• The Journal of Economics, Marketing and Management
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• v.3 no.3
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• pp.1-6
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• 2015

Quality auditor and auditors of larger firms have a positive effect on profit is unusual. The auditors smaller negative effect on profit companies profit is unusual. Change to larger audit shows the quality of earnings and to respond more investors positive changes in income and increased costs and reduced profitability is less negative price changes. Similarly, switching to a smaller auditor confirms the low quality of earnings, resulting in a negative response to the market. In this article market reaction (response investors) the quality of the audit and the auditor were studied in the Tehran Stock Exchange. in general, information about companies in capital market accounting to investors and the capital market is considered to be valuable.

• 산업혁신연구
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• v.36 no.1
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• pp.133-163
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• 2020

This study is designed to see whether overpriced IPO is caused from firm's earnings management, and how effects this to IPO firm's long-term performance. To examine addressed above, we take a look into how firm's earning quality listing on Korea Exchange in 2007 through 2016 is related with long-term stock performance post IPO. Especially, we measure how associated the disparate ratio between offer price and fair price with earnings quality and long-term performance. To examine these three factors, 'three-step mediated regression analysis method' is used. Earnings quality's calculated by discretionary accruals. Disparate ratio is calculated with offer price and estimating share price's rate measured by applying relative valuation model. To sum up, it is as follows. At first, as earnings quality gets high, the disparate ratio between offer price and fair price gets reduced. Secondly, as earnings quality gets high, firm's long term stock performance follows high. At last, as the disparate ratio between offer price and fair price gets increased, firm's long-term stock performance gets decreased. Moreover, mediation effect of the disparate ratio between offer price and fair price is partially found. Thus, it addresses that raised earnings revision before listing is resulted in overpricing of the IPO, and it also leads to poor long term stock performance. This study contributes that empirical analysis is applied to examine long-term under performance using disparate ratio between offer price and fair price. Moreover, this is useful not only to alert investors to risky investing pattern, but to provide informative reference to financial institutions in making policies or decisions about IPO.

• Management & Information Systems Review
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• v.37 no.4
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• pp.1-20
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• 2018

This study aimed to examine earnings quality of firms selected as Global Champs project which has been promoted by the government since 2013 to support small and medium sized enterprises, for the screening year(t-1) and selected year(t). Earing quality is measured as the value of discretionary accruals estimated by Dechow et al.(1995) adjusted Jones model and Kothari et al.(2005) model, respectively. I analyze the differences of earning quality between the Global Champ firms and the paired firms selected through criteria of the similar total assets and the same industry in the screening year and the selected year. This study is motivated by the needs of measurement of the performance of the Project from the accounting transparent point of view. As the results of this study, major findings are summarized as follows. Firstly the earnings quality of the selected firms was lower than that of the paired firms. This can be explained as a result of motivation of earnings management by companies eager to meet the requirements to be selected for the Project. Secondly, in the selected year, the earnings quality was proved to improve, comparing to the screening year. This can be explained by the efforts of companies to reinforce management innovation and transparent management, which in turn led to positive effects on the earnings quality. These findings were found to be consistent in the additional analyses, where the earning quality of the reconstructed sample with only selected companies was compared for the screening year and the selected year, based on the year before the screening year(t-2).

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2002.05a
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• pp.476-480
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• 2002

The theory of constraints (TOC) has become a valuable system in modern operations management. Using the ideas and methods of the TOC, companies can achieve a large reduction of work-in-process and finished-goods inventories, significant improvement in scheduling performance, and substantial earnings increase. The purpose of this paper is to calculate the optimal size of the time buffer which is used to accommodate disruptions in production processes and provide maximum productivity of capacity constrained resources. After the problem formulation in terms of single server queueing model, we observed the system behavior by sensitivity analyses.

• Management & Information Systems Review
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• v.38 no.2
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• pp.67-81
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• 2019

In accordance with K-IFRS 1109, financial instruments are classified to amortized cost (AC), fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVPL). And disposal gains are prohibited to be recirculated for net income when FVOCI financial instruments would be sold in the future, so-called recirculation prohibition. This research investigates whether accumulated other comprehensive income of available-for sale financial assets(AFS) under K-IFRS 1039, could affect reclassified amounts to the FVPL securities from the AFS securities. Also, this study investigates the effects of the reported income on the reclassified FVPL, because CEOs are likely to try earnings management when net income is predicted to be less than target or is low, comparing other firms. As a result of empirical analysis, first, I find that accumulated other comprehensive income of the AFS has a positive impact on the reclassified FVPL. Second, level of reporting income has no significant impact on the reclassified FVPL. Third, interaction effects are significantly positive on the firms which have more other comprehensive income and less level of reported income. Fourth, the effects of the bank and securities are more distinct than those of the manufactures. This study is the first research to investigate earnings management through AFS at the timing of the first adoption of K-IFRS 1109. Empirical results of this study provide evidence of earnings management on the reclassification of FVPL which gives meaningful implications to regulators, academic researchers and auditors.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.1
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• pp.29-36
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• 2020

Stock price multiple is one of the most well-known equity valuation technique used to forecast equity price. It measures by multiplying "the ratio of stock price to a value driver" by a value driver. The value driver can be earning per share (EPS), sales or other financial measurements. The objective of price multiple technique is to evaluate the value of assets and compare how similar assets are priced in the market. Although stock price multiple technique is common in financial filed, studies on the application of the technique in Thailand is still limited. The present study is conducted to serve three major objectives. The first objective is to apply the technique to measure value of firms in banking sector in the Stock Exchange of Thailand. The second objective is to develop composite price multiple index to forecast equity prices. The third objective is to compare valuation accuracy of different value drivers of price multiple (i.e. EPS, Earnings Growth, Earnings Before Interest Taxes Depreciation and Amortization, Sales, Book Value and Composite Index) in forecasting equity prices. Results indicated that EPS is the most accurate value drivers of price multiple used to forecast equity price of firms in baking sector.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.1205-1215
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• 2021

The study's purpose is to assess how board chairman tenure (BCT) contributes to limiting the earnings management practices (EM) in Iraqi banks. We compare the direct influence of the corporate governance mechanisms (CG) on EM practices and use BCT as a moderator that affects the influence of CG on EM. The sample of the study is the financial' firms listed on the Iraqi Stock Exchange for the period 2013-2018. Using purposive sampling data was collected from annual reports and data stream. We use the random effect model in panel data regression by using Stata to analyze the data. Findings proved that CG mechanisms insignificantly influence EM, except the meeting frequency was significant. By contrast, BCT had a positive and considerable influence as the moderating variable between CG and EM. These results suggested that the Chairman's tenure on the board lead to enhanced governance mechanisms to limit the EM practice in Iraqi financial firms. Accordingly, this study is one of the few studies in the Iraq environment that examine the influence of CG mechanisms on EM practices, in addition to examining the BCT as a moderator between CG and EM, thus, filling the gap in such studies in developing countries.

• Knowledge Management Research
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• v.20 no.4
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• pp.119-129
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• 2019

This paper is aim to test how market orientation is related to the investment decision making. After controlling for firm-specific factors, this study finds a significantly positive relationship between market orientation and R&D expenditures, especially firms with high ratio of intangible assets and low ratio of abnormal inventory assets. Under conditions of low quality of earnings, the negative relation between market orientation and R&D expenditures is enhanced in electronic related industries. This indicates that the relation between market orientation and R&D expenditures may exhibit more reasonable patterns for investment decision of firms in technology driven business environment.

• Management & Information Systems Review
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• v.34 no.5
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• pp.277-293
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• 2015

Mutual Savings Banks generally have weaker governance structure than other financial institutions, so the possibility of earnings management by owner-largest or managements of mutual savings banks is higher than other financial institutions. This study examines the relationship between corporate governance and quality of internal control of financial reporting. If the expropriation of minority shareholder hypothesis holds, we predict that the larger block shareholder in mutual savings banks, the weaker the internal control system by more likely the opportunistic earnings management by bank managers. On the other hand, under the convergence of interest hypothesis, we predict that the larger block shareholder in mutual savings banks, the stronger the internal control system by reduction in agency costs as owner-manager's holdings increases, and there a negative relationship is expected between internal control weakness and the holdings of the owner-largest shareholder. We find that mutual savings banks with higher owner-largest shareholder equity has significant positive relations with their internal control of financial reporting material weakness. This result suggests that the greater owner-largest shareholder equity, the more likely the opportunistic earnings management, so that decrease quality of internal control. This paper extends the literature on financial institutions corporate governance to verify whether governance system, especially, owner-largest and quality of internal control has significant positive relations.

• Management & Information Systems Review
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• v.32 no.1
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• pp.63-85
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• 2013

This study tries to investigate the fundamental implications inherent in inventory asset information(specifically, unexpected inventory investment) by analyzing how the relationship between unexpected inventory investment and future operating performance. And we study how is the response of the stock market participants to the fundamental implications inherent in inventory asset information. Prior papers often assume the efficient market and they view the significant relation between stock prices and financial indicators as evidence of the contribution of such indicators to future earnings. Leading indicators are attracting the market's attention for equity valuation. We study whether one leading indicator (unexpected Inventories) forecasts future earnings, and whether market participants fully reflect the predictive ability when they sets share prices(Mishkin test, 1983). Our empirical results of the study are summarized as follows. Current unexpected inventory investment is negatively associated with future operating performance. Also, our evidence is that the stock market participants overprice the contribution of unexpected inventory investment when predicting future earnings. Furthermore, a hedge strategy that uses the overpricing gives significant future abnormal returns. The overall results help the users of financial reports, researchers of accounting, and the accounting principle setting body.