Content Analysis Of Board Reports On Corporate Governance, Internal Controls And Risk Management: Evidence From France

The French legislature has mandated in 2008 that the board chairperson reports on governance, internal controls, and risk management approach with the objective to enhance corporate disclosures to investors.  This study examines the content of board chair reports to assess their relevance and compliance with mandated disclosure requirements. Based on a sample of 109 french publicly listed comapnies in 2009, Our results show that,  with the exception of banks subject to a more stringent regulatory standard, the mandatory nature of the legislation did not translate in extended disclosures about internal controls and risk management practices. We further observe significant variations among the different indices of disclosure particularly with regards internal accounting and financial control. The multivaraite results validate the influence of the chosen internal control framework as well as firm characteristics on the content of the information disclosed about governance, internal control, and risk management practices

Earnings Management Effect In Different Stock Market Cycles

This study examines the association between stock prices and discretionary accruals in different stock market cycles. The study presents evidence for a discrepancy in prior research and shows that investors are able to identify earnings management only in some cases. We argue that investors’ reaction to the true nature of EPS varies in different market cycles. We suggests that investors pay less attention to the nature of EPS changes in an optimistic cycles, and are more critical in neutral or pessimistic cycles. Therefore, investors are more likely to detect and count for any earnings management in the neutral or pessimistic cycle than in the optimistic cycle. The test results indicated that the association between discretionary accruals and abnormal stock returns were insignificant in the neutral market cycle, significant and positive in the optimistic cycle and significant and negative in the pessimistic cycle. These findings indicate that investors tend to ignore the income-increasing effect of discretionary accruals on EPS changes in an optimistic market. The findings suggest that researchers investigating the association between stock prices and earnings management should control for the type of the market cycle from which their samples are drawn

Voluntary disclosure of intangibles and analysts’ earnings forecasts and recommendations

Purpose – The purpose of this paper is to investigate the relationship between voluntary disclosure of intangibles and financial analysts’ earnings forecasts properties. Design/methodology/approach – Disclosures about intangible assets were hand-collected through content analysis of annual reports of a sample of U.S. non-financial firms, while analysts’ earnings forecasts properties were collected from Bloomberg Professional database. We relied on correlation and multivariate regression analyses to test our research hypotheses. Findings – The results show that increased intangible disclosures affect analysts’ earnings forecasts accuracy, dispersion, and favourable consensus recommendations. However, this effect varies according to the nature of intangible assets. Practical implications – Our results may be of interest to different market participants such as corporate managers, financial analysts, and standards setting bodies that recently published guidelines on voluntary disclosure of intangibles. Originality/value – This study develops a new comprehensive index to measure the content of narrative disclosures about a large number of intangibles, such as human, structural, and relational assets. Our findings contribute to the current debate on the value-relevance of narrative disclosures on intangibles to investors and financial analysts. Keywords Intangibles, disclosure, financial analysts, forecast error, forecast dispersion, consensus recommendation Paper type Research pape

Analyse comparative des principaux mécanismes de gouvernance dans les multinationales américaines, européennes et asiatiques appartenant à la liste Fortune Global 250

Cette recherche a pour objectif de comparer les mécanismes de gouvernance des entreprises multinationales (EMNs) cotées en bourse et provenant des principales régions géographiques à savoir les Etats-Unis, l’Europe et l’Asie afin de déterminer si ces EMNs convergent vers une uniformisation globale de leurs pratiques de gouvernance. Nos résultats basés sur un échantillon de 156 EMNs appartenant à la liste Fortune Global 250 et des tests ANOVA nous ont permis de constater l’absence d’une convergence vers un modèle international et d’affirmer que les choix des pratiques de gouvernance des EMNs semblent plutôt associés avec leur appartenance régionale.The objective of this research is to compare the governance mechanisms of publicly traded multinational companies (MNCs) from major geographic regions, namely the United States, Europe and Asia, to determine whether these MNCs are converging towards standardization of their governance practices. Our results, based on a sample of 156 Fortune Global 250 MNCs and ANOVA tests, showed that there is no convergence towards an international model and that the choice of governance practices for MNCs seems rather associated with their regional membership.El objetivo de esta investigación es comparar los mecanismos de gobernanza de las empresas multinacionales (EMN) que cotizan en los mercados bursátiles de las principales regiones geográficas, es decir los Estados Unidos, Europa y Asia, para determinar si estas EMN están convergiendo hacia la estandarización de sus prácticas de gobernanza. Nuestros resultados, basados en una muestra de 156 EMN pertenecientes a la lista Fortune Global 250 y utilizando una prueba ANOVA, mostraron que no hay convergencia hacia un modelo internacional y que la elección de prácticas de gobernanza para las EMN parece más bien estar asociada a criterios regionales

Investigating transparency and disclosure determinants at firm-level in MENA emerging markets

The objective of this study is to examine transparency and disclosure (henceforth T&D) determinants for Middle Eastern and North African (MENA) companies. Using a sample of 216 annual reports for companies followed by S&P/IFC and pertaining to 13 MENA emerging markets, we expect that the business milieu mostly inherited from the former British/French colonial era and shaped by privileged economic ties with the Anglo-American versus Continental European world has the potential to affect T&D. We investigate T&D determinants from a firm-level perspective. Our findings show that MENA companies from countries having historical links with Great Britain have substantially higher T&D scores than those from countries having historical links with France. Moreover, companies operating in the information technology sector exhibit higher levels of T&D. Multivariate analysis outlines that the nature of business culture, company size and the importance of intangibles affect positively the level of T&D in the MENA region.transparency; disclosure; emerging markets; international accounting; corporate governance; Middle East and North Africa; MENA; annual reports; historical links; UK; United Kingdom; France; financial reporting.