The application of water cycle algorithm to portfolio selection

Portfolio selection is one of the most vital financial problems in literature. The studied problem is a nonlinear multi-objective problem which has been solved by a variety of heuristic and metaheuristic techniques. In this article, a metaheuristic optimiser, the multiobjective water cycle algorithm (MOWCA), is represented to find efficient frontiers associated with the standard mean-variance (MV) portfolio optimisation model. The inspired concept of WCA is based on the simulation of water cycle process in the nature. Computational results are obtained for analyses of daily data for the period January 2012 to December 2014, including S&P100 in the US, Hang Seng in Hong Kong, FTSE100 in the UK, and DAX100 in Germany. The performance of the MOWCA for solving portfolio optimisation problems has been evaluated in comparison with other multi-objective optimisers including the NSGA-II and multiobjective particle swarm optimisation (MOPSO). Four well-known performance metrics are used to compare the reported optimisers. Statistical optimisation results indicate that the applied MOWCA is an efficient and practical optimiser compared with the other methods for handling portfolio optimisation problems

Explaining of Modeling the Auditor- Client Negotiations Paradigm Concerning Financial Reporting

One of the main steps in formatting financial reports is negotiation process between auditors and their clients in order to remove conflicts. This negotiation substantially affects final reports quality and may have consequences for parties involving this process and their firms and the whole society. This research is aimed to model the process by data-based theory and in-depth interviewing with experts from both parties i. e. audit partners and firms managers. Moreover, this study considers various levels of audit suppliers (audit firm and audit team) in this modeling. This study includes 30 interviews using snowball sampling. Findings show that main reasons for creating the conflicts between auditors and clients are 1. Instrumental reasons (standards and rules) 2. Knowledge reasons 3. Information reasons (information asymmetry) 4. Business reasons. Negotiation requires parties' knowledge quality, negotiation skills and purpose. Based on parties' opinion, implementing a constant paradigm and win-win negotiation requires an independent and logical discussion, assuring, and appropriate corporate governance. In this process, main challenges are insufficient industrial expertise of auditors, clients' inappropriate interpretation of auditing and insufficient corporate governance mechanisms. Finally, study model is approved by 2 persons of initial sample and 2 experts

Institutional Ownership and Investment Efficiency: Evidence from Iran

Investment efficiency shows how well a company invests its assets. Although institutional shareholders play undeniable roles in companies, it is not clear whether they are able to monitor managers and make investment decisions or not. This study gives answers to stakeholders, addresses concerns about the effect of the owners on investment efficiency, and aims to add to the literature on emerging markets by investigating the relationship in Iran, a different environment from developed ones. Based on monitoring power, the shareholders are divided into two types: active and passive ones. Investment problems are classified into two types: over- and under-investment problems. The sample consists of 101 firms listed on the Tehran Stock Exchange between 2010 and 2016. Some regression models are used. The results illustrated that institutional owners have a positive effect on investment efficiency and decrease both over- and under-investment problems and so, the efficient monitoring school is approved. Additionally, active ones are positively correlated with investment efficiency and decrease both investment inefficiency problems. Institutional ownership is the cause of investment efficiency, not the reverse. Based on findings, in emerging markets like Iran’s market, investors are recommended to give notice to the level of active ownership in firms; ownership structure is a good sign of efficiency