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 Indicating Ongoing Weakness in Global Container Trade
23.07.2015 | Rheinisch-Westfälisches Institut für Wirtschaftsforschung e.V.

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

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: Quantum Matter Stuck in Unrest

Using ultracold atoms trapped in light crystals, scientists from the MPQ, LMU, and the Weizmann Institute observe a novel state of matter that never thermalizes.

What happens if one mixes cold and hot water? After some initial dynamics, one is left with lukewarm water—the system has thermalized to a new thermal...

Im Focus: On the crest of the wave: Electronics on a time scale shorter than a cycle of light

Physicists from Regensburg and Marburg, Germany have succeeded in taking a slow-motion movie of speeding electrons in a solid driven by a strong light wave. In the process, they have unraveled a novel quantum phenomenon, which will be reported in the forthcoming edition of Nature.

The advent of ever faster electronics featuring clock rates up to the multiple-gigahertz range has revolutionized our day-to-day life. Researchers and...

Im Focus: Superfast fluorescence sets new speed record

Plasmonic device has speed and efficiency to serve optical computers

Researchers have developed an ultrafast light-emitting device that can flip on and off 90 billion times a second and could form the basis of optical computing.

Im Focus: Unlocking the rice immune system

Joint BioEnergy Institute study identifies bacterial protein that is key to protecting rice against bacterial blight

A bacterial signal that when recognized by rice plants enables the plants to resist a devastating blight disease has been identified by a multi-national team...

Im Focus: Smarter window materials can control light and energy

Researchers in the Cockrell School of Engineering at The University of Texas at Austin are one step closer to delivering smart windows with a new level of energy efficiency, engineering materials that allow windows to reveal light without transferring heat and, conversely, to block light while allowing heat transmission, as described in two new research papers.

By allowing indoor occupants to more precisely control the energy and sunlight passing through a window, the new materials could significantly reduce costs for...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

3rd Euro Bio-inspired - International Conference and Exhibition on Bio-inspired Materials

23.07.2015 | Event News

Clash of Realities – International Conference on the Art, Technology and Theory of Digital Games

10.07.2015 | Event News

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

25.06.2015 | Event News

 
Latest News

Tool making and additive technology exhibition: Fraunhofer IPT at Formnext

31.07.2015 | Trade Fair News

First Siemens-built Thameslink train arrives in London

31.07.2015 | Transportation and Logistics

California 'rain debt' equal to average full year of precipitation

31.07.2015 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>