Editorial of the Journal of Applied Research in Accounting and Finance (Jaraf), Vol. 9, No. 1, 2014
Journal of Applied Research in Accounting and Finance (JARAF), Vol. 9, No.1, 2014
5 Pages Posted: 23 Sep 2014
Date Written: 2014
Welcome to this edition of the Journal of Applied Research in Accounting and Finance. Now in its ninth year, JARAF continues to encourage and promote applied research that has practical applications in the contemporary teaching and practice of accounting and corporate finance. In this issue, we examine topics related to evaluating goodwill impairment practices, the relationship between equity market liquidity in the global financial crisis and understanding the value of unrecognised tax benefits.
In our first article, Owen Hall and Michael Davis discussed the ill-practice associated with goodwill impairment by many firms. The authors examined whether predictive analytics can be used to detect abnormal goodwill impairment practices and the effectiveness of it by introducing several predictive analytics models between 2009 and 2011. Their findings suggest that predictive analytics should be used as a complement to existing accounting practices in order to mitigate the use of goodwill impairment as an earnings management tool.
Next, Ahmad Mohamed and Lalith Seelanatha looked at how the recent global financial crisis (GFC) has changed the relationship between equity market liquidity and the capital structure of firms in Australia. Their analysis used a sample of 792 ASX listed companies during the period 2003 to 2011. Their study revealed that the GFC has reduced firms’ reliance on debt financing and that the magnitude and significance of the impact of liquidity on leverage have diminished during the post-GFC periods.
Finally, Charles Mulford and Alex Pfeffer examined unrecognised tax benefits for the firms comprising the S&P 100 to clarify their accounting treatment and measure their significance relative to assets, income tax expense and net income. This article would be of interest to analysts and investors as the findings highlight the potential material effects that changes to unrecognised tax benefits can have on income tax expense and net income and to regulators and accounting standard setters as the results show an insight into how accounting and disclosure rules are being applied in estimating the magnitude of uncertain tax positions.
Keywords: Accounting, Finance
JEL Classification: M40, M41
Suggested Citation: Suggested Citation