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Relationship Value, Trust And Supplier Retention In South African Automotive Supply Chains
Get PDFSuppliers have a particular role to play in assuring competitiveness in supply chains. This article investigates the relationship between first and second tier suppliers in automotive supply chains in South Africa. Automotive component suppliers (first tier suppliers to assemblers (OEMS) such as Toyota) should make an extra effort to retain their suppliers (second tier), particularly suppliers of strategic parts, to assure the best value adding by the suppliers in the highly competitive supply chain landscape. To assure best value from suppliers they need to be retained in an active trusting, long term, collaborative relationship. The more the customer trusts the supplier, the higher the perceived value of the relationship and the more likely parties will work together to retain the business relationship. The aim of this quantitative study amongst first tier suppliers is to obtain more insight into the relationships and the hierarchical correlation between the relationship value, trust and supplier retention in automotive supply chains in South Africa. With a regression analysis it was found that both trust and relationship value are substantial predictors of supplier retention, but trust is more important for supplier retention
Perceptions Of Corporate Social Responsibility In The Capital Market
Get PDFThis study investigates how capital market participants such as investors and financial analysts perceive corporate social responsibility (CSR) as improving earnings quality. Managers use CSR as a signal of future financial improvement, which causes companies to invest in CSR in the current period. An expectation of future financial improvement leads to increase in the quality of earnings because it curtails the incentive to engage in earnings management. In addition, CSR is a signal to increase the reputation of the firm. If a firm values its reputation, managers of a CSR firm would refrain from earnings management to avoid damage to its reputation. We use a sample of Korean listed companies for the period 2002–2011 and a proxy for CSR involvement based on the Korea Economic Justice Institute index. When we use earnings response coefficients (ERCs) to measure investors’ perceptions of earnings quality, we find that ERCs are higher for firms with engagement in CSR activity. Further, when we use the predictive ability of past earnings in forecasting future earnings to measure analysts’ perceptions of earnings quality, we find that the predictive ability of past earnings is higher when firms engage in CSR. Our results provide evidence that capital market participants perceive CSR as a signal of improved earnings quality
Do GAAP And IFRS Differ In Collectiblity Judgments Related To Revenue Recognition?
Get PDFThe goal of this study is to examine whether financial statement preparers may interpret the collectibility threshold differently given the differences in the prior definitions of “probable” in IFRS and GAAP. We conducted an experiment where participants were provided with either the IFRS or GAAP definition of “probable” and then asked to evaluate five short revenue recognition scenarios. We find that their judgments regarding collectibility of consideration did not differ across the IFRS or GAAP conditions. This study contributes to the prior accounting literature on interpreting vague verbal probability terms and expands this line of work to the arena of revenue recognition. Our results also provide insight for standard setter and policy makers in their efforts to achieve true convergence in accounting standards.
What Explains The Equity Risk Premium In ASEAN Countries?
Get PDFThis paper aims to mainly investigate the impact of the selected macroeconomic variables such as inflation (INF), gross domestic product (GDP), foreign direct investment (FDI) and stocks traded turn-over ratio (STTR) on equity risk premium (ERP) of six major ASEAN member countries such as Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. Applied methods are panel pooled regression and panel vector error correction model (VECM) through the latest version of Eviews9. In the former approach, among the selected macroeconomic variables, both INF and STTR significantly and positively affect the ERP. Both periods and years show to have fixed effects as dummy variables. One cointegration has been determined among macroeconomic variables and ERP suggesting a long term equilibrium association which led to employ Panel VECM. INF denotes a significant long-run relationship with ERP and the error correction term results suggest deviation of INF is a relevant factor but not the errors of liquidity as the STTR didn't show any significant impact in the model. Granger Casuality test suggests both INF and ERP do granger causes each other in the short run. Thus, inflation is a robust factor of ERP in two different methods while the STTR is not a robust as it shows different results.
Effects Of Firm Uncertainty On Association R&D Expenditure And Firm Performance: Evidence From Korea
Get PDFR&D expenditures not only improve competitiveness but also develop future growth engines. Previous studies have been conducted in relation to the relationships between R&D expenditures and individual corporate characteristics. We examine differences in the effects of firms’ R&D expenditures on firm performance (earnings persistence, earnings growth, firm value) among the firms’ uncertainty levels. In this study, 9,767 firm-year observations that settle their account end December listed on the Korea Stock Exchange (KSE) from 2002 to 2011 were empirically analyzed. The empirical findings of the study are as follows. First, R&D expenditures of firms with higher uncertainty levels had larger effects on earnings persistence than those of firms with lower uncertainty levels. Second, R&D expenditures of firms with higher uncertainty levels had larger effects on earnings growth than those of firms with lower uncertainty levels. Finally, the R&D expenditures of firms with higher uncertainty levels had larger effects on firm value than those of firms with lower uncertainty levels. Given these results. Both uncertainty and R&D expenditures can be regarded as being determined in the long term. We contribute to existing research in three main respects. First, reflecting firms’ uncertainty levels when analyzing the effects of R&D expenditures on firm performance (earnings persistence, earnings growth, firm value) is essential. Second, the characteristics of firms’ accounting and financial characteristics should be considered when determining R&D expenditures. Third, the fact that R&D expenditures affect firm performance according to firms’ uncertainty levels is helpful when managers make decisions on R&D expenditures
The Conversion From US-GAAP To IFRS And Transfer Pricing: Irreconcilable Differences
Get PDFPurpose - This paper aims to discuss the challenges the switch from US GAAP into International Financial Reporting Standards (IFRS) pose multinational companies (MNCs); to investigate the transfer pricing of intangible assets with several important trends in the global market; to analyze and discuss the impact of the conversion on intangible assets’ transfer pricing decisions; and to make recommendations to help alleviate problems associated with transfer pricing when switching to IFRS. Design/methodology/approach - The author addresses the conflicts between using the International Financial Reporting Standards and the transfer pricing policies as the multinational companies make the switch from using GAAP to the IFRS and propose some remedies to the related problems. Findings - Transfer pricing systems of MNCs should be carefully reviewed and updated because financial statement information is used and comparability of that information between tested parties and companies to which they are compared is critical to achieving a reliable analysis to help MNCs achieving their global strategic objectives. Research limitations/implications - This research focused on the significant implications on the American MNCs’ transfer pricing strategic decisions resulting from the adoption of the IFRS in general. Further research is still needed to examine the impact of the conversion process on both foreign subsidiaries and the MNC as a whole in different industries. Originality/value - The paper addresses an issue of significant implications on transfer pricing strategic decisions of intangible assets beyond financial reporting as a result of converting financial statements from U.S. GAAP to IFRS.
Electronic And Paper Document Retention And Auditors’ Responsibilities
Get PDFThe issue of the destruction of documents raises many ethical and legal problems for the auditing profession. Such an issue needs to be examined more closely to explore its ethical and legal implications, and to address the more technical issue of how to retrieve the destroyed electronic documents. The purpose of this research paper is twofold. The first is to examine the auditors’ ethical responsibilities regarding the retention of the electronic and paper documents related to an audit engagement, using the Enron case as a practical case for analysis. The second is to discuss methods of retrieving different types of destroyed electronic documents
Forecasting The South African Business Cycle Using Fourier Analysis
Get PDFA Fourier transform analysis is proposed to determine the duration of the South African business cycle, measured using log changes in nominal gross domestic product (GDP). The most prominent cycle (two smaller, but significant, cycles are also present in the time series) is found to be 7.1 years, confirmed using Empirical Mode Decomposition. The three dominant cycles are used to estimate a 3.5 year forecast of log monthly nominal GDP and these forecasts compared to observed (historical) data. Promising forecast potential is found with this significantly-reduced number of cycle components than embedded in the original series. Fourier analysis is effective in estimating the length of the business cycle, as well as in determining the current position (phase) of the economy in the business cycle
Addressing The Challenge Of Strategic Alignment Faced By Small And Medium-Sized Entities During The Selection Of Accounting Software Packages
Get PDFAlignment between an entity’s strategic business objectives and its information systems (ISs) has recently received research attention. Currently, small and medium-sized entities (SMEs) still face the challenge of successfully aligning their strategic business objectives with their ISs. Various small generic accounting software packages are available for purchase by SMEs. These accounting packages all have functionalities that enable SMEs to keep proper accounting records. However, due to their generic nature, these accounting packages do not always have sufficient functionalities to drive the SMEs’ strategic business objectives, resulting in IS misalignment. Not selecting the correct accounting software package will result in the accounting software not addressing the strategic business needs of the SME. The purpose of this study is to review and discuss the challenges faced by SMEs when selecting generic accounting packages and to develop a mapping between strategic business objectives commonly found within SMEs and software package functionalities that SMEs can refer to during the selection and implementation of new accounting software packages. This is accomplished on a non-empirical basis through a review of pertinent literature. In order for a SME to select the correct accounting software package, it is important that it invest time and effort in considering the software functionalities provided by the software package and map it against its strategic business imperatives to prevent failure of the package.
Social Presence And Cultural Competence In The Online Learning Environment (OLE): A Review Of Literature
Get PDFIn recent years growth in new technology has altered the way in which students interact with both teachers and classmates. Despite the high flexibility in online learning, Allen & Seaman (2011) explained that there is a higher dropout rate for online students as compared to a traditional classroom setting. It was found that there is lack of teacher-immediacy, teacher presence, and student interaction with teachers that may cause the high attrition rates (Martin et al., 2012). One university college of nursing has been able to combat this problem by introducing a follow-up process into the curriculum, supporting how faculty interact with each other and with their students