) in the state, foreign invested and private sectors over the last four decades in Vietnam as it emerged into an increasingly important ...economic powerhouse. This has two purposes: reviewing and synthesizing the extant literature into key themes and outlining avenues for future research. Nine salient themes emerge and shows diversity in Vietnamese HRM systems. HRM system change in the state sector has had limited results. The transfer of HRM practices is prominent in multinational companies (MNCs) originating from developed countries, but lacking in MNCs from emerging economies. The private sector has realized the importance of formal HRM and attempted to implement policies. Further research is necessary to advance the literature and fill in research gaps.
SYNOPSIS
We provide insights into the inputs and valuation models used by valuation specialists. We survey 172 valuation specialists and conduct several follow-up interviews covering various topics, ...including the valuation inputs, models, and industry information that they use, as well as how they estimate long-term growth and the cost of capital. We find that valuation specialists rely on their professional judgment to select a valuation model but prefer the discounted cash flow (DCF) model. They primarily rely on the firm's historical performance when forecasting the financial statements, but communication with management is particularly relevant for forecasting future earnings or cash flows. When estimating the cost of capital, they most commonly use the risk-free rate with subjective adjustments. The results of our study provide insights on the information use of valuation specialists that are relevant to other valuation specialists, managers, academic researchers, and regulators.
JEL classification: M41; G12; G17; G32.
We examine the impact of firm ownership (public vs. private) and the perception of the reputation of the quality of suppliers of the country from where products are sourced on time-to-recall of ...defective products from the market. Operationalizing time-to-recall as the time that has elapsed from the date of first sale in the market to the date it was recalled, we test the influence of the interplay between firm ownership and perception of the reputation of the quality of suppliers of the country on time-to-recall using data on 400 toy recalls issued in the USA during 2007–2018. We find that time-to-recall is shorter for publicly traded firms than it is for private firms. This effect is more pronounced when the products are sourced from countries with poor perception of the reputation of the quality of suppliers. We discuss the research and managerial implications of our findings.
•I compare private company acquisitions between PE and corporate acquirers.•PE acquisitions were significantly larger deals and used syndicates.•Corporate acquirers preferred PE-backed targets and ...acquired targets across international borders.•Corporate buyers had more cumulative experience and relevant industry experience.•A changing nature of acquisitions post the sub-prime crisis was observed.
This paper explores private company acquisitions, from 2000 to 2016, in the light of the market for corporate control. The two dominant acquirers – strategic acquirers (corporate firms) who seek long-term synergies, and financial ones (private equity firms) who acquire only to divest within a reasonable timeframe while harnessing returns – are bound by a target pool on a different playing field – private targets. Private companies are not affected by agency conflicts as their public counterparts and are generally less visible and more illiquid. This study examines acquirer choice, target characteristics, and deal characteristics, and its impact on deal value. Results indicated that different targets appealed to these acquirers, and PE acquirers valued targets higher than corporate ones. Further, a changing nature of acquisitions following the 2008 financial crisis was observed.
This study utilizes an advanced machine learning method known as TreeNet® (Salford Systems, 2017) to predict a variety of private company failure states, ranging from binary settings (i.e. failed vs ...non-failed) to more complex multi-class settings with up to five states of failure. Based on a large global sample, TreeNet® proved to be a significantly better predictor of private company failure than conventional models such as logistic regression. While the out-of-sample predictive performance of TreeNet® is best in binary settings, the model also produces strong area under the ROC curve (AUC) results for the multi-class models. We also find that the predictive performance of financial variables is significantly enhanced when combined with external risk factors such as macro-economic variables and other non-financial measures. The results of this study have several implications for the private company failure literature and the usefulness of machine learning methods in accounting and finance more generally.
The resources of Customary Forest play an important role for Talang Mamak Indigenous People to survive. The exploitation of the forest by private company and investor has caused a violent conflict. ...The situation of the indigenous people becomes worsen since local government does not fully protect their rights on the forest. Even, Local government tends to defend private company and investor in addressing the conflict. Customary forest of Talang Mamak indigenous people is in the oligarchs grip and conflict of interest with their elder. The Indigenous people are in crossroad, to preserve or to release their heritage and right. This study aims to determine the efforts of Talang Mamak Indigenous People to maintain their existence in the customary forest resources battle with private company and investor. This study used qualitative descriptive method. The data collection were documentation analysis and other relevant literature. This study used Theory of Oligarchy (Winters 2011) as grounded theory. The result found that the efforts of the indigenous people to fight for their rights getting weak. Some of them begin to accept compensation from the company and investor, in other word, some of them are willing to release their heritage and right on the forest.
O artigo analisa o fenômeno da participação minoritária do Estado nas sociedades empresárias. Aborda-se: (i) as principais ca- racterísticas das empresas estatais e o que as diferencia das empresas ...controladas; (ii) a forma como o Estado pode assumir a condição de acionista controlador sem a maioria do capital social e as implicações desse controle no regime jurídico dessas sociedades; (iii) o regime jurídico das sociedades com participação estatal minoritária sob controle privado e as principais causas que justificam a participação estatal des- provida de poder de controle. Conclui-se que a empresa controlada pelo Estado sofre influxo parcial do regime publicístico, eis que o Estado não pode se desvincular, como acionista contro- lador, dos princípios que regem sua intervenção no domínio econômico. Por outro lado, a participação estatal minoritária não dispensa o Esta- do de adotar práticas de governança e de con- trole proporcionais à relevância, à materialidade e aos riscos do negócio.
In a private company, conflicts arise from disagreements between controlling and non-controlling shareholders. Controlling shareholders may be involved in the management and active monitoring of ...directors in order to maximize the value of the company. On the other hand, they may also use their power to benefit themselves at the expense of the company and other shareholders such as by appointing their family members or acquaintances to be on the board of directors regardless of their qualification and performance and granting them high remuneration. Controlling shareholders can also oppress non-controlling shareholders by removing the latter from management positions and refusing to distribute dividends even when the company has sufficient profits to do so. This leaves non-controlling shareholders with no financial benefits and eventually these shareholders involuntarily decide to leave the company. This article discusses how controlling shareholders dominate the company and examines how Thai laws, particularly the Civil and Commercial Code which governs private companies, prevent controlling shareholders from exploiting the benefits of the company and non-controlling shareholders and provide remedies for both the company and non-controlling shareholders. The author argues that the legal mechanisms for deterring controlling shareholders from wrongdoing and providing remedies are not effective enough.
This paper investigates the extent to which the timeliness of UK private companies’ accounting information reflects regulatory and economic influences by studying the impact of a one month shortening ...of the statutory regulatory filing deadline. Using the financial reporting lag and propensity to file late as measures of timeliness, we find that although reporting behaviour is largely driven by regulatory deadlines, companies conjectured to be producing accounting information for reporting to outside investors publish their accounts significantly more quickly, and are substantially less likely to file beyond the statutory deadline (late), than their counterparts lacking similar incentives. However, in terms of this reporting lag differential, the change in regulation had a homogeneous impact. We report a significant reduction in the mean and median filing time, but an increase of 46% in the proportion of firms filing late, in the year following the regulatory change. Our results are robust to the employment of a number of different estimation methods, including matching and Huber and median regression.
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