Abstract
Microfinance institutions (MFIs) supply financial services to micro-enterprises and low-income families. MFIs pursue the double bottom lines of social development and financial returns, and their funding is supplied by a range of sources from donations to commercial investments. Microfinance is thus an arena in which donors meet professional investors, and it has quickly developed into a large industry. Currently, more than 3000 MFIs report their numbers to www.microfinancesummit.org and serve altogether more than 150 million people with microcredit. More than 100 international funds invest in MFIs, and microfinance is about to become an important asset class for investors, particularly those pursuing both financial and social returns (www.mixmarket.org).
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Barth, M. E., Beaver, W. H. and Landsman, W. R. (2001). ‘The Relevance of the Value Relevance Literature for Financial Accounting Standard Setting: Another View’. Journal of Accounting and Economics 31, 77–104.
Barth, M. E., Cram, D. P. and Nelson, K. K. (2001). ‘Accruals and the Prediction of Future Cash Flows’. The Accounting Review 76, 27–58.
Barth, M. E., Landsman, W. R. and Lang, M. H. (2008). ‘International Accounting Standards and Accounting Quality’. Journal of Accounting Research 46, 467–98.
Beisland, L. A. (2011). ‘The Predictive Ability and Value Relevance of Accounting Measures’. International Journal of Economics and Accounting 2, 215–41.
Beisland, L. A. and Mersland, R. (2012). ‘An Analysis of the Drivers of Microfinance Rating Assessments’. Nonprofit and Voluntary Sector Quarterly 41, 213–31.
Ben-Hsien, B. and Da-Hsien, B. (2004). ‘Income Smoothing, Earnings Quality and Firm Valuation’. Journal of Business Finance & Accounting 31, 1525–57.
Bruett, T. (2005). Measuring Performance of Microfinance Institutions (Washington, DC: SEEP Network).
Christen, R. P., Rhyne, E., Vogel, R. C. and McKean, C. (1995). ‘Maximizing the Outreach of Microenterprise Finance: An Analysis of Successful Microfinance Programs’. Agency for International Development, Washington, USA: Program and Operations Assessment Report No, 10.
Crabtree, A. and Maher, J. (2005). ‘Earnings Predictability, Bond Ratings, and Bond Yields’. Review of Quantitative Finance & Accounting 25, 233–53.
Cramer, J. S. (1987). ‘Mean and Variance of R2 in Small and Moderate Samples’. Journal of Econometrics 35, 253–66.
Dechow, P. M. (1994). ‘Accounting Earnings and Cash Flows as Measures of Firm Performance: The Role of Accounting Accruals’. Journal of Accounting & Economics 18, 3–42.
Dechow, P. M. and Dichev, I. D. (2002). ‘The Quality of Accruals and Earnings: The Role of Accrual Estimation Errors’. Accounting Review 77, 35–60.
Dechow, P. M. and Ge, W. (2006). ‘The Persistence of Earnings and Cash Flows and the Role of Special Items: Implications for the Accrual Anomaly’. Review of Accounting Studies 11, 253–96.
Dichev, I. D. and Tang, V. W. (2009). ‘Earnings Volatility and Earnings Predictability’. Journal of Accounting & Economics 47, 160–81.
Francis, J., LaFond, R., Olsson, P. and Schipper, K. (2003). ‘Earnings Quality and the Pricing Effects of Earnings Patterns’. Working Paper – Duke University.
Francis, J., LaFond, R., Olsson, P. M. and Schipper, K. (2004). ‘Costs of Equity and Earnings Attributes’. Accounting Review 79, 967–1010.
Francis, J., Olsson, P. and Schipper, K. (2006). ‘Earnings Quality’. Foundations and Trends in Accounting 1, 259–340.
Francis, J. and Smith, M. (2005). ‘A Reexamination of the Persistence of Accruals and Cash Flows’. Journal of Accounting Research 43, 413–51.
Givoly, D., Hayn, C. K. and Katz, S. P. (2010). ‘Does Public Ownership of Equity Improve Earnings Quality?’ Accounting Review 85, 195–225.
Graham, J. R., Harvey, C. R. and Rajgopal, S. (2005). ‘The Economic Implications of Corporate Financial Reporting’. Journal of Accounting & Economics 40, 3–73.
Greene, W. H. (2003). Econometric Analysis (Upper Saddle River, NJ: Prentice Hall).
Gutiérrez-Nieto, B. and Serrano-Cinca, C. (2007). ‘Factors Explaining the Rating of Microfinance Institutions’. Nonprofit and Voluntary Sector Quarterly 36, 439–64.
Hashemi, S. (2007). Beyond Good Intentions: Measuring the Social Performance of Microfinance Institutions (Washington, DC: Focus Note, CGAP).
Hayn, C. (1995). ‘The Information Content of Losses’. Journal of Accounting & Economics 20, 125–53.
Kormendi, R. and Lipe, R. (1987). ‘Earnings Innovations, Earnings Persistence, and Stock Returns’. Journal of Business 60, 323–45.
Lang, M., Smith Raedy, J. and Wilson, W. (2006). ‘Earnings Management and Cross Listing: Are Reconciled Earnings Comparable to US Earnings?’ Journal of Accounting & Economics 42, 255–83.
Manos, R. and Yaron, J. (2009). ‘Key Issues in Assessing the Performance of Microfinance Institutions’. Canadian Journal of Development Studies 29 (1–2), 101–22.
Melumad, N. D. and Nissim, D. (2008). ‘Line-Item Analysis of Earnings Quality’. Foundations & Trends in Accounting 3, 87–221.
Michelson, S. E., Jordan-Wagner, J. and Wootton, C. W. (2000). ‘The Relationship Between the Smoothing of Reported Income and Risk-Adjusted Returns’. Journal of Economics and Finance 24, 141–59.
Schipper, K. (1989). ‘Commentary on Earnings Management’. Accounting Horizons 3, 91–102.
Schipper, K. and Vincent, L. (2003). ‘Earnings Quality’. Accounting Horizons 17, 97–110.
Schreiner, M. (1997). A Framework for the Analysis of the Performance and Sustainability of Subsidized Microfinance Organizations with Application to Bancosol of Bolivia and Grameen Bank of Bangladesh. USA, The Ohio State University. Doctoral Dissertation.
Schreiner, M. (2002). ‘Aspects of Outreach: A Framework for Discussion of the Social Benefits of Microfinance’. Journal of International Development 14, 591–603.
Sloan, R. G. (1996). ‘Do Stock Prices Fully Reflect Information in Accruals and Cash Flows About Future Earnings?’ Accounting Review 71, 289–315.
Subramanyam, K. R. and Venkatachalam, M. (2007). ‘Earnings, Cash Flows, and Ex Post Intrinsic Value of Equity’. Accounting Review 82, 457–81.
Yaron, J. (1992). ‘Assessing Development Finance Institutions: A Public Interest Analysis’. The World Bank, Washington, USA: Word Bank Discussion Paper 174.
Zeller, M. and Meyer, R. L. (2002). ‘Improving the Performance of Microfinance: Financial Sustainability, Outreach and Impact’. The Triangle of Microfinance: Financial Sustainability, Outreach and Impact. Baltimore, USA: The John Hopkins Univsersity Press.
Editor information
Editors and Affiliations
Copyright information
© 2013 Leif Atle Beisland and Roy Mersland
About this chapter
Cite this chapter
Beisland, L.A., Mersland, R. (2013). Earnings Quality in the Microfinance Industry. In: Gueyie, JP., Manos, R., Yaron, J. (eds) Microfinance in Developing Countries. Palgrave Macmillan, London. https://doi.org/10.1057/9781137301925_5
Download citation
DOI: https://doi.org/10.1057/9781137301925_5
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-34563-2
Online ISBN: 978-1-137-30192-5
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)