Can Auditors Mitigate Information Asymmetry in M&As? An Empirical Analysis of the Method of Payment in Belgian Transactions

SUMMARY In this paper, we empirically examine the relationship between the external financial statement audit and the method of payment across a sample of Belgian mergers and acquisitions between listed and private firms over the period 1997–2009. We investigate whether a Big N audit (at the target level) reduces the need for a contingent payment resulting from information asymmetry about the target's value. In addition, we analyze whether a Big N audit (at the bidder level) limits incentives for bidders to exploit private information about their own value. Using multivariate ordered probit and binary regression models, we determine that contingent payments are less common when the target is audited by a Big N auditor after controlling for several other deal and firm characteristics. Furthermore, we find that the incentive to use stock payments in periods of stock market overvaluation is lower for acquirers with a Big N auditor. Finally, target shareholders are more likely to accept a contingent offer if the acquirer's financial statements are certified by a Big N auditor. JEL Classifications: G34; M4.</jats:p

Financial statement filing lags: An empirical analysis among small firms

This article examines financial statement filing lags among a sample of Belgian small firms. Our results indicate that around one-third of small firm financial statements are filed late (after the legal deadline), but that monetary sanctions could be an effective tool to encourage compliance with legal deadlines. Whereas the deadline and late filing sanctions are filing incentives, various factors, such as firm size and presence of an external financial statement audit, also affect financial statement filing lags. Evidence indicated that extremely late filings were associated with lower financial statement quality. </jats:p

Environmental performance of industrial companies, sites, installations and production processes

A set of 10 environmental impact indicators is proposed for the evaluation the environmental impact of industrial installations and processes or industrial companies and sites: global warming, destruction of the ozone layer (ozone depletion), acidification, photochemical ozone creation, human toxicity, ecotoxicity, eutrophication, resource consumption (abiotic depletion), water consumption and waste production. These are »weighed« indicators: the individual emissions or discharges of components contributing to a certain theme are multiplied with a weighing factor and aggregated. Eco-efficiency indicators are calculated by dividing the »weighed« indicators by a value related to production. These relative indicators make it possible to quantify the evolution of the environmental performance for a process, company or industrial site and to evaluate which component(s) contribute(s) most to a given theme, thus allowing to set priorities for lowering the environmental impact. Examples illustrate the proposed method. Attention is also given to the emission of persistent organic pollutants (POPs) during the incineration of waste, trying to answer the question: are waste incinerators sinks or sources of POPs? It is shown that for non-carcinogenic effects of POPs, according to the incineration scenario, the weighed input/output ranges from 0.3 to 20,500 when considering the POPs in flue gases and solid residues

Improved selection of the functional unit in environmental impact assessment of cement

The outcome of Life Cycle Assessment (LCA) studies is strongly influenced by the selection of the functional unit, which must be defined in such a way that, when products are compared, the amounts compared have identical utilities. LCA studies of cements mostly use mass based functional units (MFU). However, since different cements have a different composition and binding capacity, they result in different compressive strength and durability in their applications, so that MFUs are inadequate. Therefore, this study introduces as functional unit the Cement Functional Performance (CFP): mass of cement needed to obtain 1 MPa of compressive strength during one year of durability (kg/(MPa∙year)). To evaluate the effect of the CFP, the environmental performance of three cements is compared. Results show that adding 5% of zeolite to cement results in a similar strength and 1.78 times higher durability of the produced concrete, which is explained by the reduction of chloride diffusion. Moreover, adding 19% of zeolite to cement increases its durability 2.75 times, but reduces compressive strength by 29%. As a result, cement with 5 and 19% of zeolite added has respectively 54 and 36% of the environmental impacts of Portland cement

Characterization of Bottom and Fly Ashes Generated Co-incineration of Biomass with Automotive Shredder Residue

One of the viable techniques to reduce land filling of automotive shredder residue is by co-incinerating them with biomass. This study focuses on characterization of bottom and fly ashes produced from the coincineration of the automotive shredded residue with oil palm biomass. The co-incineration was carried out in a pilot-scale fluidized bed incinerator. The oil palm biomass used was oil palm shell while the automotive shredded residue was obtained from a local recycling company. The characterization was done based on particle size distribution, morphology (SEM analysis) and chemical composition (EDS analysis). In term of chemical composition the ashes contain C (Carbon), O (Oxygen), Si (Silicon), K (Potassium), Ca (Calcium) and Fe (Ferum

Terms and Characteristics of Homogeneous Ignition of Coal-Water Particles Coated with a Water Film

The problem of coal-water fuel ignition of particles in a high-temperature heating has been solved numericallyin the framework of a two-layer model of "coal-water". The basic characteristics of the integrated ignition has been shown. The influence of the vaporization process of the water film on the ignition conditions has been shown

Disposición de colas en aguas profundas (DCAP) como alternativa para la gestión de residuales en la industria minera

The article aims to clarify how the deep sea tailings depositions have been used worldwide as alternative mining practice. The paper is a checking of case studies where this technology is used. The available information sources were consulted, which included: case reports, scientific papers, theses and reports by proper authorities. It is achieved to expose the fundamental principles of operation and environmental impact of this technology in the marine environment by applying empirical methods and theoretical research, as well as an assessment of main cases in the world

Legal situation and current practice of waste incineration bottom ash utilisation in Europe

Almost 500 municipal solid waste incineration plants in the EU, Norway, and Switzerland generate about 17.6 Mt/a of incinerator bottom ash (IBA). IBA contains minerals and metals. Metals are mostly separated and sold to the scrap market and minerals are either disposed of in landfills or utilised in the construction sector. Since there is no uniform regulation for IBA utilisation at EU level, countries developed own rules with varying requirements for utilisation. As a result from a cooperation network between European experts an up-to-date overview of documents regulating IBA utilisation is presented. Furthermore, this work highlights the different requirements that have to be considered. Overall, 51 different parameters for the total content and 36 different parameters for the emission by leaching are defined. An analysis of the defined parameter reveals that leaching parameters are significantly more to be considered compared to total content parameters. In order to assess the leaching behaviour nine different leaching tests, including batch tests, up-flow percolation tests and one diffusion test (monolithic materials) are in place. A further discussion of leaching parameters showed that certain countries took over limit values initially defined for landfills for inert waste and adopted them for IBA utilisation. The overall utilisation rate of IBA in construction works is approximately 54 wt.%. It is revealed that the rate of utilisation does not necessarily depend on how well regulated IBA utilisation is, but rather seems to be a result of political commitment for IBA recycling and economically interesting circumstances