Causal relationship between macroeconomic variables and stock prices In Pakistan

The intention of this research is to provide empirical evidence regarding causality among interest rate, inflation rate and exchange rate with stock prices in Pakistan for the period from 1990 to 2015. The findings from cointegration test indicated that there was a negative relationship of interest rate, inflation rate and exchange rate with stock prices. Granger causality test result shows unidirectional causality running from interest rate to stock prices and no causality was observed for inflation rate and exchange rate. The overall evidence proposed that equity market of Pakistan does not incorporate substantial information of interest rate, inflation rate and exchange rate in its stock prices and do not reflect the macroeconomic condition of the country

The effect of earnings management on dividend policy in Pakistan

The aim of this study was to find out the impact of earnings management on dividend policy of oil and gas companies listed at the Karachi stock exchange. The study uses annual data of oil and gas companies for the period from 2008 to 2015. The dependent and independent variables are dividend policy and earnings management and the three control variables are leverage, return on equity and firm size. Modified cross sectional Jones model (1995) was used for calculating discretionary accruals which has been used as proxy for earnings management whereas measurement of dividend policy has been proxy by dividend payout. The findings from regression analysis indicate that earnings management has insignificant relationship with dividend policy of selected firms in Pakistan. Financial crisis in the world and economic decline period are the main reasons of this relationship. In the decline period the firms try to increase manipulation in earnings as a result the company starts reducing dividend payments. It is concluded that there are some other factors that may influence the pattern of dividend payment in the firms

Board independence and capital structure of Nigerian non-financial listed firms: the moderating role of institutional ownership

The Nigerian corporate environment has the potentials for high information asymmetry and less disclosure due to the weak institutional structure and an ineffective market for corporate control. These instances may undermine the monitoring capacity of independent directors in the boardroom. Thus, signifying the need for a complementary corporate governance mechanism to boost investors’ confidence. This research views that institutional investors have the incentives to strengthen board governance, given their sophisticated financial expertise and management skill. Therefore, this paper measures the moderating role of institutional ownership on the relationship between board independence and firms’ capital structure. The study analysed the balanced panel data of 56 Nigerian non-financial listed companies for seven years (2012-2018) using the random effects technique. This study presents evidence that higher levels of institutional ownership strengthen the effect of board independence on the firms’ leverage and vice versa. Hence, the result implies that managers may face stringent monitoring when institutional investors and independent directors interact. Such superior monitoring may compel managers to take on higher leverage to boost firm’ value. Our finding has an important policy implication on enhancing sound corporate governance practices, particularly for firms operating in developing countries where the market for corporate control is ineffective

The Effect of Bank Recapitalization and Corporate Governance on Performance of Banking Sector: A Proposed Conceptual Framework

The global financial crisis of the last decade has been described as the most serious crisis that affects the world's economy since the Great Depression of 1940, which lead to the bank's recapitalization exercises in many countries. The purpose of this study is to propose a conceptual framework that will investigate the effect of bank recapitalization on the performance of the banking sector and to measure the moderating effect of corporate governance. However, the nature and existence of this relationship are found to be mixed and inconclusive (i.e., positive, negative, or no relationship at all). These have prompted scholars, experts, and authorities to re-examine the relationship between recapitalization and the performance of the banking sector. This study addresses the research deficit and proposes a conceptual and theoretical framework for measuring the effectiveness of bank recapitalization, corporate governance on the bank's performance, which could be used by banks and other regulatory bodies. Furthermore, a recommendation for future research in this area also suggested. Keywords: Recapitalization, Corporate Governance, Banks Performance, Debt Restructuring, Bailout, Blanket Guarantee JEL Classifications: G01, G03, G21, G34, L25 DOI: https://doi.org/10.32479/ijefi.897

Auditor independence threats and factors affecting independence

In various professional standards and regulations,the accounting profession has generally described independence as a lack of specific interests and relationships that are presumed to affect auditor objectivity. An auditor must be watchful to any harmful impacts on his planning, investigation, or reporting to preserve independence under the numerous pressures from clients.This article reviews auditor independence literature and factors affecting independence in order to determine the effects of the factors on independence. The method employed for the research isadesksystem of research design, in which data were collected through secondary sources such as journals, books and internet materials. The finding of the review indicates that the most mentioned threats to auditor independence are non-audit services, audit tenure, auditor-client relationship and client importance.Independence continues to be a problem when it comes to finding out how accurate and credible investor financial statements are. The leading factor of the independence of the auditor was not evident, but other researchers ranked them based on importance because of their belief that they chose to experimen

Does bank recapitalization affect the performance of the banking sector? The empirical evidence

Over the last decade, financial institutions, especially the banking sector across emerging markets, have been faced with forceful recapitalizations as a result of numerous global financial crises. The study aims to investigate the effect of bank recapitalization approaches such as mergers and acquisitions, equity issues and interventions (bailouts) on the performance of the Nigerian banking sector. The notion that bank recapitalization heats up has been discussed and still does not present a proper consensus in the available literature. Therefore, topics that involve research on the strategies of recapitalization and their effects on bank performance are of interest in the literature. A survey method was used to gather data and the responses received from the regional, branch and senior managers in the banking sector were used to analyse and check to see if bank recapitalization actually affects the performance of the banking sector. Structural equation modelling (SEM) results indicated that bank recapitalization is positively related to bank performance. The results further revealed that all the recapitalization approaches have a positive and significant effect on bank performance. Thus, the use of recapitalization mechanisms for undercapitalized banks during crises or normal times is highly encouraged for sustainability and in the banking sector, as the backbone of the economy of any nation. Further suggestions for future research directions are also offered

The Effectiveness of Monitoring Mechanisms for Constraining Earnings Management: A Literature Survey for a Conceptual Framework

Recently, financial crisis and high profile corporate scandals in the United States, Europe and East Asia, have brought corporate governance and audit quality issues to the forefront in developing countries, emerging markets and transitional economies. In fact, the main issue involves manipulation of accounting data which lose investor confidence and trust in the financial reports. In order to enrich investor confidence and trust regarding financial reporting quality, firms need to adopt effective monitoring mechanisms. In relation to that, this paper proposes a conceptual framework to investigate the role of regulatory mechanisms concentrating on corporate governance and external audit for mitigating earnings management. Evidence from previous studies supports the proposed model. Hence, the extant study argues that firms with effective monitoring mechanisms in the form of corporate governance and external audit are less likely to allow earnings management because opportunistic earning's cause uncertainty about the economic value of a firm. Keywords: Corporate Governance, Bankruptcy, External Audit, Earnings Management. JEL Classifications: G3, G33, G39, G3

A proposed gst compliance model of gst registered person in Malaysia

This paper attempts to identify the determinant factors that may influence the tax compliance behaviour of Goods and Service Tax (GST) registered persons in Malaysia. Revenue from broad based indirect taxation of consumption plays an important role in the Malaysian economy. The issue of GST compliance, such as over claiming of input tax and under declaring of output tax by the registered persons motivated this study. Thus, this study attempts to propose a conceptual framework for GST compliance behaviour by integrating economic factors such as tax system structure of GST, tax rate, audit, penalty and compound/fine, and psychological and sociological factors, including attitude towards GST and GST knowledge

An initial investigation of the relationship between capital structure and firm performance among large (G7) construction companies: a conceptual framework

Capital structure decision plays a vital role in examining firm performance. The relationship between capital structure and firm performance is one that has received considerable attention in the previous literature. In Malaysia, a substantial amount of research on the relationship between capital structure and firm performance solely focused on companies that are listed in main market of Bursa Malaysia mainly in plantation, and rarely focused on construction firms. Furthermore, as for to date, limited study explores on large construction companies in regards to technology, consumer product, finance, industrial products and trading or services. By considering this drawback, this study aims to investigate the relationship between capital structure and firm performance among construction companies in Malaysia. Several determinants of capital structure and firm performance of the companies listed on the Bursa Malaysia are defined. To achieve the research aim, this study developed a conceptual framework based on an extensive previous study and several hypotheses. The results will show the differences of the relationship among sectors and it also will determine the direction of the relationship between variables. This study will make several important contributions to the existing studies of capital structure by providing basic knowledge on the relationships capital structure and their firm performance in which increasing their competitiveness in the market and future business opportunities

The relationship between self-leadership, personality and job satisfaction: a review

This review paper explores the relationship between self-leadership, personality and job satisfaction among employees. Self-leadership is define as a set of self-influence strategies that have effective potential for application in various types of organization. Personality is commonly associated with individual's unique behavioral traits. Authors also discuss the Big Five Model Theory and Type A and Type B personality theory. The impacts of the constructs of the two theories on employees' job satisfaction are reviewed in this paper