/jurnalpengurusan Sat, 08 Oct 2022 20:31:54 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.1 /jurnalpengurusan/article/international-financial-reporting-standards-and-financial-information-quality-principles-versus-rules-based-standards/?utm_source=rss&utm_medium=rss&utm_campaign=international-financial-reporting-standards-and-financial-information-quality-principles-versus-rules-based-standards Sat, 08 Oct 2022 20:31:54 +0000 /jurnalpengurusan/?post_type=article&p=3791 The objective of the present study is to examine whether the adoption of International Financial Reporting Standards (IFRS) increases financial information quality. The IFRS brings about substantial changes in accounting standards. One of the prominent features of the system is that it results in the production of financial information of higher quality. Most extant studies in this area are performed at firm-level. The present study, on the other hand, examines the impact of IFRS adoption at the country-level. Environmental determinism theory states that accounting is a function of environmental variables, such as ownership structure, information environment and capital market condition. Therefore, the impact of IFRS adoption could be different across different countries. The present study addresses the existing lack of research that compares the outcomes of IFRS adoption between countries. Besides comparing the quality of financial information before and after the adoption of IFRS, the present study also compares the effects of IFRS adoption between countries with different accounting bases prior to the adoption. The results show that financial information quality, measured by five indicators, improves after IFRS adoption; and that the impact is more prevalent in a rules-based country compared to a principles-based country.

]]> /jurnalpengurusan/article/fair-value-accounting-and-the-cost-of-equity-capital-of-asian-banks/?utm_source=rss&utm_medium=rss&utm_campaign=fair-value-accounting-and-the-cost-of-equity-capital-of-asian-banks Sat, 08 Oct 2022 10:45:34 +0000 /jurnalpengurusan/?post_type=article&p=2497 The cost of equity is a measure of the required return by investors. It is desirable for firms, especially banks, to lower the cost of equity. There are a number of factors related to the quality of information disclosed that could influence the cost of equity. The accounting regulators aim to improve the quality of information by requiring assets to be valued at fair value. However the application of fair value accounting potentially increases information asymmetry, especially if fair value is estimated and subjected to the judgment of the preparers of financial statements. This asymmetric information problem potentially lowers the information quality and increases investors’ estimation risk and thus influences the cost of equity capital. Therefore, this research investigates the effect of fair value accounting on the cost of equity capital for a sample of Asian banks since banks hold a relatively larger proportion of assets at fair value. Using the generalized method of moment model for dynamic panel data, this research finds significant and positive relationship between assets at fair value and the cost of equity. The results found are similar for both quoted and unquoted assets. Thus although to regulators, fair value accounting provide relevant and timely information to investors, assets at fair value are perceived to be risky and as a consequence investors require higher returns.

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