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Über dieses Buch

This book integrates corporate governance, corporate finance and accounting to formulate sound financial management strategies. It offers practical steps for managers using an integrated optimisation financial model to achieve good corporate governance practices which lead to lower risks and higher firm value.

Inhaltsverzeichnis

Frontmatter

1. Sound Financial Management Strategies for Achieving Good Corporate Governance Practices

The subject of this book is the formulation of sound financial management strategies for achieving the economic benefits of good corporate governance (GCG) practices through an optimisation financial model developed from managerial and financial accounting perspectives. This chapter presents the background of this study: the phenomenon of corporate failures, the current global financial crisis and the need for sound financial management strategies for achieving GCG practices. Good financial management strategies that incorporate elements of GCG practices are essential for a company’s survival. This chapter also provides an initial discussion of an optimisation approach as one of the methods for formulating sound financial management strategies. The chapter then emphasises the uniqueness of the current study and lists the aims of and motivation behind the research. A short discussion of the research methodology underpinning the study is presented next, followed by the contributions of the book, and a description of its structure.
Siti Nuryanah, Sardar M. N. Islam

2. The Foundations for Formulating Sound Financial Management Strategies Using an Integrated Financial Optimisation Model

A Critical Literature Review
As discussed in Chapter 1, to achieve the benefits of good corporate governance (GCG) practices a company needs sound financial management strategies. It is necessary that the formulation of these strategies is based on the interrelationships among corporate governance, corporate finance and accounting practices. Therefore this chapter presents three relevant theories and explanation of how they are interrelated as the basis for formulating sound strategies. The role of a mathematical model is also presented as a tool for formulating the strategies and for assessing the effectiveness of these strategies on achieving the benefits of GCG practices.
Siti Nuryanah, Sardar M. N. Islam

3. Conceptual Framework and Research Methodology

This chapter describes the conceptual framework of an integrated financial optimisation model for formulating sound financial management strategies in the context of good corporate governance (GCG) practices. The conceptual framework is developed to answer the main research question: What financial management strategies can help to achieve the benefits of GCG practices and how can they do this? From managerial and financial accounting perspectives the framework conceptualises and incorporates all factors relevant for sound financial management strategies for achieving the benefits of GCG practices. An integrated model that depicts the conceptual framework will then be tested and justified using a quantitative research methodology — namely a dynamic multi-period optimisation approach. Furthermore, proxies of GCG variables in the integrated model are carefully chosen so that the monetary effects of each variable of financial management strategies can be assessed and measured, thereby optimising the benefits of GCG practices which are to reduce risks and improve the value of a firm.
Siti Nuryanah, Sardar M. N. Islam

4. An Integrated Financial Optimisation Model for Formulating Sound Financial Management Strategies

The previous chapter which presented the conceptual framework and methodology of this book provides the basis for this chapter to develop an integrated financial model (computational optimisation in Accounting) for formulating optimal financial management strategies which can achieve the economic benefits of GCG practices. This chapter discusses the details of the proposed model.
Siti Nuryanah, Sardar M. N. Islam

5. The Context of the Case Study

This chapter will provide a bridge between the previous chapter which presented the details of the integrated financial optimisation model with the following chapter which is a numerical model of this study. This chapter presents the sample of the study and the snapshot of the company’s business activities including the country’s characteristics related to corporate governance practices, capital market and regulatory environments. Before describing the sample further, the sampling method is explained. Understanding the characteristics of the sample will give a clue to the application of the model and what the analysis and implications in the following chapters are drawn upon.
Siti Nuryanah, Sardar M. N. Islam

6. The Numerical Model, Results and Analysis

This chapter presents a numerical model and results of the study. Section 6.2 shows the numerical model of this study which is based on the integrated financial optimisation model developed in Chapter 4 and applied in a case study as described in Chapter 5. Section 6.3 describes the characteristics of the simulation software, while Section 6.4 presents the output of the model. In this section, the model is validated and verified to ensure its quality and plausibility for decision-making. Section 6.5 then discusses the sensitivity analysis of the model. Section 6.6 compares the optimal value created under the proposed sound financial management strategies with the book value which was achieved under the current strategies executed by the management (as shown in the financial statements). Finally, the chapter concludes with a discussion of the model’s plausibility and its applicability for generalisation. The results of the model presented in this chapter will be discussed further in Chapter 7.
Siti Nuryanah, Sardar M. N. Islam

7. Implications of The Results for Sound Financial Management Strategies, Corporate Governance, and Managerial and Financial Accounting Perspectives

The literature review in Chapter 2 revealed that the interrelationships among corporate governance, corporate finance and accounting practices, especially in an optimisation framework, have been overlooked by previous studies. Therefore, Chapter 3 discussed these interrelationships further, while Chapter 4 specified the relationships in a financial optimisation model.
Siti Nuryanah, Sardar M. N. Islam

8. Conclusion and Recommendations for Future Research

This final chapter provides a summary of the research developed by the study. Initially, this chapter discusses briefly the background and literature that motivated this study. Next, how to achieve its main objective: developing sound financial management strategies through a financial optimisation model is reviewed. Section 8.4 presents how this book achieves its specific aims which are: (1) determining the GCG practices, business risks and regulatory environments that should be incorporated into the financial management strategies of a company; (2) quantifying the policy and mechanisms of GCG practices and identifying the right proxy for them; (3) designing an integrated multi-period financial optimisation model based on managerial and financial accounting perspectives; and (4) using a FCF approach, which is believed to be the best approach, to quantify the economic benefits of GCG practice.
Siti Nuryanah, Sardar M. N. Islam

Backmatter

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