The Experts below are selected from a list of 95622 Experts worldwide ranked by ideXlab platform
Suhas A Sridharan - One of the best experts on this subject based on the ideXlab platform.
-
volatility forecasting using Financial Statement information
The Accounting Review, 2015Co-Authors: Suhas A SridharanAbstract:ABSTRACT: This paper examines whether Financial Statement information can predict future realized equity volatility incremental to market-based equity volatility forecasts. I use an analytical framework to identify accounting-based drivers of realized volatility. My main hypothesis is that accounting-based drivers can be used to forecast future realized volatility incremental to either past realized volatility or option-implied volatility. I confirm this empirically and document abnormal returns to an option-based trading strategy that takes a long (short) position in firms with Financial Statement information indicative of high (low) future realized volatility. These results suggest that accounting-based volatility drivers may serve as useful indicators of variance risk. Finally, I demonstrate that the incorporation of accounting-based fundamental information into forecasting models yields lower forecast errors relative to models based solely on past realized volatility.
-
volatility forecasting using Financial Statement information
Social Science Research Network, 2013Co-Authors: Suhas A SridharanAbstract:This paper examines whether Financial Statement information can predict future realized volatility incremental to the volatility implied by option market prices. Prior research establishes that option-implied volatility is a biased estimator of future realized volatility. I use an analytical framework to identify accounting-based drivers of equity returns volatility. My main hypothesis is accounting-based drivers can be used to forecast future volatility incremental to either past volatility or the market’s expectation of future volatility quantified as option-implied volatility. I confirm this empirically and show that my findings are robust to the measurement of option-implied volatility using either a model-free approach or the Black-Scholes model. I also document abnormal returns to a option-based trading strategy that takes a long (short) position in firms with Financial Statement information indicative of high (low) future volatility. Additionally, I provide evidence that contradicts a risk-based explanation for the incremental predictive ability of accounting-based variables. Taken together, my results indicate that the market’s failure to fully process accounting-based fundamental information explains some of the previously documented bias in implied volatility.
Zabihollah Rezaee - One of the best experts on this subject based on the ideXlab platform.
-
Financial Statement fraud insights from the academic literature
Ear and Hearing, 2008Co-Authors: Chris E Hogan, Zabihollah Rezaee, Richard A Riley, Uma VeluryAbstract:SUMMARY: We summarize relevant academic research findings to contribute to the Public Company Accounting Oversight Board (PCAOB) project on Financial Statement fraud and to offer insights and conclusions relevant to academics, standard setters, and practitioners. We discuss the characteristics of firms committing Financial Statement fraud, as identified in the literature, and research related to the fraud triangle. We then discuss research related to the procedures and abilities of auditors to detect fraud, and how fraud risk assessments impact audit planning and testing. In addition, we discuss several “high risk” areas and other issues as identified by the PCAOB. Finally, we summarize prior findings and offer conclusions and suggestions for areas where future research is needed.
-
Causes, consequences, and deterence of Financial Statement fraud
Critical Perspectives on Accounting, 2005Co-Authors: Zabihollah RezaeeAbstract:Abstract Financial Statement fraud (FSF) has cost market participants, including investors, creditors, pensioners, and employees, more than $500 billion during the past several years. Capital market participants expect vigilant and active corporate governance to ensure the integrity, transparency, and quality of Financial information. Financial Statement fraud is a serious threat to market participants’ confidence in published audited Financial Statements. Financial Statement fraud has recently received considerable attention from the business community, accounting profession, academicians, and regulators. This article (1) defines Financial Statement fraud; (2) presents a profile of Financial Statement fraud by reviewing a selective sample of alleged Financial Statement fraud cases; (3) demonstrates that “cooking the books” causes Financial Statement fraud and results in a crime; and (4) presents fraud prevention and detection strategies in reducing Financial Statement fraud incidents. Financial Statement fraud continues to be a concern in the business community and the accounting profession as indicated by recent Securities and Exchange Commission (SEC) enforcement actions and the Corporate Fraud Task Force report. This paper sheds light on the factors that may increase the likelihood of Financial Statement fraud. This paper should increase corporate governance participants’ (the board of directors, audit committees, top management team, internal auditors, external auditors, and governing bodies) attention toward Financial Statement fraud and their strategies for its prevention and detection. The Sarbanes-Oxley Act of 2002 was enacted to improve corporate governance, quality of Financial reports, and credibility of audit functions. The Act establishes a new regulatory framework for public accountants who audit public companies, creates more accountability for public companies and their executives, and increases criminal penalties for violations of securities and other applicable laws and regulations. Given the difficulties and costs associated with deterring Financial Statement fraud, understanding the interactive factors described in this article (Cooks, Recipes, Incentives, Monitoring and End-Results (CRIME)) that can influence fraud occurrence, detection and prevention is relevant to accounting and auditing research.
-
Financial Statement fraud prevention and detection
2002Co-Authors: Zabihollah Rezaee, Richard A RileyAbstract:Financial Statement Fraud Defined.Financial Reporting of Public Companies.Cooking the Books Equals Fraud. Realization, Prevention, and Detection.Taxonomy and Schemes. Role of Corporate Governance. Board of Directors' Oversight Responsibility. Audit Committees and Corporate Governance. Management Responsibility. Role of the Internal Auditor. Role of External Auditors. Governing Bodies. Fraud in a Digital Environment.Fraud Examination Practice and Education.Index.
Shail Pandit - One of the best experts on this subject based on the ideXlab platform.
-
do compustat Financial Statement data articulate
Journal of Financial Reporting, 2016Co-Authors: Ryan Casey, Feng Gao, Michael Kirschenheiter, Shail PanditAbstract:ABSTRACT: Using the Financial Statement Balancing Model (FSBM) from Compustat, we examine whether Financial Statement data articulate for 10,681 U.S. nonFinancial firms for 24 years, a total of 92,...
-
do compustat Financial Statement data articulate
Social Science Research Network, 2015Co-Authors: Ryan Casey, Feng Gao, Michael Kirschenheiter, Shail PanditAbstract:Using the Financial Statement Balancing Model (FSBM) from Compustat, we examine whether Financial Statement data articulate for 10,681 U.S. non-Financial firms for 24 years, a total of 92,951 firm years. We accomplish three specific research goals. First, we build the first formal model of Financial Statement articulation, providing a benchmark for subsequent discussions of articulation. Second, we show how to handle missing data to ensure articulation, by either filling in zeros or backing out the missing data with other variables in the equations. Third, we produce modified variables that resolve exceptions in the articulating equations, so that these variables form relations that are consistent across time and firms. We then compare the “modified database” (MDB) using these updated variables with the original Compustat data, and find significant differences in many commonly used Financial variables, such as the Altman’s z-score, and the disclosure quality based on non-missing Compustat variables. We believe that our MDB has the potential to increase sample size and the accuracy of data in empirical studies, which could help researchers draw improved inferences.
Edward J. Sullivan - One of the best experts on this subject based on the ideXlab platform.
-
Teaching Financial Statement analysis: A cooperative learning approach
Journal of Accounting Education, 1996Co-Authors: Edward J. SullivanAbstract:Abstract This paper demonstrates how cooperative learning can be used to teach Financial Statement analysis. Cooperative learning is a teaching technique that develops problem solving and critical thinking skills through student team work. Using Financial Statement analysis as an exercise example, this paper shows how this technique can be applied in the classroom.
Rodrigo S. Verdi - One of the best experts on this subject based on the ideXlab platform.
-
an input based measure of Financial Statement comparability
Social Science Research Network, 2018Co-Authors: Rani Hoitash, Udi Hoitash, Ahmet C Kurt, Rodrigo S. VerdiAbstract:We propose a new input-based measure of Financial Statement comparability (FSC) that captures the degree of overlap in the Financial Statement line items reported by industry peers. FSC quantifies the extent to which peer firms have similar economic events and accounting transactions as reflected in their Financial Statements. We validate FSC by showing its use in benchmarking exercises by corporate boards and Financial analysts. We then exploit a unique feature of our measure, namely that it allows us to construct finer FSC measures such as income Statement versus balance sheet comparability. We show that income Statement comparability is particularly useful when forecasting earnings, whereas balance sheet comparability is more important when forecasting balance sheet items such as debt and when assessing credit risk. Our results show that different components of FSC are beneficial in different contexts and for different Financial Statement users.
-
The Benefits of Financial Statement Comparability
Journal of Accounting Research, 2011Co-Authors: Gus De Franco, S P Kothari, Rodrigo S. VerdiAbstract:Investors, regulators, academics, and researchers all emphasize the importance of Financial Statement comparability. However, an empirical construct of comparability is typically not specified. In addition, little evidence exists on the benefits of comparability to users. This study attempts to fill these gaps by developing a measure of Financial Statement comparability. Empirically, this measure is positively related to analyst following and forecast accuracy, and negatively related to analysts’ dispersion in earnings forecasts. These results suggest that Financial Statement comparability lowers the cost of acquiring information, and increases the overall quantity and quality of information available to analysts about the firm.
