Published: Feb. 14, 2011

This study examines the predictive power of comprehensive income and its individual components within the homogenous institutional setting of German IFRS firms. First of all, the predictive power of income numbers is an attribute of high relevance for analysts as it reduces their forecast risks. Second, the standard setters are prominently referring to the importance of financial statements to assist their users in predicting the entity’s future cash flows and, in particular, their timing and certainty. Third, the examination of predictive power provides direct evidence on the relation between accounting information and future firm operating performance. The authors find no …

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Published: Feb. 14, 2011

The corporate social responsibility (CSR) movement has attracted significant attention from academics and has quickly moved up the corporate agenda over the past number of years. However, the literature tends to focus disproportionately on large organizations. As SMEs (small and medium enterprises) play a crucial role in the European economy and their unique characteristics make it far from applicable for them to employ CSR theories and practices of large corporations, considerable research is needed to enhance SME CSR field. The purpose of this article is to contribute to this endeavor by conducting a thorough review of the literature on the …

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Published: Feb. 14, 2011

This paper presents the findings from a study, based on the annual reports’ analysis of German corporations listed in the DAX30, TecDAX, MDAX and SDAX, that investigates whether the implementation of audit committees and independent members with financial expertise leads to higher accounting quality (lower earnings management and accounting errors). The analysis of regressions conducted states a significant negative link between the independence and financial expertise of its members, earnings management and accounting errors. Significant results cannot be achieved if less than 50% of the audit committee members are independent financial experts

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