Editorial

Citation

Yao, L.J. (2012), "Editorial", Journal of Asia Business Studies, Vol. 6 No. 1. https://doi.org/10.1108/jabs.2012.51606aaa.001

Editorial

Article Type: Editorial From: Journal of Asia Business Studies, Volume 6, Issue 1

Asia is the up and coming world economic powerhouse for the next era while accounting and finance are the engine for such phenomenon development. I am most happy to present to you in this Special Issue in accounting and finance very insightful research on such development from all corners of the globe. It is so exciting to see not only researchers from the region, i.e. China, India, Bangladesh and Malaysia studying important topics but also researchers from the more developed countries such as USA and UK joining the effort of uncovering questions that make an impact on explaining important accounting and finance inquiries.

McGee and Yuan, on “Corporate governance and the timeliness of financial reporting: a comparative study of the People’s Republic of China, the USA and the European Union,” report on the importance of timeliness of financial reporting as one of the attributes of good corporate governance. Comparing firms listed on the Shanghai Stock Exchange in China with those listed on United States and on the European Union in term of time elapsed between year-end and the independent auditor’s report date, they find that Chinese companies take significantly longer to issue their financial statements than do EU or US counterparts. They also find that companies audited by one of the Big 4 firms are not timelier in financial reporting than their Chinese counterpart, indicating the use of reputable accounting firms can improve such performance.

Following the line of financial reporting, Nurunnabi and Hossain in their “The voluntary disclosure of Internet Financial Reporting in an emerging economy: a case of digital Bangladesh” reporting on the current state of voluntary disclosure of Internet Financial Reporting using 83 listed companies in Bangladesh. They find that only a small number of companies have web sites and even smaller number of companies provides financial information. Larger companies tend to be more willing to provide such information. One important finding from this study is that those firms without the legally required audit committee have more voluntary information disclosure, raising the question of how good the regulatory enforcement is in Bangladesh.

The profitability of any company is important to investors. Thiyagarajan and Arul in “Mediating effects on funding strategies and profit maximization – Indian non-banking finance sector“ look at the recently regulated non-banking finance sector in India on the effect on mobilization of funds with the linking of their funds mobilization to their internally owned funds. Examining the funds profile and their utilization to maximize the returns in the form of profit, this paper identifies an existence of relationship between various variables including external and internal funds with the core operating profit. Mediational effects of borrowings with profitability are established. The pair finds that the gap in funds can be matched effectively through mobilization of funds of short duration in India.

One way to increase profit is by lowering costs, for which outsourcing becoming a very force behind this cost reduction drive. Maelah and Aman in their “Accounting outsourcing in Malaysia” share the accounting outsourcing practices, risks and, controls in Malaysia. They find that the most common outsourcing activities are financial reporting and auditing while the main reasons to outsource are quality service, core competencies and scale economies. The decision to outsource accounting services is related to the type of industry and expertise in the firms. Most of the firms outsource their preparation of account and audit work as well as tax for better quality services. Firms rely more on formal contract and concern about confidentiality and security of accounting data. This model is certainly something for others to explore in their practices, decisions, processes and perception of risks and control in accounting outsourcing.

With profit on hand, companies will pay dividends to investors. The next paper, by Baker and Powell entitled “Dividend policy in Indonesia: survey evidence from executives,” survey managers of dividend-paying companies listed on the Indonesian Stock Exchange to uncover the factors influencing dividend policy, dividend issues, and explanations for paying dividends. It finds that the most important determinants of dividends are the stability of earnings, the level of current, expected future earnings, the effects of dividends on stock prices and needs of current shareholders. Comparing the Indonesian firms, using the rankings of 22 factors, with American and Canadian firms, find a significant correlation between the factors. It is suggested that no universal set of factors is likely to be applicable to all firms for setting dividend policy. Indonesian managers perceive that dividend policy affects firm value.

Last but not least, Kwong et al. in their “An exploratory study of a risk neutral pricing model for accumulators” illustrates how accumulators as a stock derivative investment tools have been the subject of much controversy in Hong Kong due to limited understanding of the way it works by the investors. This paper characterizes the properties of this new stock derivative investment tool by analyzes accumulators based on observations of 11 stocks listed on the Hang Send Index. They find that the profit and loss of accumulator contracts depends mostly on knockout percentage, discount percentage, variability of the underlying stock, and the overall market trends. These findings are very useful in providing insight on how to formulate a risk neutral pricing model for accumulators in the future.

This special theme of accounting and finance in the Journal of Asia Business Studies, with the high quality of the papers presented, are proved both timely and invaluable resources for researchers and practitioners alike, who have an interest in Asia and are kind to advance the knowledge frontier. I hope you find reading the high impact papers particular relevant to the Asian region and interesting.

Lee J. YaoProfessor of Accounting, at the Joseph A. Butt College of Business, Loyola University, New Orleans, Louisiana, USA.

Corresponding author

Lee J. Yao can be contacted at: yao@loyno.edu