ASSESSMENT: Quantitative Financial Analysis

Module Code: BMA 0092 Module Title: Quantitative Financial Analysis Assessment Type Individual Assignment (Report) Academic Year 2021/22 Assessment Task This assignment concerns two topics on empirical research of accounting and finance. You are required to choose ONE topic and answer ALL the research questions in that topic using empirical analysis. You will be provided with different sets of data for each of the two topics (Topic 1: Earning management and Topic 2: Pension fund investment). The datasets will be available in the Brightspace. The companies in the dataset (and the topic) you have chosen will be the focus of your analyses. Task specific guidance: Topic 1: Earning management Research questions: (1) To what extent can accounting and financial data be used to detect earning management?  Question (1) must be answered by independently selecting 5 or more financial ratios. Examples and data collection methods will be provided as the course progresses. (2) Can these models based upon accounting and finance data be improved by including corporate governance information?  In order to answer research Question (2) you will be provided with a dataset containing various corporate governance variables to use as you feel necessary. (3) Given your analyses, what evidence can you provide as to the main cause(s) for companies engaging in earning management? Topic 2: Pension fund investment decisions Research questions: (1) To what extent can companies financial characteristics determine pension asset allocations?  Question (1) must be answered by independently selecting 5 or more financial ratios. Examples and data collection methods will be provided as the course progresses. (2) Can these models based upon accounting and finance data be improved by including corporate governance information?  In order to answer research Question (2) you will be provided with a dataset containing various corporate governance variables to use as you feel necessary. (3) Given your analyses, what evidence can you provide as to the main cause(s) for companies change their pension asset allocations? A minimum requirement to pass this module is that students should be able to determine if they are able to identify key financial characteristics of companies (at least 5 of your choice). Students should demonstrate the ability to include descriptive analysis and regression analysis in order to answer the questions. Students should be able to comment on the results of the initial multivariate model and refer to the prior literature. The initial multivariate model must be compared in terms of accuracy to a further model which incorporates corporate governance measures in order to answer Question 2. Please submit your report in a single document. Create an appendix section at the end which contains all the Stata code needed to reproduce your results (you do not need to include the code that failed to run, but just the cleaned-up version. Your code must work when the module leader run it in the relevant software). Failure to include the Stata code means that the coursework will be marked incomplete. Plagiarism in any form is not tolerated by the University of Huddersfield Business School. Marking criteria are specified in the appendix 1. Structure: Using the tools provided, you are required to conduct independent research to investigate and answer the research questions. Your final written document should adhere to the following structure: " Abstract " Brief Introduction with mini Literature Review " Methodology " Data " Ethics, Sustainability & Responsibility " Results " Conclusion " References " Appendices Recommended reading:  Amir, E., & Benartzi, S. (1999). Accounting recognition and the determinants of pension asset allocation. Journal of Accounting, Auditing & Finance, 14(3), 321- 343.  Amir, E., Guan, Y., & Oswald, D. (2010). The effect of pension accounting on corporate pension asset allocation. Review of Accounting Studies, 15(2), 345-366.  An, H., Lee, Y. W., & Zhang, T. (2014). Do corporations manage earnings to meet/exceed analyst forecasts? Evidence from pension plan assumption changes. Review of Accounting Studies, 19(2), 698-735. 2  Anantharaman, D., & Lee, Y. G. (2014). Managerial risk taking incentives and corporate pension policy. Journal of Financial Economics, 111(2), 328-351.  Chen, G., Firth, M., Gao, D. N., & Rui, O. M. (2006). Ownership structure, corporate governance, and fraud: Evidence from China. Journal of Corporate Finance, 12(3), 424-448.  Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. Accounting Review, 193-225.  Jones, J. J. (1991). Earnings management during import relief investigations. Journal of Accounting Research, 29(2), 193-228.  Phan, H. V., & Hegde, S. P. (2013). Corporate governance and risk taking in pension plans: Evidence from defined benefit asset allocations. Journal of Financial and Quantitative Analysis, 48(3), 919-946.  Tang, D. Y., & Zhang, Y. (2018). Do shareholders benefit from green bonds?. Journal of Corporate Finance.  Xie, B., Davidson III, W. N., & DaDalt, P. J. (2003). Earnings management and corporate governance: the role of the board and the audit committee. Journal of Corporate Finance, 9(3), 295-316. General study guidance:  The University has regulations relating to academic misconduct, including plagiarism. The Learning Innovation and Development Centre can advise and help you with how to avoid poor scholarship and potential academic misconduct. You can contact them at *This Text is Removed by Studyfull for Privacy & Security Purposes*.  If you have any concerns about your writing, referencing, research or presentation skills, you are welcome to consult the Learning Innovation Development Centre team *This Text is Removed by Studyfull for Privacy & Security Purposes*. It is possible to arrange 1:1 consultation with a LIDC tutor once you have planned or written a section of your work, so that they can advise you on areas to develop. Assessment criteria  The Assessment Criteria are shown at the end of this document. Your tutor will discuss how your work will be assessed/marked and will explain how the assessment criteria apply to this piece of work. These criteria have been designed for your level of study.  These criteria will be used to mark your work and will be used to support the electronic feedback you receive on your marked assignment. Before submission, check that you have tried to meet the requirements of the higher-grade bands to the best of your ability. Please note that the 3 marking process involves academic judgement and interpretation within the marking criteria.  The Learning Innovation Development Centre can help you to understand and use the assessment criteria. To book an appointment, either visit them on The Street in the Charles Sikes Building or email them on Learning Outcomes This section is for information only. The assessment task outlined above has been designed to address specific validated learning outcomes for this module. It is useful to keep in mind that these are the things you need to show in this piece of work. On completion of this module, students will need to demonstrate: Learning Outcomes 1. Demonstrate a critical understanding of econometric techniques that can be applied to cross section, time series and panel data. 2. Critically apply econometric techniques to analyse financial data. Ability Ability Outcomes 3. Justify the selection of quantitative techniques in financial research. 4. Communicate quantitative data appropriately in writing using academic conventions. 5. Able to utilise the relevant quantitative analysis software. Please note these learning outcomes are not additional questions. Submission information Word/Time Limit: 2500 words (not acceptable to be above this word limit). Word limit does not include tables, figures, footnotes and references. Submission Date: 12 June 2022 Feedback Date: 12 July 2022 Submission Time: 15:00 Submission Method: 4