ORCID Profile
0000-0001-6064-3110
Current Organisations
University of Dhaka
,
Holmes Institute
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Publisher: Emerald
Date: 31-08-2010
DOI: 10.1108/03074351011070251
Abstract: The purpose of this paper is to examine the nature and extent of instability of capital asset pricing model (CAPM) beta in a small emerging capital market. Inter‐period as well as intra beta instability are examined. Inter‐period instability is examined by Mann‐Whitney z‐scores and Blume's regressions. Intra‐period beta instability is examined using Bruesch‐Pagan LM test and Chow break point test. Robustness tests are performed applying time‐varying parameter models. Beta instability increases with increase in holding (s le) periods. There is evidence of inter‐period as well as intra‐period beta instability. Analysis of the full eight‐year interval reveals a very high incidence of beta instability, namely, about 26 per cent of the in idual stocks tested and about 31 per cent of in idual stocks have structural break. The extent of beta instability does not significantly decline when corrected for non‐synchronous trading and thin trading as represented by Dimson beta. However, the extent of beta instability is similar to that of developed market. Time‐varying parameter model under Kalman filter approach using AR(1) specification performs better than any other models in terms of in‐s le forecast errors. Dominance of AR(1) approach suggests that stock betas in DSE are time varying, and shocks to the conditional beta have some degree of persistence which ultimately reverts to a mean. This result is in contrast to the findings of Faff et al. revealing the dominance of Random Walk specification in Australian market, suggesting that shocks to stock beta in Australian market persist indefinitely into the future. These contrasting findings may indicate that beta instability in different markets and for different stocks in the same market are of different nature and different models may be suitable for different markets and different stocks in the same market in capturing the time‐varying nature of beta coefficients. This study covers only 110 stocks of Dhaka Stock Exchange. It can be extended to include more stocks. The study can also be done in other developing markets. While the issues of beta instability have been extensively explored for developed markets, evidence for emerging markets is less readily available. The present study contributes to the emerging market literature on beta instability by investigating the extent of beta instability and its time‐varying properties in Dhaka Stock Exchange (DSE), Bangladesh. Understanding the systematic risk behaviour of in idual stocks in DSE is important for both local and international investors. With the saturation of investment opportunities in developed markets due to their high integration, and with the enhanced deregulation and liberalization of emerging economies, emerging financial markets like DSE provide suitable and a relatively safe investment environment for international investors and fund managers seeking global ersification for better risk‐return trade‐offs. When most of the world markets declined during the recent global financial crisis, stock prices in DSE experienced a continuous rise. This makes it more interesting as an emerging market to study beta instability.
Publisher: Emerald
Date: 14-09-2015
DOI: 10.1108/JAAR-05-2013-0038
Abstract: – The purpose of this paper is to examine the effect of audit quality on firms’ compliance with IFRS for goodwill impairment testing and disclosure. Differences in the compliance among the clients of Big-4 auditors and between the clients of Big-4 and non-Big-4 auditors are examined. This study also examines the effect of audit committee (AC) members’ accounting and finance backgrounds on firms’ compliance with IFRS for goodwill impairment testing and disclosure. – Different univariate tests, multivariate regressions and fixed effect panel regressions have been used to examine the hypotheses. The s le includes 911 firm-year observations for the period of 2006-2009. – A statistically significant difference in compliance levels has been found between the clients of Big-4 and non-Big-4 auditors. The compliance levels of the clients of Big-4 auditors have also been found to be significantly different. The findings also suggest that AC members’ accounting and finance backgrounds are positively associated with firms’ compliance with IFRS for goodwill impairment testing and disclosure. – The single country context and the single standard context limit the generalizability of the findings. – The findings of this study have important implications for researches in accounting, finance and corporate governance that usually consider Big-4 auditors vs non-Big-4 auditors as a proxy for audit quality. The results also reinforce the importance of developing institutional mechanisms such as high-quality auditing or corporate governance (AC members’ expertise) to encourage firms’ compliance with IFRS. – Firms’ compliance with IFRS for goodwill impairment testing is not essentially the same for the clients of all Big-4 auditors in Australia, suggesting that the quality of services provided by Big-4 auditors significantly differ from one another in enforcing their clients to compliance with IFRS. The lax enforcement on the part of auditors and the regulatory inaction in this regard may point to teething difficulties and systematic deficiencies in the move towards the impairment regime and fair value accounting. The findings also bear an important message for the move towards the harmonization of accounting practices.
Publisher: Emerald
Date: 06-03-2017
DOI: 10.1108/IJAIM-02-2016-0018
Abstract: This study aims to examine the impact of the recent regime change in accounting for goodwill, from the systematic periodic amortisation to the impairment testing, on the frequency and the extent of goodwill write-offs in the context of Australia. It also examines the impact of the change from the amortisation approach to the impairment approach on the value relevance of older goodwill. The authors approach the first research question by comparing the actual amount of goodwill impairment charge by the s le firms with the minimum “as if” amortisation charge that would have been required under the amortisation regime. The authors approach the second question using a modified Ohlson model (1995), similar to Bugeja and Gallery (2006). The s le consists of 911 firm-year observations with the number of observations in the particular year being 238, 242, 220 and 211 in 2009, 2008, 2007 and 2006, respectively. The findings suggest that the adoption of the impairment approach has decreased the frequency and the amount of goodwill write-off. The goodwill impairment amount is substantially less than the “as if” amortisation amount that would have been required under the amortisation regime. The results also suggest that older goodwill is now value-relevant, whereas goodwill purchased during the current year is not value-relevant. One reason for this may be that AASB 3: Business Combination allows for the provisional allocation of the purchase price to goodwill to be allocated to other identifiable intangible assets latter on. Hence, during the year of business combination, investors do not form a firm view of the amount of goodwill arising out of the business combination. This study uses data for the first four years since the inception of the impairment approach. The findings of this study have important implications for the fair value accounting debate. The discretions allowed the managers under the impairment approach to improve the information content of goodwill. The relatively low levels of goodwill impairment even during the 2008-2009 global financial crisis contradict to the apprehensions found in the literature that managers will use the goodwill write-off as a tool for downward earnings management. The findings also imply that if managers are allowed with adequate flexibility through accounting standards rather than stipulating some systematic and mechanistic rules, the information value of the accounting measurement may improve. The findings feed into the debate of “rule-based” versus “principle-based” accounting standards and favours the “principle-based” accounting standards. The findings also contribute to the accounting measurement literature by concluding that if allowed with discretionary choices, managers may not always opt for the conservative accounting measurements (such as, recording goodwill write-offs). Adopting an alternative approach, this study shows that the fair value accounting for goodwill has resulted in an optimistic approach to goodwill write-offs. It has also improved the information content of reported goodwill. This is the first known study addressing the research questions in consideration after the adoption of the goodwill impairment approach.
Publisher: Emerald
Date: 25-02-2014
DOI: 10.1108/JAOC-02-2011-0008
Abstract: – This study aims to examine the impact of the 2008-2009 global financial crisis (GFC) on Australian firms' compliance with IFRS 36/AASB 136 for goodwill impairment testing. It also examines the factors associated with the cross-sectional variations in the compliance levels. – Based on a survey of disclosure notes in companies' annual reports, firm-level compliance scores were developed and further analysed applying quantitative statistical methods. – The findings suggest that firms' compliance has increased during the GFC compared to the PCP. There was no significant intra-period change in the compliance levels during the PCP. Firms belonging to goodwill intensive industries show greater compliance levels than firms in other industries. Audit quality is also a significant determinant of firms' compliance with IFRS for goodwill impairment testing. Goodwill intensity is a significant determinant of firms' compliance level during the GFC but not during the PCP. Firm size is associated with the compliance levels when the industry effects are not controlled for. When the industry effects are controlled for, the effect of size on firms' compliance levels disappears. Profitability is also associated with firms' compliance with IFRS for goodwill impairment testing. However, firms' leverage ratio is not significantly associated with compliance levels. – This is the first known study to examine the issue of compliance with IFRS for goodwill impairment testing in the context of the GFC and the PCP.
Publisher: University of Wollongong Library
Date: 2015
Publisher: Informa UK Limited
Date: 21-04-2022
Publisher: University of Wollongong Library
Date: 2020
Abstract: Purpose: We examine the earnings management behaviour of Australian firms during the Global Financial Crisis (GFC) and the effectiveness of audit quality and audit committee characteristics in mitigating such behaviour. Design/methodology/approach: The s le consists of 503 firm-year -observations spanning from 2006 to 2009. The years 2008 and 2009 are considered as the global financial crisis period. Discretionary accruals have been used as the proxy for earnings management. To test the hypothesis, we apply multivariate fixed effect regression to test the hypothesis. As the robustness test, we use propensity matching score, to find out comparable clients audited by Big-4 and Non-Big-4 audit firms to control observations to mitigate the effect of selection bias. Findings: We find that the s led firms engage in a significantly higher level of earnings management during the GFC compared to the pre-crisis period (PCP). We find that audit quality, in terms of being audited by Big4 auditors, constrains earnings management during the PCP, but not during the GFC. Audit committee independence has a significant mitigating effect on firms' earnings management, while audit committee members' accounting and finance expertise do not constrain earnings management. Research limitations/implications: Future research can include a larger s le and examine the effects of other corporate governance variables on earnings management during periods of macroscopic shocks. Practical implications: Our findings support the importance of having independent directors in the audit committee. Moreover, the fact that Big4 auditors do not constrain earnings management during the GFC although constraining it during the PCP implies that regulators and policy makers should concentrate more on the audit committee for effective mitigation of earnings management during periods of macroeconomic shock. Originality/value: A key policy implication of the findings is that regulators and standard setters may need to shift their focus from the quality of a firm's auditor to encouraging well-functioning audit committees. The specific action to promote audit committee effectiveness includes mandating independence.
Publisher: Informa UK Limited
Date: 02-01-2022
Publisher: Emerald
Date: 10-08-2023
DOI: 10.1108/JAOC-09-2022-0131
Abstract: This study aims to examine the strategies that auditors in Bangladesh follow in identifying and reporting key audit matters (KAMs). The study also examines the factors affecting auditors’ strategies in the identification and disclosures of KAMs. The authors have conducted interviews with audit partners, chief financial officers (CFOs) and regulators involved in KAMs reporting and monitoring. The authors have used the lens of institutional theory of coercive, mimetic and normative isomorphism and the concept of decoupling. Auditors have used a decoupling strategy by identifying and reporting greater number of industry-generic KAMs than that of other countries in an effort to minimize risks and avoid regulatory scrutiny, although they disclose remote risks as KAMs and mask severe problem areas of the client. Because of the principle-based approach of International Standards on Auditing (ISA) 701 and because of the pressure and misunderstanding from the audit committee, auditors report industry-generic items and generic descriptions of KAMs. The findings have important implications for the standard setters and local and global audit firms for the diffusion of new auditing standards in different jurisdictions. Without the development of audit firm-level capability and the corporate governance environment, changes in standards may not be effective in achieving the objectives of the standards. Although auditors consider that the KAMs reporting requirements provide with opportunities to enhance audit profession’s legitimacy and public trusts, the actual KAMs reporting practices are driven by the market logic, an urge to maintain the status quo with clients and eventual rationalization of the impairment of professional independence. Given the dearth of prior research on the implementation and diffusion patterns of ISA 701 KAMs reporting, this study fills the gap in the literature. To the best of the authors’ knowledge, this is the first known study to examine auditors’ strategic responses to balance among conflicting priorities in reporting KAMs.
Publisher: Wiley
Date: 03-08-2022
DOI: 10.1002/JCAF.22587
Abstract: In this study we have examined if audit committee characteristics in terms of audit committee members’ gender, audit committee members’ accounting and finance backgrounds, audit committee members’ industry expertise and audit committee members’ legal expertise affect the number and content characteristics of KAMs reported. We examine the issue based on a s le of 1112 firm‐year‐observations and 3013 KAMs spanning for the period 2017–2020. We use multivariate regression models to examine the research questions. We also use a variety of other specifications for robustness test. Our findings suggest that female audit committee members reduce the number and lengths of KAMs. Our results further suggest that auditors disclose more specific information, identify more firm specific KAMs and produce more readable KAMs in the presence of female members in the audit committee. We find similar results for audit committee members’ accounting and finance backgrounds and audit committee members’ industry expertise. However, audit committee members’ legal expertise reduces disclosure specificity, readability, and lengths of KAMs. Our results suggest that the audit committee strength/ ersity affects the number and content characteristics of KAMs disclosure. This study makes a unique contribution by showing that audit committee characteristics affect the content specificity and idiosyncrasy of KAMs disclosed by external auditors. Moreover, this study supports the previous findings in the UK context that audit committee characteristics affect the number and readability of KAMs. Given the global adoption of ISA 701, evidence from current study will add to the global effort to understand the determinants of KAMs reporting practices. For regulators this study contributes by showing that audit committee members’ ersity affects the content characters of KAM.
Publisher: Emerald
Date: 04-09-2023
Publisher: Emerald
Date: 08-2013
Publisher: Emerald
Date: 02-11-2015
Publisher: Emerald
Date: 06-06-2016
Abstract: This paper aims to critically analyse the content of the assurance statements of corporate sustainability reports to examine the degree to which assurance statements enhance and uphold organisational transparency and accountability to stakeholders. This framework of content analysis draws on a research instrument developed by O’Dwyer and Owen (2005), as well as the most recent assurance guidelines (Global Reporting Initiative) and standards AA1000AS, 2008 and ISAE 3000. Due to the lack of stakeholders’ engagement in the assurance process, due to the scope limitation placed on the assurance engagement and due to the reluctance of the assuror to address the assurance statements to the stakeholders groups, sustainability assurance practice cannot be considered as the accountability enabler. With persistent focus on internal systems, process, data generation and data capture, assurance practice is serving more as an internal control tool than as a social accounting/auditing instrument. A single country context is studied. However, to the extent that assurances are conducted using common sets of assurance standards and guidelines, there is external validity of the findings. Despite the institutional initiatives by the global and local institutions regarding social and environmental sustainability reporting and assurance, the assurance practice has not yet emerged as a tool of social accountability. This study provides a comprehensive and up-to-date empirical assessment of the degree to which the sustainability assurance practice encompasses the issue of stakeholders’ interests and forms the potential basis for policy implications to the assurance practice and to the assurance standard setting process.
Location: Australia
No related grants have been discovered for Md Khokan Bepari.