Accruals Management to Avoid The Current Ratio Falling Below One: An Empirical Analysis Among Nonprofits

2020 ◽  
pp. 089976402097767
Author(s):  
Lode Lancksweerdt ◽  
Tom Van Caneghem ◽  
Anne-Mie Reheul
Keyword(s):  
Nonprofit Organizations ◽  
Financial Reporting ◽  
Multivariate Regression ◽  
Working Capital ◽  
Multivariate Regression Model ◽  
Current Ratio ◽  
Accruals Management ◽  
Reporting Process ◽  
Different Types ◽  
A Current

This study examines the distribution of the current ratio among large Belgian nonprofit organizations (NPOs). A current ratio falling below one signals (potential) liquidity problems among different types of stakeholders. Consistent with managerial intervention to avoid the current ratio falling below one, we observe significantly more (fewer) observations meeting or just exceeding (falling below) the threshold of one than would normally be expected. This discontinuity around one disappears when considering the distribution of the “pre-managed” current ratio (i.e., the current ratio corrected for abnormal working capital accruals). The latter observation is consistent with managerial intervention in the financial reporting process to avoid the current ratio falling below one. The aforementioned findings are supported by a multivariate regression model revealing significantly higher abnormal working capital accruals for observations having a current ratio equaling or exceeding one, but a pre-managed current ratio falling below one.

scholarly journals A Current Evaluation of Independence as a Foundational Element of the Auditing Profession in the United States

2019 ◽  
Vol 13 (1) ◽  
pp. P17-P27
Author(s):  
J. Gregory Jenkins ◽  
Jonathan D. Stanley
Keyword(s):  
United States ◽  
Financial Reporting ◽  
The United States ◽  
Auditor Independence ◽  
Audit Committees ◽  
Client Relationships ◽  
Reporting Process ◽  
Regulatory Approach ◽  
A Current ◽  
The U.S

SUMMARY This paper summarizes '“Auditor Independence in the United States: Cornerstone of the Profession or Thorn in Our Side?”' (Church, Jenkins, and Stanley 2018). Their paper maintains that while the concept of independence is theoretically appealing, it is fraught with practical problems. Church et al. (2018) analyze the current oversight of auditor independence in the U.S. and the need for auditor independence from the perspective of various parties involved in the financial reporting process. In doing so, the paper discusses implications and challenges affecting one or more of these parties. Finally, Church et al. (2018) evaluate alternatives to the current regulatory approach of prohibiting various auditor client relationships to manage auditor independence. The paper concludes that increasing audit committees' responsibilities for monitoring auditor independence, along with additional disclosure about threats and safeguards to auditor independence, is worthy of further discussion and debate as a path toward addressing the auditor independence conundrum.

Factors That Influence Financial Performance

2019 ◽  
Vol 118 (5) ◽  
pp. 1-8
Author(s):  
Nursito ◽  
Yulianto Hadi ◽  
Dewi Puspaningtyas Faeni
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Debt Ratio ◽  
Working Capital ◽  
Current Ratio ◽  
Feed Industry ◽  
Livestock Feed ◽  
Net Profit ◽  
Asset Turnover ◽  
Equity Ratio

This study aims to test empirically the factors that affect financial performance: current ratio, debt ratio, debt to equity ratio, total asset turnover, working capital turnover and net profit margin on return on investment in subsector of livestock feed industry listed in Indonesia Stock Exchange during the period 2006-2015.

A Study On Comparison About Working Capital Management Of State Bank Of India And Industrial Credit And Investement Corporation Of India

Think India ◽  
2019 ◽  
Vol 22 (2) ◽  
pp. 251-276
Author(s):  
S. DEVI ◽  
R.POORNIMA RANI
Keyword(s):  
Main Theme ◽  
Managerial Accounting ◽  
Capital Management ◽  
Working Capital ◽  
Current Ratio ◽  
Efficient Operation ◽  
Working Capital Management ◽  
Satisfactory Level ◽  
Current Asset

Working capital management refers to a company's managerial accounting strategy designed to monitor and utilize the two components of working capital, current assets and current liabilities, to ensure the most financially efficient operation of the company. The goal of working capital management is to manage the firm’s current asset and current liabilities in such a way that satisfactory level of working capital is maintained. A study on comparison in working capital management with State Bank of India and Industrial Credit and Investment Corporation of India is analyzed to know the liquidity and current ratio. The interaction between current asset and current liabilities is therefore is the main theme of the theory of working capital management.

Women Involved in the Financial Reporting Process and Financial Reporting Quality

2017 ◽  
Author(s):  
Isabelle Allemand ◽  
Paul Andrr ◽  
Benedicte Brullebaut ◽  
Alain Schatt
Keyword(s):  
Financial Reporting ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Reporting Process

Auditor Independence in the United States: Cornerstone of the Profession or Thorn in Our Side?

2018 ◽  
Vol 32 (3) ◽  
pp. 145-168 ◽  
Author(s):  
Bryan K. Church ◽  
J. Gregory Jenkins ◽  
Jonathan D. Stanley
Keyword(s):  
United States ◽  
Financial Reporting ◽  
The United States ◽  
Auditor Independence ◽  
Audit Committees ◽  
Systematic Evaluation ◽  
Client Relationships ◽  
Reporting Process ◽  
Regulatory Approach

SYNOPSIS The objective of this paper is to provide a systematic evaluation of independence as a foundational element of the auditing profession. We maintain that while independence is a theoretically appealing construct, it is fraught with practical problems surrounding its implementation, monitoring, and regulation. We analyze the current oversight of auditor independence and evaluate the need for auditor independence from the perspective of information users and information producers. In the process, we discuss important implications and intractable challenges that affect one or more parties involved in the financial-reporting process. Finally, we carefully evaluate alternatives to the current regulatory approach for managing auditor independence (i.e., proscribing various auditor-client relationships). We conclude that increasing audit committees' responsibilities for monitoring the auditor's independence—along with additional disclosure about threats and safeguards to auditor independence—is worthy of further consideration and debate as a path toward addressing the auditor independence conundrum.

Does Recent Academic Research Support Changes to Audit Reporting Standards?

2016 ◽  
Vol 30 (2) ◽  
pp. 255-275 ◽  
Author(s):  
Jean Bédard ◽  
Paul Coram ◽  
Reza Espahbodi ◽  
Theodore J. Mock
Keyword(s):  
Financial Reporting ◽  
Academic Research ◽  
Financial Statements ◽  
Future Research ◽  
Research Support ◽  
The Public ◽  
Market Participants ◽  
Information Gap ◽  
Public Company ◽  
Reporting Process

SYNOPSIS The Public Company Accounting Oversight Board (PCAOB), the International Auditing and Assurance Standards Board (IAASB), and the U.K. Financial Reporting Council (FRC) have proposed or approved standards that significantly change the independent auditor's report. These initiatives require the auditor to make additional disclosures intended to close the information gap; that is, the gap between the information users desire and the information available through the audited financial statements, other corporate disclosures, and the auditor's report. They are also intended to improve the relevancy of the auditor's report. We augment prior academic research by providing standard setters with an updated synthesis of relevant research. More importantly, we provide an assessment of whether the changes are likely to close the information gap, which is important to financial market participants and other stakeholders in the audit reporting process. Also, we identify areas where there seems to be a lack of sufficient research. These results are of interest to all stakeholders in the audit reporting process, as the changes to the auditor's report are fundamental. Additionally, our summaries of research on the auditor's report highlight where there is limited research or inconsistent results, which will help academics identify important opportunities for future research.

scholarly journals Preliminary Study on Gold Recovery from High Grade E-Waste by Thiourea Leaching and Electrowinning

Minerals ◽  
2021 ◽  
Vol 11 (3) ◽  
pp. 235
Author(s):  
Nicolò Maria Ippolito ◽  
Ionela Birloaga ◽  
Francesco Ferella ◽  
Marcello Centofanti ◽  
Francesco Vegliò
Keyword(s):  
Sulfuric Acid ◽  
Leach Solution ◽  
High Grade ◽  
Gold Dissolution ◽  
Plastic Part ◽  
The Third ◽  
Current Consumption ◽  
Different Types ◽  
Preliminary Study ◽  
A Current

The present paper is focused on the extraction of gold from high-grade e-waste, i.e., spent electronic connectors and plates, by leaching and electrowinning. These connectors are usually made up of an alloy covered by a layer of gold; sometimes, in some of them, a plastic part is also present. The applied leaching system consisted of an acid solution of diluted sulfuric acid (0.2 mol/L) with thiourea (20 g/L) as a reagent and ferric sulfate (21.8 g/L) as an oxidant. This system was applied on three different high-grade e-waste, namely: (1) Connectors with the partial gold-plated surface (Au concentration—1139 mg/kg); (2) different types of connectors with some of which with completely gold-plated surface (Au concentration—590 mg/kg); and (3) connectors and plates with the completely gold-plated surface (Au concentration—7900 mg/kg). Gold dissolution yields of 52, 94, and 49% were achieved from the first, second, and third samples, respectively. About 95% of Au recovery was achieved after 1.5 h of electrowinning at a current efficiency of only 4.06% and current consumption of 3.02 kWh/kg of Au from the leach solution of the third sample.

GASB No. 34's Governmental Financial Reporting Model: Evidence on Its Information Relevance

2007 ◽  
Vol 82 (1) ◽  
pp. 205-240 ◽  
Author(s):  
Elizabeth Plummer ◽  
Paul D. Hutchison ◽  
Terry K. Patton
Keyword(s):  
School Districts ◽  
Financial Reporting ◽  
Default Risk ◽  
Balance Sheet ◽  
Cash Flows ◽  
Working Capital ◽  
Information Relevance ◽  
Net Assets ◽  
Accrual Basis ◽  
The Government

This study uses a sample of 530 Texas school districts to investigate the information relevance of governmental financial statements published under Governmental Accounting Standards Board Statement No. 34 (GASB No. 34). Specifically, we examine whether the new government-wide statements provide information relevant for assessing a government's default risk, and if this information is incremental to that provided by the governmental funds statements. GASB No. 34 requires governments to publish governmental funds statements prepared on a modified accrual basis, and government-wide statements prepared on an accrual basis. We find that GASB No. 34's Statement of Net Assets (similar to a corporation's balance sheet) provides information relevant for assessing default risk, and this information is incremental to that provided by the governmental funds statements. However, GASB No. 34's Statement of Activities (similar to a corporation's income statement) does not provide information relevant for assessing default risk. The accrual “earnings” measure is not more informative than the modified-accrual “earnings” measure. A government's modified accrual earnings measure can be thought of as a type of measure of changes in working capital. Therefore, our results are consistent with research on corporate entities that attributes the superiority of earnings over cash flows primarily to working capital accruals and not long-term accruals. For our sample of school districts, evidence suggests that total net assets from the government-wide Statement of Net Assets, along with a measure of modified-accrual “earnings” from the governmental funds statement, provide the best information for explaining default risk.

scholarly journals L2,1-norm regularized multivariate regression model with applications to genomic prediction

2021 ◽  
Author(s):  
Alain J Mbebi ◽  
Hao Tong ◽  
Zoran Nikoloski
Keyword(s):  
Variable Selection ◽  
Regression Model ◽  
Multivariate Regression ◽  
Statistical Testing ◽  
Supplementary Information ◽  
Nucleotide Polymorphisms ◽  
Multiple Traits ◽  
Multivariate Regression Model ◽  
Proposed Model ◽  
Iterative Optimization Algorithm

AbstractMotivationGenomic selection (GS) is currently deemed the most effective approach to speed up breeding of agricultural varieties. It has been recognized that consideration of multiple traits in GS can improve accuracy of prediction for traits of low heritability. However, since GS forgoes statistical testing with the idea of improving predictions, it does not facilitate mechanistic understanding of the contribution of particular single nucleotide polymorphisms (SNP).ResultsHere, we propose a L2,1-norm regularized multivariate regression model and devise a fast and efficient iterative optimization algorithm, called L2,1-joint, applicable in multi-trait GS. The usage of the L2,1-norm facilitates variable selection in a penalized multivariate regression that considers the relation between individuals, when the number of SNPs is much larger than the number of individuals. The capacity for variable selection allows us to define master regulators that can be used in a multi-trait GS setting to dissect the genetic architecture of the analyzed traits. Our comparative analyses demonstrate that the proposed model is a favorable candidate compared to existing state-of-the-art approaches. Prediction and variable selection with datasets from Brassica napus, wheat and Arabidopsis thaliana diversity panels are conducted to further showcase the performance of the proposed model.Availability and implementation: The model is implemented using R programming language and the code is freely available from https://github.com/alainmbebi/L21-norm-GS.Supplementary informationSupplementary data are available at Bioinformatics online.

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