Perceptions and characteristics of financial statement users in developing countries: Evidence from Iran

We examine the perceptions and characteristics of users of corporate financial statements in Iran. We provide evidence based on a survey of seven different user-groups. Our results suggest that annual reports are regularly used as a basis for making investment and other economic decisions. As in many developing countries, users depend more heavily on information obtained from the published annual reports than on advice from stockbrokers and acquaintances or on tips and rumors. While respondents differed in their rating of the importance of different sections of the annual report, the overall results showed that they ranked the income statement, the auditors’ report, and the balance sheet as the three most important parts of the annual report (in that order). There is a weak level of consensus among bank loan officers, tax officers, and auditor groups about the importance of several information items. Most users believe that a delay in publishing annual reports, lack of reliability of the information, and lack of adequate disclosure are the main concerns with corporate financial reports in Iran. The evidence on Iran is relevant to other developing countries in the Middle East and beyond.     

Twitter investor sentiment and corporate earnings announcements

We examine the impact of firm-specific investor sentiment (FSIS) on stock returns for negative and positive earnings surprises. Using a measure constructed from firm-specific tweets, we find that FSIS has a greater impact on stock returns for negative relative to positive earnings surprises. We further show that the impact of FSIS is greater for firms whose valuation is uncertain and difficult to arbitrage. Moreover, we provide evidence of return reversals over post-announcement periods. Our results highlight the importance of FSIS around earnings announcements.     

Australian corporate collapse: The case of HIH Insurance

‘Australia's current financial reporting framework is recognised as amongst the world's best, but this obviously did not and cannot offer immunity from corporate failure’. There are numerous individual factors that can have and are having an impact on the reporting framework and should be addressed. Specifically, the auditor's role is to add credibility to the financial reports prepared and signed off by the company's directors and to provide a high level of assurance that the financial reports are free from material misstatement. Auditors may be unfairly or harshly judged for not foreseeing the collapse and warning the market and shareholders. In some instances there are clear cases of complacency on the auditors' part or outright negligence on the part of the auditor. The HIH Insurance collapse in 2001 has significantly influenced the audit profession, especially in the area of audit independence, audit committee and the legal liabilities of auditors and this case leads to a number of lessons that need to be learnt regarding the audit profession and the responsibilities of auditors.     

The relationship between tourism,foreign direct investment and economic growth: evidence from Iran

Tourism is one of the world's largest industries and an increasingly important source of foreign currency that is used to finance economic growth. The purpose of this study is to examine the long-term and short-term relationships between tourism and economic growth in Iran, by using annual data covering the 1985–2013 period and autoregressive distributed lag and the Error Correction model to examine the relationships between variables. The findings showed that there is a positive relationship between tourism expenditure and economic growth in the long term and short term. The result indicate that there is also positive relationship between the real effective exchange rate (REER), foreign direct investment (FDI) and economic growth. The Granger causality test shows a bidirectional causality running between tourism expenditure and economic growth.     

Tourism demand: a panel data approach

This paper estimates the coefficients of the determinants of international tourism demand for the period 1995–2014 in the USA using the gravity framework. The analysis is based on a panel dataset of tourist arrivals among 14 countries using autoregressive distributed lag methods. The results show real gross domestic product, consumer price index, real exchange rate and certain specific events have a significant impact on international tourism demand. The income elasticity suggests that tourism is non-luxury goods, and prices and real exchange rate have negative relation to tourist arrivals. We also find that tourism transport infrastructure is a significant determinant of tourist arrivals into USA. This implies that infrastructure to reinforce taste formation is important to attract more international tourists to USA. In addition, results also suggest implications for public and private tourism authorities.     

Financial statements in less developed countries： What do preparers demand？

This study reports on an empirical investigation of the characteristics, attitudes, and beliefs of preparers of external financial reports in a less developed country. The basic research instrument consisted of a questionnaire in two parts： the first addressing attitudes of professional accountants toward annual financial reports generally; the second, more specifically measuring the importance of the information items to preparers. Our results suggest that the independent auditor is the most influential group in decision-making processes. As in many developed countries, the auditor＇s report and the regulatory framework are considered to have a major influence on financial reporting practices. Preparers believe that a lack of knowledge of external users＇ needs and lack of reporting standards and accepted accounting principles are the main concerns with corporate financial reports in Iran. The results showed that the balance sheet, auditors＇ report, and income statement in that order are the three most important parts of the annual reports.