The objective of the study is to find out the impact of audit quality on earnings management. The study used a sample of all eighteen banks quoted on the stock exchange as at December, 2010. Data was gathered for the period 2005 to 2010. The cross-sectional year by year regression analysis was performed. Audit quality is measured by using audit fees and auditor change, and abnormal loan loss provision is used to measure earnings management. Though the result was mixed, however, based on the frequency of results for the period of the study, both audit fee and auditor change were positively related to abnormal loan loss provision. This suggests that high audit fee and change in auditor tenure will aggravate earnings management. We recommend that auditor change should not be ceremonial but based on fact of inefficiency and audit fee from each auditor client should be monitored to enforce the five per cent maximum from each client as suggested by Institute of Chartered Accountants code of ethics.

The study sought to investigate tax incentives, exclusively tax holiday and capital deductions and how they influence the attraction and retention of the Foreign Direct Investments in Export Processing Zones. A sample size of 72 employees of the firms operating under EPZs was selected for the study using stratified method for the firms and purposive method for the respondents. The study utilized descriptive survey design using self administered questionnaires to solicit information from sampled senior of Export Processing Zones firms. The study found that the use of tax holiday greatly influences the attraction and retention of Foreign Direct Investments. Arguably, the manufacturing sector seems greatly favored by the tax incentives compared to other sectors due to extended capital allowances. The research concludes that tax incentives should be enhanced towards boosting the growth and expansion of the foreign director investors and that the government should be willing to extend the tax holiday beyond ten years for the firms depending on capital injected on long term basis.

Purpose: This paper explains the analysis of built-in premium within ‘premium-free’ FX Option strategies, also known as ‘exotic options’. The aim is to analyse whether such an increase in built-in premium would have an effect on the outcome of the strategies. Methodology: The analysis was conducted through three different currency pairs, namely, the EURUSD, EURJPY and EURGBP, throughout a period between 2007 to 2014. The authors used the Bloomberg terminal to design two different option strategies: Window Forward Extra and At Expiry Forward Extra. These strategies are known as low risk hedging strategies within the FX options industry. The authors examined different combinations of changes in built-in premium and analysed the respective outcome with each combination. The outcomes were compared to analyse whether an increase in built-in premium would have an effect on the outcome of the strategy. A test was also conducted should these strategies be used as a speculative tool. The strategies were built on a 1 year tenor which is rolled over every month. Hence, each month a hedge using the strategy for 1 year was conducted. The authors used back dated implied volatilies when performing the back-testing in order for results to be realistic. Findings: In most cases it was found that there was no effect on the outcome of the strategy. However, this was only valid if an expiry at a time is taken. On the other hand, when taking into account the whole sample, even though only 3% of the times there was an effect on the outcome of the strategy, the total result finds that an increase in built-in premium has an effect on the outcome of the strategy. Such result was found to be statistically significant using a paired sample t-test. This applied for all currency pairs under review. When analysing the exotic option strategies for speculative purposes, the authors found that in most cases it would have been better for brokers to take higher risk and receive an upfront Premium.

This research was conducted to address the prevalent issues regarding the effect of industrial diversification and geographic diversification either partially or simultaneously on the practice of earnings management. By utilizing purposive sampling techniques on the secondary data, the total of 80 sample studies were drawn from manufacturing companies listed on Indonesian Stock Exchange for the period of 2011-2014. Multiple linear regression analysis provided by SPSS 21.0 was also employed to test the hypotheses constructed within this research. The result of the multiple linear regression analysis presents evidence that industrial diversification and geographic diversification simultaneously have a significant effect on the practice of earnings management. Alongside, it also affirms that partially, industrial diversification and geographic diversification have a significance effect on the practice of earnings management. These findings provide scholarly evidence on the implication of diversification strategies on the practice of earnings management to help financial statement users (investors, creditors, stakeholders, etc.), accounting standard setters, and regulators to assess the pervasiveness of earnings management within the company.

The purpose of this study is to analyze the dividend policy dynamics in context to firm specific and macroeconomic variables with stock price volatility in the financial sector of Pakistan. Panel data is used for the period 2006-2014 to identify the common, fixed, random and GMM effect. It is concluded that dividend payout ratio, market value, interest volatility and inflation volatility have positive significant correlation with price volatility. Common effect model shows that dividend payout and interest volatility has a significant positive impact on the share prices. Whereas fixed effect model is more appropriate and good fit than random effect model and model indicate that dividend payout ratio has significant positive impact and market volatility has significant negative impact on stock prices. GMM results also support the fixed and random effect outcomes with more robustness. This study significantly contributes in dividend policy decisions and elaborates the dynamic roll of micro and macro variables on stock price volatility in financial sector of Pakistan.

Main topic: A tsunami of regulations since the 2013 financial crisis is steering toward’s Europe’s financial service sector. At the same time the accounting standard for financial institutions’ core products the financial instruments will be changing. As disclosures according to IFRS 9 become mandatory by 2018, the existing IFRS Taxonomy for IFRS 9 already developed by the IFRS Foundation, represents a suitable and objective framework to assess IFRS 9 impact on disclosures. The specific goal of this paper is to perform a conceptual gap analysis considering the IFRS 9 taxonomy issued by the IASB and the Financial Reporting (FinRep) taxonomy on IFRS 9 issued by the European Banking Authority (EBA). In general, the IFRS Taxonomy is not used very much in practice. This is not understandable as several advantages relate to the IFRS taxonomy: as it is not the objective of a principle-based accounting standard to define specific rules for each and every disclosure, this is the reason why to derive reporting elements would be very difficult to accomplish. The IASB started to perform a review process of the XBRL Due Process in 2013. As a result the development of the IFRS taxonomy should become part of the general due process of the financial reporting standards. Due to these changes it is expected that the importance of the IFRS taxonomy will be growing. The FinRep-taxonomy has become mandatory since 2014 for all banks within Europe, to fulfill the regulatory reporting requirements according to the Capital Requirements Directive (CRR) IV. Results: Even though the disclosures for external reporting and for regulatory reporting are based on the same accounting framework International Financial Reporting Standards Boards (IFRS), differences can be observed with regard to disclosures, which are partly material. These differences become transparent when analysing IFRS- and FinRep-taxonomy reporting elements. This is caused by the principle-based IFRS, which enable scope of interpretation and the different objectives of the IASB and the banking supervision. Whereas the IASB follows the objective to develop industry non-specific international financial reporting standards, the banking supervision core focus lies on the banking industry. The EBA follows specific information requests with the FinRep-taxonomy in the role as banking supervisory. The IASB intends to provide decision useful information for investors. Nevertheless these two taxonomies provide the possibility for a starting point for the harmonization and the development of common practice disclosures, which could counteract against heterogeneous financial reporting and the issue of “information overload”. Method: Analytical Practical Implications: This paper is relevant for managers who are responsible for external and regulatory reporting.

South Korea continued its achievements in education field like its global economic success. South Korea located in the first three ranks according to PISA (Programme for Intermational Student Assessment) report which ranks students’ success published by Organization for Economic Cooperation And Development (OECD) in 2012. Therefore with PISA report South Korea’s success in the field of education is registered. The aim of this study is investigating accounting education in South Korea, where its success on education is registered by PISA report and International Financial Reporting Standards (IFRS) are being used for long years. In accordance with the aim of the study, one high school, one associate degree and two undergraduate degree programs where accounting education is given are visited and interviews are conducted with the instructors. And assessments are made on accounting education in South Korea in the frame of these visits and interviews.