Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Making information available to shareholders and investors

24.06.2008
In view of the recent collapse of firms through derivative use, shareholders and potential investors need to know what to look for in the annual reports of firms in which they have an interest.

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
Further information:
http://www.le.ac.uk/gradschool/festival

More articles from Business and Finance:

nachricht RWI/ISL Container Throughput Index: Setback for World Trade
23.06.2015 | Rheinisch-Westfälisches Institut für Wirtschaftsforschung e.V.

nachricht New research shows positive welfare effects of natural resource extraction in Africa
02.06.2015 | University of Gothenburg

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Viaducts with wind turbines, the new renewable energy source

Wind turbines could be installed under some of the biggest bridges on the road network to produce electricity. So it is confirmed by calculations carried out by a European researchers team, that have taken a viaduct in the Canary Islands as a reference. This concept could be applied in heavily built-up territories or natural areas with new constructions limitations.

The Juncal Viaduct, in Gran Canaria, has served as a reference for Spanish and British researchers to verify that the wind blowing between the pillars on this...

Im Focus: X-rays and electrons join forces to map catalytic reactions in real-time

New technique combines electron microscopy and synchrotron X-rays to track chemical reactions under real operating conditions

A new technique pioneered at the U.S. Department of Energy's Brookhaven National Laboratory reveals atomic-scale changes during catalytic reactions in real...

Im Focus: Iron: A biological element?

Think of an object made of iron: An I-beam, a car frame, a nail. Now imagine that half of the iron in that object owes its existence to bacteria living two and a half billion years ago.

Think of an object made of iron: An I-beam, a car frame, a nail. Now imagine that half of the iron in that object owes its existence to bacteria living two and...

Im Focus: Thousands of Droplets for Diagnostics

Researchers develop new method enabling DNA molecules to be counted in just 30 minutes

A team of scientists including PhD student Friedrich Schuler from the Laboratory of MEMS Applications at the Department of Microsystems Engineering (IMTEK) of...

Im Focus: Bionic eye clinical trial results show long-term safety, efficacy vision-restoring implant

Patients using Argus II experienced significant improvement in visual function and quality of life

The three-year clinical trial results of the retinal implant popularly known as the "bionic eye," have proven the long-term efficacy, safety and reliability of...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

World Conference on Regenerative Medicine in Leipzig: Last chance to submit abstracts until 2 July

25.06.2015 | Event News

World Conference on Regenerative Medicine: Abstract Submission has been extended to 24 June

16.06.2015 | Event News

MUSE hosting Europe’s largest science communication conference

11.06.2015 | Event News

 
Latest News

Aluminum Clusters Shut Down Molecular Fuel Factory

06.07.2015 | Power and Electrical Engineering

Veja Mate Offshore orders 67 wind turbines including record long-term service

06.07.2015 | Press release

The quantum middle man

06.07.2015 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>