An analysis of the effect of mandatory adoption of IAS/IFRS on earnings management

This paper examines whether mandatory adoption of international accounting standards, IAS/IFRS, by French companies is associated with lower earnings management. In addition, the impact of six factors that may be related to earnings management level are also considered: the independence and the efficiency of the board of directors, the separation of roles of CEO and Chairman of the board, the existence of an independent audit committee, the existence of block shareholders, the quality of the external audit and the listing on foreign financial markets.Based on a sample of 353 French listed groups relating to the period 2003–2006, our results show that the mandatory adoption of IAS/IFRS is associated with a reduction in the earnings management level. In addition, the independence and the efficiency of the board of directors, the existence of an independent audit committee, the existence of block shareholders, the quality of the external audit and the listing on foreign financial markets are important factors for enforcement of IAS/IFRS in France. Mandatory adoption of IAS/IFRS has decreased earnings management level for companies with good corporate governance and those that depend on foreign financial markets.     

Big data tools for Islamic financial analysis

Behavioural science states that emotions, principles and the manner of thinking can affect the behaviour of individuals and even investors in their decision making on financial markets. In this paper, we have tried to measure the investor sentiment by three means of big data. The first is based on a search query of a list of words related to Islamic context. The second is inferred from the engagement degree on social media. The last measure of sentiment is built, based on the Twitter API classified into positive and negative directions by a machine learning algorithm based on the naive Bayes method. Then, we investigate whether these sensations and emotions have an impact on the market sentiment and the price fluctuations by means of a vector autoregression model and Granger causality analysis. In the final step, we apply the agent‐based simulation by means of the sequential Monte Carlo method with the control of our Twitter measure on Islamic index returns. We show, then, that the three social media sentiment measures present a remarkable impact on the contemporaneous and lagged returns of the different Islamic assets studied. We also give an estimation of the parameters of the latent variables relative to the agent model studied.     

Promoting knowledge sharing in Tunisian KIFs through HRM Practices. The mediating role of human capital and learning climate

Abstract

Although human capital and learning climate have been considered in the SHRM Literature as two critical predictors of organizational success, little efforts have been made to examining their role in knowledge sharing. Our research aims at filling this gap. Using data from 203 knowledge workers in seven Tunisian KIFs, our study provides evidence, on a first level, for a direct link between the five HR practices and knowledge sharing. On a second level, we report a mediating role of human capital. In congruence with prior SHRM research, this result implies that the knowledge-based HR practices influence the value and uniqueness of the employees’ KSAOs, which in turn will improve their knowledge sharing behavior. On a third and final level, our results suggest that learning climate plays a mediation role as well. Such a result echoes recent research findings that confirmed the importance of learning climates in shaping employees’ behaviors toward achieving specific organizational objectives. Our findings provide important insights on the intermediary mechanisms between HRM practices and knowledge sharing behavior in KIFs and offer interesting research perspectives on the under-theorized role of human capital in a knowledge sharing context.     

Using design science to improve web search innovation in real estate

We analyze 14 leading real estate websites, seven residential and seven commercial. They exhibit limited demographic and geographic information systems (GIS) data display capability. They exhibit economic data display capability except one, and lack demographic, economic, and GIS data search capability. Real estate web searching is inefficient, time consuming, and inflexible. To overcome these limitations, we use design-science to create three search modes (Sc2, Sc3, and Sc4). Sc2 uses demographic data, Sc3 economic data, and Sc4 GIS data.     

A model of optimal portfolio selection under liquidity risk and price impact

We study a financial model with one risk-free and one risky asset subject to liquidity risk and price impact. In this market, an investor may transfer funds between the two assets at any discrete time. Each purchase or sale policy decision affects the rice of the risky asset and incurs some fixed transaction cost. The objective is to maximize the expected utility from terminal liquidation value over a finite horizon and subject to a solvency constraint. This is formulated as an impulse control problem under state constraints and we characterize the value function as the unique constrained viscosity solution to the associated quasi-variational Hamilton–Jacobi–Bellman inequality. We would like to thank Mihail Zervos for useful discussions.     

Former auditors on the audit committee and earnings management: Evidence from African banks

This paper investigates whether former auditors on the audit committee constrain earnings management through loan loss provisions. Based on an analysis of the annual reports of 82 African listed banks over the period 2011–2016, findings show that the presence of former auditors on an audit committee is associated with lower earnings management. This result suggests that audit committee members with auditing expertise and background contribute to effective monitoring of management’s accounting practices. Furthermore, results reveal that the reducing effect on earnings management of former auditors is strongest for directors who are unaffiliated with the bank’s current external auditor.