The Relationship Between Executive Compensation and Firm...

THE RELATIONSHIP BETWEEN EXECUTIVE COMPENSATION AND FIRM PERFORMANCE IN KENYAN BANKING INDUSTRY Dr. Josiah Aduda, jaduda@uonbi.ac.ke, Lecturer and chairman, department of Finance and Accounting, School of Business, University of Nairobi, Kenya and Leonard Musyoka, University of Nairobi Abstract Economic theory of executive pay has focused on the design of optimal compensation schemes to align the interests of hired managers and shareholders. Agency theory has identified several factors by which these interests may differ; including the level of effort exerted by the manager and problems resulting from the unobservabilty of the agent’s relevant skills. The design of optimal compensation contracts essentially†¦show more content†¦For decades accounting measures have been used as primary indicators of managerial performance with prior research documenting a significant relation between accounting based performance and executive compensation (Antle and Smith, 1986, Ittner, et al., 1997). Moreover, both the annual cash bonus and the sum of the cash bonus plus stock based compensation have been linked to accounting based performance as well as numerous other attributes of the firm’s governance structure (Core, et al., 1999). The compensation aspect suggests that most annual cash bonus plans for key executive officers are based in large part on accounting performance measures (Ittner, et al., 1997). There is also some relation between accounting performance and stock based compensation in many firms since the pool of stock options or stock awards to be distributed each year is often based on annual accounting performance measures. There is a high degree of correlation in the total annual inceptive pay amongst the top executives in each firm, and it is commonly assumed that what is observed for the CEO is representative of the incentive pay for the entire top management team for most entities (Antle Smith, 1986; Gore, et al., 2003; Ittner, et al., 1997). Accounting and finance has also extensively been debated on as to whether accounting information should be used to measure managerial performance (Bushman and Indjejikian, 1993; Kim and Suh, 1993;Show MoreRelatedRole of Cultural Factors in Shaping Human R esource Management6912 Words   |  28 Pageslooked into the issues related to how culture plays a role in shaping key Human Resource(HR) practices such as: compensation policy, job security, training and development, selection and recruitment, decentralization and teamwork, and information sharing in the South Asian context. In this paper, Hosftede’s (1980) culture dimensions are used as a lens to explore the relationship between critical HR practices and Bangladeshi employees. Identification of these critical practices should help theRead MoreEffects of Retention Strategies on Employee Turnover8857 Words   |  36 PagesIf there are images in this attachment, they will not be displayed. Download the original attachment RESEARCH PROPOSAL THE EFFECT OF ORGANIZATIONAL RETENTION STRATEGIES ON EMPLOYEE TURNOVER (A Case Study of the Kenyan Courts-Mombasa Law Courts) PRESENTED BY NAME: SUPERVISED BY: DATE PRESENTED: ABSTRACT This paper presents some of the existing institutionalRead MoreThe Effects of Ownership Structure, Board Effectiveness and Managerial Discretion on Performance of Listed Companies in Kenya27922 Words   |  112 PagesTHE EFFECTS OF OWNERSHIP STRUCTURE, BOARD EFFECTIVENESS AND MANAGERIAL DISCRETION ON PERFORMANCE OF LISTED COMPANIES IN KENYA ONGORE, VINCENT OKOTH Thesis submitted in fulfillment of the requirements for the award of the degree of Doctor of Philosophy (Ph D) in Business Administration, School of Business, University of Nairobi, Kenya. 2008. DECLARATION I declare that this thesis is my original work and, to the best of my knowledge, has not been submitted to any university for a degreeRead MoreFunctional Approach to Internal Analysis14942 Words   |  60 Pagesis a tool used to express the needs of a client/user in terms of functions and performances expected, instead of focusing on a solution. In other words, the problem is presented without thinking about the solution. To accomplish this, the buyer must identify, sort, characterize and prioritize the needs of a client (internal customer). Functional analysis is the basic tool for Value Management. Value is the ratio between the level of client satisfaction and the relative cost of a product or serviceRead MoreComparative Annual Report7272 Words   |  30 Pagesfinancial performance. It is general documents that give shareholders an idea of the condition of the company as a whole. The Securities Commission makes public companies disclose certain information to the shareholders of the company. It will create a standardized method that investors can use to evaluate the potential of a company. The purpose of this project is to analyze the annual reports between two industries. For our project paper, we have focus on services and plantation industries and comparedRead MoreAn Investigation Into Effectiveness of Performance Appraisal Tools11338 Words   |  46 PagesAN INVESTIGATION INTO THE EFFECTIVENESS OF PERFORMANCE APPRAISAL TOOLS USED ON EMPLOYEE PERFORMANCE: (A CASE OF KENYA ANTI CORRUPTION COMMISSION) BY: RESEARCH PROPOSAL SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR AWARD OF A DEGREE OF BACHELOR OF BUSINESS AND OFFICE MANAGEMENT OF JOMO KENYATTA UNIVERSITY OF AGRICULUTURE AND TECHNOLOGY MAY 2008 DECLARATION This research proposal is my original work and has not been presented in any universityRead More65 Successful Harvard Business School Application Essays 2nd Edition 147256 Words   |  190 Pagesthe essays to demonstrate different aspects of your intellectual, emotional, and moral fiber. For instance, if you choose to prove your ability as a competent project manager in one essay, you may wish to discuss a more personal issue like your relationship with your parents or partner in the  ·next., Reach inside yourself for examples of strength, confidence, and accomplishment. In the end, your fundamental objective is to prove that you are greater than the sum of your individual application partsRead MoreImplication of Oil and Gas Investment in Ghana15418 Words   |  62 Pagesgold†, fuels the global economy. Oil converted into gas, petrol and diesel fuels our various modes of transportation that allows for the movement of goods and people around the globe. Due to the enormous fi nancial resources that can accrue from this industry, the discovery of oil in any location, particularly developing countries, is greeted with great optimism. Such was the case in the golden jubilee year of Ghana’s independence when oil was discovered in commercial quantities in the Western Region

Features of Post Colonialism and Its Application on Four...

TERM PAPER Novel What is post colonialism?What are dominant features of post colonialism?Apply post-colonial theory on four novels Features of Post-colonial theory Application of post-colonial theory on four Post-colonial novels Abstract The aim of author is to correctly explore the definition of Postcolonial. The prominent features of post-colonial novel are explained in the next part of this assignment. Then four novels of postcolonial era are selected to apply the post-colonial theory on them. It is tried to explain these post-colonial novel in the light of postulates of post-colonial theory.Generally the term postcolonial stands for the period at the end of colonialism. It was the time†¦show more content†¦Surely, the reevaluation of national identity is an eventual and essential result of a country gaining independence from a colonial power, or a country emerging from a fledgling settler colony. It is a big undertaking for an author to claim to be a representative of entire identity and to convey postcolonial message. Each nation, province, island, state, neighborhood and individual has its own unique amalgamation of history, culture, language and tradition. Only by understanding and embracing the idea of cultural hybridity when attempting to explore the concept of national identity can any one individual, or nation, truly hope to understand or communicate the lasting effects of the colonial process. Displacement or dislocation is another key feature of post colonialism and it means displacement that occupation and other experiences linked with this process. At that time this feature of displacement was seen at large. People were leaving their homes to settle in colonies. The transportation of slaves also comes under the cover of this term. It may be a willing or unwilling displacement. Invasion and settlement is also a form of dislocation. The effects of displacement for the people who have been placed in a location, because of colonial hegemonic practices need to be reinvented in language, in narrative and in myth. This term stands for unhousedness or uncanniness. This process of displacement is disruptive and disorienting but itShow MoreRelatedEssay on Like water for chocolate6961 Words   |  28 Pagesrealistic laws of cause and effect are suspended: whereas events in realistic novels occur for reasons that are eventually made clear and lead logically to the conclusion of the plot, in magical realism events don’t follow these â€Å"normal† expectations so we often see things happening without an explanation and or reasons we can’t or don’t expect—we are left to accept even the strange without surprise. In realistic novels, characters are given individualized names, personalities, and family historiesRead MoreOne Significant Change That Has Occurred in the World Between 1900 and 2005. 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Associated Systems Computer Program Product -Myassignmenthelp.Com

Question: Discuss About The Associated Systems Computer Program Product? Answer: Introducation From the situation provided it can be said that Berowra Accountants are providing a guarantee of the tax refund to their clients via special advertising ways. In this case, it is worthwhile to know the basic concept of tax refund. To explain tax refund, it can be said that it is the difference between the paid tax and the owed tax. To determine whether a business organization will receive a tax refund or not is totally dependent on the factors like the profit, income and the expenses regarding tax of the concerned business operations. It will not be possible for the auditors to ensure a tax refund (Galit and Metaban 2012). Apart from that the major responsibility of the auditors are to scrutinize the financial accounting of the business organizations to identify the material misstatement and also to check the compliances. Thus it can be said that it would be definitely a non-audit service in case of tax refund. Due to this reason as per APES 110 Code of Ethics for Professional Accoun tants, Section 130, the act of Berowra Accountants has broke the principle of Professional Competence and Due Care (Han Fan, Woodbine and Cheng 2013). According to this act, an auditor can retain their clients by getting to know the limitations of the professions and in this case the accountants of Berowra have not been able to do so. As per the case study provided, Jamie Harvey, who is an auditor of a charter accounting firm is been asked to take up the role of the treasurer of a local club and Harvey only does audit of large public organizations. it should be mentioned that the athletic clubs are considered to be non-profit-organizations. As per APES 110 Professional Appointment, Section 210, while accepting an appointment of a new client, the auditors should determine whether the acceptance of the appointment would affect the compliance of the basic ethical principles of audit. In this case, if the proposal of becoming the treasurer gets accepted by the auditor, there would not be any breach of principles due to some reasons (Ottaway 2014). The reasons are Harvey is the auditor of a large public concern and there is no relation between the operations of a large business organization and local clubs. Another reason is that no basic ethical principle will be affected in case of appointment in the organizations wh ich are of non-profit category (Kuan 2014). These are the reasons that ensure that there will be no issues which are ethical. In the case provided, there is a situation mentioned where the payment of the auditor, which is payable Accountants is immensely dependent audit opinion that should be appropriate to the audit client Monlec Ltd. It explains that Monlec Ltd is asking for a favorable audit report from the auditors. In this regard, it is worthwhile to mention that the auditors are the representatives of investors and the stakeholders; not the organizations. As per APES 110 Principle of Objectivity, Section 120, the auditors should not conciliate their professional and business judgment for any type of biasness, influence or any conflict of interest (Athanasiou 2014). It explains that the judgment of the auditors must not be manipulated by any types of biasness or influence. As per the situation provided, if the audit report provided by the auditor is favorable for Monlec Ltd, there will be a breach of objectivity principle of auditing. There shall not be any violation of ethical principles of auditing i f the auditors does not provide an opinion that is biased (Trung 2015). In the case provided, it is evident that Winton Accountants has provided all the papers and reports of Motoring services to the Chadwick Chartered Accountants. Chadwick Chartered accountants have the job of reviewing the quality o audit if the Winton Accountants. This situation shows that the Chadwick Chartered Accountants have to carry out various processes and tests to check the Winton accountants quality of auditing. As per APES 110 Principles of Confidentiality, Section 140, the auditors have professional obligations to sustain the confidentiality of the acquired information regarding the auditing clients. It shows that the auditor should not disclose the information previously acquired regarding the audit clients to any third party. According to the situation provided, it is seen that Winton Accountants have unveiled all important data and information regarding Motoring Services to Chadwick Chartered Accountants by providing them with all the audit papers (Carey, Monroe and Shai ler 2014). Thus in this particular case, Winton Accountants have violated the principles of the confidentiality regarding auditing with their specified actions. From the case study provided, it can be seen that the Thornleigh Accountants have sent Jane Davis to replace Leona Ng in order to complete the audit work of Jenkins Ltd because of the illness of Leona. The situation is that the management of Thornleigh Accountants are inclined to take Jane Davis in the audit team of the organization in order to conduct the audit works of Jenkins Ltd from the middle of July. This situation enhances the threat of interdependence of audit for Thornleigh Accountants. As per APES 110, Self-review Threat, Section 100.12, a member of an audit team should not possess the right to use the outcomes of the judgment of previous audit made by any other members of the same audit team. Apart from that, it also explains that the outcomes of previous judgments of audit by any member of the same team cannot be used. A same principle is also applicable for the Thornleigh Accountants because the organization is making plans to use the judgment of audit done by Jane Davi s as she has been the accounts manager of Jenkins Ltd and possesses the knowledge regarding the accounts of the business organization (DeFond and Zhang 2014). Hence, it can be said that the self-review threat of the independence of the auditors shall be raised in the case Thornleigh Accountants involving Jane Davis in the audit team. According to the situation provided, it can be said that John Darrow is accountable to conduct the operations of audit of Winmalee Ltd. Winmalee Ltd has provided all the accounting papers including computer files and accounting standards to John to support their intangible assets valuation. In this regard it is necessary to mention that that it should be the responsibility of the auditors to attain conclusive evidences by scrutinizing various types of financial accounts of the audit clients and the auditors should not consider any papers provided to them by the audit client. According to the situation provided, the auditors can feel pressurized by the audit client to agree with the audit clients judgment. Apart from that, by providing the papers Winmalee Ltd can definitely indirectly pressurize John to give favorable audit report to them. Therefore, according to APES 110, Section 200.8, the specified situation can definitely create Intimidation Threat to the independence of the audit ors (Ojo 2013). In accordance to the case study provided, it can be said that the chocolate company has invited the auditors to stop over the second chocolate show and also the organization invited the auditors to the social club of the business organization. In this context, it sould be mentioned that the auditors should not involve any types of entertaining activities with the audit clients. As per APES 110, Self-interest Threat, Section 100.12, there should be a threat to the independence of the auditors in case of any types of nonfinancial or financial interest of the influence of the auditors regarding their opinion on the audit. In the case study, it can be noticed that the chocolate company might be trying to manipulate the auditors by inviting them in entertaining activities with a strong motive of manipulating the outcomes of the audit (Deumes et al. 2012). Therefore it can be said that if the auditors choose to accept the invitation of the management of the chocolate company, they shall fa ll under the self-interest threat of the independence of the auditor. The chief responsibility of the auditors are to scrutinize th financial statements of the business organizations to make sure that the financial statements of the organizations are free from all types of material misstatements and they are prepared by complying with all major regulations. Apart from that, the auditors should not make comments on the financial position of any organization without seeing any fraudulent activities. In the case of Connor organization, it is seen that the organization is dependent on the bank overdraft to pay off their debts. Subsequently the bank wants the repayment of the sum within 1 month. It explains the weak financial condition of the organization and the auditor has not faced any types of material misstatement regarding the financial statement of Connor Company. This explains that the organization did not edit their financial statements to hide their financial condition. Hence the auditor should issue Unqualified Audit Opinion for Connor Company (T sipouridou and Spathis 2014) It should be the responsibility of the organizations to present their financial statements depending on the accounting principle standards. Apart from that, they should comply with the regulations of accounting of the country where they are operating. In the case study that is provided, it is seen that the organization should follow FIFO method for the valuation of inventory, but currently they are using LIFO method because their parent company back in United States use that method. Thus the differential effect between FIFO and LIFO has majorly affected the valuation of inventory making a material misstatement. Thus, in this case, the auditor has the rights to issue adverse opinion. As apart there are no discrepancies in any financial statement, there should not be any compliance issues. In this case, the auditor can issue Qualified Audit Option, where the auditor can add a paragraph highlighting the reason behind the report being unqualified (Rahimian, Tavakolnia and Karamlou 2014). The business organizations should do valuation of the fixed assets like machinery, building, plant and others on a regular basis because of the changing market price. For Victorian Manufacturing Company, it can be seen that they have not done the valuation of their Melbourne factory for the last five years as the directors of the organization thought that there are no changes in the market valuation. This can create major material misstatement. Thus while auditing the auditors will not be able to give accurate audit opinions and can issue Disclaimer of Opinion (Kachelmeier, Schmidt and Valentine 2016). References Athanasiou, A., 2014. Avoiding client persuasion.Taxation in Australia,48(10), p.601. Athanasiou, A., 2014. Boy, you're gonna carry that weight a long time!.Taxation in Australia,49(2), p.106. Carey, P.J., Monroe, G.S. and Shailer, G., 2014. Review of Post?CLERP 9 Australian Auditor Independence Research.Australian Accounting Review,24(4), pp.370-380. DeFond, M. and Zhang, J., 2014. A review of archival auditing research.Journal of Accounting and Economics,58(2), pp.275-326. Deumes, R., Schelleman, C., Vander Bauwhede, H. and Vanstraelen, A., 2012. Audit firm governance: Do transparency reports reveal audit quality?.Auditing: A Journal of Practice Theory,31(4), pp.193-214. Galit, S.H. and Sorbe, T., Metabank, 2012.Computerized extension of credit to existing demand deposit accounts, prepaid cards and lines of credit based on expected tax refund proceeds, associated systems and computer program products. U.S. Patent 8,090,649. Han Fan, Y., Woodbine, G. and Cheng, W., 2013. A study of Australian and Chinese accountants attitudes towards independence issues and the impact on ethical judgements.Asian Review of Accounting,21(3), pp.205-222. Kachelmeier, S.J., Schmidt, J.J. and Valentine, K., 2016. The disclaimer effect of disclosing critical audit matters in the auditors report. Kuan, K.T.C., 2014.Auditor independence: an analysis of the adequacy of selected provisions in CLERP 9(Doctoral dissertation, Queensland University of Technology). Ojo, M., 2013. Audits, audit quality and signalling mechanisms: concentrated ownership structures. Ottaway, J., 2014. IMPROVING AUDITOR INDEPENDENCE IN AUSTRALIA: IS MANDATORY AUDIT FIRM ROTATIONTHE BEST OPTION?. RAHIMIAN, N., TAVAKOLNIA, E. and KARAMLOU, M., 2014. Qualified Audit Opinion and Debt Maturity Structure. Trung, N.K., 2015. Ethics Education In The University.International Journal of Scientific Technology Research,4(8), pp.5-10. Tsipouridou, M. and Spathis, C., 2014, March. Audit opinion and earnings management: Evidence from Greece. In Accounting Forum(Vol. 38, No. 1, pp. 38-54). Elsevier.