Non-GAAP earnings: International overview and suggestions for future research

This paper shows how non-generally accepted accounting principles (GAAP) earnings have been found to be more informative than GAAP earnings in several scenarios like countries where non-GAAP disclosures are compulsory and countries where these disclosures are voluntary but regulated

The influence of internal corporate governance mechanisms on capital structure decisions of Chinese listed firms

Purpose: This paper examines the effects of internal corporate governance mechanisms on the capital structure decisions of Chinese listed firms. Design/Methodology: Using a large and more recent dataset consisting of 2386 Chinese listed firms over the period from 1998 to 2012, we employ panel data and use different statistical methods (OLS, fixed effects, and system GMM) to analyse the effects of firm-specific and corporate governance influences on capital structure. Findings: We find that the proportion of independent directors and ownership concentration exert significant influence on the level of Chinese long-term debt ratios after controlling for firm-specific determinants and split share reforms. Further analysis separating our sample into state-owned enterprises (SOEs) and privately- owned enterprises (POEs) suggests that ownership concentration in the hands of the state leads to decrease in debt ratios. Implications: The finding implies that concentrated ownership in the hands of the state appears more efficient compared to their private counterparts in their monitoring role. Original Value: This study extends prior literature, which has concentrated disproportionately on firm-specific influences on capital structure, to the effects of within-firm governance mechanisms on capital structure decisions. The paper contributes to the agency theory-capital structure discourse in an emerging country context where corporate governance system appears weak

Analyst's evaluation of KPI usefulness, standardisation and assurance

Purpose: The purpose of this paper is to examine analysts’ evaluations of usefulness of KPIs disclosed by UK corporates. The disclosure of KPIs, both financial and non-financial is driven by legislation in the form of the Companies Act 2006. The paper considers two of the key concerns raised with KPI disclosure: a lack of standardisation (leading to inconsistency of calculation) and a lack of external assurance. Design/methodology/approach: A questionnaire was prepared which was used as the basis for semi-structured interviews with senior professional equity analysts. Questions were designed to cover aspects of usefulness and desirability of standardisation to improve consistency and comparability as well as the incremental value of audit firms providing assurance of KPIs. Findings: KPIs are indeed a useful supplement to the financial statements in developing a corporate narrative. Analysts highlighted that a significant amount of this information is released to the market in advance of the Annual Report which performs a confirmatory role. Whilst analysts highlight inconsistencies in calculation methods of KPIs they did not feel that a standard calculation should be prescribed. Further they did not feel that assurance over the calculation would be valuable as they perceived that this would remove the flexibility of companies to select the most appropriate measures. Research limitations/implications: The paper contributes to the body of research on disclosure by focussing on how the KPI disclosure is used by the intended audience and whether and how the disclosure mechanism may be strengthened. Practical implications: The findings provide an interface between theory and practice adding to the body of knowledge on disclosure theory and in particular KPI disclosure and how it is used. This will in turn help the standard setters in ensuring that disclosures enhance usefulness. Originality/value: Insight into the actual usefulness of these measures is important to inform this debate on presentation of the corporate “narrative”. This goes some way to addressing the unanswered questions in Healy and Palepu (2001) and the calls for further qualitative research in the area (Watson et al., 2002)

Public Policy Issues Raised by Bank Securities Activities

In this Article, the Securities Industry Association presents its perspectives on various legislative proposals currently being considered to redefine the role of commercial banks in the securities field. The author presents a history of the congressional policy that has defined permissible activities of commercial banks, and an overview of the securities activities of banks. The author then presents an examination of the various policy issues raised by bank participation in securities activities. The author concludes in calling for a reexamination of the Glass-Steagall Act and recommending that such a reexamination should proceed in the context of a comprehensive review of the laws and regulations bearing on the structure of financial institutions

Bank Securities Activities: Memorandum for Study and Discussion

A strong and vital United States Banking system is essential to the economic well being of this nation and, indeed, the economic stability of the world. Banks play a central role in international trade and finance and domestically provide the credit essential to the smooth flow of commerce. The importance of the role of banks in this country is underscored by the unique legal and regulatory framework in which they function. Because of this unique position, it is no small wonder that the American people have repeatedly demonstrated their determination to have a sound system of banking

Do brokers act in the best interests of their clients? New evidence from electronic trading systems

Prior research suggests brokers do not always act in the best interests of clients, although morally obligated to do so. We empirically investigated this issue focusing on trades executed at best execution price, before and after the introduction of electronic limit-order trading, on the London Stock Exchange. As a result of limit-order trading, the proportion of trades executed at the best execution price for the customer significantly increased. We attribute this to a sustained increase in the liquidity of stocks as a result of limit-order trading, regardless of market capitalisation. We discuss the ethical implications of our findings and conclude that market structures that enhance market competitiveness may help reconcile broker and client interests

Towards an Economy of Higher Education

This paper draws a distinction between ways thinking and acting, and hence of policy and practice in higher education, in terms of different kinds of economy: economies of exchange and economies of excess. Crucial features of economies of exchange are outlined and their presence in prevailing conceptions of teaching and learning is illustrated. These are contrasted with other possible forms of practice, which in turn bring to light the nature of an economy of excess. In more philosophical terms, and to expand on the picture, economies of excess are elaborated with reference, first, to the understanding of alterity in the work of Emmanuel Levinas and, second, to the idea of Dionysian intensity that is to be found in Nietzsche. In the light of critical comment on some current directions in policy and practice, the implications of these ways of thinking for the administrator, the teacher and the student in higher education are explored