The annual report is the only document that has been put in the public domain from which members of the public can know whether their firms have indeed been using derivatives to manage risk or to speculate.
However, many firms are not disclosing the information required by shareholders in order to be able to observe the hedging process i.e. what managers do with derivatives.
Knowing what to look for in companies’ annual reports will help shareholders to be able to make rational economic decisions of which companies’ shares they should invest in.
This project is investigating the impact of recent changes in international reporting standards that demand some disclosure in the accounts of a firm's use of derivative products.
Liafisu Sina Yekini, a PhD student working on the Leicester research project, explained: “Large firms in the UK use complex financial instruments called derivatives to manage/hedge financial risks they face.
“Shareholders invest in firms because they expect some benefits in shareholding in the firms. These benefits are either in form of increased market value of the shares of these companies or in form of income derivable from profit made by them.
“In a nut shell, shareholders expect their firms to be a ‘growth’ as well as ‘income’ generating firms.
“Recent happenings in organisations have made the above the ideal or the theoretical expectations of shareholders who have invested their savings in the purchase of the shares in these firms.
“Shareholders must therefore know that by investing in the shares of these companies they are linking their financial wealth or indeed financial bankruptcy/liquidation with that of these firms.
“Managers undertake various decisions on behalf of the shareholders in firms in their attempt to achieve the firms’ objective explained above. One of such decisions is how to manage the risk that firms face."
A fellow of the Institute of Chartered Accountants, Sina Yekini qualified with Arthur Andersen and Co after which he joined the banking industry for a period of more than 10 years, mostly at management level.
Following his exposure both in practice and in the banking industry, Sina decided to explore issues that are controversial between theory and practice of accounting and finance, hence his enrolment with the University of Leicester for MSc in finance and now Ph D in accounting and finance (on going). He had earlier graduated with B. Sc in Accounting in 1988.
His research interest can be broadly grouped around risk management, foreign currency derivatives, the hedging process, information asymmetry and the accounting regulation.
The research is being presented to the public at the University of Leicester on Thursday 26th June. The Festival of Postgraduate Research introduces employers and the public to the next generation of innovators and cutting-edge researchers, and gives postgraduate researchers the opportunity to explain the real world implications of their research to a wide ranging audience.
More information about the Festival of Postgraduate Research is available at: www.le.ac.uk/gradschool/festival
Ather Mirza | alfa
How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung
Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT
In recent years, lasers with ultrashort pulses (USP) down to the femtosecond range have become established on an industrial scale. They could advance some applications with the much-lauded “cold ablation” – if that meant they would then achieve more throughput. A new generation of process engineering that will address this issue in particular will be discussed at the “4th UKP Workshop – Ultrafast Laser Technology” in April 2017.
Even back in the 1990s, scientists were comparing materials processing with nanosecond, picosecond and femtosesecond pulses. The result was surprising:...
Have you ever wondered how you see the world? Vision is about photons of light, which are packets of energy, interacting with the atoms or molecules in what...
A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.
Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...
In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.
“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...
The Max Planck Institute for Physics (MPP) is opening up a new research field. A workshop from November 21 - 22, 2016 will mark the start of activities for an innovative axion experiment. Axions are still only purely hypothetical particles. Their detection could solve two fundamental problems in particle physics: What dark matter consists of and why it has not yet been possible to directly observe a CP violation for the strong interaction.
The “MADMAX” project is the MPP’s commitment to axion research. Axions are so far only a theoretical prediction and are difficult to detect: on the one hand,...
16.11.2016 | Event News
01.11.2016 | Event News
14.10.2016 | Event News
08.12.2016 | Life Sciences
08.12.2016 | Physics and Astronomy
08.12.2016 | Materials Sciences