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 Preferential trade agreements enhance global trade at the expense of its resilience
17.02.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung

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: Breakthrough with a chain of gold atoms

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

Im Focus: DNA repair: a new letter in the cell alphabet

Results reveal how discoveries may be hidden in scientific “blind spots”

Cells need to repair damaged DNA in our genes to prevent the development of cancer and other diseases. Our cells therefore activate and send “repair-proteins”...

Im Focus: Dresdner scientists print tomorrow’s world

The Fraunhofer IWS Dresden and Technische Universität Dresden inaugurated their jointly operated Center for Additive Manufacturing Dresden (AMCD) with a festive ceremony on February 7, 2017. Scientists from various disciplines perform research on materials, additive manufacturing processes and innovative technologies, which build up components in a layer by layer process. This technology opens up new horizons for component design and combinations of functions. For example during fabrication, electrical conductors and sensors are already able to be additively manufactured into components. They provide information about stress conditions of a product during operation.

The 3D-printing technology, or additive manufacturing as it is often called, has long made the step out of scientific research laboratories into industrial...

Im Focus: Mimicking nature's cellular architectures via 3-D printing

Research offers new level of control over the structure of 3-D printed materials

Nature does amazing things with limited design materials. Grass, for example, can support its own weight, resist strong wind loads, and recover after being...

Im Focus: Three Magnetic States for Each Hole

Nanometer-scale magnetic perforated grids could create new possibilities for computing. Together with international colleagues, scientists from the Helmholtz Zentrum Dresden-Rossendorf (HZDR) have shown how a cobalt grid can be reliably programmed at room temperature. In addition they discovered that for every hole ("antidot") three magnetic states can be configured. The results have been published in the journal "Scientific Reports".

Physicist Dr. Rantej Bali from the HZDR, together with scientists from Singapore and Australia, designed a special grid structure in a thin layer of cobalt in...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Booth and panel discussion – The Lindau Nobel Laureate Meetings at the AAAS 2017 Annual Meeting

13.02.2017 | Event News

Complex Loading versus Hidden Reserves

10.02.2017 | Event News

International Conference on Crystal Growth in Freiburg

09.02.2017 | Event News

 
Latest News

Stingless bees have their nests protected by soldiers

24.02.2017 | Life Sciences

New risk factors for anxiety disorders

24.02.2017 | Life Sciences

MWC 2017: 5G Capital Berlin

24.02.2017 | Trade Fair News

VideoLinks
B2B-VideoLinks
More VideoLinks >>>