Shahed Imam

Corporate social performance reporting in Bangladesh

Corporate Social Reporting (CSR) assumes that the companies are socially conscious to discharge their social obligations for the well being of the society. Now business enterprises are under pressure from stakeholders to report to them, as to what extent they have been successful in protecting their interests. Thus, it is essential for them to adopt social accounting practices and report to interested parties as to what extent they have discharged the social responsibilities delegated to them. This study reveals that most of the listed companies in Bangladesh did not provide any information regarding the environment, human resources, community, and consumers in 1996‐97. Though some progressive companies disclosed some information, that information was not at all adequate in discharging social responsibilities. All the information provided by these companies was qualitative in nature and the disclosure level was very poor.

Analysts' Perceptions of Earnings Quality

Abstract This paper examines sell‐side analysts’ perceptions of ‘earnings quality’. Prior research suggests that analysts’ stock recommendations, price targets, earnings forecasts and written reports are relevant to share price formation. One of the main inputs in analysts’ forecasting and valuation models is earnings, and analysts’ perceptions of earnings quality are therefore important. There is, however, little direct evidence in the literature on what these perceptions are and on what role they have in decision‐making. This paper seeks first to understand earnings quality as interpreted by analysts, and it then tests this interpretation against its actual usage in analysts’ research reports. An inductive approach is used that combines interview data with content analysis, and the findings are interpreted in the light of findings from market‐based and other research. We find that the concept of earnings quality is both accounting‐based (relating to notions of core or sustainable earnings, cash and accrual components of earnings, and accounting policies) and non‐accounting‐based (relating to information drawn from outside the financial statements). We find more non‐accounting than accounting references to earnings quality, and that (relatively subjective) non‐accounting references are especially widely used where analysts express positive or negative opinions about earnings quality. It is relatively unusual for an analysts opinion to be both negative and accounting‐ based. If, however, an analyst does express negative, accounting‐based views on earnings quality, then he or she is highly unlikely to be positive in other respects. We interpret this evidence to be consistent with analysts’ economic incentives to generate trading volume yet to be favourably biased towards companies, while seeking to use value‐relevant information relating to earnings. We also conclude that the importance of accounting‐based information relating to earnings quality is more important than it might seem, and that it exerts a significant influence on the analysis and recommendations in analysts’ reports.

Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers

Abstract We review the academic literature on the use of financial reporting information by capital providers. We classify our findings by investor type and by information objective. While most capital providers use accounting information, our survey indicates that they do so in a variety of ways with financial reporting information competing with other sources of information. We also find that information intermediaries are influential in both credit and equity markets, making the identification of a typical target ‘user’ inherently difficult. Our main findings question the underlying objective of the Conceptual Framework to guide the development of standards for general-purpose financial statements to provide a typical knowledgeable investor with a true and fair view about the reporting entity. Finally, we identify gaps in the literature and suggest areas where future research can help inform important academic and policy debates.

Context not predictions: a field study of financial analysts

Purpose - – The purpose of this paper is to shed light on the nature of the work that financial analysts actually do in the context of the market for information and to further open up research in this area to qualitative and sociological inquiry. Design/methodology/approach - – A field study with 49 financial analysts (both buy-side and sell-side) was undertaken in order to understand the work that they actually do. This field study was theoretically informed by the sociology of Pierre Bourdieu. Findings - – The authors find, in contrast to both conventional wisdom and assumptions in prior (mostly quantitative) literature, that the primary value of sell-side analyst work lies not in the recommendations that analysts ultimately produce, but in the rich contextual information that they provide to buy-side analysts. In order to successfully provide this information, analysts have to embody large amounts of technical capital into their habitus. Research limitations/implications - – Much research in this area erroneously presumes that forecasting is the primary function of analysts. Analyst work needs to be understood as multifarious and requiring a well-developed habitus that is attuned to the accumulation of both technical and social capital. Future qualitative research might usefully explore in more detail the way in which corporate managers interact with analysts. The present study solicits the viewpoints only of the analysts themselves. The organisational context of the analysts was not explored in detail and the interviews were pre-crisis, which possibly explains why the technical capital of sell-side analysts was extolled by interviewees rather than lambasted. Originality/value - – The paper is one of few studies to look at analysts from a qualitative and sociological perspective. It both complements and extends both emerging sociological work on financial intermediaries and qualitative work on the “market for information”.