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Article
Publication date: 1 February 2004

Pervaiz Alam and Anibal Báez‐Díaz

This study uses a simultaneous equations approach to examine the price‐earnings relationship of non‐U.S. firms that directly list their securities in U.S. capital markets or trade…

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Abstract

This study uses a simultaneous equations approach to examine the price‐earnings relationship of non‐U.S. firms that directly list their securities in U.S. capital markets or trade as American Depository Receipts (ADRs). The Hausman test shows that price changes and earnings changes are endogenously determined, thus the simultaneous equations approach is used to estimate the earnings response coefficient (ERC) and the returns response coefficient (RRC). Under the ordinary least squares (OLS) estimation, the parameter estimates are biased downward because the OLS fails to correct for endogeneity. In general, our results show that the joint estimation procedure mitigates some of the single‐equation bias. The estimated ERC and the RRC are higher under the three stage least regression (3SLS) than under the OLS regression. In addition, the product of the ERC and the RRC coefficients approaches its theoretical value of one when using the 3SLS estimation. The evidence also shows that institutional factors affect the way the market value information for these firms. We find that the ERC and RRC are insignificant for the common law non‐ADR firms and significantly positive for common law ADR firms.

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Review of Accounting and Finance, vol. 3 no. 2
Type: Research Article
ISSN: 1475-7702

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Publication date: 2 December 2021

Rogelio J. Cardona, Karen C. Castro-González, Carmen B. Ríos-Figueroa and José C. Vega-Vilca

Puerto Rico (PR) is among the US jurisdictions with the lowest passing rates on the Certified Public Accountant (CPA) exam (National Association of State Boards of Accountancy

Abstract

Puerto Rico (PR) is among the US jurisdictions with the lowest passing rates on the Certified Public Accountant (CPA) exam (National Association of State Boards of Accountancy (NASBA), 2016, 2017). No prior studies have addressed this issue. To fill this gap, the authors conducted a survey among candidates to examine the factors perceived as challenges on the exam. The authors also studied the relationship between respondents’ individual, educational, and CPA exam-related characteristics and the likelihood of success on the exam. Results reveal there are three factors perceived by respondents as their main challenges: level of technical difficulty, cost of the exam, and not enough time to study for the exam. Additional analysis indicates that age, major Grade Point Average, weekly study hours, and the time interval between graduation and the first attempt at the exam are significant factors that affect the passing rates on the exam. These findings suggest that a combination of individual, educational, and exam-related factors affect Puerto Rican candidates’ results on the exam. The socioeconomic background of PR may heighten the impact of such factors. Considering that the accounting profession is always adapting to the evolutionary demands of the business environment, these results may contribute to the development of adequate measures in support of Puerto Rican and other minorities with diverse backgrounds.

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Advances in Accounting Education: Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-80071-702-2

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Publication date: 2 December 2021

Abstract

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Advances in Accounting Education: Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-80071-702-2

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