Managerial ability and fair value accounting: evidence from nonfinancial firms

Bradley, Wray; Sun, Li

doi:10.1108/jfra-08-2020-0229

Cited by 5 publications

(4 citation statements)

References 49 publications

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“…Untuk mengembangkan studi mengenai relevansi nilai informasi akuntansi, penelitian ini meneliti relevansi nilai pengukuran nilai wajar aset nonkeuangan. Nilai wajar dianggap lebih mampu mencerminkan kondisi nilai ekonomi (Barth et al, 1995;Zyla, 2020;Bradley & Sun, 2021). Nilai wajar dapat menggambarkan nilai pasar aktual.…”

Section: Pendahuluanunclassified

Peran Tata Kelola Perusahaan Dalam Meningkatkan Relevansi Nilai Pengukuran Nilai Wajar Aset Nonkeuangan

Pratiwi,

Tangkau,

Tala

2023

Jurnal Maneksi

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Accounting information is one of many information that is used in making decisions by investors. Accounting information has value relevance when the information raises investor reactions, meaning that the information is used for decision-making that affects stock prices. This study aimed to examine the value relevance of earnings, book value of equity, and fair value measurement of non-financial assets, along with the role of corporate governance in increasing the value relevance of that information. This study used 18 companies listed on the LQ45 index on the Indonesia Stock Exchange (IDX) during 2018-2022. Moderated Regression Analysis (MRA) was used as an analytical tool to test the relationship of research variables. The results showed that earnings, book value of equity, and fair value measurement of nonfinancial assets had value relevance. Corporate governance was found to play a role in improving the value relevance of earnings and the fair value measurement of non-financial assets. The existence of corporate governance was able to reduce agency conflicts and provide assurance that information has been presented fairly to investors thereby increasing value relevance.

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Section: Pendahuluanunclassified

Peran Tata Kelola Perusahaan Dalam Meningkatkan Relevansi Nilai Pengukuran Nilai Wajar Aset Nonkeuangan

Pratiwi,

Tangkau,

Tala

2023

Jurnal Maneksi

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“…In general, fair value research remains relevant with recent research examples including Badia et al. (2017), Griffith (2020), and Bradley and Sun (2021).…”

Section: Literature Review Theoretical Framework and Hypothesis Devel...mentioning

confidence: 99%

“…Goncharov et al (2014) stated "this increased discretion can compound agency costs, leading auditors to increase their assessment of reputation risk, litigation risk, or both and, consequently, their efforts to verify fair value estimates," and it is important to note prior research views audit fees as an agency cost (Goncharov et al, 2014;Jensen & Meckling 1976). In general, fair value research remains relevant with recent research examples including Badia et al ( 2017), Griffith (2020), and Bradley and Sun (2021).…”

Section: 1mentioning

confidence: 99%

Fair value hierarchy, bargaining power, and audit pricing across audit firms’ client portfolios

Clark

Vagner

Ward

2022

J Corp Accounting Finance

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This study explores how the presence of Level 2 and/or 3 fair value assets (FVA_23) influences audit pricing across small and large clients for Big-4 and non-Big-4 audit firms. Through analysis of 7918 firm-year observations, we investigate whether companies with FVA_23 incur higher audit fees than companies without FVA_23 and the differences between how Big-4 and non-Big-4 firms price risk for large and small companies. Our theoretical basis is product differentiation and economic importance, which suggest competing influences on audit fees based on firm and company size. We are the first to analyze the effect of FVA_23 on audit fees with the United States sample including all industries during a stabilized regulatory period, and we are the first to explore the effect of FVA_23 on audit pricing across small and large audit clients for Big-4 and non-Big-4 firms. We find companies with FVA_23 incur higher audit fees than companies without FVA_23. More specifically, we find small and large companies realize different audit fees compared to companies of similar size without FVA_23. Additionally, Big-4 and non-Big-4 firms price audits with FVA_23 differently than audits without FVA_23. Furthermore, Big-4 and non-Big-4 audit pricing is influenced by FVA_23 differently based on company size.

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“…From a research perspective, it should be noted that most of the research conducted in the field of managerial ability, such as the research of Yan et al (2021); Bradley and Sun (2021); Chen and Chen (2020); Rashidi (2020) and Jabbarzadeh Kangarluie and Radi (2019), it has sought to quantitatively examine the relationship between this variable and other variables in the financial field, and less research has sought to link the relationship between quantitative and qualitative characteristics to the effect of managerial ability on protecting shareholders' interests to develop theories related to behavioral sciences in accounting from a practical point of view, it should be noted that in Iran, over time, along with improving the level of operational transparency, many efforts have been made to improve the performance of the company and managers against stakeholders, including the Corporate Governance Law of 2007; Publication of internal control report in 2012; Establishment of an audit committee in 2011 and, most importantly, the ranking of companies in terms of the quality of disclosure in 2014.…”

Section: Introductionmentioning

confidence: 99%

Managerial Ability and Investors Protect: Test of Stimulating Decision-Making Functions by Devil's Advocate Theory

Mohammadi

Gerayli

Shahri

et al. 2022

IJFIFSA

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The efforts of the developers of capital market laws and regulations over the past years have been aimed at increasing the level of information transparency to create more symmetry between companies and shareholders so that they can be more attractive to investors to invest in the stock market. But given the interplay of individual characteristics of corporate decision-makers with the interests of shareholders and investors, it seems that focusing on behavioral functions in the area of promoting managerial ability can more effectively lead to increased protection of shareholder interests. The purpose of this study is to investigate the effect of management ability on the protection of investors based on the development of the theory of the devil's advocate. Therefore, the present study, using the structural equation modeling approach and partial least squares analysis (PLS), while fitting the model's desirability, examined the impact of management ability on protecting investors. In this study, in order to measure the in-field variable, ie protection of shareholders' interests, a researcher-made questionnaire was created through meta-analysis with the participation of 15 research experts. Then the criterion of Demirjan et al ( 2013) was used to measure managerial ability as an exogenous variable in partial least squares analysis. The researcher-made questionnaire was sent to 142 CEOs of companies listed on the Tehran Stock Exchange, and finally, after many follow-ups, 105 questionnaires were completed and returned and used as a final sample for analysis. After ensuring the acceptable fit of the measurement and structural models of the research, according to the theory of the devil's advocate, the results showed that the ability of management has a positive and significant effect on protecting the investors. Managerial ability, as one of the specialized decision-making capacities, puts the company on the path of effective interaction with stakeholders and provides the ground for investors to Protect in companies' priorities to gain their trust.

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Managerial ability and fair value accounting: evidence from nonfinancial firms

Cited by 5 publications

References 49 publications

Peran Tata Kelola Perusahaan Dalam Meningkatkan Relevansi Nilai Pengukuran Nilai Wajar Aset Nonkeuangan

Peran Tata Kelola Perusahaan Dalam Meningkatkan Relevansi Nilai Pengukuran Nilai Wajar Aset Nonkeuangan

Fair value hierarchy, bargaining power, and audit pricing across audit firms’ client portfolios

Managerial Ability and Investors Protect: Test of Stimulating Decision-Making Functions by Devil's Advocate Theory

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