Saeed Akbar

Value Relevance of Advertising Expenditure: A Review of the Literature

This paper presents a review of the relevant empirical literature on advertising value relevance. The current dominant accounting practice is to treat advertising as a current period expense. There has been growing evidence, however, to suggest that advertising should be viewed as an investment in long-term brand equity. While the primary focus is on the valuation studies of advertising expenditure, the paper also provides an overview of various other studies that relate advertising to profitability or sales of the firm or industry to investigate the effects of advertising expenditure. As a consequence, it is emphasized that there has been a recent shift to the use of valuation models in exploring the nature of advertising expenditure. Since market value captures both the current and future profitability effects of advertising, valuation models are often seen as a better alternative in exploring the intangible nature of advertising expenditure. It is found that the bulk of evidence on advertising value relevance comes from the US, where there has historically been greater disclosure of advertising expenditure. There appears to be little evidence on this matter in the UK, however. This may largely be attributed to the lack of advertising data availability in the UK.

Effectiveness of Performance Appraisal: An Integrated Framework

Based on a robust analysis of the existing literature on performance appraisal (PA), this paper makes a case for an integrated framework of effectiveness of performance appraisal (EPA). To achieve this, it draws on the expanded view of measurement criteria of EPA, i.e. purposefulness, fairness and accuracy, and identifies their relationships with ratee reactions. The analysis reveals that the expanded view of purposefulness includes more theoretical anchors for the purposes of PA and relates to various aspects of human resource functions, e.g. feedback and goal orientation. The expansion in the PA fairness criterion suggests certain newly established nomological networks, which were ignored in the past, e.g. the relationship between distributive fairness and organization-referenced outcomes. Further, refinements in PA accuracy reveal a more comprehensive categorization of rating biases. Coherence among measurement criteria has resulted in a ratee reactions-based integrated framework, which should be useful for both researchers and practitioners.

An investigation of user perceptions of Islamic banking practices in the United Kingdom

Purpose – Islamic banking as a financial institution has always been proclaimed to be different from conventional banking systems. This is mainly due to the prohibition of interest and emphasis on achieving social economic responsibility in society. However, in practice, Islamic banking practices in the UK seem to be far away from its paradigm version. The main purpose of this study is to evaluate user perceptions of Islamic banking practices in the UK. Design/methodology/approach – To explore the understandings and perceptions of customers about Islamic banking practices in the UK an online questionnaire survey is used as the research approach in this study. The survey was conducted through a closed-ended structured questionnaire. Findings – The overall findings of this study suggest that Islamic banking in the UK is not fully aligned with the paradigm version of Islamic finance. The respondents generally agree with the view that the principle of profit and loss sharing element represents the true spirit of Islamic banking practices, however, due to the complex nature of Islamic banking products, they are unsure about the full benefits of this system. There is a high expectation among the respondents about the commitment and strong welfare role of Islamic banks in society. It is therefore suggested that through research, effective marketing and generating more awareness in users about Islamic finance, it is possible to achieve more from the Islamic banking paradigm. Originality/value – This study is not only relevant to Muslims, but also to the banking regulators in the UK, as many conventional banks are now offering Islamic products and services alongside their routine interest-based transactions. Hence there is a need for the regulators to understand the real nature of such practices by both the Islamic and conventional banks and establish a uniform regulation so that users are not ill-treated by banks in the UK.

Firm size, sector and market valuation of R&D expenditures

Significant market value effects of R&D are found for UK firms of all sizes. Sector-based analyses indicate large, positive and statistically significant influences of R&D on market values of UK firms in both manufacturing and nonmanufacturing sectors.

The journey to develop educated entrepreneurs: prospects and problems of Afghan businessmen

Purpose – This study seeks to examine self‐perceived entrepreneurial problems and prospects in a post‐war scenario. It aims to present a holistic and historical account of Afghan graduates and their ability to transform into educated entrepreneurs. The study further aims to highlight entrepreneurial characteristics of the Afghans and link them to the unique livelihood strategies they adopt.Design/methodology/approach – Given a lack of archival data, this study relies on semi‐structured interviews and historical data from different sources. The findings are mainly based on life narratives of graduate entrepreneurs in different sectors. Descriptive questions about entrepreneurial problems and prospects in the post‐war era were asked.Findings – Long wars and internal turmoil have pushed both educated and uneducated Afghans into entrepreneurship. The study finds that entrepreneurs rank entrepreneurial characteristics as major prospects available while adverse security conditions and widespread corruption are ...

An empirical investigation of the Libyan audit market: perceptions of auditor's independence

Auditor independence has received considerable attention in recent years. This is due to the fact that independently audited financial statements may result in the generation of true and fair accounting information which will help stakeholders to form rational expectations about firms and minimise the agency cost. It can also be argued that lack of independence would lead auditors to collaborate with the management of firms and would produce misleading accounting information. Accepting this premise, this study explores the effects of 12 different variables on the perceptions of auditor independence in Libya. A sample of five user groups namely owners, investors, lenders, managers and auditors were chosen for the survey. The results suggest that all user groups regard auditor independence as an important factor in forming their decisions about firms. Amongst other variables, the non-availability of auditing standards in Libya is found to be the strongest factor which undermines auditor independence in Libya.

Stock market reaction to capital expenditure announcements by UK firms

The key objective of this article is to analyse the stock market reaction to capital expenditure announcements by UK firms. To attain such an objective, we adopt an ‘event study’ methodology. We analyse a large sample of 884 capital expenditure announcements made by 426 companies allocated in different sectors over a period of 14 years from 1990 to 2003. The results suggest a significant and positive relationship between capital spending announcements and share prices. Our results also suggest a positive (negative) and significant relationship between announcements of increase (decrease) in capital expenditure and abnormal stock returns. Market participants seem to respond positively to corporate capital expenditure decisions regardless of the types of projects in which the funds are to be invested.

International Evidence on the Determinants of Organizational Ethical Vulnerability: The Determinants of Organizational Ethical Vulnerability

This paper proposes a model to explain what makes organizations ethically vulnerable. Drawing upon legitimacy, institutional, agency and individual moral reasoning theories we consider three sets of explanatory factors and examine their association with organizational ethical vulnerability. The three sets comprise external institutional context, internal corporate governance mechanisms and organizational ethical infrastructure. We combine these three sets of factors and develop an analytical framework for classifying ethical issues and propose a new model of organizational ethical vulnerability. We test our model on a sample of 253 firms that were involved in ethical misconduct and compare them with a matched sample of the same number of firms from 28 different countries. The results suggest that weak regulatory environment and internal corporate governance, combined with profitability warnings or losses in the preceding year, increase organizational ethical vulnerability. We find counterintuitive evidence suggesting that firms’ involvement in bribery and corruption prevention training programmes is positively associated with the likelihood of ethical vulnerability. By synthesizing insights about individual and corporate behaviour from multiple theories, this study extends existing analytical literature on business ethics. Our findings have implications for firms’ external regulatory settings, corporate governance mechanisms and organizational ethical infrastructure.

Management accounting change: a comparative study of Indian and UK organisations

In the last two decades, management accounting research has received considerable attention. The research findings highlight a significant role for management accounting systems in modern organisations due to which management accounting information is now used in planning, decision making, control, performance measurement and business strategy in most organisations. However, as a result of the changing business needs, increased global competition and rapidly changing production technology, the internal management accounting systems of companies face severe challenges. This study, therefore, explores the changes in management accounting systems with respect to a number of change drivers and evaluates those changes in relation to the changing needs of different organisations in India and the UK. Two main drivers of management accounting system change are revealed: increased competition and changes in production technology. It is concluded that changes in management accounting systems attributed to change drivers have considerable effects on organisational performance in both Indian and UK organisations.

Spin-offs, stages of growth and funding issues: some UK evidence

This paper explores funding issues at the early development stages of Technology-Based Small Firms (TBSFs) spun-out from universities, non-university research organisations and parent companies. This paper presents empirical evidence for the UK, derived from an extensive online questionnaire survey. The sample consists of 53 spin-offs representing a subsample of 133 TBSFs. The sample is divided into three subcategories, university, non-university and parent company spin-offs. The results suggest that high technology small firms which have spun-off from other organisations may have particular needs for finance and that these may change as they develop through the early stages of development. The results further suggest that there are funding heterogeneities among university, non-university and parent company spin-offs. This paper presents evidence on these issues and suggests differences in the experience of various types of spin-off TBSFs both in terms of economic performance and financing.