Corporate Financial Distress of Industry Level Listings in Vietnam

Vo, Duc Hong; Pham, Binh Ninh Vo; Hồ, Chí Minh; McAleer, Michael

doi:10.3390/jrfm12040155

Cited by 24 publications

(19 citation statements)

References 46 publications

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“…We do not consider the variable measuring activity which is present in the model of Altman (1968) as it has been found to be insignificant and industry sensitive (Altman 1968(Altman , 1993. Furthermore, this is also consistent with Vo et al (2019) and Ntoung et al (2020) who also predicted bankruptcy with the accounting-based variables of Altman (1968) but without the variable measuring activity. Altman (1968) used the market value of equity in the numerator of the variable, BVEQ/TL.…”

Section: The Input Variablessupporting

confidence: 89%

Do IFRS Promote Transparency? Evidence from the Bankruptcy Prediction of Privately Held Swedish and Norwegian Companies

Kainth

Wahlstrøm

2021

JRFM

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The purpose of our paper is to investigate whether any differences between International Financial Reporting Standards (IFRS) and local Generally Accepted Accounting Principles (GAAP) impact the transparency of financial reporting of non-listed companies through bankruptcy prediction. This contributes to extant research that has focused on the effects of IFRS adoption in the context of listed companies. For our investigation, we used logistic regression, well-established accounting-based predictors, and a sample of financial statements from privately held Swedish companies using IFRS, and Norwegian companies using Norwegian GAAP. The results indicate that financial statements made under IFRS may be better suited for bankruptcy prediction than those made under Norwegian GAAP. Our findings suggest that the use of IFRS could aid in increasing the informativeness of financial reports by promoting transparency and prevent managers of firms facing insolvency from engaging in creative accounting practices. Our results should, however, be applied with caution, as they may be due to the differences in characteristics across firms that are not captured by our research design. We leave this issue open to future research.

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Section: The Input Variablessupporting

confidence: 89%

Do IFRS Promote Transparency? Evidence from the Bankruptcy Prediction of Privately Held Swedish and Norwegian Companies

Kainth

Wahlstrøm

2021

JRFM

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“…In fact, this model has been proven to perform well across different country settings (Altman et al, 2017) and is widely used by practitioners and academics (e.g. Kainth and Wahlstrøm, 2021;Ntoung et al, 2020;Vo et al, 2019;Tian and Yu, 2017;Bodle et al, 2016;Appiah et al, 2015;Tian et al, 2015;Mansi et al, 2012). This study compares two predictions of company's financial conditions based on the Z-Score model, one using the financial statements prepared in accordance with the IFRS (2017-2019) and the other using the financial statements prepared in accordance with the Saudi accounting standards (2014-2016).…”

Section: Variables and Measurementsmentioning

confidence: 99%

Does the implementation of IFRS improve transparency regarding the company's financial conditions?: evidence from an emerging market

Ebaid

2022

PRR

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PurposeThis study aims to examine whether there are differences between financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and financial statements prepared in accordance with local accounting standards in terms of its ability to present the financial conditions of companies listed on the Saudi Stock Exchange as one of the emerging markets.Design/methodology/approachData on study variables were obtained from the published financial statements of 67 of listed companies in the Saudi Stock Exchange during the period 2014–2019. The study addressed the research hypotheses by using Altman Z-score model. Both the T-test and Wilcoxon rank test were used to investigate the significance of differences between the values of Z-score and the individual variables included in the model in the pre- and post-IFRS mandatory adoption periods.FindingsThe results revealed a decrease in the values of Z-score as well as the values of the individual variables included in the model in the period following the adoption of IFRS than it was before the adoption of IFRS, which indicates the ability of IFRS to show the financial conditions of companies more transparently than local accounting standards. However, the results of the T-test and Wilcoxon test showed that these decreases were not statistically significant.Research limitations/implicationsThis study has some limitations, including the small sample size as a result of the small size of the Saudi Stock Exchange, As well as the reliance of this study only on the Altman model with its five variables in assessing financial conditions without examining the impact of other factors that may affect the financial conditions of companies.Practical implicationsFinancial conditions of the companies have important implications for multiple parties such as management, government, investors and others as an early warning sign that enables them to take the necessary measures early before the actual bankruptcy occurs and what results in costs.Originality/valueAlthough assessing financial conditions of the companies is one of the basic uses of accounting information, this topic has not received sufficient attention as a means to test the benefits of adopting IFRS, especially in emerging markets such as Saudi Stock Exchange. This is the first study to examine the impact of adopting IFRS on the transparency of financial reporting in assessing financial conditions in Saudi Arabia.

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“…First, the declining market value of equity (MVE) indicates that the company is experiencing financial distress (Khaliq et al, 2014). This is appropriate with the results of research conducted by Binh et al (2018) and Vo et al (2019).…”

Section: Accounting Factorsmentioning

confidence: 99%

“…However, a few researches have dependent on market and macroeconomic variables to interpret and predict the change in the financial distress (Tinoco et al, 2018) or macroenomic only (El-Ansary & Bassam, 2019). Three factors, namely accounting, market, and macroeconomics, have been investigated for financial distress by Tinoco & Wilson (2013), Binh et al (2018), andVo et al (2019). Thus, the contribution of this paper is to enrich the empirical results of all factors -accounting, market, and macroeconomics, specifically in Indonesia.…”

Section: Introductionmentioning

confidence: 99%

Do Accounting, Market, and Macroeconomic Factors Affect Financial Distress? Evidence in Indonesia

Taufik

Sugianto

2021

TIJAB

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This paper aims to investigate the effect of accounting, market, and macroeconomic factors on financial distress. The investigations were expanded by constructing seven research models to simulate all factors. The research sample includes companies listed on the IDX from 2016 to 2020 which produce 1.710 data. This paper finds that retained earnings (RETA) and earnings (EBITTA) as part of accounting factors have a role in weakening financial distress and can be consistently tested in several research models. Equity (MVE) as part of the market factor weakens financial distress and is consistently tested. Although solvency (SOLV) was described as the company's ability to maximize debt, it is not consistently tested in several research models. Finally, it was found that deflationary conditions caused financial distress which represented macroeconomic factors. This paper makes a practical contribution to companies and governments to evade financial distress

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Corporate Financial Distress of Industry Level Listings in Vietnam

Cited by 24 publications

References 46 publications

Do IFRS Promote Transparency? Evidence from the Bankruptcy Prediction of Privately Held Swedish and Norwegian Companies

Do IFRS Promote Transparency? Evidence from the Bankruptcy Prediction of Privately Held Swedish and Norwegian Companies

Does the implementation of IFRS improve transparency regarding the company's financial conditions?: evidence from an emerging market

Do Accounting, Market, and Macroeconomic Factors Affect Financial Distress? Evidence in Indonesia

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