• 아태비즈니스연구
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• 제13권4호
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• pp.109-121
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• 2022

Purpose - This study investigates how earnings volatility influences current stock price informativeness about expectations of future earnings. Design/methodology/approach - I adopt the FERC model developed by Collins et al. (1994) and modified by Lundholm and Myers (2002) to investigate the connection between earnings volatility and future earnings reflected in current returns. I define five-year rolling standard deviations of earnings and components as earnings volatility measures and the degree of deviation of earnings from cash flows over the same five-year, which is developed by Jayaraman (2008). Finding - My results show that earnings volatility delays current stock price response to future operation expectations. They also verify that as earnings are more divergent from cash flows, current returns are less timely incorporating value-relevant future operation. Research implications or Originality This study shows that when volatile earnings deliver obscure and unreliable information about future operation expectations, they cause the market to be conflicting in understandings their implications and make it difficult in attaining correct future cashflow estimates.

• 아태비즈니스연구
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• 제14권4호
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• pp.255-273
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• 2023

Purpose - This study examines whether internal control has an effect on stock price informativeness about future earnings. High quality internal control provides continuous assurance for the quality of financial reports, and these future earnings-related information is accurately reflected in the current stock price. Design/methodology/approach - This study collected 12,862 data from 2006 to 2021 in China to make an empirical analysis using the future earnings response coefficient (FERC) and the multiple regression analysis were hired in order to analyze the data. Findings - We find that internal control strengthens the association between current returns and future earnings, indicating that more information about future earnings is reflected in current stock prices. This positive effect exists in both the main board market and the growth enterprise market of China's stock market, especially in the main board market after the implementation of the internal control policy. In addition, we find that the positive effect is weaker for firms that report internal control deficiencies or receives non unqualified internal control audit opinions. The results using earnings persistence yield similar findings, further supporting the results based on the FERC model. Research Implications or Originality - Our tests provide strong evidence that the quality of internal control affects FERC in China stock market.

• 한국융합학회논문지
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• 제8권11호
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• pp.363-372
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• 2017

본 연구는 경영자가 제공하는 이익예측정보가 미래 이익의 질에 어떤 영향을 미치는지 분석하였다. 연구의 분석기간은 관심변수(종속변수)를 기준으로 하여 2003년부터 2009년까지(2004년부터 2011년까지)이며, 유가증권상장기업 중 경영자가 영업이익의 예측치를 공시한 기업을 대상으로 총 475개 기업/년 자료가 분석에 이용되었다. 분석결과를 살펴보면 첫째, 당기 경영자의 이익예측성향이 낙관적일수록 미래 이익의 질이 낮은 것으로 나타났다. 둘째, 당기 경영자의 이익예측정확성이 낮을수록 미래 이익의 질이 낮은 것으로 나타났다. 이러한 결과는 미래이익의 질을 결정하는데 있어 경영자의 이익예측정보가 활용될 수 있음을 시사한다.

• 한국콘텐츠학회논문지
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• 제17권6호
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• pp.319-328
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• 2017

이익조정이란 실제 기업성과대로 이익을 보고하지 않는 경영자의 의사결정에서 비롯된다. 많은 선행연구들은 이익조정이 경영자의 사적 이득을 얻기 위한 기회주의적 행위뿐만 아니라 기업의 미래전망에 대한 경영자의 사적 정보를 전달하는 수단이 될 수 있다고 주장하였다. 본 연구에서는 국내 공공기관의 이익조정과 미래 경영성과와의 관계를 분석함으로써 이익조정의 함축의미를 실증적으로 분석하고자 하였다. 만약 재량적 발생액으로 측정된 당기의 이익조정이 경영자의 사적 정보를 반영하고 있다면 미래 경영성과를 견인하게 되므로 차후기간의 경영성과와 양(+)의 관계를 나타낼 것으로 예상된다. 반대로, 재량적 발생액이 경영자의 기회주의적 이익조정 의사를 반영한다면 이는 차후기간의 경영성과에 부정적인 영향을 줄 것으로 예상된다. 분석결과, 당기의 이익조정은 미래 경영성과와 음(-)의 관계를 나타내었으며, 이러한 관계는 차기 이후 모든 분석기간 지속적으로 나타났다. 위의 결과는 국내 공공기관의 이익조정이 평균적으로는 경영자의 기회주의적 조정동기를 반영하고 있음을 밝히는 실증적 증거라 할 수 있다.

• The Journal of Asian Finance, Economics and Business
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• 제7권3호
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• pp.73-85
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• 2020

The study aims to provide better understanding of sustainable earnings by a comprehensive analysis of earnings persistence of business firms in Vietnam as an example of developing economies in South-East Asia. Dataset of 1,278 publicly listed firms (excluding banking and financial services firms) on Vietnam Stock Exchange for the period from 2008 to 2017 was collected. By applying fixed effect regression model, the empirical results provided the basis to measure the persistence index (Pers index) and find low level of their earnings persistence. The literature of earnings quality analysis in developed countries suggests earnings persistence as a noteworthy determinant of future earnings forecast and stock valuation. However, research of sustainable earnings in developing countries is still highly underdeveloped. For Vietnamese listed firms, the average Pers index was estimated for the period from 2008 to 2010, indicating low level of earnings persistence. We also incorporated earnings persistence level into future earnings forecast by running the quintile regression model divided the data into four equal levels and conducted each section independently to see the difference in each percentile, thence assessed the factors' influence on the specific model. The findings provide important information on the expected returns of firms, especially helping investors make sound decisions.

• The Journal of Asian Finance, Economics and Business
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• 제8권12호
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• pp.323-336
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• 2021

The present study aims to examine the impact of real earnings management on the future value of the firm and its persistence. The study also tests suspect firm effects on the relationship between real earnings management and the future value of the firm. The sample of the present study consists of all listed non-financial firms from the year 2011 to 2018. Real earnings management has been measured in three alternative ways viz., abnormal operating cash flows, abnormal discretionary spending, and abnormal production cost. Tobin's Q is used as a measure of firm value. The interaction term of real earnings management and Tobin's Q is used to test firm value persistence. The results of the analysis disclose that out of three measures of real earnings management, abnormal reduction in discretionary spending only has a significant negative impact on the persistence of firm value. Moreover, the suspect firm analysis reveals that when the underlying motive of real earnings management is to meet zero earnings, both abnormal increases in operating cash flows and abnormal reduction in discretionary spending have a significant negative impact on firm value persistence.

• The Journal of Asian Finance, Economics and Business
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• 제7권5호
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• pp.31-40
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• 2020

This study investigates whether other comprehensive income (OCI) reported in the statement of comprehensive income (one of the main financial statements after the adoption of K-IFRS) predicts a firm's future performance. Using the quarterly data of Korean listed companies, we examine the association between OCI estimates and future earnings. First of all, we find that OCI is positively associated with earnings in both 1- and 2-quarter ahead, supporting the predictive value of OCI. When we break down OCI into its individual components, our results suggest that the net unrealized gains/losses on available-for-sale (AFS) investment securities are positively associated with future earnings, while the other components (e.g., net unrealized gains/losses on valuation of cash flow hedge derivatives) present insignificant results. In addition, we investigate whether the reliability in OCI estimates enhances the predictive value of OCI to predict future performance. We find that the predictive ability of OCI, in particular the net unrealized gains/losses on available-for-sale (AFS) investment securities, becomes more pronounced when firms are audited by the Big 4 audit firms. Overall, our study suggests that information content embedded in OCI can provide decision-useful information that is helpful for the prediction of future firm performance.

• 기업가정신과 벤처연구
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• 제19권3호
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• pp.43-55
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• 2016

본 연구는 국내 데이터를 이용하여 2011~2014년 간 특별손익항목이 미래 이익에 미치는 영향에 대해 연구하였다. 국내에서는 특별손익항목에 대한 분류가 없기 때문에 본 연구에서는 선행연구를 따라서 금액이 크고 비반복적으로 발생하는 항목을 특별손익항목으로 지정하고 분석하였다. 우선, 미래 이익과 양(+)과 음(-)의 특별손익항목간의 관계를 검토하는 회귀식을 통하여 본 연구에서는 양(+)과 음(-)의 특별손익항목이 미래 이익에 미치는 영향이 다름을 제시하였다. 음(-)의 특별손익항목은 기간 간 비용을 이전하는데 활용되어 미래 비용이 현재 비용으로 이전됨으로써 미래 이익을 증가시키는 데 기여하는 반면 양(+)의 특별손익항목은 전형적인 이론으로는 설명이 안 되는 비정형적인 특성을 보였다. 다음으로 본 연구에서는 음(-)의 특별손익항목을 세분화하여 미래 이익에 미치는 영향에 대해서 검토한 결과, 유형자산 손상차손과 무형자산 손상차손이 부분적으로 기간 간 비용 이전으로 설명이 가능한 데 반하여, 기타 비용항목은 기간 간 비용이전으로 설명되지 않는 것으로 나타났다. 마지막으로 주식시장을 코스피와 코스닥 시장으로 나눠서 검토했을 때, 코스닥시장에서는 기존의 결과들이 약화되거나 사라지는 것을 확인하였다.

• 유통과학연구
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• 제20권12호
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• pp.117-123
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• 2022

Purpose: This study investigates the relationship between earnings forecasts estimated from a cross-sectional earnings forecast model and firm characteristics such as firm size, sales volatility, and earnings volatility. Research design, data and methodology: The association between earnings forecasts and the aforementioned firm characteristics is examined using 214 firm-year observations with analyst following and 848 firm-year observations without analyst following for the period of 2011-2019. I estimate future earnings using a cross-sectional earnings forecast model, and then compare these model-based earnings forecasts with analysts' earnings forecasts in terms of forecast bias and forecast accuracy. The earnings forecast bias and accuracy are regressed on firm size, sales volatility, and earnings volatility. Results: For a sample with analyst following, I find that the model-based earnings forecasts are more accurate as the firm size is larger, whereas the analysts' earnings forecasts are less biased and more accurate as the firm size is larger. However, for a sample without analyst following, I find that the model-based earnings forecasts are more pessimistic and less accurate as firms' past earnings are more volatile. Conclusions: Although model-based earnings forecasts are useful for evaluating firms without analyst following, their accuracy depends on the firms' earnings volatility.

• The Journal of Asian Finance, Economics and Business
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• 제6권4호
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• pp.75-81
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• 2019

The paper aims to investigate the linkage among prior financial performance, organizational reputation and earnings quality. Firstly, it examines the influence of prior financial performance on organizational reputation and on earnings quality. Secondly, this research explores the moderating role that prior financial performance plays in the causal relationship from organizational reputation to earnings quality. Thirdly, the mediating role of organizational reputation in the effect of prior financial performance on earnings quality is analyzed. The empirical findings show that, prior financial performance positively affects both earnings quality and organizational reputation that in turn partly mediates the causal connection from prior financial performance to earnings quality; whereas prior financial performance imposes a positive moderation in the influence of organizational reputation on earnings quality. This research is expected to provide scholars and practitioners with a thorough understanding of the complex link among prior financial performance, organizational reputation and earnings quality. That helps them to deliver good decisions on the investment of suitable resources in maintaining and enhancing their organizational reputation, which assures a higher quality of reported earnings that in turn improves involved stakeholders' confidence in their firm. This likely leads the firms to gain better performance in the future.