Asheq Rahman

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Papers by Asheq Rahman

Goodwill Relevance and Disclosure Practice in Vietnam

SSRN Electronic Journal, 2015

Business acquisitions have become a common practice and goodwill values reported by firms in Viet... more Business acquisitions have become a common practice and goodwill values reported by firms in Vietnam have gradually increased in both absolute terms and relative to reported total assets. This study examines goodwill and goodwill reporting practices of 69 Vietnamese firms reporting goodwill in their balance sheet over a five year period, 2008-2012. In contrast to the general view that investors in emerging countries are less likely to use accounting numbers due to their lack of knowledge and expertise, the market association test in this study shows that goodwill and its amortization are empirically relevant for market equity valuation. However, a disclosure analysis shows that the purpose of goodwill disclosures by most groups in Hochiminh Stock Exchange are likely to meet the reporting requirements, rather than to provide useful information to financial statement users. The level of disclosure compliance is also found to be unevenly distributed, with large-cap firms mainly having meaningful and effective disclosure. Further, the amortization policies and goodwill write-off policies are vague. Lastly, the findings suggest that the mandatory reporting framework is not very effective.

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Trends in Accounting and Auditing in New Zealand

Inside the “Black Box” of Ownership Structures in Russia: Evidence from Stock Price Synchronicity

Journal of International Accounting Research

Ownership structure, an important feature of corporate governance, acts as a determinant of the o... more Ownership structure, an important feature of corporate governance, acts as a determinant of the opacity of firms. This study penetrates the “black box” of the ownership structures of Russian corporations, identifies their salient features, and examines the effects of those features on the information environment (stock price synchronicity) of the corporations. Examining a sample of companies listed on the Moscow Exchange, we find that stock price synchronicity is: (1) positively associated with divergence between control and cash-flow rights of the ultimate owner; (2) negatively associated with the ownership concentration of the ultimate owner; (3) negatively associated with companies controlled indirectly by the state through holding corporations with the presence of oligarchs; and (4) negatively associated with firms with transparent oligarchs. Analyzing the economic impact of the results, we find the presence of non-transparent oligarchs and foreign-offshore holdings has the most...

Firm life cycle and the disclosure of estimates and judgments in goodwill impairment tests: Evidence from Australia

Journal of Contemporary Accounting & Economics

Audit effort, materiality and audit fees: evidence from the adoption of IFRS in Australia

Accounting Research Journal

Purpose This paper aims to investigate the association between International Financial Reporting ... more Purpose This paper aims to investigate the association between International Financial Reporting Standards (IFRS) effort due to higher levels of material adjustments and audit fees. In addition, this paper tests whether these associations differ between industry specialist auditors and non-specialist auditors. Design/methodology/approach The authors measure IFRS effort by using differences between local GAAP and IFRS. More specifically, they measure the differences in the balances of accounts that are prepared under IFRS as opposed to the previously used Australian Accounting Standards Board (AASB) standards. They posit that higher material adjustments and more risk to fair presentation of financial statements require additional accounting and auditing effort (“IFRS effort”). Findings The authors find that audit fees are higher when accounting standards are more material and complex at an aggregate level. Nevertheless, not all standards are equally complex and/or material and not al...

Web-based impression management? Salient features for CSR disclosure prominence

Sustainability Accounting, Management and Policy Journal

Purpose The purpose of this paper is to identify the web-based features of corporate social respo... more Purpose The purpose of this paper is to identify the web-based features of corporate social responsibility (CSR) disclosure that play a role in making CSR information prominent to investors and give the information better recognition for investment decisions. Design/methodology/approach The authors posit a positive association between the company’s capital market performance and the web-based features used for CSR disclosure by the company. The authors argue that the more effective the feature is in enhancing the prominence of CSR information, the higher is the share turnover and market value of shares of a company, and the lower is its share prices’ bid-ask spread. Five specific web-based features, namely, the location, accessibility, medium, variety and extent of disclosure are identified as features used for web-based CSR disclosure. The research framework is drawn from Brennan and Merkl–Davies’ (2013) impression management strategies and Merton’s (1987) “investor recognition hyp...

Do Gender Diversity Recommendations in Corporate Governance Codes Matter? Evidence from Audit Committees

AUDITING: A Journal of Practice & Theory

Motivated by two opposing views, the limited supply view and the discrimination view, we examine ... more Motivated by two opposing views, the limited supply view and the discrimination view, we examine the impact of gender diversity guidelines on the strength of the association between the presence of female audit committee members and audit quality. The limited supply view predicts that the effect of female audit committee members on audit quality would decrease after the guidelines were issued because they increased the demand for women directors without a commensurate increase in the supply of qualified women directors. The discrimination view predicts this relation would increase after the guidelines were issued since some firms would have abandoned their suboptimal hiring practices that favored men over better qualified women, resulting in higher quality firm-director matches as opportunities for women increase. Consistent with the limited supply view, we find that the positive association between audit committee gender diversity and audit quality weakened after gender diversity g...

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Islamic ethical values of corporate top leadership and real earnings management

International Journal of Law and Management

Purpose This paper aims to study the roles of Muslim CEO, Muslim Chairman and Muslim board of dir... more Purpose This paper aims to study the roles of Muslim CEO, Muslim Chairman and Muslim board of directors in mitigating earnings management via real activities manipulation. Design/methodology/approach In total, 656 firm year-observations from 2007 to 2014 of Malaysian Top 100 firms listed on Bursa Malaysia is used to examine the relationship between real earnings management (REM) and the religious ethical values of Muslim top leadership of the firms. Findings The study provides evidence that there was no significant relationship between ethical values and REM measures among Muslim top corporate leaders. However, through additional analysis on sub-sample firms, this study finds that Muslim CEO and Muslim Chairman have a significant and negative association with proxies of REM: RCFO and RPC. Research limitations/implications The results show that Muslim CEO and Muslim Chairman are the actors that contribute more control in limiting REM especially in family-owned firms in Malaysia. Orig...

Government-Linked Investment Companies and Real Earnings Management: Malaysian Evidence

International Journal of Financial Research

This study examines the association between government-linked investment companies’ (GLICs’) shar... more This study examines the association between government-linked investment companies’ (GLICs’) shareholdings and real earnings management activities in Malaysia. Consistent with prior research, this study uses three proxies to measure real earnings management; abnormal cash flow from operations (RCFO), abnormal production costs (RPC), and abnormal discretionary expenses (RDE). This study segregates GLICs’ shareholdings into two categories; Federal Government Pension Investment Funds (FGPIF) and other GLICs (OFGLIC). Using a sample of 213 firm-year observations of Malaysian government-linked companies from 2010 to 2015, this study finds that FGPIF is a more effective monitoring mechanism than OFGLIC in limiting real earnings management. The findings also show that there is a significant and negative relationship between Employee Provident Fund (EPF), Khazanah Nasional Berhad (Khazanah), Permodalan Nasional Berhad (PNB) and RCFO and RPC. The evidence suggests that these three are the mo...

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The Association between Goodwill Impairment Loss and Goodwill Impairment Test-Related Disclosures in Australia

SSRN Electronic Journal

From totalitarianism to capitalism - the case of IFRS adoption in Vietnam

Accounting & Finance

“Problem” directors and audit fees

International Journal of Auditing

How Does the IASB Use the Conceptual Framework in Developing IFRSs? An Examination of the Development of IFRS 16 Leases

Journal of Financial Reporting

We examine how the International Accounting Standards Board (IASB) used the Conceptual Framework ... more We examine how the International Accounting Standards Board (IASB) used the Conceptual Framework for Financial Reporting (Framework) in developing the new lease accounting standard International Financial Reporting Standard (IFRS) 16 Leases. We report three major findings in this paper. First, while the IASB used the Framework concepts to justify new lease accounting requirements, it also used an outside-the-Framework notion to justify a requirement. Second, accommodating constituents' demands, it introduced rules in IFRS 16 to mitigate their concerns relating to high implementation costs. Third, there are instances where the IASB did not apply appropriate concepts to justify lease accounting requirements. These findings have implications for setting IFRSs.

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Experience of Audit Committee Members and Audit Quality

European Accounting Review

The Australian Accounting Standards Review Board (RLE Accounting)

... r Five develops Rahman&#x27;s preferred theoretical model by examining the nature of tory... more

Frequency of Corporate Announcements via Stock Exchange Web Sites and Market Efficiency

Journal of Accounting, Auditing & Finance

Abstract Continuous corporate reporting is gaining prominence in the current real-time reporting ... more Abstract Continuous corporate reporting is gaining prominence in the current real-time reporting environment. This has added a new dimension to corporate reporting, the frequency with which firms report their material information. The purpose of this study is to assess the impact of frequency of online material information disclosures on market efficiency. Our measure of frequency of online material information disclosures is the monthly frequency of corporate announcements via stock exchange Web sites. Our ...

Corporate Network Centrality Score: Methodologies and Informativeness

Journal of Information Systems

This research proposes a Corporation Network Centrality Score (CNCS) that exploits the social net... more This research proposes a Corporation Network Centrality Score (CNCS) that exploits the social network implicit in Twitter interactions that are relevant to capital markets. The CNCS is the eigenvector network centrality score for interactions about corporations. The CNCS provides a summary numeric metric that captures a wide range of market-relevant information about the corporation it represents. The study asserts that the CNCS will assist the monitoring of corporations by auditors, regulators, and other market participants. The research calculates the CNCS for Standard & Poor's (S&P) 1500 firms and then tests the robustness of the metric by regressing CNCS on a set of variables that are known to convey firm fundamentals information to the capital markets. The study finds that CNCS is strongly associated with firm-led disclosures, market-based firm characteristics, and accounting-based firm fundamentals information. JEL Classifications: M41.

The role of corporate governance in accounting discretion under IFRS: Goodwill impairment in Australia

Journal of Contemporary Accounting & Economics

We appreciate the constructive comments of the editor and the anonymous reviewer. We also thank t... more We appreciate the constructive comments of the editor and the anonymous reviewer. We also thank the participants at 2015 AFAANZ Conference, Auckland Region Accounting conference 2014 and Auckland University of Technology seminar for their comments on earlier versions of this paper. The role of corporate governance in accounting discretion under IFRS: Goodwill impairment in Australia Abstract A major concern with the adoption of International Financial Reporting Standards (IFRS) is the accounting discretion allowed under the IFRS, and its potential opportunistic use by managers. We examine the role of corporate governance in the accounting discretion inherent in goodwill impairment decisions under the IFRS. More specifically, we investigate whether, in Australia, stronger governance strengthens associations between economic factors and goodwill impairment loss but weakens associations between contracting incentives and goodwill impairment loss. Using data from 2007 to 2012, we find evidence consistent with the notion that stronger governance enhances the associations between economic factors and goodwill impairment loss. However, we find that strong governance cannot completely eliminate the opportunistic use of discretion in an impairment decision, especially when pre-impairment income is negative, and when the impairment occurs in the first year of a CEO's tenure. Our results are robust with regards to alternative measures of the dependent variable, firm performance variables, and the governance variable, even after controlling for potential self-selection biases.

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Asia Pulp & Paper: a balanced balance sheet?

Emerald Emerging Markets Case Studies, 2016

Subject area International business, Accounting and Finance. Study level/applicability Undergradu... more Subject area International business, Accounting and Finance. Study level/applicability Undergraduate and Postgraduate levels (advanced financial accounting, international accounting, other accounting and business courses with an international setting. Case overview The case uses the Asia Pulp & Paper Company’s (APP) entry into the international debt market to highlight the consequences of different business practices between the East (in this case, Indonesia) and the West. On the one hand, it shows that APP was set up as the “front” to access international debt capital; on the other, it reveals the naïvety of Western lenders who parted with their funds without conducting a thorough background research on the financial viability of the company they invested in. The APP debacle is a poignant reminder for market participants and business/accounting students that the divergence of the business settings across countries can make business contractual arrangements tenuous and corporate fin...

Audit failure of New Zealand finance companies – an exploratory investigation

Pacific Accounting Review, 2016

Purpose The setting of private finance companies that failed in New Zealand during 2006-2012 was ... more Purpose The setting of private finance companies that failed in New Zealand during 2006-2012 was characterized by weaker corporate governance and enforcement of securities law. This paper aims to explore audit failure in this setting and examine whether auditors erred in their audits of the failed finance companies and whether the audit failure rate of Big N auditors was different from that of non-Big N auditors. Design/methodology/approach This paper adopts the archival research method and uses three sets of evidence to assess audit failure – the frequency of going concern opinion (GCO) prior to failure, misstatements in the last audited financial statements, and the violation of the Code of Ethics. Findings The study finds that only 41 per cent of the sample companies received the GCO in their last audit prior to failure and provides evidence of material misstatements in the financial statements of a number of failed finance companies that received clean audit opinions prior to fa...

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