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The purpose of this paper was to determine whether a model utilizing a number of economic variables in combination with financial ratios results in a model superior to the traditional models including the financial ratios alone. A sample of 110 manufacturing companies which had become bankrupt between 1990 and 1997 were identified from the F & S Index and matched to 110 non‐failed companies on the basis total assets, financial statement date and four digit industry code. The proposed model predicted correctly 87.82 and 87.50 percent of the estimation and holdout samples, respectively. The significance of the coefficients in each year’s model was evaluated by using the t‐statistic corresponding to each coefficient’s value. The overall models are significant at ∝‐level of 0.05.

This study aims to determine the factors affecting the merger and acquisition (M&A) process in the United Arab Emirates (UAE) banking sector. It distinguishes between internal and external factors that may motivate M&A activities in the banking sector.

This study adopts quantitative research and a survey strategy for data collection. A model was developed using a survey e-mailed to 500 bankers to gather data on the factors affecting the banking sector’s M&A.

This study’s findings provide strong empirical evidence for factors extracted by the factor analysis (Income, Growth, Costs, Survival, Diversifications, Security and Risk and Legal), which are important in determining the consolidation process leading to successful M&A in the banking industry. This study also contributes to the business combinations and consolidation literature by explaining the important factors in measuring the bank’s performance during the M&A process.

Future studies could be directed in many directions. First, the authors extend the study to other GCC countries and examine whether the determinants of banks’ M&A are similar across markets. Second, the authors examine additional nonfinancial bank-specific characteristics, such as management incentives and corporate governance or additional market characteristics. Third, the authors examine the motives for acquisitions of foreign banks by UAE banks and vice versa. There may be much to learn about how acquisition motives are likely to differ.

The findings can help bank managers know if their banks have developed the same profile or factors similar to typical target banks. The theoretical understanding of the importance of this study in creating an environment of trust that governs the behavior of bankers for both banks will reduce the agency issue. Regarding general management, this study indicates that opportunistic behaviors could interest banks, bankers’ associations, central banks, governments, other financial authorities and policymakers. Therefore, this study paves the way for further investigation of mergers, agency theory and ethics issues. These banks’ owners, managers and regulators were also advised to consider these factors in formulating their policies and processes, given their influence on performance and their ability to manage the relationship between banks and improve the efficiency of the UAE banking sector.

This study provides new perspectives concerning motives leading financial institutions to M&A owing to banks’ decisions to improve their financial positions, coupled with the need to obey pressures of macro factors such as economic, legal and political systems, government and technology.

This paper uses annual accounting data to show that the frequency of occurrence of the first and second digits contained in the income numbers of companies, listed in the Istanbul Stock Exchange, does not deviate significantly from expectations.

Focuses on Jordan and the plethora of laws relating to financial reporting, which resulted in the Jordan Association of Certified Public Accountants adopting the International Accounting and Auditing Standards, to be applied to all financial statements issued after 1990. Investigates the effect this will have and, particularly, if there are any accounting irregularities leading to income enhancement. Surveys 74 firms in the period January 1990 ‐ December 1994, with data drawn from the Amman Financial Market annual figures. Explains how the data was analysed and used to test the hypothesis that the occurrence of numbers appearing in the second place of income numbers in annual reports conforms to the expected random distribution. Indicates, from findings, that there is a small deviation from the random distribution for the second digit and that the annual reports consist of accurate accounting data.

Accounting education is passing through a critical stage. In 1988 the American Institute of Certified Public Accountants (AICPA) voted overwhelmingly to require 150 semester hours of education, including a baccalaureate degree, for new members from the year 2000. AICPA together with the National Association of State Boards of Accounting (NASBA) is working to require the 150 hours education requirement to sit for the CPA examination. Twenty four states have passed various versions of this law; many more are in the process of passing it.

Annual accounting numbers are used in different ways by researchers and investors. Besides the obvious regulatory uses of accounting numbers in financial institutions and public utilities, researchers and investors uses annual accounting data in forming their expectations about the future prospects of enterprises. Watts and Zimmerman [1990] stated that researchers also uses financial accounting data to investigate differences in investment opportunity sets, accounting policies, contracting costs, organisational structures, and financial polices.

When an individual decides to go into business, it can be an intimidating experience for him or her because of the many important business decisions to be made prior to entering the free market. In unforeseen ways, these decisions can have a tremendous impact on the operation and ultimate success of a new business.

We test for the presence of non‐linear dynamics in real stock return, in the American, British, and Japanese equity markets. Evidence on non‐linearities will have important implications for financial analysts. The results provide evidence of nonlinear structure in stock returns, in the three markets, suggesting that linear models, such as Ordinary Least Squares or Vector Autoregressive (VAR), may not always be appropriate for analyzing data.