63 research outputs found
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Vulture Funds and the Fresh Start Accounting Value of Firms Emerging from Bankruptcy
We study how distress-oriented hedge funds (vulture funds) play an important role in the fresh start valuation of firms emerging from Chapter 11 reorganization. We find that loanto-own vultures acquire debt positions of the distressed firm that grant dominant power in the bankruptcy negotiations, and they then use the discretion allowed by fresh start accounting to introduce valuation bias in their favor. We show that the strategic influence over fresh start values can create opportunities to increase vulture investors’ returns at the expense of other claim holders
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Do analysts understand accruals’ persistence? Evidence revisited
We revisit the question of whether analysts anticipate accruals’ predicted reversals (or persistence) of future earnings. Prior evidence shows that analysts are over optimistic with respect to working capital (WC) accruals which is interpreted as their inability to understand accruals’ persistence. Using total accruals (TACC) that in addition to WC accruals cover non-current operating and financing accruals, we show that analysts’ forecast errors are uncorrelated with accruals. We show that analysts’ optimism with respect to accruals is due to the use of an incomplete accrual measure, which does not necessarily indicate analysts’ lack of sophistication. Our results imply that traditional accrual definition should be revised in future studies. The main implication of our finding is that analysts seem to exhibit the necessary sophistication in understanding accruals persistence contrary to suggestions in prior research. Our findings are in line with the idea that any anomalous stock price behaviour related to accruals is not due to analysts’ forecasts, i.e., analysts' earnings forecasts and recommendations should not be considered as the originating source of stock price underreaction or overreaction with respect to accruals
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Firm Incentives, Institutional Complexity and the Quality of "Harmonized" Accounting Numbers
In this paper, we investigate how firm reporting incentives and institutional factors affect accounting quality in firms from 26 countries. We exploit a unique multicountry setting where firms are required to comply with the same set of international reporting standards. We develop an approach of cross-country comparisons allowing for differences between firms within a country and we investigate the relative importance of country- versus firm-specific factors in explaining accounting quality. We find that financial reporting quality increases in the presence of strong monitoring mechanisms by means of ownership concentration, analyst scrutiny, effective auditing, external financing needs, and leverage. Instability of business operations, existence of losses, and lack of transparent disclosure negatively affect the quality of accounting information. At the country level, we observe better accounting quality for firms from regulatory environments with stronger institutions, higher levels of economic development, greater business sophistication, and more globalized markets. More importantly, we find that firm-specific incentives play a greater role in explaining accounting quality than countrywide factors. This evidence suggests that institutional factors shape the firm's specific incentives that influence reporting quality. Our findings support the view that the global adoption of a single set of accounting standards in isolation is not likely to lead to more comparable and transparent financial statements unless the institutional conditions and the firm-specific reporting incentives also change
Somatotypes and hand-grip strength analysis of elite cadet sambo athletes
The objectives of this research were to establish somatotype and hand-grip strength between elite cadet male and female sambo athletes divided by weight categories. A total of 97 elite cadet sambo athletes, participants of the World Cadets Sambo Championships 2018 participated in the study. Male and female sambo athletes were divided by official weight categories. Anthropometrical variables were taken in order to calculate somatotypes and hand-grip strength. A one-way analysis of variance and Tukey's post hoc tests were used to compare group differences by weight categories. Results of this study provide the first description of somatotype and hand-grip strength of elite male and female cadet sambo athletes in relation to weight category. A typical somatotype in male sambo athletes was endomorphic mesomorphs with a predominance of musculoskeletal tissue, while female athletes differed concerning weight category. Overall, an increase in handgrip strength across weight categories was noted. Hand-grip strength increases linearly from the lightest to the heaviest weight category except in -66 and -84 kg in male athletes. Differences in handgrip strength of female athletes were detected between the lightest group and last six groups in all three variables in favor of last six as well as -44 and kg -48 kg compared with the heaviest. To the best of our knowledge, this study provides the first normative data of somatotype and hand-grip strength analyses in relation to age, gender, and weight categories of cadet sambo athletes. The anthropometric profile of sambo athletes changed according to their weight category. Mesomorphy was the most dominant somatotype component in male athletes, while female had three different types of somatotype component in relation to weight category. In conclusion, we found differences in hand-grip strength related to weight category, which can be linked to the muscle mass of athletes. Future studies should focus on somatotype and strength handgrip values of international compared to national level sambo athletes
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Thinly Traded Growth Stocks: A Joint Examination of Transparency in Communication and the Trading Platform
When thinly traded growth stocks (TTGS) listed on a secondary exchange experience difficulty in gaining investors' attention, one possible solution is to increase the intensity of disclosure. However, if the stock is traded on a quote-driven system, market makers can collude to maintain wide bid-ask spreads that discourage firms from disclosing. As a result, TTGS traded on a quote-driven system can face a liquidity trap that can prevent them from harvesting the benefits of increased disclosure activities. In this paper, we argue that the well-documented negative relation between disclosure and the bid-ask spread is likely to be moderated by the type of protocol chosen by exchanges to handle the trading of TTGS. To test our theory we use a unique setting created by the introduction of a hybrid order-driven protocol for TTGS in the UK. Following an increase in the disclosure activity by a TTGS, we find that the magnitudes of the predicted reductions in the bid-ask spreads are dependent on whether the TTGS switch their trading protocols. © 2013 © 2013 European Accounting Association
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The Rise of Covenant-Lite Bond Contracting
We investigate the trading and yield effects of covenant-lite (cov-lite) high-yield bond contracts, which have a restricted (lite) set of covenants. The excluded covenants often are those that use accounting performance measures. Although much research has focused on the potential benefits of accounting as a basis for debt contracting, little is known about settings where it may be optimal to exclude accounting performance statistics from public debt contracts. We find that cov-lite high-yield bonds have a higher trading turnover and lower yield spreads. Our findings provide empirical support for theory which predicts, for optimal bond covenant design, that a trade-off between improving trading ease versus enhanced investor protection needs to be managed. These results enhance our understanding of the limits of accounting’s role in (bond) contracting design
Prevalence and clinical implications of the HPV16 infection in oral cancer in Montenegro - Evidence to support the immunization program
Oral squamous cell carcinoma (OSCC) makes 85-95% of all malignances in the oral cavity. Increasing evidence shows that the Human Papillomaviruses (HPVs) are preferentially associated with some oropharyngeal and OSCCs, namely the genotype 16. The aim of the present study was to determine the prevalence and clinical implications of HPV16 infection in oral squamous cell carcinoma in population of Montenegro.This study included 60 patients with OSCC (localized on the lower lip, tongue or/and floor of the mouth), surgically treated at the Clinical Centre of Montenegro from 2012 to 2018. Surgically obtained formalin-fixed and paraffin-embedded specimens were used for histopathological analysis and HPV16 genome detection using standard Polymerase Chain Reaction (primers for detection of E6 gene). Each individual was further followed up for the period of three years and for different clinico-pathological characteristics, including disease free interval (DFI).The prevalence of HPV16 infection in OSCCs was 23.3% and the infection was significantly more common in female patients (P = 0.038). No significant correlation was detectable between HPV16 infection and the patients' age (P = 0.302), tumor site (P = 0.125), tumor grade (P = 0.363) and disease stage (P = 0.995). Observing the total sample the DFI was not significantly different for HPV16-positive versus HPV16-negative patients (P = 0.427), but a gender-based difference in DFI was observed, with the significantly shorter DFI (Log Rank test, P = 0.003) in HPV16 positive female patients compared to male patients (P = 0.003).The results obtained in this study provide scientific evidence for the development of national HPV vaccination program in Montenegro
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Transparency, disclosure and the pricing of future earnings in the European market
Paper presented at "Accounting at a Tipping Point", the American Accounting Association (AAA) Annual Meeting held in New York City on August 1-5, 2009. Final version published in Journal of Business Finance and Accounting until title Accruals, Disclosure and the Pricing of Future Earnings in the European Market. Available online at http://onlinelibrary.wiley.com/The present study examines the role of disclosure in assisting market participants to form expectations of future earnings by observing the accrual content of reported earnings. Accounting research has been focusing on investigating the ability of accounting numbers and practices to provide relevant information to market participants. In the context of the association between market returns and accounting numbers or practices, conclusions can be only drawn on the effect of these numbers and practices at an average level of disclosure. Here it is shown that these conclusions can be significantly altered at varying levels of disclosure. Employing a sample of European firms and their Transparency and Disclosure ratings conducted by Standard and Poor’s, we show how disclosure and accruals jointly affect earnings expectations that are included in current stock returns. It is shown that both the joint effect of disclosure and accruals depends on the magnitude, sign and the nature of accruals (i.e. current and non-current accruals), and that increased disclosure appears to correct overstated expectations arising mostly from the extensive use of current accruals and negative non-current accruals
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