Before testing the rational expectations hypothesis, it is necessary to fix an asset-pricing model that is to be used in the statistical test. Therefore, whether accounting accruals are rationally priced or mispriced depends on the selected asset-pricing model. By comparing multiple candidates of a benchmark-pricing model, we reexamine the accrual anomaly in this study. The obtained empirical results are not supportive of the functional fixation hypothesis and there is a possibility that accruals are rationally priced by market participants.

View full abstract

　In Japan, approximately 70% of GDP is occupied by the service industries, where it is required to improve the productivity and profitability. In this context, it is demonstrated to increase the possibility of getting competitive advantage in service companies if the quality of decision support function is improved. Therefore, this paper aims to examine how the dynamic AIS capability as organizational capability to utilize the accounting information system influences the quality of the accounting reporting process, the AIS/ERP benefits, and the enterprise performance. As a result of the covariance structure analysis based on the mailing questionnaire survey to Japanese service listed companies, it is empirically examined the possibility of improving the quality of the accounting reporting process and enterprise performance by appropriately improving system flexibility, utilizing the BI（ Business Intelligence） and improving the IT capability of accountant, which three factors constitute dynamic AIS capability.

View full abstract

　We refined and expanded the previous research. In the previous research, fixed costs are increased when companies have large uncertainties. For example Banker et al.（ 2014）, using the magnitude of the variance of sales as a surrogate variable of uncertainty, they verified the variance of sales and increased fixed cost per fiscal year. We verified quarterly data. We focused on breakdown of sales variance and broke down into predictable variance and unpredictable variance. We hypothesized that they have different effects on fixed costs. Then, the components were decomposed using the state-space model. As results,（ 1） Cost of goods sold is that seasonal fluctuations do not affect fixed costs, （2） Selling, general and administrative costs seasonal fluctuation is that fixed costs increase,（ 3） Unforeseeable fluctuations are to increase fixed costs of both cost of goods sold and selling, general and administrative costs, were revealed.

View full abstract

　On June 30, 2010, The Accounting Standards Board of Japan （ASBJ） announced ASBJ Statement No.25, Accounting Standard for Presentation of Comprehensive Income. According to the accounting standards, the comprehensive income of a listed company should be disclosed in the consolidated statement of comprehensive income. This study verifies how the relationship between distributable amounts in non-consolidated statements and other comprehensive income affect a company’s changes in dividend amounts. This paper demonstrates that when the distributable amount is a large amount, other comprehensive income, whether it is positive and negative, would strongly influence the changes in dividend amounts.

View full abstract

　In this study, I examine the effect of the Fair Disclosure Rule（ FD rule） on firm’s investment efficiency. In recent studies, the real effects of disclosure rule has attracted a great deal of attention. Therefore, this study focuses on the effects of FD rule on the manager’s disclosure policy and firm’s investment efficiency. The results show the effects on firm’s investment efficiency is different based on how manager’s disclosure policy changed.

View full abstract

　In developing the right-of use （ROU） model on lease accounting, the FASB and the IASB decided that in a lease contract the lessee has bought a ROU asset as a non-financial asset. However, the FASB uses the annuity-type pattern to change the carrying amount of operating lease ROU asset in ASC 842. It would be inconsistent with that decision. This study examines the applicability of the annuity method of depreciation to verify the hypothesis: the lessee has not bought a ROU asset but has obtained operational flexibility, which the IASB mentioned in IFRS 16. The results show that the annuity method can be best explained by an expense recognition pattern that varies based on the residual value of the underlying asset.

View full abstract

　This paper verifies the discretionary behavior of the management in segment financial reporting. Pseudo-segments were produced based on the internal data of companies, and compared with their externally reported segments. As a result, it was found that before adopting the management approach（ MA）, the management of Japanese companies tends to refrain from disclosing the results of non-competitive businesses that have a high present value or unprofitable businesses that have a low present value. This finding is consistent with the proprietary cost （PC） hypothesis and the agency cost（ AC） hypothesis. Through the study of the situation after the adoption of the MA, it was confirmed that the ratio of companies that report pseudo-segments increased significantly. However, not all businesses are reported equally, and the management still tends to refrain from disclosing the results of business segments whose PC or AC is large. Accordingly, little evidence was found for indicating the restraint on the above mentioned discretionary behavior. After the introduction of MA, I rather found some evidence implying the augmentation of this tendency. By using the internal and publicly disclosed data of Japanese listed companies, this study contributed by giving initial evidence of the discretionary behavior of the management in segment classification before the adoption of the MA, the effects of the MA on the behavior, and remaining problems.

View full abstract