In accounting models of value dividends typically appear to have a strong positive relationship with value despite theoretical reasons to expect dividend displacement. We show that this result is driven by the relationship between dividends and both core earnings and other information derived...

Fama and French (2015) recently proposed a five-factor model which adds investment and profitability terms to their seminal three-factor model. Motivated by the accounting-based nature of the new factors, we conduct a comprehensive test of variants of the models in Indonesia – a country which...

This paper investigates the determinants of voluntary audit committee (AC) formation in a setting characterized by: (i) a two-tier board system; (ii) a post-transitional economy. Both factors may affect the system of incentives that influences the decision to form an AC and both factors...

Because financial crises are characterized by dangerous rare events that occur more frequently than those predicted by models with finite variances, we investigate the underlying stochastic process generating these events. In the 1960s Mandelbrot [Mandelbrot B (1963) J Bus 36:394-419] and Fama...

Private firms are likely to use the financial reporting process more for other objectives, such as tax savings, than for communicating performance. However, observing firms choosing accounting policies for tax-minimisation purposes is not straightforward due to (i) tax and non-tax costs of...

Using a large sample of 3,066 firm-year observations, representing 372 distinct firms listed on IDX during the period 1995-2012, we show that dividends are reliably positively priced by the capital market, violating thus the dividend displacement theorem. This result persists even after...

This study examines the effect of audit on private firms' cost of debt. We use a sample of 1,949 small private firms operating in the period 2006-2010 with optional financial statement audit. High quality data allows us to construct a more precise interest rate measure than existing studies...

We find that earnings quality (EQ) is reliably negatively correlated with market values of equity of firms listed on Jakarta Stock Exchange (IDX). The financial reporting process produces earnings viewed as increasingly “incomplete” for valuation purposes by the capital market despite moves...