Emerald | Journal of Accounting in Emerging Economies | Table of Contents

Exploratory Evidence on the Nature, Extent and Determinants of Disclosures in Libyan Banks’ Annual Reports.

Wed, 10 Oct 2012 00:00:00 +0100

Abstract

Purpose - The paper investigates disclosure practices in the annual reports of Libyan banks in the run-up to the opening of the nation’s first stock exchange. Banks dominate this embryonic market but very little research has examined the extent (or determinants) of transparency achieved by these firms, an issue argued by Stiglitz and others to be crucial in the post-crisis era. Currently, no detailed evidence of disclosure practices prior to the launch of the exchange exists, making an accurate assessment of the market’s impact in this area impossible; the present study therefore contributes in this regard as well.Design/methodology/approach - The study employs two main methods: (i) a disclosure index-based analysis of mandatory and overall disclosure levels; and (ii) panel regression analysis of the determinants of the overall disclosure levels.Findings - The results suggest that while many items are disclosed on a regular basis, on average barely more than half of all possible items appear in the annual reports. As regards compliance with mandatory requirements, the figures are higher but, worryingly, begin to fall as the launch of the market neared. The results of panel-data analysis suggest that the overall extent of disclosure is non-random, instead reflecting the profits achieved by the banks concerned.Originality/value - This paper is the first detailed analysis of disclosure practices in Libyan banks and the results suggest that market authorities should seek improvement in the figures, in particular the reversal of a downward trend in compliance with mandatory requirements. The paper reports a link between profit level and disclosure propensity; this evidence might be of use to regulators charged with increasing disclosure levels in the future. More generally, the results provide a comparative basis on which to assess, once the current political difficulties have ended, the effect of the market’s launch on disclosure practices in Libya.

SUCCESSFUL TURNAROUND STRATEGY: THAILAND EVIDENCE

Wed, 10 Oct 2012 00:00:00 +0100

Abstract

Purpose - This research seeks to determine the success of turnaround strategies adopted by corporations in Thailand following post-bankruptcy reorganization plans approved by the Thai Central Bankruptcy Court. Design/methodology/approach - The study uses a sample of 101 companies whose reorganization plans have been confirmed by the Thai Central Bankruptcy Court in the period 1999 – 2002, with performance measures to 2005. Findings - The results indicate that over a three year reorganization period successful companies were found to be most likely to adopt cost and expense reduction, company size reduction and disposal of non-core assets while operational strategies aimed at reconfiguring internal operations and systems were not likely to be associated with successful companies. Practical implications - The data suggests, subject to limitations, the selection of restructuring methods may differ between those companies which successfully reform and those which do not. Companies pursuing successful turnaround strategies where found most likely to adopt cost and expense reduction, company size reduction and disposal of non-core assets as significant operational strategy. Originality/value - Prior research in Thailand has not investigated turnaround strategy of successful and unsuccessful companies. The result of the study has practical significance as it provides information of use to regulators, management, lenders, creditors, practitioners, and investors. The prevailing economic conditions worldwide suggest the need for replication and continual refinement of research in this area not only in Thailand but elsewhere.

A model for effective board governance in Uganda’s services sector firms

Wed, 10 Oct 2012 00:00:00 +0100

Abstract

Purpose - The present study was carried out with the purpose of establishing a model of effective board governance in Uganda’s service sector firms.Design/methodology/approach - This study is cross-sectional. The analysis was conducted using Analysis of Moment Structures (AMOS) software on a sample of 128 service firms in Uganda. The perceived effective board governance in Uganda was measured by the perceptions of 128 respondents who are managers or directors in each of those service firms. Three confirmatory factor analysis models were tested and fitted.Findings - The three dimensional model of effective board governance in Uganda – consisting of control and meetings’ organization, board activity and effective communication – was determined to be the best fitting model. Evidence in support of relevant theories of board governance was adduced.Research limitations/implications - Although plenty of literature on corporate governance exists, there is scarce literature on effective board governance conceptualization and this together with imprecise terminology regarding this area may have affected our conceptualization of the study. Our study was limited to the service sector firms registered and operating in Kampala, Uganda and it is possible that our results are only applicable to this sector in Uganda. Nevertheless, policy makers of Uganda dealing with financial markets, academicians, company directors, company owners and even general readers interested in the area of effective board governance might find this paper handy. Practical implications - We believe that application of our model should improve the quality of board governance in Uganda and can also apply to other sectors of Uganda’s firms to help avert the problem of ineffective boards as evidenced by consistent firm failures in Uganda. By improving the quality of board governance, Ugandan boards will demonstrate their relevance in company direction and improvement of company value to the benefit of all stakeholders.Originality/value - The present study provides one of the few studies that have analysed with confirmatory factor analysis (CFA) using AMOS to test effective board governance measurement model and provides a benchmark for Uganda’s service firms yearning to leverage the use of their boards.

Factors That Influence Iranian Students’ Decision to Major in Accounting

Wed, 10 Oct 2012 00:00:00 +0100

Abstract

Purpose - The aim of this study is to explore whether there are statistically significant differences in the influence that various career-choice factors may have on a decision to choose accounting and non-accounting majors in Iran. The findings derived from this study could assist accounting educators and professional accounting bodies to understand the reasons why students may want to choose an accounting major. In this regard, the findings could help accounting academics and the policy makers in the accounting sector in Iran and in other similar countries develop appropriate strategies to attract proper students into the accounting programs and to recruit bright accounting graduates into the accounting profession.Design/methodology/approach - At the univariate level, t-tests of significant differences were performed in order to investigate the similarities and differences between the accounting and non-accounting students with respect to the importance placed on the career-choice factors. At the multivariate level, discriminant analysis was conducted in order to find out the important determinants of the choice of an accounting major. Moreover, t-test and ANOVA statistics were employed in order to explore whether differences in gender, age, and university affect each factor.Findings - The results reveal that the accounting students attach profound importance on financial and job-market factors and opinions of referents. Intrinsic factors, aptitude for and genuine interest in the subject, perception of the accounting course, and perception of the accounting profession are not found to have significant influence on students’ decision to major in accounting. Research limitations/implications - First of all, the research is based solely on domestic students in Iran. Other limitation of the current study is that it tries to address the perceptions of only first year students. Moreover, accounting and other business students were surveyed for the purpose of the current study as has been done in some of the prior research (e.g. Felton et al., 1994; Sugahara et al., 2008). However, students who have opted for a business degree are more profit oriented when compared to the students of non-business fields such as humanities, law, and psychology. Practical implications - It is expected that the findings of this study may assist accounting educators and policy makers to understand the reasons why students may want to choose an accounting major. In this regard, the findings are expected to help accounting academics and the policy makers in the accounting sector in Iran and in other similar countries develop more effective strategies to attract as many students as possible into the accounting profession.Originality/value - This study is unique in that it is the first empirical paper which explores Iranian students’ perceptions of the career-choice factors in pursuing an accounting major.