Earnings management: detection, application and contagion

The accounting scandals in the 2000s and 2010s have led to a number of large-scale reforms in financial reporting and corporate governance regulations around the world, and still attract a lot of public debates recently. In that context, the demand for further knowledge on earnings management is very topical. What we have known is earnings management does exist. What we have not known, however, seems still overwhelming. We need to know more about issues such as how earnings management could be detected, to what extent earnings management has an impact on investment decisions, what drives earnings management behaviour etc. The accounting research community has responded to such demand by producing a very large, and still growing, volume of publications on the topic during the last few decades. In fact, earnings management has now been one of the largest strands in the mainstream accounting literature. This thesis aims to make original and important contributions to the literature on earnings management. The main components of the thesis comprise of three empirical chapters which analyse secondary data on the United Kingdom's (the UK hereafter) stock market during the period from 1995 to 2011. The contributions are made on three important and inter-related research strands within the earnings management literature, namely the earnings management detection models, the impact of earnings management on stock market investment, and the spread of earnings management as a corporate decision through board network. The first empirical chapter constructs a signal-based composite index, namely ESCORE, which captures the context of earnings management. Specifically, ESCORE aggregates fifteen individual signals related to earnings management based on prior relevant literature. Empirical results using UK data shows that when ESCORE is higher, firms do manage earnings with greater magnitude and are more likely to be most aggressive using both accruals and real earnings management. Firms which are investigated for financial-statement-related irregularities are also shown to have significantly higher ESCORE. The composite score can be easily applied in practice as well as replicated in subsequent studies, especially in emerging market where small samples technically constrain the use of other existing earnings management detection models. The approach to construct ESCORE is innovative and it only measures the likelihood rather than the magnitude of earnings management. This aspect of ESCORE is important given the growing criticisms that none of the existing earnings management models could actually measure the magnitude of earnings management. Using ESCORE as a measure that captures the general context of earnings management, the second empirical chapter asks if investors rationally price the information contained in such context. Empirical evidence shows that firms with low ESCORE outperform those with high ESCORE by 1.37% per month after controlling for risk loadings on the market, size, book-to-market and momentum factors in up to one year after portfolio formation. The relationship between ESCORE and future returns is still significant, in both economic and statistical terms, after controlling for various other known 'market anomalies', including the size, value-glamour, seasoned equity offer, market irrational reaction to financial distress, balance sheet bloat, profitability and discretionary accruals. This finding is in line with the behavioural explanation that investors tend to ignore the observable context of earnings management under the influence of the well-documented base rate fallacy. This is an original piece of knowledge which makes significant and interesting contributions to the literature on market anomalies. The third and last empirical chapter investigates whether aggressive earnings management practices spread across firms sharing interlocked directors. The evidence shows that if a firm aggressively manages earnings (referred to as a 'contagious firm') via accruals (or production activities and discretionary expenses) manipulation in a year, any firms (referred to as 'exposed firms') which are interlocked with that contagious firm in that year and the two following years are more likely to aggressively manage earnings via accruals (or production activities and discretionary expenses, respectively) manipulation. The contagion effect is found to be more pronounced if the interlocked director is male, older, British, and charged with duties which could influence financial reporting. The contagion effect is robust after controlling for endogeneity issues and common characteristics of the interlocked firms. The evidence presented in this chapter is both original and a significant contribution to our knowledge on the impact of board networks on corporate decisions, a topic which attracts a lot of attention as it fits directly to the process of reforming corporate governance codes to enhance the efficiency and effectiveness of the boards of directors

ROLE OF THE Na,K-ATPase IN POLYCYSTIC KIDNEY DISEASE

Autosomal dominant polycystic kidney disease (ADPKD) is the most common monogenic disease, and is characterized by multiple fluid-filled cysts that impair the organ, ultimately leading to renal failure. Formation and enlargement of the cysts require abnormal proliferation and cell death, as well as changes in the transport properties of the renal tubule epithelial cells. Because of its primary role in the vectorial movement of salt and water in the kidney, the Na,K-ATPase has been the focus of investigation to understand the pathophysiology of ADPKD. However, the precise role of the transporter has not been identified. In this dissertation, we describe studies designed to characterize the Na,K-ATPase in ADPKD, and examine the mechanisms underlying its role in the disease. The transport properties of the Na,K-ATPase is regulated by the hormone ouabain, which inhibits its movement of the cations. In addition, ouabain binding to the Na,K-ATPase has been been found to activate a cascade of phosphorylating events, leading to cell growth. Interestingly, we have found a population of the Na,K-ATPase in human cystic epithelial cells to have a higher affinity for ouabain, at concentrations consistent with circulating levels of the hormone. Thus, nanomolar concentrations of ouabain that do not normally affect the activity of the Na,K-ATPase in the kidney partially inhibit the enzyme of cystic tissue and cells. The Na,K-ATPase has been found to interact with polycystin-1, and we have found this to association to increase the sensitivity of the enzyme to ouabain. Our hypothesis is that due to their increased sensitivity to the hormone in ADPKD, the cystic renal epithelium is more susceptible to the effects of endogenous ouabain. We found ouabain to stimulate both proliferation and apoptotic death of the ADPKD cells, causing a disbalance that favors increased cell growth. While the mitogenic effect of ouabain is mediated by activation of the epidermal growth factor receptor (EGFR), Src kinase and extracellular signal-regulated kinase (ERK) pathway, its apoptotic effect was found to be through activation of the intrinsic pathway of apoptotic cell death. We also found ouabain to exacerbate the development and growth of cysts, both in cultured human ADPKD cells and metanephric organ cultures from Pkd1m1Bei mice, a well characterized model of ADPKD. Collectively, these results demonstrate ouabain, acting through the Na,K-ATPase, is a novel agent that can adversely affect the progression of ADPKD

Growth, productivity and survival of Vietnamese enterprises

Diese Dissertation konzentriert sich auf die Dynamik des Wachstums von Unternehmen, deren Produktivität und Überlebenswahrscheinlichkeit in Vietnam. Die Arbeit untersucht die wichtigsten Determinanten dieser drei Merkmale auf Unternehmensebene über die Periode 2000-2007. Der erste Aufsatz überprüft die Gültigkeit des sog. Gibrat Gesetzes und untersucht die Determinanten des Unternehmenswachstums im Handels-und Dienstleistungssektor anhand eines dynamischen Panel-Data Ansatzes. Der GMM Schätzer, den ich verwende, kontrolliert für die potenziellen Endogenitätsprobleme und für die unbeobachtbare Heterogenität innerhalb meiner Stichprobe. Durch das Heranziehen dieses Schätzers komme ich zum Ergebnis, dass das sog. Gesetz von Gibrat abgelehnt werden soll. Die Ergebnisse zeigen, daß Unternehmensgröße und Produktivität des Faktors Arbeit die wichtigsten Determinanten des Unternehmenswachstums sind. Der zweite Aufsatz untersucht empirisch die Auswirkungen von IT-Einrichtungen und Investitionen auf die Arbeitsproduktivität. Im Gegensatz zu den meisten Arbeiten in der vorhandenen Literatur, die sich auf die Beziehung der F&E Ausgaben/ Patente und Produktivität konzentrieren, untersuche ich die tatsächlichen Investitionen in zwei Hauptbereichen: (i) IT-Einrichtungen, (ii) die Entwicklung des Investitionskapital. Die ökonometrische Methode berücksichtigt das Vorliegen von sog. fixed und random Effects und impliziert, daß das sog. "Produktivität Paradoxon" für die F & E-Quote nicht vorliegt. Der dritte Aufsatz konzentriert sich auf die Determinanten der Überlebenswahrscheinlichkeit von staatlichen und privaten Unternehmen in der verarbeitenden Industrie. Im Rahmen dieses Aufsatzes wird das semi-parametrische Cox Proportional Hazard Model verwendet. Die Ergebnisse zeigen, daß die Überlebenswahrscheinlichkeit der neuen staatlichen und privaten Unternehmen unterschiedliche Determinanten aufweisen.This dissertation concentrates on the dynamics of firm growth, productivity and survival in a developing country, Vietnam, and investigates their main determinants under the context of globalization during the period 2000-2007. The first essay tests the validity of Gibrat’s law and investigates determinants of firm growth of the commercial-service sector by employing the dynamic panel model. Applying the system GMM estimator to control unobserved heterogeneity and endogeneity, the findings imply that Gibrat’s Law should be rejected. The results confirm the sensitivity of the growth-size relationship to firm attributes. Besides, firm size and labor quality are main determinants of firm growth. The second essay empirically investigates the impact of IT facilities and development investments on labor productivity to test the “productivity paradox” and evaluates interaction effects of firm-level contextual factors on this impact. In contrast to most of the existing that mainly consider patents or R&D in the relationship with firm productivity , the essay investigates actual investments in two main areas: (i) Information technology facilities; (ii) development investments. The essay applies the fixed and random effects models for the manufacturing and commercial-service sectors, and the whole economy. Findings imply that the “productivity paradox” does not occur for factor of R&D rate in investments of all firms, for computerization for manufacturing firms, for LAN connection and Internet situation for the commercial-service firms. And these effects significantly depend on contextual moderating factors. The third essay focuses on determinants of survival of new state-owned and private firms in the manufacturing sector. Employing the semi-parametric Cox proportional hazard model, the essay provides evidence which supports the thesis of a ‘liability of adolescence’. Besides, the essay finds that the negative effect of state-ownership fades under other effects or economic contexts. After controlling the effect of start-up total assets, private-ownership seems to benefit firm survival. In addition, there is evidence of market selection that labour productivity and profit per employee are the most important internal factor in improving firm survival. There are differences between state-owned and private firms in terms of determinants of survival. Market share and small size are considered an obstacle only for SOEs firm survival. However, equitization reduces the risk of SOEs mortality. For private firms, in terms of start-up factors, although total assets increase probability of survival, total sales decrease. Besides, industry which has increasing number of employees opens favourable opportunities only for new private firms. While the macroeconomic factor, GDP, significantly supports the development of private firms, the northern location is an advantage to the survival of SOEs

Proposal of Image generation model using cGANs for sketching faces

The transition from sketches to realistic images of human faces has an important application in criminal investigation science to find criminals as depicted by witnesses. However, due to the difference between the sketch image and the real face image in terms of image detail and color, it is challenging and takes time to transform from hand-drawn sketches to actual faces. To solve this problem, we propose an image generation model using the conditional generative adversarial network with autoencoder (cGANs-AE) model to generate synthetic samples for variable length and multi-feature sequence datasets. The goal of the model is to learn how to encode a dataset that reduces its vector size. Using a vector with reducing the dimension, the autoencoder will have to recreate the image similar to the original image. The autoencoder aims to produce output as input and focus only on the essential features. Raw sketches over the cGANS create realistic images that quickly and easily make the sketch images raw images. The results show that the model achieves high accuracy of up to 75%, and PSNR is 25.5 dB that is potentially applicable for practice with only 606 face images. The performance of our proposed architecture is compared with other solutions, and the results show that our proposal obtains competitive performance in terms of output quality (25.5 dB) and efficiency (above 75%)

CELLULOSE NANOCRYSTALS: SYNTHESIS, CHARACTERISTICS AND EFFECT ON HYDROXYPROPYL METHYLCELLULOSE-BASED COMPOSITE FILMS AND COATINGS

This study aimed to synthesize, determine characteristics of cellulose nanocrystals such as morphology, size particle, zeta potential, Fourier transform infrared spectroscopy (FT-IR) and transmission electron microscopy (TEM). The study also evaluated effect of concentration of added cellulose nanocrystals to hydroxypropyl methylcellulose-base films and coatings containing carnauba Nano emulsion and chitosan nanoparticles. Results showed the shape and size of the nanoparticle generally depend on hydrolysis condition of microcrystalline cellulose. Cellulose nanocrystals obtained from processing hydrolyzed microcrystalline cellulose in range from 47 wt. % to 55 wt. % had length range of from 160 to 196 nm and diameter from 9 to 11 nm. Cellulose nanocrystals were added into nanocomposite HPMC that incorporated with both of carnauba Nano emulsion and chitosan nanoparticles with concentration of cellulose nanocrystals at levels: 0.2, 0.5, 0.8 and 1.1 %. Scanning electron microscopy (SEM) images revealed that nanocomposite films become more compact and dense due to the cellulose nanocrystals occupy empty spaces of porous of matrix nanocomposite HPMC increasing the collapse of the pores in the films. The concentration of cellulose nanocrystals at 0.5 % was added to Nanocomposite HPMC including both of carnauba nano emulsion and chitosan nanoparticles improved the physical strength of film with the best quality compared with other films as: film solubility was raised up 16.65 %, film drying time is faster than others (51.33 minutes). Assessement of the effect of cellulose nanocrystals added into the nanocomposite films coated on fruit bananas showed that respiration of bananas were reduced from 57.08 ml CO2/kg.h to 30.17 ml CO2/kg.h;  weight loss was declined from 4.0 % to 1.82 % thanks to the limitation of the films gas and moisture permeability

USING RUBRIC TO ASSESS PRIMARY SCHOOL STUDENTS' COMPETENCE IN TEACHING SCIENCE IN VIETNAM

Vietnam is in the early stages of implementing the reform of the curriculum and textbooks. Vietnam's general education is changing strongly from content-based teaching to competence-building teaching [1]. That change has been implemented by researchers and teachers in all elements of the teaching process, including testing and evaluation. Evaluation of educational outcomes needs to shift from testing memorization to assessing the ability to apply knowledge to solve practical problems, attaching importance to both assessment of learning outcomes and assessment in the learning process. In this situation, testing and assessment in teaching Science in primary schools are also interesting to many teachers, and assessment of scientific competence in teaching this subject is considered an important factor contributing to improving the quality of Science and the quality of subject teaching in the direction of developing students' ability. The article mentions some theoretical foundations and the actual situation of using Rubric in assessing the scientific competence of students in grades 4 and 5 when teachers teach Science, thereby proposing some measures to improve the effectiveness of assessment in teaching this subject.  Article visualizations

Innovations in Water Management for Sustainable Development of Higher Education Institutions: Experience from Ton Duc Thang University, Vietnam

Ton Duc Thang University (TDTU), which was established in 1997, is a fully autonomous public university in Vietnam. After over 22 years of development, TDTU is now the number one university in Vietnam for all aspects. In 2019, TDTU was ranked the 1st in Vietnam and ranked 165th in the world on sustainable development by UI GreenMetric World University Rankings (UI GreenMetric). Among six categories of UI GreenMetric, including: setting and infrastructure, energy and climate change, waste, water, transport, and education, the water category of TDTU achieved 725 points out of 1000 maximum points (72.50%). This paper presents water management of TDTU, focusing on water conservation, water recycling, the use of water efficient appliances and piped water consumption. Specifically, the paper highlights innovations in water management that TDTU has implemented during the past few years. The paper concludes that sustainable water management makes great contribution to sustainable development of a higher education institutio

The Impacts of the COVID-19 Pandemic on First-generation, Low-income and Rural Students in Indonesia and Vietnam: A cross-cultural comparative study

The COVID-19 pandemic has had a significant impact worldwide, affecting 600 million students in higher education institutions across 200 countries. However, comparative studies by country on this topic are limited. In this paper, we explore the question: how has the COVID-19 pandemic affected higher education students and which ones have been impacted the most? Indonesia and Vietnam are our focus. We leveraged a rich set of data collected online from college/university students from both countries involving over 2600 participants, and used regression analyses to measure the students\u27 outcomes, including the dimensions of their wellbeing, financial hardships, access to technology, and educational satisfaction. As expected, we find that there are statistically significant differences between both countries, especially among first-generation, low-income and rural students in almost all the outcomes in our four domains. We observed that low-income students and rural students in both countries were less likely to have access to technology during the pandemic than their more affluent and urban counterparts. They also were more likely to endure financial hardships during the pandemic. We did not find any statistically significant estimates for students’ burnout measures among the students in these two countries. In addition, we observed lower likelihood of satisfaction from rural and low-income students in Indonesia. We provide our policy recommendations for both countries

Using learning games for fourth-grade students to teach Vietnamese lessons and teachers' perspectives on learning games

Students can learn   in   a   meaningful way through the use of educational games. When students apply their skills and information in order to progress through a game, a huge degree of engagement is generated among them in the classroom as a result both their capabilities and their learning   increase. 153 children from primary schools in Vietnam participated in this research. The children were split into two groups: an experimental and a control group. Both groups participated in two sessions of word and sentence practice as well as spelling instruction. According to the findings of the study, the educational outcomes of the students are greatly improved when games are used in their classrooms. In addition, research has shown that some teachers are against the use of games in the classroom since it makes it more difficult to prepare educational materials. Some educators believe that playing educational games is a more effective method of instruction as it allows for greater flexibility during the learning process. This makes a contribution to the theoretical framework that is necessary to guide educators and instructors in the process of improving learning game programs for children in primary schools and other learners