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.     

Accuracy, Bias, and Dispersion in Analysts' Earnings Forecasts: The Case of Cross-Listed Foreign Firms

This paper examines differences in analysts' earnings forecast characteristics for foreign incorporated non-U.S. firms cross-listed in the U.S. stock markets relative to a control sample of purely domestic firms. Examining summary earnings forecasts over the calendar years 1984 through 1989, this paper provides evidence that there are statistically significant differences in bias and accuracy between domestic and cross-listed foreign firms. Consistent with prior research, we find a horizon effect in accuracy; i.e., accuracy improves as we get closer to the actual earnings announcement for both types of firms. However, the differences in accuracy between the cross-listed and domestic firms persist only in the earlier forecast horizons where analysts' forecasts are less accurate for foreign cross-listed firms compared with domestic firms. The evidence is also consistent with analysts' exhibiting less optimism with respect to cross-listed foreign firms compared with the domestic firms. Finally, the paper also documents that there is a greater consensus among analysts for foreign cross-listed firms than for domestic firms.     

Stock price prediction using DEEP learning algorithm and its comparison with machine learning algorithms

Security indices are the main tools for evaluation of the status of financial markets. Moreover, a main part of the economy of any country is constituted of investment in stock markets. Therefore, investors could maximize the return of investment if it becomes possible to predict the future trend of stock market with appropriate methods. The nonlinearity and nonstationarity of financial series make their prediction complicated. This study seeks to evaluate the prediction power of machine‐learning models in a stock market. The data used in this study include the daily close price data of iShares MSCI United Kingdom exchange‐traded fund from January 2015 to June 2018. The prediction process is done through four models of machine‐learning algorithms. The results indicate that the deep learning method is better in prediction than the other methods, and the support vector regression method is in the next rank with respect to neural network and random forest methods with less error.     

Accounting Regulation in ASEAN: A Choice between the Global and Regional Paradigms of Harmonization

This paper analyzes accounting regulation in ASEAN countries in the context of the global and regional paradigms of accounting harmonization. It uses a comparative framework to highlight the similarities and differences in the regulatory environment of five ASEAN countries. The regional paradigm is discussed in the context of the ASEAN Federation of Accountants' efforts towards regional harmonization while the global paradigm looks at members countries' adoption of IASC standards. The paper examines forces driving global harmonization in ASEAN and discusses the economic and political conditions for regional harmonization which, unlike in the EU, do not yet exist in ASEAN. It concludes that this has led to the dominance of the global paradigm of harmonization in ASEAN countries.     

Evaluation of mobile services and substantial adoption factors with Analytic Hierarchy Process (AHP)

Emergence of new technological innovations in networks, platforms, and applications has enabled service providers to gain back their massive investment in their infrastructures. However, due to lagging adoption, many service innovations have failed to generate profit. The adoption of different mobile service categories depends on several factors. The current explorative study aims to use Analytic Hierarchy Process (AHP) to identify the most relevant mobile services for consumers and the factors driving the adoption. The results of the AHP analyses indicate that functionality of services is of utmost important for the majority of respondents. The results reveal that basic mobile communication services are the most preferred ones, although several services within different categories are available. The results have important implications for mobile network operators, service and application providers on how to develop and implement specific mobile services. The current study also offers new insights for researchers by showing that AHP is applicable to analyze consumers' preferences.     

Financial Disclosure Levels and Foreign Stock Exchange Listing Decisions

Firms are increasingly listing their shares on foreign stock exchanges. However, not all exchanges have had equal appeal. Anecdotal evidence suggests that when firms are making foreign listing decisions, they are influenced by financial disclosure requirements. As a result, regulatory authorities around the globe are weighing increasing demands for foreign capital and investment opportunities against the desire to protect domestic investors from possibly misleading foreign financial disclosures. The competitiveness of domestic stock exchanges often hangs in the balance.
This study examines a key question in this debate: whether firms' choices regarding alternative foreign stock exchange listings are influenced by financial disclosure levels. Examined are the listings of 302 internationally traded firms with at least one foreign listing, on one of nine major exchanges, as of year-end 1987. Also examined are changes in listings between 1981 and 1987, an important design feature since these changes are more likely to have been influenced by differences across countries in financial disclosure levels during this period. Financial disclosure levels are obtained from a survey of 142 experts actively involved in the foreign listing process.
Test results based on the cross-section of listings at year-end 1987 are consistent with the hypothesis that exchange choices are influenced by financial disclosure levels. However, they do not lend support to a second hypothesis suggesting that this effect should operate only for firms whose domestic disclosure levels are lower than those of a given foreign exchange. Tests based on changes in listings between 1981 and 1987 support both hypotheses. Overall, the results lend credence to concerns expressed by regulatory authorities and exchange officials that stringent disclosure levels could reduce access to foreign capital and foreign investment opportunities.     

A note on value relevance of mark-to-market values of energy contracts under EITF Issue No. 98-10

This paper examines whether marked-to-market values of energy trading assets and liabilities of companies that enter into energy contracts are related to market value of equity. The Emerging Issues Task Force of the Financial Accounting Standards Board ruled in November 2002 to ban the use of mark-to-market accounting for energy contracts out of concern that fair values can be easily inflated. We find that the excess of fair value over original value of energy trading assets and energy trading liabilities is not relevant for valuation. It may be inferred that fair values which are subject to management estimates and not verifiable are poor signals of worth and performance (Watts, R., 2003. Conservatism in accounting Part I: Explanations and implications. Accounting Horizons 17, 207–221).     

The Commercial Valuation of Danubius A Study of the Privatization Process in Hungary

As former East Bloc countries attempt to move from state-controlled to market economies they are privatizing their economic enterprises in large numbers. Privatization generally requires the valuation of erstwhile government-owned assets. This has definite accounting and financial reporting implications particularly if the business entity hopes to attract capital from abroad. Foreign investors are likely to insist on financial information in a form that meets internationally acceptable norms before they provide capital to these businesses. This article looks at the case of a Hungarian company that has privatized recently. It describes the process from the managers' initial decision to 'go public' to the final issuance of the shares. It highlights certain practices that, while unusual by Western standards, are important components of the privatization process in Hungary. The Hungarian experience is of particular interest to other former East Bloc countries since Hungary is several years ahead of them on the road to privatization. Lessons learned from the Hungarian experience could assist them better manage their privatization programs. It provides financial managers and academics useful insights into the innovative vehicles for going public that are being developed by countries that have traditionally been perceived as being backward in their accounting and finance practices.