Timeliness of financial reporting University of Westminster Westminster Business School W1592755 Current Themes of Accounting Contents Introduction-Background3 Literature Review4 Research Objectives...

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Timeliness of financial reporting University of Westminster Westminster Business School W1592755 Current Themes of Accounting Contents Introduction-Background3 Literature Review4 Research Objectives and Research Questions11 Research Design12 Data collection and analysis14 Timescale15 References16 Topic: "Does the timeliness of the financial reporting made by listed companies’ impact their share price in emerging markets like Malaysia? Introduction-Background Businesses from emerging market have a tendency to publish reports with scarce data at a sedate pace due to lax enforcement on Due to lax enforcement and sanctions on investor al incomplete data trading in investor protection and sanctions for insider trading, therefore, well-timed reporting is asignificant means of alleviating insider leaks, trading and rumors in this market. This situation is in stark contrast to the developed capital market, in which there is the clearly defined a system for publishing revenue information so that economical statements are published later than earning announcement, as a timely source, perhaps not so important Information (Ahmad BaharulUlum, 2013). The main reason for this article is to test whether disclosure theory applies to emerging managers' discretionary choices when issuing financial statements in emerging capital markets. Its contribution is to extend a work of the Owusu-Ansah (2000) with a focus on particularly selected variables to cover the disclosure theory of the proprietary prizes, information prize savings, moreover relative impacts of favorable and adverse news (Binti Abu Bakar and Rosbi, 2014). This paper reacts to the empirical test requirements for discretion in the disclosure policy, in particular, to test relevant theories in a different context than the US. Growing literature on corporate governance issues exists; the discussion of the function of directors in the process of publication has not been thoroughly explored. Most studies consider the relationship between business performance and the different characteristics of company management. Comment by doreen gan: 1) Businesses from emerging market have a tendency to publish reports with scarce data at a sedate pace due to lax enforcement on Due to lax enforcement and sanctions on investor al incomplete data trading in investor protection and sanctions for insider trading. 2) “Therefore, well-timed reporting is asignificant means of alleviating insider leaks, trading and rumors in this market.”Note: Change this sentence. Doesn’t make sense to me. Companies could be publishing on time but still face insider trading; due to government political or corruption issue. Please clarify more and explain well Comment by doreen gan: On the contrary, developed capital markets such as the United States of America (USA) do not face such problems due to the intricate and strict financial reporting standards they have to comply (Ahmad BaharulUlum, 2013).Note: Please change it to what I have rephrased to. Your sentence are kind of irrelevant. “Perhaps not so important” sounds so uncertain and does not justify your previous point. It seems like a sentence you copy and paste from the web.Comment by doreen gan: What does this got to do with introducing your essay? Literature Review The literature on the timeliness and impact factors of the company's annual financial reports has been studied around a world. Company size, as well as operational complexity, is used to explain the timeliness. Within the year 1960 to 1974, timeliness of reports from 210 industries listed on the New York Stock Exchange (NYSE) improved (Mohd Kamal, 2013). Although bad news is often delayed, the market reacts differently too early as well as the late announcement. The timeliness of the announcement and the company's profitability, there was a significant negative correlation between size as well as distribution dividend. But, he disagrees with their relationship with timeliness or industry members. Mrzygłod and Nowak (add the year of publication) found negligible relationships in his research. Companies spent nearly four months of financial year reporting to a shareholder by examining a relationship among four additional companies attributes moreover the reported delays of New Zealand planned businesses (Mrzygłod and Nowak, 2013). Attributes examined include company age, the number of shareholders, yearly report pages or company. Mrzygłod and Nowak founds that none of the elements examined were importantly related to the auditor's signature lag. In addition, authors found that the businesses in fuel or energy and financial companies are fast journalists, while companies in mining, exploration or service industries are journalists.Comment by doreen gan: Kind of a random point that doesn’t connect Comment by doreen gan: 1) Who are you referring to when you mentioned “he disagree”? 2) “The timeliness of the announcement and the company's profitability, there was a significant negative correlation between size as well as distribution dividend.” Note:I don’t understand. Too many points in a sentence. There is a negative correlation between the size and distribution dividend? Or negative correlation between the timeliness of report with profitability? Comment by doreen gan: Why is new Zealand in your context? And what does comparing four additional companies got to do with new Zealand planned business? Maybe elaborate more so I can understand? American Accounting Association views timeliness as the qualitative characteristic of helpful information (Olbrys, 2013). Additionally, Olbrys (2013) stated that framework of accounting standards set by IASB considered timeliness as the characteristics of determining timeliness. This standard is particularly significant for listed businesses because the investors require time as well as reliable data to make the right decision for their investment in the stock market. The Malaysian Accounting Standards Board (MASB) emphasizes that it is not possible to provide users with the usefulness of financial statements for a reasonable time of period after the date of the balance sheet (PikHar and Wei Chih, 2016).Comment by doreen gan: This standard is particularly significant for listed businesses because investors require time and reliable data to make the right decision for their investment in the stock marketComment by doreen gan: What are you justifying with this point? Doesn’t connect with the previous sentence The problem of managing companies that has raised concerns is the phenomenon of dominant personality and was found to be associated with bad disclosure. This is based on a dual role, when the Managing Director is also the Chairman of the Board of Directors. There are two views on this issue. Representatives of the agency theory argue for the separation of both roles to provide the necessary controls and balance of management performance (please reference this). In addition, if the Chief Executive Officer is also work as a Chairman, then management functions may be jeopardized. This is because the Director-General will be able to assess board meetings, select program items and select selected Board members. An alternative argument is that role-sharing is not critical because many companies are well controlled by combined tasks and have strong advices that are fully capable of providing reasonable control. With linked task, it enables CEOs to transcend their job scope by shaping the company to achieve its set goals with minimal interference. Comment by doreen gan: In a company, there are circumstances where an employee could be taking up two roles; managing director and chairman of the board of directors. Such situation raise concerns between the management of a company and could be view from two perspective.Comment by doreen gan: Don’t use same word twice Additionally, when the task is linked, the CEO can be able to shape a company to achieve the set goals, as there will be less interference (Ahmad Baharul, Ulum, 2013). Two roles are supported. Their arguments are based on stewardship theory, in which manager’s act in the best interests of society and shareholders, and the duality of roles increases the effectiveness of counseling (Ahmad Baharul, Ulum, 2013). In short, those who favor the duality of roles rely on stewardship theory, unlike the theory of an agency that considers executives as opportunistic shirkers. The theory of stewardship has a more positive perspective by seeing the director as a guardian of corporate assets and wanting to do the best for society. So, there is no problem if both roles are combined. However, the separation of tasks between the Bureau and the Chief Executive Officer will help to increase the quality of monitoring and reduce the benefits of detention, thereby improving the quality of reporting. In the Malaysian context, the duality of roles in listed companies is not particularly common. but the potential impact on disclosure is considered a good test.Comment by doreen gan: What do you mean by this? Can remove this Comment by doreen gan: Rephrase this. Aim for one comma in a sentence. No more than that Comment by doreen gan: Therefore, combined roles would not be a problem. Comment by doreen gan: Rephrase this. Aim for one comma in a sentence. No more than that Segment reporting is done by reporting financial information of an entity according to the divisions. The Malaysian Accounting Standards Board (MASB) defines segment information as information about different types of business products and services and their activities in different geographical areas. Segment reporting in Malaysia was compulsory in 1987. In the past, this disclosure was only voluntary, since the 1965 Act on Companies did not include any provision regarding the publication of segment reporting. Transnational and highly diversified companies are struggling to make larger segment information available in their financial statements. Different diversification activities of companies in different industries or in different geographic areas raised the question of whether aggregated accounting data is appropriate for companies comprised of different activities in different locations. While disclosure of segment information is beneficial, several arguments have been put forward against this publication around the world. Some arguments apply to all companies; others only apply in certain situations. One of the main arguments is that the higher costs of compiling, processing, and spreading segment information outweigh the potential benefits. However, the most important argument is that disseminating segment information is likely to benefit existing or potential competitors. Such disclosure would be a disadvantage the competitive position of the intelligence company. A competitive disadvantage is any event that deprives a company of a competitive advantage as a whole or a part thereof, any activity that confers a competitive advantage on other persons and any opportunities that lead to the costs borne by the company as compared with its competitors. [According to The Starbiz (August 2, 2012), industry experts also agree that it is unacceptable for listed companies to fail to release their audited reports on time for any reason. The timely publication of the a company's an entity audited financial information depends to a large extent on the time required to finish the review (Qian and Diaz, 2017). as financial statements may not be released until the end of the review .The most significant determinant of timeliness of the earnings announcements is a length of audit”. The audit delay is defined by Almosa and Alabbas (2007) as the length of the time from an end of the company's economic year to the date of an audit report (Ahmad Baharul Ulum, 2013).]Comment by doreen gan: Such disclosure would be a disadvantage to the competitive position of an intelligence company.Comment by doreen gan: Too many things going on in a sentence and is rather
Answered Same DayJan 09, 2021

Answer To: Timeliness of financial reporting University of Westminster Westminster Business School W1592755...

Akansha answered on Jan 11 2021
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Timeliness of financial reporting
University of Westminster
Westminster Business School
W1592755
Current Themes of Accounting
Contents
Introduction-Background    3
Literature Review    4
Research Objectives and Research Questions    11
Research Design    12
Data collection and analysis    14
Timescale    15
References    16
Topic: "Does the timeliness of the financial reporting made by listed companies’ impact their share price in emerging markets like Malaysia?
Introduction-Background
An important qualitative characteristic of financial reports identified by Imam, Ahmed and Khan (2001) is the timeliness of financial statements.This criterion is especially important for public listed companies as investors need timely and reliable information to make correct decisions for their investments in the stock markets. Malaysian Accounting Standard Board (MASB) emphasizes that the usefulness of financial statements is impaired if they are not available to users within a reasonable period after the balance sheet date
An essential feature of any financial report is the timely publication of the statements. This characteristic is the mos
t important for all public listed companies because the investors do need information that is reliable on time so that they can make proper investment decisions regarding stock markets. Certain businesses from the emerging market have a tendency to publish their financial reports at a sedate pace due to lax enforcement and lose its worth in the market. On the contrary, developed capital markets such as the United States of America (USA) do not face such problems due to the intricate and strict financial reporting standards they have to comply (Ahmad BaharulUlum, 2013).
The main reason for this article is to test whether disclosure theory applies to emerging managers' discretionary choices when issuing financial statements in emerging capital markets. The purpose of the report is to check whether timeliness of financial reporting affects its share prices in the emerging markets or not. Its contribution is to extend a work of the Owusu-Ansah (2000) with a focus on particularly selected variables to cover the disclosure theory of the proprietary prizes, information prize savings, moreover relative impacts of favorable and adverse news (Binti Abu Bakar and Rosbi, 2014). This paper reacts to the empirical test requirements for discretion in the disclosure policy, in particular, to test relevant theories in a different context than the US. Growing literature on corporate governance issues exists; the discussion of the function of directors in the process of publication has not been thoroughly explored.
Literature Review
The literature on the timeliness and impact factors of the company's annual financial reports has been studied around the world. Company size, as well as operational complexity is used to explain the timeliness. Within the year 1960 to 1974, timeliness of reports from 210 industries listed on the New York Stock Exchange (NYSE) improved (Mohd Kamal, 2013). Givoly and Palmon (1982) point out the type of the industry and their traditions as the reasons of reporting delays. Majority industries in the country tend to announce the bad news with a delay and vice versa because they perceive that the market reaction would be different in case of late and early disclosures. The study by Givoly and Palmon was supported by Abdulla (1996) as he contributed with empirical evidence regarding the characteristics of the timely financial reports. He confirmed that there exists a negative association between the timeliness of the reports and a company’s size, distributed dividends and profitability.
Mrzygłod and Nowak (2013) conducted a study with the listed companies of New Zealand and found that the sample population took around 4 months more after the year end in order to make financial reports and publish it to their shareholders. The authors examined the relationship between four of the company attributes and the observed reporting delay of the listed companies. The variables that were tested were number of shareholders, industry type, company age and the length of the annual report. But none of the variables was strongly related to the auditor’s signature lag (Mrzygłod and Nowak, 2013). Moreover, the findings suggest that fuel and energy sector companies were reporting on time along with financial industries.
American Accounting Association views timeliness as the qualitative characteristic of helpful information (Olbrys, 2013). Additionally, Olbrys (2013) stated that framework of accounting standards set by IASB considered timeliness as the characteristics of determining timeliness. This variable is particularly significant for listed businesses because investors require time and reliable data to make the right decision for their investment in the stock market. If such information is delayed by the preparer, it would result into higher market inefficiencies and related problems (PikHar and Wei Chih, 2016).
In a company, there are circumstances where an employee could be taking up two roles; managing director and chairman of the board of directors. Such situation raises concerns between the management of a company and could be view from two perspectives. Representatives of the agency theory argue for the separation of both roles to provide the necessary controls and balance of management performance (Mohd Kamal, 2013). In addition, if the Chief Executive Officer is also working as a Chairman, then management functions may be jeopardized. This is because the Director-General will be able to assess board meetings, select program items and select the Board members. An alternative argument is that role-sharing is not critical because many companies are well controlled by combined tasks and have strong opinions that are fully capable of providing reasonable control. With linked task, it enables CEOs to transcend their job scope by shaping the company to achieve its set goals with minimal interference.
Additionally, when the task is linked, the CEO can be able to shape a company to achieve the set goals, as there will be less interference (Ahmad Baharul, Ulum, 2013). Their arguments are based on stewardship theory, in which manager’s act in the best interests of society and shareholders, and the duality of roles increases the effectiveness of counseling (Ahmad Baharul, Ulum, 2013). Thus, we can say that experts who favor dual roles are based on the stewardship theory. This is in contrast to the agency theory which considers executives as opportunistic shirkers. The theory of stewardship has a more positive perspective by seeing the director as a guardian of corporate assets and wanting to do the best for society. Therefore, combined roles would not be a problem. Moreover the tasks if allocated systematically between the Bureau and the CEO would enhance the quality of monitoring along with reduced detention benefits and improved reporting. In the Malaysian context the duality of roles in listed companies is not particularly common, but the potential impact on disclosure is considered a good test.
Segment reporting is done by reporting financial information of an entity according to the divisions. The Malaysian Accounting Standards Board (MASB) defines segment information as information about different types of business products and services and their activities in different geographical areas. Segment reporting in Malaysia was compulsory in 1987. In the past, this disclosure was only voluntary, since the 1965 Act on Companies did not include any provision regarding the publication of segment reporting. Transnational and highly diversified companies are struggling to make larger segment information available in their financial statements. Different diversification activities of companies in different industries or in different geographic areas raised the question of whether aggregated accounting data is appropriate for companies comprised of different activities in different locations. While disclosure of segment information is beneficial, several arguments have been put forward against this publication around the world. Some arguments apply to all companies; others only apply in certain situations. One of the main arguments is that the higher costs of compiling, processing, and spreading segment information outweigh the potential benefits. However, the most important argument is that disseminating segment information is likely to benefit existing or potential competitors. Such disclosure would be a disadvantage to the competitive position of an intelligence company. Competitive disadvantage can be said to be an event which deprives a company having competitive advantage as a part or whole. It is any activity or an opportunity which confers an advantage on other parties leading to increased costs to be borne by the company considering the competitors in the market.
According to the Starbiz (2012), industry experts agreed that failure to release audited reports on time by listed companies is unacceptable. The publication of financial reports on time depends almost majorly on the time period taken for the audit process. This is because the reports are only issued after the conclusion of the audit process. Without the audited reports, financial statements cannot be publicly published for internal or external stakeholders to view. The length of audit is a determinant of timeliness and plays a dynamic role when it comes to announcing entity earnings. The audit delay is defined by Almosa and Alabbas (2007) as the length of the time from an end of the company's economic year to the date of an audit report (Ahmad Baharul Ulum, 2013).
The Malaysian exchange has proposed to reduce the timetable for issuance of audited financial statements from four months to two months. With a shorter time frame, can the companies in Malaysia comply with the new requirements? The purpose of this paper is to study the extent of delays and audit delays in Malaysian listed companies and the factors associated with such delays (Binti Abu Bakar and Rosbi, 2014). Timely reporting helps reduce the adverse effects of the moral hazard as well as the effects of the adverse selections (Mrzygłod and Nowak, 2013). It represents voluntary decisions related to company disclosure or can also be used to test the theory of the disclosure decision. All other things being alike, it may be predictable that every company will disclose data as fast as possible to ignore adverse selections. It is expected that favorable news may be reported before the adverse news (Mrzygłod and Nowak, 2013). The buyer does not necessarily interpret the retained information as an adverse message because the additional proprietary cost may be a favorable message. In this case, all buyers of the company’s stock can discount the company’s value to the management by assuming the worst case (Albetairi, Kukreja and Hamdan, 2018).
According to Diamond (1985) it is best to disclose more to prevent any speculation from investors and brokers. By doing so, it allows one to reduce the overall information cost to improve Pareto. The analysts are informed better; their forecast converges as well as there are threat-sharing advantages. But company dynamics might affect the release of data. Depends on entering game scenarios, businesses that are less afraid of probable...
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