International Research Journal of Finance and Economics
 Issue 167
 May, 2018
Assessing the Quality of Local Government Financial Report Before Applying the Government Accounting Standards of Accrual Basis (Cash Toward Accrual) in 2014 and Two Years After Applying Accrual Basis in 2015 and 2016

This study was undertaken to examine the quality of the financial report of Jambi Provincial Government during the preparation of the financial reports which are still using cash towards accrual basis in 2014 and two years after using accrual basis in 2015 and 2016. Assessment of the quality of financial reporting in this study by looking at opinion of audit results by Supreme Audit Agency which was viewed from three aspects: (1) aspects of the examination of the Financial Report (2) aspects of the examination of internal control systems, and (3) aspects of the examination of compliance with the legislation.
The results of the review of these three aspects indicate that the quality of the financial report of the Government of Jambi Province in the last three years in good categories with an unqualified opinion, except for year 2014 the financial report with component balance sheet has not described the total value of real assets because it has not counted the calculation of depreciation of fixed assets. Meanwhile, in 2015 and 2016 the financial report quality is also in the good category and the information presented is more informative because it recount the preparation of fixed assets that have defined the actual value of the total assets. Measuring the quality of the financial report of the aspects of the examination of internal control system and compliance with the legislation in the past three years still has some weaknesses because of lack of human resources in accounting skill, but every year it becomes better because of the cases in these two aspect decline. This means that the financial performance of the Jambi Provincial government becomes better. Therefore, it improves the quality of finacial reportautomatcally.
Keywords: Quality of Financial Report, Opinion, Cash Basis, Accrual Basis, Assets
JEL Classification:
Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach
Sharon Rebecca Tan, Hiram Ting, Nelson Lajuni, Yusman Yacob and Joseph Wee Siong Hii

This research is a case study involving an oil palm plantation company (Case Company) which owns seven oil palm plantations. These seven plantations had all been valued by Licensed Property Valuers (LPV) who used the market comparison method. The research study applies the Discounted Cash Flow Method (DCF Method), a quantitative financial model as a business valuation method, to value the seven plantations. This research study starts out by looking for an alternative or comparative business valuation method so that it can be used as an additional valuation tool in the loan credit evaluation process, in addition to the LPV valuation. The test results show the two sets of values to be significantly similar. The results of the study supported the DCF Method for valuation for the palm oil plantations. This finding is important because it is of tremendous benefit to both practitioners, especially, those in the banking industry, and the academia to have a financial business valuation model that can be used to enhance the loan credit evaluation process. This gives the confidence that the DCF Method can be considered to be used for valuation purposes for bank loan collaterals. However, because of some limitations of this research study, this study should be replicated for further studies to be conducted to further reaffirm the proposal for the DCF Method to be completely accepted as a business valuation approach for bank credit purposes.
Keywords: Discounted Cash Flow (DCF) method, licensed property valuers (LPV), crude palm oil (CPO), palm oil industry, business valuation.
JEL Classification:
The Wealthy Hand-to-Mouth in Japan: Evidence from 1983 to 2012
Takeshi Niizeki

Using Japanese household panel data, this paper examines (i) what share of households are hand-to-mouth (HtM), (ii) what share of households are wealthy HtM (W-HtM), and (iii) whether W-HtM households respond more strongly to transitory income shocks than non-HtM (N-HtM) households. We find that approximately 11.2% of Japanese households are HtM, of which 7.3% are W-HtM, and that the consumption response of W-HtM households is similar to that of P-HtM and much larger than that of N-HtM households.
Keywords: Wealthy hand-to-mouth, illiquid wealth, household consumption.
JEL Classification: D12, E21
Survey of Hedging Techniques to Manage Foreign-Exchange Risk
Ahmad Bash, Abdullah M. Al-Awadhi, Afrah J. Al-Abdulhadi, Noura F. Al-Ibrahim and Musaed S. Al-Ali

This literature review surveys some of the main topics regarding foreign-exchange risk exposure managment. The basic goal is to conduct literature surveys on some of the major studies in the field that focus on foreign-exchange risk managment. The primary focus is to undersand when the firm must hedge and to differentiate between financial and operational hedging techniques. This is done by summarising some of the existing literature in these areas in order to synthesize this topic and understand the impact of hedging techniques on corporate foreign-exchange risk.
Keywords: Heging, Foreign-Exchange Risk.
JEL Classification: