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Journal of Accounting in Emerging Economies

The accuracy of management profit forecasts in IPO prospectuses: Evidence from


Indonesia
Tanweer Hasan, Muliaman Hadad, Kamran Ahmed,
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JAEE
6,1
The accuracy of management
profit forecasts
in IPO prospectuses
2
Evidence from Indonesia
Tanweer Hasan
Heller College of Business, Roosevelt University, Schaumburg, Illinois, USA
Muliaman Hadad
Bank Indonesia, Jakarta, Indonesia, and
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Kamran Ahmed
School of Accounting, La Trobe University, Bundoora, Australia

Abstract
Purpose – The purpose of this paper is to measure the accuracy of management profit forecast in
initial public offerings (IPO) prospectuses and investigate the determinants of any observed forecast
error in Indonesia.
Design/methodology/approach – A sample of 105 Indonesian IPO firms over a ten-year period,
1999-2008, is used in the present study. The accuracy of management profit forecasts, or forecast
errors, in IPO prospectuses is calculated, following Lee et al. (2006), over the ten-year sample period.
Then, a multivariate model, following the extant literature, is used to identify the determinants of any
observed forecast error in Indonesia.
Findings – A mean (median) forecast error of 19 percent (9 percent) is reported over the entire sample
period. Multivariate analysis shows that, among the explanatory variables used in the present study,
forecast horizon and management optimism seem to be the most significant determinants of forecast
error in Indonesia.
Research limitations/implications – The ordinary, specifically small, investors in Indonesia lack
the sophistication needed to evaluate new issues while alternative independent sources of information
or analysis on IPOs are virtually non-existent. Consequently, whether the forecasts made by the
managers during IPOs are reliable or not is of particular importance in Indonesia.
Originality/value – Indonesia is a significant emerging market in Asia. However, to date, no
published work has examined the accuracy of management profit forecasts or forecast errors in this
market. The present study attempts to fill this gap in the literature and is the first to capture the
magnitude/degree of forecast accuracy or error and investigate the determinants of the documented
forecast error in Indonesia using a sample of 105 IPO firms over the period 1999 through 2008.
Keywords IPO, Indonesia, Forecast error
Paper type Research paper

1. Introduction
Profit forecasts, contained in initial public offerings (IPO) prospectuses, are disclosures
that provide information about management’s estimates about the future prospects of a
firm. As insiders, management has access to a superior set of information.
The possession of such superior information puts the managers in an advantageous
Journal of Accounting in Emerging
position; they may be opportunistic and mislead investors by disclosing information to
Economies extract benefits for themselves or they may behave in an efficient manner and provide
Vol. 6 No. 1, 2016
pp. 2-12
© Emerald Group Publishing Limited
2042-1168
The authors would like to thank the anonymous reviewer for detailed comments on earlier
DOI 10.1108/JAEE-02-2013-0010 versions of the manuscript. Akib Khan provided excellent research assistance.
unbiased information for the benefits of all interested parties. The reliability of Profit
management predictions is determined by the degree of variance between the forecast forecasts
and actual numbers – popularly known as “management forecast error” or “the
measure of accuracy” in the extant literature. Such forecast error has been studied from
in IPO
different perspectives including the calculation of forecast error (e.g. Lee et al., 1993), prospectuses
the stock price reaction to the forecast error (e.g. Chen et al., 2001), factors internal or
external to the firm that could be associated with degree of forecast error (e.g. Chan 3
et al., 1996); these studies have been conducted for a large number of developed and
developing markets around the world.
However, to date, no published work has examined the accuracy of management
profit forecasts or forecast errors in Indonesia which is a significant and emerging
market in Asia. Small ordinary investors in Indonesia possibly lack the sophistication
to evaluate new equity issues while alternative independent sources of information or
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analysis on IPOs are virtually non-existent. Consequently, forecasts made by managers


during IPOs are particularly significant in terms of their power to influence small
ordinary investors in Indonesia; as IPO firms are typically at an early stage of their
corporate life cycles they tend to not have a long operating history (OH) for investors to
base their predictions on. The present study attempts to fill this gap in the literature;
it is the first to measure the degree of forecast accuracy among IPO profit predictions
for Indonesian companies and investigate the determinants of any forecast error using
a sample of 105 exchange-listed firms over the period from 1999 through 2008. Results
reported in the study indicate a median and mean forecast error of 9 and 19 percent,
respectively for the sample of Indonesian firms over the ten-year period. Multivariate
analysis shows that forecast horizon (FH) and management optimism (MO) seem to
have a significant effect on the accuracy of management profit forecasts in Indonesia.
The remainder of the paper is organized as follows. The data and research
methodology used in the present study are described in Section 2. Discussion about the
empirical results is contained in Section 3. Section 4 concludes the paper.

2. Data and research methodology


A visit to the Indonesian Stock Exchange was made in 2009. All the available IPO
prospectuses were collected from the exchange library for the period 1999-2007.
The corresponding annual reports after the IPO date were also collected for the period
2000-2008. After matching the available prospectuses with their corresponding annual
reports for the accounting period ending after the prospectus date, a total of 105 IPO
firms were included in the final sample used in the present study. All the firm-specific
variables relevant for the present study were collected from the respective IPO
prospectuses and company annual reports issued after going public.
Forecast error for each sample firm was calculated, following Lee et al. (2006), as the
absolute difference between forecast profit and actual profit deflated by the IPO or
issue size. IPO or issue size for each sample firm is the product of the number of shares
offered to the public times the offer price per share. Forecasted profit and IPO issue size
are taken from the prospectus of the IPO firm and actual profit is taken from the annual
report of the same firm subsequent to IPO date:
 
FE i ¼ ðAP i – FP i Þ=issue sizei

where FEi is the forecast error for company i, APi the actual profit of company i, FPi the
forecasted profit of company i and issue sizei the size of the IPO for company i.
JAEE 2.1 Determinants of forecast error
6,1 The following multivariate regression model is estimated to investigate the association
between forecast error and firm-specific as well other external factors over the ten-year
sample period:
X9
FE i ¼ a0 þ b1 FH i þ b2 U Ri þ b3 M Oi þ b4 OH i þ b5 BRi þ bi I N DDi þ ei
i¼6
4
A description of all the explanatory variables and the corresponding hypotheses follows.
2.1.1 FH and forecast error. An important determinant of forecast quality is FH, that
is, the length of time between the forecast issue date and the end of the period for which
the forecast is made (Pedwell et al., 1994; Chan et al., 1996). The business of forecasting
involves uncertainty. A longer time horizon implies a greater probability that
unanticipated events will occur. Consequently, it is expected that firms with longer FH
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are likely to have higher forecast errors. Prior studies on forecast accuracy usually a
include FH variable. Indeed, a significant positive association between FH and
management forecast error is reported in Canada (Clarkson, 2000; Pedwell et al., 1994),
New Zealand (Mak, 1989), the UK (Keasey and McGuinness, 1991; Dev and Webb, 1972),
Australia (Lee et al., 1993, 2006; Hartnett, 1993; Goodwin, 1989), Singapore (Firth et al.,
1995) and Thailand (Lonkani and Firth, 2005). However, an insignificant relationship
between management forecast error and FH is documented in studies for Hong Kong
(Chan et al., 1996; Jaggi, 1997; Cheng and Firth, 2000), Malaysia (Mohammad et al., 1994;
Jelic et al., 1998) and Jordan (El-Rajabi and Gunasekaran, 2006). Only Ferris and Hayes
(1977) report that forecast accuracy is positively associated with FH in the UK. These
authors assume that longer FHs may provide management with better opportunities to
make discretionary choices in order to meet their predictions. Despite the mixed findings,
we predict that the longer the FH the higher the forecast error will be:
H1. The longer the FH period the higher the forecast error.
FH for an IPO firm, in the present study, is calculated as the number of months from the
publication date of the prospectus to the month in which the fiscal year ends in
the post-IPO period.
2.1.2 Underwriter reputation (UR) and forecast error. Extant literature suggests UR
is an important signal of IPO quality. For example, Keasey and McGuinness (1991) argue
that more reputable underwriters are chosen by IPO firms with better future prospects.
Firth and Smith (1992) support this view when they report that management forecasts
are more accurate when reputable underwriters are involved. Also, Chen et al. (2001)
suggest that large forecast errors damage UR and thus there is a clear incentive, on
the part of the underwriter, to closely monitor management forecasts of earnings. The
general consensus seems to be that reputable underwriters are associated with more
successful issues and subsequently, their involvement will result in greater forecast
accuracy or lower forecast errors. This, consequently, leads us to the second hypothesis:
H2. The more reputable the underwriter the lower is the forecast error.
New issues in Indonesia are typically underwritten by a large consortium of
underwriters and there seems to be no consensus as to their rankings. From among the
consortium members involved in each IPO the name of the underwriter listed at the top
is assumed to be the lead underwriter. A list of lead underwriters for all sample IPO
firms was compiled. Then, the number of times a particular underwriter’s name shows
up as a lead underwriter is counted; this yielded a median value of 2.5. If any particular Profit
underwriter’s name appeared more than 2.5 times in the sample, it assumed to have a forecasts
“high reputation” and assigned a value of 1 otherwise, a value of 0 is assigned[1].
2.1.3 MO and forecast error. As management forecasts of earnings/profit play an
in IPO
important signaling role in the IPO process it is hypothesized that managers may be prospectuses
reluctant to forecast a decline in earnings/profits prior to offering IPOs even when they
expect such a decline privately. Empirical evidence shows a significantly higher 5
forecast error for the firms that subsequently experience a reduction in earnings/profit
( Jelic et al., 1998; Ismail and Weetman, 2007). We expect that the higher the decline in
actual earnings/profits after the IPO, the greater is the forecast error:
H3. The larger the level of MO the higher the forecast error.
Profit reduction, in the present study, is calculated by comparing the actual profits of
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the forecast period with the actual profits of the accounting period immediately prior to
the date of issuing the forecast. A dummy variable is used to proxy for MO and firms
with a decline in profits are given a value of 1; 0 otherwise.
2.1.4 OH and forecast error. Firms with a longer OH may have more control over
their operations and consequently, are in a better position to make more reliable
forecasts. Jelic et al. (1998) and Jog and McConomy (2003) state that it is more difficult
to forecast the future profits of companies with no prior OH because historical data are
a very important input into the prediction process. Older companies have more
experience to draw from when it comes to making forecasts and consequently, may be
viewed as being less risky (Chen et al., 2001). All these views lead to a fourth
hypothesis:
H4. The longer the OH of a firm the smaller the forecast error.
The OH of a firm is reported to be significantly associated with forecast error in
Australia (Lee et al., 2003; Hartnett and Romcke, 2000), Canada (Clarkson, 2000; Pedwell
et al., 1994) Hong Kong ( Jaggi, 1997) and New Zealand (Mak, 1989). In the present
study, the OH of each sample firm is calculated, following the extant literature, as the
number of years from the incorporation of the firm to its prospectus date.
2.1.5 Business risk (BR) and forecast error. The extant literature suggests that
forecast accuracy provides a partial measure of audit quality and is affected by both
the firm’s ability to forecast and its BR. Consequently, we hypothesize that the higher
the BR of the issuing firm the lower the management forecast accuracy:
H5. The higher the risk of a firm the higher the forecast error.
Following Simunic and Stein (1987) and Clarkson (2000) a simple count of risk factors,
identified in the prospectus, is used to proxy for the BR of the IPO firm. The risk factors
specified in the IPO prospectuses in Indonesia include: political and social risks; legal
risks; technology risks; currency/exchange rate risks; risks related to changes in
competitive situations; personnel risks; geological risks, etc.
2.1.6 Industry classification (IND) and forecast error. Profits for firms in some
industries may be more difficult to predict than others due to differential cost
structures and revenue volatility. Empirical evidence on the impact of industry
difference for forecast accuracy has been mixed (Ferris, 1976; Richards, 1976; Bhaskar
and Morris, 1984; Goodwin, 1989; Mak, 1989; Hartnett and Romcke, 2000; etc.). Nine
IND exist for the exchange-listed stocks in Indonesia. Given that some of these
JAEE classifications have very few companies all the sample IPO firms were reclassified
6,1 under five different industry groups: first, agriculture and mining; second, basic
industries and chemicals, miscellaneous industry and consumer goods industry; third,
property, real estate and building construction and infrastructure utilities and
transportation; fourth, finance; and finally, trade, services and investment[2]. Dummies
for the first four industries, denoted as INDD1 through INDD4, were used in the
6 multivariate analysis in order to check for possible industry effects on the magnitude of
forecast error in Indonesia.
The variables financial leverage, auditor reputation and firm size have been popularly
used in prior empirical research to explain management forecast error. Most IPO firms
included in the current sample did not carry any long-term debt on their balance sheets at
the time of going public. Consequently, the variable financial leverage was not used.
The variables auditor and UR essentially capture the same notion – higher quality
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auditors and underwriters have large investments in reputational capital and stand to
damage this reputational capital by certifying financial statements that cannot be relied
upon by creditors and investors. Consequently, firms going public will have incentives to
hire high-quality underwriters and auditors because they are likely to add credibility
to the reported historical accounting numbers and forecast information provided in the
prospectuses. BIG-4 (BIG-5, BIG-6 and BIG-8, depending on the time-frame covered)
accounting firms are used as a proxy for high-quality auditors in the extant literature.
But Basioudis and Fifi (2004) report that audit fee premium does not exist for BIG-5
auditors during the sample period of their study in Indonesia. Also, the information on
the audit firms used by many IPO companies in our sample was missing or incomplete
and, consequently, the variable audit quality was dropped; only the variable UR was
used in the present study. The information available to create a proxy for the size of each
IPO firm was very limited too as the data on sales and/or total assets of a lot of the
sample IPO firms were missing.

3. Empirical results
Management forecast error was estimated for the sample firms each year over the sample
period 1999 through 2007 and descriptive statistics are reported in Table I. The mean
forecast error peaked at 30 percent, in 2001 and its lowest average of 10 percent, was

Issue Firms in the sample Mean forecast Median forecast


year (n) error error SD Minimum Maximum

1999 5 0.19 0.02 0.27 0.00 1.22


2000 16 0.14 0.12 0.13 0.01 0.53
2001 27 0.30 0.14 0.38 0.00 1.22
2002 15 0.13 0.08 0.19 0.00 0.76
2003 4 0.28 0.20 0.30 0.01 0.70
2004 11 0.13 0.09 0.14 0.00 0.40
2005 6 0.14 0.02 0.22 0.00 0.53
Table I. 2006 8 0.10 0.06 0.12 0.01 0.39
Management profit 2007 13 0.18 0.09 0.22 0.00 0.77
forecast error for Notes: FE, forecast error is calculated as: FE ¼ |(AP–FP)|/issue size, where AP and FP represent actual
IPO firms in profit and forecasted profit of each IPO firm, respectively; issue size is measured as the total fund raised
Indonesia: 1999-2007 by each IPO firm and calculated as the number of shares offered to the public times the offer price
reported in 2006. The forecast error for the median firm was slightly different; it was at Profit
its highest (20 percent) in 2003 and lowest (2 percent) in both 1999 and 2005. The firm forecasts
with the largest forecast error of 70 percent went public in 2003. However, both the mean
and median forecast error generally tapered off from 2004 and onwards.
in IPO
Descriptive statistics for the sample used in the present study are reported in Table II. prospectuses
The mean and median forecast error for the entire sample period is reported to be 19 and
9 percent, respectively; however, there was a significant amount of variation around 7
these measures of central tendency as reflected in the high standard deviation of about 27
percent. The mean management forecast error reported in present study for Indonesia
(19 percent) is significantly lower than that reported for Malaysia (54.1 percent)
(Mohammad et al., 1994) and Thailand (35.76 percent) (Lonkani and Firth, 2005) but
higher than the corresponding figure for Singapore (10.4 percent) (Firth et al., 1995). The
descriptive statistics for the FH indicate that firms, on average, issued forecasts about
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five months and 28 days ahead of their year end, but the gap between the maximum and
minimum of about one year indicates a high level of dispersion among the observations
as is reflected in a standard deviation of more than three months. The mean for the UR
variable is 0.55 which suggests that the market share of different underwriters in
Indonesia is not concentrated. MO does not seem to be prevalent, as the mean value of
this variable for the sample firms used in the present study is only 0.22. The mean and
median OH of the sample firms is 16.73 and 12.00 years, respectively although the
magnitude of this variable varies from one year to 93 years.
Spearman correlations between the variables are shown in Table III. Among the
explanatory variables, the correlation coefficients are not high enough to warrant
concerns of multicollinearity.

Variable Mean Median SD Minimum Maximum

Forecast error (FE) 0.19 0.09 0.27 0.00 1.22


Forecast horizon (FH) 5.28 6.10 3.28 0.30 12.03
Underwriters’ reputation (UR) 0.55 1.00 0.50 0.00 1.00
Management optimism (MO) 0.22 0.00 0.42 0.00 1.00
Operating history (OH) 16.73 12.00 15.20 1.00 93.00
Business risk (BR) 9.96 9.00 4.63 4.00 28.00
Notes: n ¼ 105. FE ¼ |(AP – FP)|/issue size, where AP and FP represents actual profit and forecasted
profit of each IPO firm, respectively; issue size is measured as the total fund raised by each IPO firm
and calculated as the number of shares offered to the public times the offer price; FH is measured is
calculated as the number of months from the publication date of the prospectus to the month in which
fiscal year ends in the post-IPO period; UR is a dummy variable. New issues in Indonesia are typically
underwritten by a large consortium of underwriters and there seems to be no consensus as to their
rankings. A list of underwriters, whose name showed up first (within the consortium) for each sample
firm, was compiled. Then, the number of times the names of these underwriters’ name showed up first
(as lead underwriter), for all the sample firms, is counted and the calculated median value turned out to
be 2.5. If any particular underwriter’s name shows up more than 2.5 times, in the sample, it assumed
to be of “greater reputation” and assigned a value of 1 (otherwise, a value of 0 is assigned); MO is a
dummy variable. The actual profits of the forecast period is compared with the actual profits of the
accounting period immediately prior to the date of issuing the forecast are compared. Firms with a
decline in profits are given a value of 1 and 0 otherwise; OH is measured as the number of years from Table II.
incorporation to prospectus date of the IPO firm; BR is measured by counting the number of risk Descriptive statistics
factors identified and discussed in the prospectuses of IPO firms; descriptive statistics for the Industry for the regression
dummies are not reported variables
JAEE Nevertheless, variance inflation factors (VIFs) were calculated during the regression
6,1 estimation and no evidence of multicollinearity was found as all the VIFs were found to
be well below 2.
Results from the multivariate analysis are reported in Table IV. Only FH and MO
seem to have a statistically significant effect on forecast error. FH, as hypothesized, has
a significant positive relationship with forecast error – meaning the longer the FH
8 period the higher the forecast error. Similarly, MO or an earnings/profit reduction
seems to be associated with the forecast error in a significantly positive way; the
greater the profit reduction the higher the forecast error. Almost all the prior studies on
the determinants of the forecast error, for different countries, report FH to have a
significant positive effect on the forecast error and Indonesia is no exception in this
regard. On the other hand, given the legal system and legal culture (specifically, the
speed at which the system works), management probably has no incentive to shy away
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from being overly optimistic in their forecasts which is reflected in the reported
significant positive relation between MO and the forecast error. All the industry
dummies were statistically insignificant. Thus industry-specific attributes do not
appear to affect the documented management profit forecast error in Indonesia. Of the
explanatory variables not found to have any significant impact on forecast error, OH

Variable FE FH UR MO OH BR

Forecast error (FE) 1.00


Forecast horizon (FH) 0.24** 1.00
Underwriters’ reputation (UR) 0.15 −0.03 1.00
Management optimism (MO) 0.27* −0.14 0.01 1.00
Operating history (OH) 0.08 −0.08 0.13 0.14 1.00
Table III. Business risk (BR) −0.08 −0.03 0.09 0.13 0.10 1.00
Spearman Notes: Coefficients for the industry dummies are not reported. *,**Correlation coefficient is significant
correlations at 1 and 5 percent level, respectively

Variable Coefficient t-Statistic

Constant −0.01 −0.07


Forecast Horizon (FH) 0.02 2.43**
Underwriters’ Reputation (UR) 0.08 1.63
Management Optimism (MO) 0.20 3.30*
Operating History (OH) −0.00 −0.70
Business Risk (BR) −0.00 −0.14
Industry Dummy 1 (INDD1) 0.09 1.05
Industry Dummy 2 (INDD2) 0.03 0.43
Industry Dummy 3 (INDD3) 0.03 0.43
Industry Dummy 4 (INDD4) 0.05 0.71
F-statistic 2.15**
Adjusted R2 9%
Table IV. Notes: n ¼ 105. The VIF ranges from 1.04 to 1.73 with a mean of 1.29. *,**Correlation coefficient is
Determinants of at 1 and 5 percent level, respectively. FE i ¼ a0 þ b1 FH i þ b2 U Ri þ b3 M Oi þb4 OH i
significant P
forecast error þ b5 BRi þ 9i¼6 bi I N DDi þei
was the most surprising as almost all prior research reports it to be a statistically Profit
significant determinant of forecast error. New issues in Indonesia are typically forecasts
underwritten by a large consortium of underwriters and there seems to be no
consensus as to their rankings. The lack of association between UR and the forecast
in IPO
error may potentially be attributed to the “noisy” or “ad hoc” proxy used to capture UR prospectuses
in the present study. Thus the multivariate analysis, in the present study, supports two
of the five hypotheses developed in Section 2. 9
4. Concluding remarks
The present study is the first to measure and report the accuracy of management profit
forecasts in IPO prospectuses for Indonesia and investigate the determinants of the
profit forecast error using a sample of 105 exchange-listed firms over the sample period
1999 through 2008. Results reported in the study indicate a median and mean forecast
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error of 9 and 19 percent, respectively for Indonesia over the ten-year sample period.
Multivariate analysis shows that FH and MO are the two significant determinants of
this forecast error in Indonesia.

Notes
1. An alternative proxy for underwriter reputation was also used in the multivariate model but
not reported. The amount of capital offered by each IPO firm was calculated as the product of
number of shares offered and offer price. Next, the median amount of capital offered over
the sample period was calculated to be Rp. 38.85 billion. If the capital offered by any
sample firm exceeded this median number the new issue was assumed to be underwritten
by a “reputable” underwriter and assigned a value of 1 (0, otherwise). The estimated
regression results essentially remain the same irrespective of the proxies used to capture
underwriter reputation.
2. Please see the Table AI for the existing industry groupings for the exchange-listed stocks in
Indonesia. Table AII reports how the sample firms were regrouped under five categories for
the present study.

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Appendix
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Group no. Industry classification Number of firms

1 Agriculture 6
2 Mining 8
3 Basic industries and chemicals 10
4 Miscellaneous industry 6
5 Consumer goods industry 3 Table AI.
6 Property, real estate and building construction 12 Industry group
7 Infrastructure, utilities and transportation 5 classifications for
8 Finance 29 exchange-listed
9 Trade, services and investment 26 stocks in Indonesia –
105 original specification

Originals groups
New group Making up this new group Number of firms

1 Agriculture mining 14
2 Basic industries and chemicals
Miscellaneous industry
Consumer goods industry 19
3 Property, real estate and building construction Table AII.
Infrastructure, utilities and transportation 18 Industry group
4 Finance 29 classifications –
5 Trade, services and investment 25 regrouped for the
105 present study
JAEE About the authors
6,1 Professor Tanweer Hasan, with dual appointment in Accounting and Finance areas, currently
holds the Rolf Weil Professorship in Finance at the Roosevelt University in Chicago (USA).
Tanweer’s research interest includes corporate governance, accounting regulations, financial
disclosures, IPOs, market efficiency, management of commercial banks and management of
microfinance institutions. He has published his work in numerous refereed journals that include
Research in Accounting Regulation, Journal of Accounting in Emerging Economies, Journal of
12 Accounting & Organizational Change, Applied Financial Economics Letters, Multinational Finance
Journal, Studies in Economics & Finance, Academy of Accounting & Financial Studies Journal,
Review of Pacific Basin Financial Markets & Policies and Quarterly Journal of Business &
Economics. Professor Hasan has served as the Editor of Journal of Forensic & Investigative
Accounting, Guest Editor of Managerial Finance (special issue on microfinance institutions) and
Editor of Forensic Accounting Educator (newsletter for the Forensic and Investigative
Accounting Section of the American Accounting Association) in the recent past. Professor
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Tanweer Hasan is the corresponding author and can be contacted at: thasan@roosevelt.edu
Dr Muliaman Hadad is currently serving his second term as the Deputy Governor of the Bank
Indonesia (central bank of Indonesia) and has been holding this position since 2009. He obtained
his Undergraduate Degree from the University of Indonesia, a Masters from the Harvard
University (USA) and a Doctoral Degree from the Monash University (Australia). Dr Hadad’s
prior appointments at the central bank include the Head of the Financial System Stability Bureau
in 2003 and Director of the Directorate of Banking Research and Administration in 2005. He is
active in the management of the Indonesian Economist Association (ISEI) as the Secretary
General, and has been associated with several universities in Indonesia.
Dr Kamran Ahmed is a Professor of Accounting at the La Trobe Business School (La Trobe
University) in Australia. Professor Ahmed’s research interests include corporate disclosure,
corporate accounting policy choice, earnings management and international accounting
harmonization. He has published his work in many scholarly journals that include Abacus,
Accounting and Business Research, Accounting and Finance, British Accounting Review,
International Journal of Accounting, Journal of Accounting and Public Policy, Journal of Business
Finance and Accounting and Journal of International Accounting Research. Professor Ahmed
serves on the Editorial Board of several journals including International Journal of Accounting,
International Journal of Accounting Auditing and Performance Evaluation, Journal of Accounting
and Organizational Change and Research in Accounting in Emerging Economies.

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