Article Abstract:
A study was conducted to examine how firms determine the proper level of aggregation in segmental disclosures which are monitored by competitors as well as players in the capital market. This undertaking requires trading off the benefits of conveying information to the capital market regarding the value of the firm against the disadvantages of assisting the competitor. The constructed model indicated that a firm with full reporting flexibility reacts to the segment reporting decision through conditioning of the reporting decision on its private information about the two segments. On the other hand, the Financial Accounting Standards Board (FASB) has suggested segment definitions according to the ex ante stochastic properties of the activities. Under the FASB definition, the activities included in the model are to be reported as one segment because the two activities have similar stochastic properties given similar permanence of earnings series.
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Article Abstract:
A study was conducted on 808 financially troubled firms from the years 1984-1991 to investigate the possible influence of auditor incentives in decisions to release going-concern disclosures to financially-distressed client enterprises. A model is designed that will reflect the auditor's going-concern disclosure as a function both of the client business' financial conditions/prospects and variables linked with the auditor's loss function including prospective audit fees, the duration of the auditor-client relationship, recent auditor litigation, client losses and the existence of previously disclosed evidence of going concern difficulties. Results do not seem to support the contention that auditors' going-concern disclosure decisions are methodically influenced by certain incentive factors that were included in the study.
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Article Abstract:
The degree of institutional investor ownership has a functional relationship with security price changes defined at corporate earnings disclosure dates. Institutional investors monitor large companies and use vital resources for information research. Thus, they contribute to and influence the information production cycle. Percentage institutional ownership and security price differences are positively related at earnings announcements after size limitations. This follows from ownership concentration which reduces price information before announcements. This situation may be caused by the presence of investors in the information market, capital market structures for trading or other economic variables.
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