Search

Purpose A long history of literature has considered the role of information risk in determining the cost of equity. The question that has remained unanswered is whether information risk plays any systematic role in determining the cost of equity. One of the fundamental decisions that every business needs to make is to assess where to invest its funds and to re-evaluate, at regular intervals, the quality of its existing investments. The cost of capital is the most important yardstick to evaluate such decisions. Greater information is associated with the lower cost of capital via mitigating transaction costs and/or reducing estimation risk and stock returns. This study aims to investigate the impact of information risk on the cost of equity and corporate stock returns. Design/methodology/approach The research sample consists of 960 firm-year observations for companies listed on the Tehran Stock Exchange from 2009 to 2018. The research hypotheses were tested using multivariate regression models based on panel data. Findings The results reveal that information risk has a significant positive impact on the firm’s cost of equity. However, the impact of information risk on stock returns is not statistically significant. Originality/value To the best of the knowledge, the current study is almost the first of its kind in the Iranian literature which investigates the subject matter; therefore, the findings of the study not only extend the extant theoretical literature concerning the information risk in developing countries including the emerging capital market of Iran but also help investors, capital market regulators and accounting standard setters to make timely decisions.

Incorporating the firm’s corporate parent in a tax haven is a major decision that receives significant attention from many stakeholders, yet certain implications of this corporate strategy remain unclear. While tax haven incorporation offers tax savings, it also imposes risks that are potentially costly and hence important to consider. We predict and find a higher cost of equity capital in firms with parent companies that are incorporated in tax havens but that are primarily based in nonhaven countries. We also predict and find that the observed cost of equity premium is more pronounced in firms with greater tax risk, firm-level information risk, and country-level legal risk. We also employ corporate inversions in a difference-in-differences test and again find a positive relation between tax haven parent incorporation and the cost of capital. Our findings imply that an increased cost of capital is a material cost of tax haven parent incorporation. We contribute to the literatures on valuation of tax haven use, tax and nontax costs of corporate tax strategies, corporate inversions, and the relation between taxes and the cost of capital. Our study provides evidence on the tax and nontax risks of a uniquely observable tax strategy (i.e., tax haven parent incorporation) that could factor into firms’ decisions about whether to incorporate in a tax haven and policymakers’ efforts to deter such activity.

We assess information embedded in the difference between the reported book income and the taxable income (the book-tax difference, BTD hereafter) from the debtholders’ point of view. Using bank loan contracts of the U.S. publicly traded companies over years 2001–2017, we find that firms with larger book-tax differences pay higher interest for bank loans than do firms with smaller book-tax differences. Moreover, we find that banks reduce the use of financial covenants while increasing the use of general covenants for borrowers that have larger book-tax differences. In addition, banks are more likely to shorten loan maturity and require their loans to be collateralized for borrowers with larger book-tax differences. Furthermore, we find that the effects of BTDs on loan contracting are stronger if the CEOs of the borrowers are overconfident. Taken together, our findings suggest that larger book-tax differences increase a bank’s concerns regarding a borrower’s information risk and default risk. Thus, banks tend to take price and non-price protection against borrowers which have large BTDs.

P2P platform default risk seriously affects the returns of investors, which may cause systemic financial risks. The existing literature mostly focuses on borrower risk, ignoring the research on P2P platform default risk. This paper uses signal theory and data mining-related methods to study the default risk prediction of P2P platforms that integrate soft and hard information signals in different economic environments. First, using the cluster analysis method, the macroeconomic environment of P2P platforms is studied. Second, from the perspective of signal costs, signal theory is used to analyze the impacts of soft and hard information risk signals on platform default in different economic environments. Finally, by integrating the lasso and stacking methods, a LAS-STACK model is proposed to study the prediction of P2P platform default risk in the high-dimensional unbalanced data context. The conclusions of this paper show that the fusion of soft and hard information can better predict the default risk of P2P platforms, especially during periods with low economic levels. Additionally, the LAS-STACK model has a better prediction ability for the P2P platform default risk in the high-dimensional unbalanced data context. This study can improve the ability of regulators and P2P platforms to warn and manage default risks in a specific economic environment and protect investors' returns.

Under the impact of covid-19, the global and domestic manufacturing supply chains, almost suffered from the serious interruption crisis of manpower flow, logistics, information flow and capital flow. The risk of supply chain disruption has become the primary risk of the supply chain. However, some risk inducement of supply chain interruption is complex and diverse, so it is very difficult to grasp and screen the risk data needed for research from the supply chain operation data. To improve the robustness of supply chain for boosting the domestic and international circulation of China's manufacturing, in this paper, according to the characteristics of China's manufacturing supply chain and its risk incentives, the data needed for risk prediction modeling has been sorted out through questionnaire survey, and a regression model of risk prediction for manufacturing supply chain by using empirical method would be put forward. Then, C4.5 decision tree method is used to train and evaluation the risk prediction model. The conclusion shows that the customer satisfaction has great diagnostic value for risk, and the model has a strong sensitivity to market information risk and market order risk. The conclusion is more consistent with general cognition, and the model fits well, indicating that the model proposed in this paper has a certain theoretical significance, and its practical application value is worthy of further testing. © 2021, North Atlantic University Union NAUN. All rights reserved.

Relevance. Digitalization of education is becoming an increasingly urgent issue today. This is due both to the information transformations taking place all over the world and the online technologies usage trend. The education system as an integral and determinative part of all processes in society is also under the influence of the trend. It is obvious that under the conditions of informational isolation, remote access to educational resources is in demand more than ever. On the one hand, it entails a sharp increase of the importance of information and digital resources in education. But on the other hand, this leads to the wide range of threats and dangers that determine the risks for existing information systems in education and new ones. The aim of the study is to identify the information risk factors in the modern educational environment, on the basis of which it is possible to carry out a probabilistic analysis of its security. The methodological basis of the research combines the theory and practice of information and system approaches; modeling of a probabilistic model of information risks based on scenarios. Results and discussion. The study of the information aspect of education security has shown a fairly significant number of risks for information systems in education. At the same time, the range of such risks is constantly expanding due to the specifics of the information processes in education. It requires to take into account such risks and to assume system based measures aimed to assess the risks in the context of correlating the definitions “asset”, “vulnerability”, “threat” and “damage” in the information educational environment. Accordingly, this scenario-based approach makes it possible to create a general scheme of "security policy" in relation to information risks in education. Its implementation is represented as a risk management based on the analysis of the causes and consequences of an IS violation that also allows to analyze the security of the entire information educational environment. Conclusion. Implementation of the developed method allows to assess existing levels of risk and to conduct regular security analysis for the entire educational environment on the basis of probabilistic model based on the scenario method of educational environment information risks assessment.

The link between cost of capital and information risk is one of the most fundamental and controversial issues in financial accounting. We need an exogenous shock to unequivocally tease out the link...

The use of multisource information fusion technology to predict the risk of water inrush from coal floor is a research hotspot in recent years, but the current evaluation method is mainly based on a constant weight evaluation model. Using constant weights to reflect the control effect of changing factor state values on water inrush evaluation has obvious limitations, and it is unable to describe the control effect of the hydrogeological condition mutation on the water inrush from the floor. In order to solve the above problems, this manuscript introduces the idea of variable weight into the field of water inrush evaluation, expounds on the significance of variable weight theory for water inrush evaluation, analyzes the characteristics of mine water inrush variable weight evaluation, and, on this basis, further combines GIS-based multisource information fusion technology and typical engineering case to compare with the evaluation effect map, evaluation unit, and comprehensive evaluation values. The differences between the variable weight model (VWM) and the constant weight model (CWM) are analyzed, which proves that the evaluation process of the variable weight evaluation model is more reasonable and can effectively improve the evaluation accuracy.

Purpose This study aims to investigate whether and how earnings guidance affects corporate innovation. Design/methodology/approach Exploiting the setting of China, where the Shenzhen Stock Exchange has required all public firms listed on its ChiNext board to issue earnings guidance since 2012, this study uses a difference-in-differences (DID) methodology to examine the effect of earnings guidance on corporate innovation and further conducts cross-sectional analyzes from the information risk and monitoring demand perspectives. Moreover, the authors conduct path analysis to verify the possible channels through which corporate innovation is impeded by market pressure or improved through increased corporate transparency. Findings This study documents a positive relationship between earnings guidance and corporate innovation, as measured by the number of invention patents, indicating that the “corporate governance” hypothesis dominates in China. Cross-sectional analyzes show that this positive effect is more pronounced for firms subject to greater information risk and monitoring demand. Finally, the path analysis further confirms that earnings guidance improves innovation by increasing corporate transparency. Practical implications First, this study captures the bright side of mandatory earnings guidance and suggests that increasing the disclosure frequency can yield benefits for firms. Second, the findings imply that regulations, regardless of what they refer to, should be based on a country’s specific context. Originality/value First, this study provides evidence supporting the “corporate governance” argument based on the context of China and, thus contributes to the debate on earnings guidance. Second, this study enriches the literature on the economic consequences of earnings guidance. Third, the study extends research on the determinants of corporate innovation.

We examine the role and economic consequences of emotions in shaping the judgment of corporate executives. Analyzing a large sample of U.S. public firms, we find that sunshine-induced good mood leads managers to make upwardly biased earnings forecasts. Importantly, our evidence implies that managers become less susceptible to the sunshine priming effect in unambiguous settings, when their forecasts are subject to stricter external monitoring, and when they have stronger incentives to issue accurate forecasts. Additional tests show that equity market participants discern less informative signals from forecasts influenced by sunshine and that managers prone to the sunshine priming effect impose costs on their firms in the form of higher information risk and equity financing costs. Reflecting that labor markets also play a disciplinary role, we find that mood-prone managers suffer adverse career outcomes. We provide the first large-scale analysis on the nuanced ways in which emotions affect top executives. JEL Classifications: G02; G30; M40; M41.

Recent regulatory proposals tie the systemic importance of a financial institution to its complexity. However, we know little about how complexity affects a bank's behavior, including its risk management. Using the gradual deregulation of banks' nonbank activities during 1996-1999 as a natural experiment, we show that the frequency and magnitude of operational risk events in U.S. bank holding companies have increased significantly with their business complexity. This trend is particularly strong for banks that were bound by regulations beforehand, especially for those with an existing Section 20 subsidiary, and weaker for the other banks that were not bound and for nonbank financial institutions that were not subject to the same regulations to begin with. These results reveal the darker side of post-deregulation diversification, which in earlier studies has been shown to lead to improved stock and earnings performance. We use operational risk events as a risk management measure because (i) the timing of the origin of each event is well identified, and can be years before it is materialized into a loss in the balance sheet, and (ii) the risk events can serve as a direct measure of materialized failures in risk management without being influenced by the confounding factors that drive asset prices, such as implicit government guarantees. Our findings have important implications for the regulation of financial institutions deemed 'systemically important,' a designation tied closely to their complexity by the Bank for International Settlements and the Federal Reserve.

Amendments to the legislation of Ukraine allow building, implementing, and conducting certifications of information protection systems owned by the state, or the requirements for the protection of which are established by law. It is recommended to use the requirements and/or guidelines of international practices that provide for the use of a risk-oriented approach. Thus, the international standard ISO/IES 27001 implemented in Ukraine recommends choosing or developing a method for assessing information security risks. At the same time, the results of the analysis of open sources revealed the absence of models and methods for quantifying their limit values. By informational, we mean the risks associated with the possibility of losses as a result due to violations of the properties of confidentiality, integrity, availability of information. Therefore, the purpose of this article is to develop an interpretive model that will provide the limit values of information security risks. Their quantitative values could be used as criteria at the stage of formation requirements for a comprehensive information security system and / or information security management system. The basis for calculating the value of the risk limit value is the standard deviation of the uncollected profit for the period. If the profit exceeds the planned, then hypothetically during the analysis period there were no incidents that would affect resources. Information risks are a component of the organization's risks. According to the recommendations of ISO/IES 27005, where risk is the effect of uncertainty on the achievement of goals, and the effect is a positive or negative deviation from the expected, the hypothetically obtained standard deviation can be considered an assessment of the impact of information uncertainty of additive information resources on economic results. In addition, assessing the acceptable threshold of information risk of the organization. Thus, an interpretive model for estimating the marginal risks of information security and allowable losses on individual components of threats to the information properties as a formalization of the impact of information uncertainty on financial consequences. This made it possible to quantify these estimates based on available actual economic / cost indicators of information activity in the organization.

Do stock prices of publicly listed companies respond to changes in transaction costs? Using the SEC’s pilot program that increased the tick size for approximately 1,200 randomly chosen stocks, we find a stock price decrease between 1.75% and 3.2% for small spread stocks affected by the larger tick size relative to a control group. We find that the increase in the present value of transaction costs accounts for a small percentage of the price decrease. We study channels of price variation due to changes in expected returns: information risk, investor horizon, and liquidity risk. The evidence suggests that trading frictions affect the cost of capital.

Стаття присвячена питанню надійності та захисту інформаційних ресурсів, аналізу можливих негативних наслідків при настанні ризикових ситуацій. Автори визначили сутність та зміст поняття «інформаційний ризик» в умовах цифрової революції і нових технологій, відзначили необхідність комплексного підходу до ідентифікації, аналізу інформаційних ризиків та розробки плану управління інформаційними ризиками. Особливу увагу приділено інформаційним ризикам як окремій групі ризиків, що виникають при застосуванні інформаційних технологій. Важко уявити, з якими ще ризиками на шляху діджиталізації зіткнеться організація та суспільство в найближчому майбутньому. У цьому сенсі цілком перспективною виглядає спроба пошуку шляхів та можливостей для безпечного подолання потенційних загроз, спираючись на тенденції та пріоритети, які диктує ринок і суспільство. The article is devoted to the issue of reliability and protection of information resources, possible negative consequences when risk situations arise. The authors have made an attempt to define the essence and content of the concept of information risk in the conditions of the digital revolution and new technologies, noted the need for a comprehensive approach to the identification and analysis of information risks, reducing negative consequences in case of risk events. Particular attention is paid to information risks as a component of risks arising from the use of different information technologies. Losses from information risks can be material (in the form of damages, lawsuits, etc.), and can be viewed through the prism of intangible losses (in the form of loss of trust or, in general, reputation). The main task of information security professionals is to apply timely and complete assessment of IT risks using methodological bases of risk management. Organizations must determine their strategy in information security in order to further manage their risks effectively. In the article the authors give an example of analysis, estimation, probability matrix and possible influence of risk events in the process of digitization. To help combat IT risks in the information technology market, software has been developed to provide adequate management by information flows and IT risks, including Risk Advisor, COBRA, KONDOR +, Proteus Enterprise, OCTAVE, as well as Digital Security Office, RiskManager, Oracle Crystal Ball, @Risk, Risk Watch. It is difficult to imagine what other risks an organization and society will face in the near future in the way of digitization. In this sense, an attempt to find ways and opportunities to safely overcome potential threats, based on trends and priorities which are dictated by the market and society, is quite promising

We draw on information risk theory and paradox theory to examine the additive and combined effects of disclosing exploration and exploitation information on cost of equity capital. We build on theory that presupposes that the information disclosed by a firm about its innovation activities will reduce information risk of investors. However, we contend that disclosure of exploration and exploitation innovation activities could convey potentially paradoxical expectations about a firm's future value. Based on longitudinal data of the UK FTSE 350 firms from 2011–2016, we show that firms tend to disclose more information related to exploration than exploitation. However, the bulk of market benefits are driven by exploitation rather than exploration disclosures—except for R&D-active firms that are rewarded for exploration disclosure. We also find that the combined disclosure is negatively associated with cost of equity capital, with the sub-population of R&D-active firms particularly accruing synergies from combined disclosure of both exploration and exploitation. These findings suggest that the market differentiates between exploration and exploitation information in addressing information risk, more so than previously assumed. We discuss implications for information-type-dependency in information-risk theory, the outward projection of internal paradoxes, capital market valuations of disclosure by R&D-active firms, opportunity-seeking by large publicly listed corporations, and policy implications.

PurposeThis study endeavours to examine the relationship between information asymmetry and expected stock returns at the National Stock Exchange (NSE) of India, with a sample of NIFTY 500 stocks for a period ranging from 1st April 2000 to 31st March 2018, by employing three different proxies of information asymmetry: number of transactions, institutional ownership and idiosyncratic volatility.Design/methodology/approachThe return differential amongst information-sorted decile portfolios has been assessed to understand the effect of information risk on stock returns by employing (1) traditional measures of performance evaluation like mean, Sharpe, Treynor and information ratios, (2) regression models like the capital asset pricing (CAPM), Fama and French three-factor, Carhart's four-factor, information-augmented CAPM, information-augmented Fama and French three-factor and information-augmented Carhart's four-factor models and (3) an autoregressive distributed lag (ARDL) model.FindingsThe empirical evidence indicated that as information asymmetry associated with portfolio increases, returns also expand to recompense investors for bearing information risk validating the existence of a significant positive relationship between information asymmetry and expected stock returns at the NSE. Amongst the various asset pricing models employed in this study, the information-augmented Fama and French three-factor model turned out to be the best in explaining cross-sectional variations in portfolio returns.Research limitations/implicationsStrong information premium was observed such that high information stocks outperformed low information stocks which have strong inference for investors and portfolio managers, who all continuously look out for investment strategies that can lend hand to beat the market.Originality/valueEasley and O'Hara (2004) proposed that stocks with more information asymmetry have higher expected returns. Very few studies have examined this relationship between information risk and stock returns that too restricted to the US market only, with a few on other emerging markets. No work has been conducted on the concerned issue in the Indian context. Therefore, it seems to be the first study to explore the relationship between information asymmetry and expected stock returns in the Indian securities market.

Using hand‐collected data on the level of pension‐related mandatory disclosures required by International Accounting Standard 19 Employee Benefits , we test whether compliance levels with these disclosures convey information that affects firms’ access to the public instead of the private debt market, as well as the cost of their new debt issues. We document a higher tendency to access the public debt market for firms with higher levels of pension‐related disclosure. Furthermore, we find that firms with higher levels of pension‐related disclosure enjoy a lower cost in terms of issuance of public debt, but not a lower cost for private debt issues. Thus, the benefits of disclosure in reducing information risk are only realisable when creditors rely heavily on financial statements in their decision making, due to the limited access to private information. Additional tests reveal that high compliance levels effectively mitigate the negative effect of pension deficits on the cost of public debt. These findings provide novel evidence in the extant literature on the role of mandatory (and, in particular, pension‐related) disclosures on firms’ debt financing. They also have important policy implications.

This research examines the link between managerial ability and firms’ external financing. Our findings show that firms with more able managers tend to mitigate information risk by reducing their loan financing and increasing equity financing. These findings are more prominent for financially unconstrained and well-governed firms, suggesting that high-ability managers are more apt to use equity financing as a financial source in firms with better financial and governance quality. To address potential endogeneity problems, we document that the impact of managerial ability on external financing remains unchanged after we employ yearly regression, change analysis, quantile regression, and the instrumental variable approach.

The implementation of Industry 4.0 concept brings many risks mainly for small and medium-sized enterprises (SMEs). The objective of the study is a diagnosis and comparison of the perception of selected risk issues connected with Industry 4.0 implementation in Slovak and Polish SMEs, which have knowledge or experience with cluster cooperation. This category of SMEs is specific due to the fact, that not all of the SMEs have experience with cluster cooperation or know this form of doing business. For this purpose, the questionnaire survey of 787 respondents was conducted, focused on the risks of Industry 4.0 that are the most important for SMEs included in three categories: technical readiness, risks of innovation and risks of information. The statistical analysis of the survey results with the application of software STATISTICA and Social Science Statistics calculator leads to the conclusion that, except for the kind of risk of “New products and services”, all the observed risks are perceived as higher by Slovak SMEs than by Polish SMEs. The novelty of this research and its contribution to the body of knowledge lies in identification and evaluation of most important risks for specific group of SMEs related to Industry 4.0 implementation compared in two countries. The results of this research provide useful information for the practical fine-tuning of the policy aimed at transfer to Industry 4.0 in specific field – cluster cooperation, depending on the size of the enterprise.

The objective of the study was to assess the current situation of the availability of information to researchers in the field of the environment, to identify the obstacles faced by researchers in obtaining information and its impact on researchers and the criteria of blocking and providing information in accordance with international standards for researchers and the information risk faced by researchers and the relationship of providing information to achieve the objectives of the 2030 Sustainable Development Plan. In order to achieve the objectives of the study was selected a sample of 162 size distributed to researchers in the field of environment at the Institute of Environmental Studies and Research, Ain Shams University. The researcher used the theory of the information society and the theory of informational significance. The descriptive approach was used by using the social survey method. The results of the study found that the researchers achieved percentages ranging between the decrease and the rise within (44.4%) Yes, (35.2%) Sometimes, (20.4%) of the indicators of the availability of information, %). This does not mean that there is a current ratio facing obstacles in obtaining information, including spatial and physical constraints, and transparency and accessibility. At the level of blocking criteria and access to researchers in the field of the environment, researchers who see that there is application of the criteria of blocking and availability in the information centers of relative importance (37.7%), yes (49.1%) sometimes (13.2%). The environmental field in the researchers is psychologically affected when it is difficult for them to obtain information and the total sample is relatively important (79.2%) Yes, (20.8%) Sometimes, (0%) No. (71.7%) Yes, (17%) Sometimes, (11.3%) No The study recommends increasing the number of workshops and training courses for researchers on various electronic databases to facilitate access to information in order to overcome the handicap of the place, the handicap of time and the physical handicap, as well as raising the awareness of the researchers about the quality of the information risk facing them and how to overcome it by making sure the information from more than one electronic source. Not all the information presented on the Internet is certain, the provision of modern electronic devices in the library to facilitate the researcher to obtain information, providing an online query service to researchers from the library of researchers, Information that can be legally prohibited and information to be made available.

This study examines whether good accruals quality is associated with less disagreement among credit rating agencies. Distinct from prior studies that focus on equity analysts, I examine how the quality of financial information influences rating agencies in determining bond ratings. Precise accounting information reduces the information risk of the users of the financial statements such as the credit rating agencies, and thereby affects the frequency and magnitude of split bond ratings by credit rating agencies. Specifically, this paper examines whether the quality of accounting information, proxied by accruals quality, reduces disagreement about bond ratings (i.e., split bond ratings) among the three rating agencies in Korea. I test the hypothesis which predicts that poor accruals quality raises information uncertainty about a firm’s financial condition for creditors, thereby increasing split bond ratings among rating agencies. Using 1,867 observations for public bonds in Korea, I show that better accruals quality is associated with lower frequency and magnitude of split bond ratings by credit rating agencies. This finding persists after controlling for other firm-specific factors that affect split ratings, and is robust to a battery of sensitivity analyses.

The article describes the features of risk of integrated reporting audit identification and assessment. It is determined that the audit risk model should take into account the circumstances affecting the generation, evaluation and application of integrated reporting data in relation to the transformation of information users’ requests, modification of the reporting interpretation of relevant data, and the extension of the audit scope as an assurance task. In this regard, the purpose of the study is to formalize methodological approaches to audit risk modeling in the context of integrated reporting audit tasks. The financial and non-financial data that could be disclosed in the integrated reporting are characterized. It is established that the circumstances of the formation of information to be identified by the auditor to assess the audit risk are determined by users’ requests, organizational and methodological approaches to its processing, availability of appropriate technical facilities and personnel. It is defined that the audit risk is the auditor's ability expected to express an inappropriate opinion on the audit results, which will include the misplacement or incorrect accounting of the deviations existing in the information or their incorrect identification. The article substantiates the model of the integrated reporting audit risk assessment, and the model provides the identification and determination of the level of such elements as: information risk, the risk of information preparing, the risk of information evaluation and the risk of changes in the influence of factors due to determination of preliminary assessment. The main advantage of the proposed audit risk assessment model is the definition of its elements, based on the main aspects of formulating and evaluating the information contained in the integrated reporting. In doing so, these aspects should be examined during the audit of the historical, forecast and hypothetical information contained in the integrated reporting.

We propose a new, price-based measure of information risk called abnormal idiosyncratic volatility (AIV) that captures information asymmetry faced by uninformed investors. AIV is the idiosyncratic volatility prior to information events in excess of normal levels. Using earnings announcements as information events, we show that AIV is positively associated with informed return run-ups, abnormal insider trading, short selling, and institutional trading during pre-earnings-announcement periods. We find that stocks with high AIV earn economically and statistically larger future returns than stocks with low AIV. Taken together, our findings support the notion that information risk is priced.

In this article common attack vectors on the information systems, which are based on the Android client applications, are observed, analyzed and compared. The purpose of this analysis consists in creating the theoretical base for development the practical principles of securing the architecture level of such systems. To accomplish the aims set, there was conducted the categorization of attacks and vulnerabilities specific to the Android information infrastructure and environment. There were also conducted analysis of Android application functional components and typical underlying infrastructure which have possible impact on a system security. Available data about the widespread vulnerabilities of the described elements was analyzed in context of possible exploitation. Based on the Android application usage model there were figured out several adversary models and attack vectors related to the researched information system type. Developed adversary models were formed with a focus on technical possibilities and threat abstraction. Mentioned vectors can be used by an attacker to violate the confidentiality and integrity of critical information in the system. The carried out research was used to form the characteristic comparison of the mentioned vectors and adversary models to evaluate the attack surface on the different parts of information system represented as attack vectors. As a result, we have developed the theoretical principles for securing the architecture of Android applications-driven information systems. Achieved results can be used to form the threat and adversary model, create practical recommendations for the information risk reducing practices in Android-applications driven information systems and to develop the technical requirements for security testing and development.

The article is devoted to the assessment of information security risks in automated systems of class "1". An adapted approach to the assessment of information security risks in such automated systems using the Methodology and requirements of the standards of GSTU SUIB 1.0 / ISO / IEC 27001: 2010 and GSTU SUIB 2.0 / ISO / IEC 27002: 2010 is proposed. The efficiency and methods of implementation of the approach are proved on the example of consideration of real threats and vulnerabilities of class 1 automated systems. The main requirement for the creation of information security management system in the organization is risk assessment and identification of threats to information resources that are processed in information and telecommunications systems and speakers. The basic standards on information security in Ukraine are considered, which give general recommendations for the construction and assessment of information security risks within the ISMS. The most common methods and methodologies for assessing information security risks of international standard are analyzed, their advantages and disadvantages are identified. The order of carrying out of works on an estimation of risks of information security of the AS of a class "1" is defined. The vulnerabilities considered by the expert according to the standard ISO/IEC 27002:2005 and the Methodology are given. A conditional scale for determining the impact on the implementation of threats to integrity, accessibility, observation is given. Measures and means of counteracting the emergence of threats are proposed. This approach can be used both for direct information risk assessment and for educational purposes. It allows to get the final result regardless of the experience and qualifications of the specialist who conducts risk assessment, with the subsequent implementation and improvement of the existing risk management system in the organization.

This article examines the problem of implementing active teaching methods for students majoring in 125 Cybersecurity. The study of qualitative analysis of information security risks (IS) is presented on the example of studying the discipline "Risk Theory", namely the use of SWOT-analysis tools for risk assessment in the field of IS of small and medium business. General relevance and possibilities of using SWOT-analysis in the field of IS risk to study the internal environment of the organization, its strengths and weaknesses with the definition of enterprise strategies in the external environment: confronting threats to secure information (confidentiality, availability and integrity), and other its development. Based on scientific sources, the main research of the definition is analyzed: IS risks, risk analysis and their quality assessment. The content and procedure of SWOT-analysis are described. Using forms of group work and active methods (trainings) in the educational process, the basic factors for SWOT-analysis of the virtual organization "Internet Provider" were created, methodical expert assessments were conducted to identify the primary features of these factors, the analysis of the results was obtained.It is proved that the introduction of this technology in the educational process promotes the development of theoretical knowledge and the formation and development of practical skills of future specialists in information and cyber security

Notes to the financial statements are an important source of economic and accounting information. The tendency to information overload of notes causes a rethinking of their role and content, as well as a revision of regulations governing the process of submitting financial statements at the legislative level. There is an urgent need to improve the disclosure process for disclosure requirements to prevent duplication of information in the financial statements as a whole and to eliminate irrelevant disclosures. This contributes to the fact that the information in the notes is clear, consistent, can be compared both in the dynamics of the enterprise and with the enterprises of the industry. The article examines the scientific approaches of domestic scientists on the architecture of notes to financial statements, which takes into account the relationship between the level of objectivity risk and the level of information risk. Starting in 2019, companies that are required to report under International Financial Reporting Standards are required to file taxonomic financial statements in a single electronic XBRL format. The main legislative acts regulating the use of this format are analyzed. The article considers the key principles of using the HBRL format. Based on the study of information resources, the elements of taxonomy are described in detail with an explanation of their functions. Describes the purpose and identifies the main benefits of reporting in XBRL format. The article clearly considers the submission of reports in XBRL-format on the example of reporting of agricultural enterprises, the feature of which is the application of IAS 41 "Agriculture". Namely, the main components of this format that need to be used are studied, as well as the sources of information for filling in the main blocks of notes according to this standard, taking into account industry specifics. It is determined that an important stage of reporting in XBRL-format is validation, which involves checking the compliance of the completed data. The article describes free resources for reading this format, as well as free software for the formation and validation of financial statements in XBRL-format. The need for training and retraining of specialists responsible for the process of preparing financial statements is emphasized.

The article analyzes the domestic and foreign experience of information security in today’s society. The peculiarities of the research are analyzing the process of information security from the point of two sociological paradigms: structural-functional and interpretive. The process of informatization in the society is one of the key factors of its development. This article analyzes the establishment of an information society. The article analyzes the process of informatization, which is to facilitate the survival of humanity and set it on the path of sustainable development. Owing to that fact, the problem of information security is attracting increasing interest; it is assuming primary importance among the rest of security types. This problem is investigated with the following methods. First, we reveal the nature of information security, its forms, and content within the framework of the modern information society. Second, we define the possible ways information security affects the development of society.

We introduce a noisy information structure into an otherwise standard international real business cycle model with two countries. When domestic firms observe current foreign technology with some noise, predictions of the model on international correlation can be very different from those of a standard perfect information model. We show that the model can explain: (a) positive output correlation both in complete and incomplete market models, (b) consumption correlation smaller than output correlation with an introduction of information‐constrained consumers, and (c) observation of both positive and negative productivity–hours correlation in two countries.

This study aims to improve that the quality of accounting information and information risk are very important to having a significant impact on implied volatility behavior around earnings, also we aim to investigate the relationship between the quality of accounting information and the risk of accounting information and the time of announcement of the profit report, The quality of accounting information (earnings/accruals) is one of the most widely researched areas in accounting literature. So, we examine the impact of the Accounting Quality and Information Risk on the time of Earning Announcement, we interpret our findings as indicative of information risk having a significant impact on implied volatility behavior around earnings announcements. On the other hand, risk has always been one of the concerns of management, especially in the field of financial management of companies. Considering the above-mentioned issues, Whether and how accounting information quality affects the cost of capital has been a matter of much debate. The results show that there is a relationship between accounting information quality and accounting information risk. accounting and has been of interest to accountants, investors and financial managers. This is one of the most important topics in the field of financial and accounting research

With the development of the network economy, especially the promotion and popularization of mobile networks, traditional offline businesses are further integrated with online businesses, promoting the development of business online strategies. However, with the growth of enterprises’ business, their negative externalities on the environment have gradually become prominent, further affecting sustainable consumption. The relationships between businesses, the environment, and consumption have become the focus of attention. China’s fast-growing bottled water companies face similar challenges. The pollution that occurs due to bottled water packaging poses great threats to consumers. Hence, this study extended the Theory of Planned Behavior (TPB) by integrating three risk aspects, namely, water pollution risk perception (WPRP), non-degradable package pollution risk perception (NPPRP), and false information risk perception (FIRP), to examine the consumers’ perceptions toward these risk aspects before purchasing bottled water online. This study employed a cross-sectional approach to collect data from online consumers via a survey method. A total of 401 valid samples were collected and then analyzed via a structural equation model using the AMOS statistical package. The results showed that attitude (AT), subjective norm (SN), and perceived behavior control (PBC) toward online bottled water purchase had significant and positive effects on the consumers’ purchase intentions (PIs). However, under the influence of risk perception, the consumers’ attitudes, SNs and PBC became suppressed by WPRP, and SN became suppressed due to the impact of FIRP. Furthermore, the negative impacts of NPPRP and FIRP on PI were partially mediated by AT, SN and PBC. Meanwhile, WPRP imposed the most significant direct effect on PI. The study results will help businesses to develop better online strategies to reduce the risk perception of bottled water and provide theoretical value and practical guidance for realizing sustainable consumption.

During development and deployment of Government-to-Citizen (G2C) e-services, stakeholders must take cybersecurity risks into account. Recently, Estonia proposed a novel e-service delivery through the use of virtual assistants. Cybersecurity is important to any organization due to the prevalence of attacks in recent times. Organizations in both the public sector and private sector typically have a program that determines, calculates and treats risks. These programs are identified as “risk management,” and cybersecurity risk assessment and analysis are a key part of these organizations. When correctly implemented, these programs can help decision makers allocate their cyber defense budgets in a more effective manner.The researchers conducted interviews with seven cybersecurity experts discussing cybersecurity data, metrics and risk assessment and analysis methods. These interviews informed the use of the Open Group’s Factor Analysis of Information Risk (FAIR) model in this paper.Because Estonia is one of the first countries in the world to prioritize e-service development in this domain, there is a literature gap pertaining to cybersecurity risk analyses of virtual assistant enabled e-services. Although a multiplicity of methods exist for risk assessment and analysis, this research follows the FAIR method to assess a G2C e-service which uses a third party provider for an Amazon Alexa skill that has become corrupted due to malware infection. The FAIR method projects the risk for a particular vulnerability in terms of dollar amount loss over time. It states the annualized loss exposure in terms of a minimum loss, a maximum loss, and a most likely amount of loss.Aggregated global public sector cyber breach frequency data was taken from the Privacy Rights Clearinghouse database and loss magnitude data was taken from the Cyentia IRIS 2020 report which utilized the Advisen cyber loss database. Based upon a Project Evaluation and Review Technique (PERT) distribution Monte Carlo simulation of this data, the annualized loss exposure projection for the public sector entity was $0 minimum likely value, most likely value $70,500 and maximum likely value of $6,000,000. Future work proposes more country and organization specific data for FAIR methodology use for G2C virtual assistant e-services analysis. The value of the work is that it shows how public sector agencies could use the FAIR model to make their cybersecurity risk models more quantitative than is generally currently practiced even in cases of new types of developments and services in order to aid decision-makers in allocation of funding to better defend against the most impactful risks.

Information security is an important issue in epidemic prevention and control, which is related to national stability and social harmony. A personal information security awareness evaluation model based on TOPSIS and K-means++ is proposed in this paper. Through the investigation of the citizens’ understanding of the information risk sources in the process of the collection, release, storage and processing of personal information by the government, we can understand the information security awareness of citizens under the prevention and control of the epidemic. According to the results of the survey, it is recommended to set the storage period of personal information, provide an effective mechanism for individuals to participate in information processing, and strengthen the information security training for government employees in information processing positions.

Machine unlearning refers to mechanisms that can remove the influence of a subset of training data upon request from a trained model without incurring the cost of re-training from scratch. This paper develops a unified PAC-Bayesian framework for machine unlearning that recovers the two recent design principles - variational unlearning (Nguyen et.al., 2020) and forgetting Lagrangian (Golatkar et.al., 2020) - as information risk minimization problems (Zhang,2006). Accordingly, both criteria can be interpreted as PAC-Bayesian upper bounds on the test loss of the unlearned model that take the form of free energy metrics., Under Review

The application of information technology in government agencies is in line with Indonesian Presidential Regulation 95/2018 concerning Electronic-Based Government Systems (EBGS). Information in the digital form generated from the application of EBGS is a precious asset that must be protected from risk. This makes an organization need information security risk management (ISRM) to control the risk. This study aims to design ISRM in a government agency as a non-profit organization, especially in a Police Command Center. The design is carried out by integrating two standards to manage information security risks. ISO 27005: 2018, which can be applied to government organizations and non-profit organizations, is used as a base of information security management, and NIST SP 800-30 revision 1 standard is used as a method in conducting information risk assessments. From this research, an information security risk management’s design is produced, and the results of risk identification and recommendations for handling it. ISO 27002 is used as reference for control recommendation. The validation results concluded that the ISRM design results equipped with policy for the Indonesian national Police Command Center have been able to meet organizational needs in identifying and managing risks in carrying out operational tasks.

This study examines the impact of corporate transparency on bank risk for a sample of 29 Islamic banks operating in five Gulf Cooperation Council countries over the period 2013–2016. We construct a transparency index based on several international regulatory documents and we measure the index using content analysis on the banks' annual reports. The results reveal wide variation in terms of disclosure among Islamic banks. Only two countries, Bahrain and the United Arab Emirates, have a higher level of transparency. We also find a lack of transparency related to corporate governance, Sharia governance and management risk dimensions. Our regression findings using the random-effect GLS technique show that an increase in the transparency of Islamic banks has a significant impact on banks’ stability. Finally, we identify several internal and external variables that impact bank risk, namely size, efficiency, level of deposit, growth of assets, GDP growth, depth of credit information risk and concentration. Keywords: Corporate transparency, Bank risk, Disclosure, Islamic banks, GCC countries, JEL classification: G21, G28, G32

Prior research suggests that last-in-first-out (LIFO) inventory policy produces higher accruals quality than first-in-first-out (FIFO), leading to lower information risk for LIFO firms. Equity investors, in turn, price lower information risk by giving a premium to LIFO firms. Prior research also suggests that LIFO inventory policy, by understating aggregate earnings and net assets, creates hidden reserves that can be released to produce higher future earnings. Prior research, however, is silent on how debtholders price inventory policy choice. Focusing on private debtholders, we explore three research questions: (a) Do private debtholders price LIFO differently from FIFO? (b) If so, how does downside risk affect the pricing of LIFO? and (c) What is the underlying reason for the pricing effect, accounting quality, or hidden reserves? First, we find that LIFO is associated with a lower loan spread than FIFO. Not surprisingly, the pricing effect of LIFO is larger in high-inflation years than in other years. Second, we find that the pricing effect of LIFO is much larger for unrated firms than for rated firms. Third, we find that the negative association between LIFO and loan spread is driven primarily by hidden LIFO reserves rather than accounting quality. Overall, our evidence shows that inventory policy choice affects private debtholders’ pricing decisions, and this effect is primarily due to future earnings implications of hidden LIFO reserves.

We examine whether reputable intermediaries provide valuable certification which help corporate issuers of Islamic bonds lower their cost of capital. Our focus on Islamic bonds is motivated by the fact that besides information risk, investors also face unique Shariah non-compliance risk. Based on a sample of 3462 Islamic bond tranches issued in Malaysia from 2001 to 2014, we find certification by reputable Shariah advisors and Shariah committees is associated with a significantly lower average bond spread, as is information certification by reputable lead arrangers. Our results thus support the certification hypothesis.

PurposeIn current times, organizations operating in emerging economies are providing digital services to its citizen the internet. Literature indicates that digital services are facing major challenges with respect to its adoption among users groups due to the perceived risks.Design/methodology/approachWith the use of generalized analytic network process (GANP), prioritization of different dimensions of risk has been done on the basis of an empirical survey among user groups in India.FindingsThe result indicates that dimensions like privacy risk, performance risk and financial risk are more important risks across digital services models. However, physical risk, social risk, psychological risk and time risk are comparatively less important risks across digital services. This research also finds out that the end users are reluctant to provide their personal information.Research limitations/implicationsThe sample size is relatively small which limits generalizability of results beyond India. However, an application of GANP has been showcased for empirical research.Practical implicationsThe research outcome can help managers in deciding which dimensions of risk are more important for digital service delivery and thus facilitate adoption.Originality/valueThis paper focused on the different facets of risk perceived by consumers, toward the digital services available in smart cities. Perceived risk dimensions such as privacy risk, performance risk, financial risk, physical risk, social risk, psychological risk and time risk have shown that there is a need to prioritize these risks to the digital services which is offered to the residents of the smart cities.

PurposeThe purpose of this paper is to study the relationship between accounting conservatism and executive compensation-performance sensitivity with a view to identify the influence of accounting conservatism on the efficiency of executive compensation contracts.Design/methodology/approachThis study uses multiple regression models based on the approach of Iyengar and Zampelli (2010), Clarkson et al. (2011) and Huang and Kisgen (2013) with the data from all of China’s listed non-financial firms over the period of 10 years to test the relationship between accounting conservatism and the sensitivity of executive compensation-performance.FindingsThis study finds a positive association between executive compensation and accounting-based measure of performance. More importantly, it reveals that conservatism has a positive relation with the executive compensation-performance sensitivity after controlling for a number of firm-specific factors and control variables. This study shows that the sensitivity of executive compensation to firm performance is higher for firms with higher accounting conservatism.Originality/valueThis is one of the few studies to examine the relationship between accounting conservatism and executive compensation-performance sensitivity. It provides supportive evidence to the argument that accounting conservatism, being an efficient governance mechanism, can help mitigate information risk and moral risk for agency problems.

The purpose of this study is to investigate empirically the risk factors that will influence both simultaneously and partially on the customer's decision to make purchases through online media. This research was used by using questionnairesmethods. Population of this study was student and employee at Darma Cendika Catholic University, Surabaya. Research involves to 220 respondent. The sampling technique in this study was used convenience sampling and purposive sampling. The technique of data analysis using factor confirmatory analysis andmultiple linier regression analysis. The result of the research by factor analyze confirmatory showed that new factor risk is Psychological Risk. The results of multiple linear regression analysis indicate Privacy Risk, Quality Risk, Purchase Behavior Risk, Information Risk, Product Delivery Risk, Psychological Risk, Health Risk, and Product Size Risk have a significant negative effect on customer Purchasing Decisions through online media.

Examining a certain risk will provide an insight into a single dimension, but a picture of different risks in the supply chain (SC) is still lacking, as risks do not take place independently, but typically simultaneously. This research aims to propose and validate a conceptual framework for linking various dimensions of risk to system performance in the SC by applying SC mapping - a new approach in the SC risk body of literature. In the model, risks were classified into three categories with regard to their level of impact on performance: 1) core risks, e.g., supply risk, investor-related operational risks, contractor-related operational risks and demand risks; 2) infrastructure risks, e.g., finance risk, information risk and time risk; 3) external risks, e.g., human-made risks; 4) natural risks. Using the framework, companies will have a systematic view of risks in the whole SC network whereby they can define risks in their own context and ascertain critical SC risks that cause negative effects on SC performance.

The possibility of using the fundamentals of system analysis when choosing the optimal information processing strategy in the design of complex information systems with the aim of obtaining a complete and objective assessment of information resources, implemented in the interest of analyzing the technical characteristics of integrated information processing tools of complex automated systems, is considered. Information risk analysis was carried out, i.e. the process of integrated assessment of information processing in an automated system with the transition to quantitative or qualitative indicators. In addition, each indicator represents the probable damage, which depends on the information processing in the system. The process of identifying and reducing risks that can affect the information system is understood as the process of risk management. The results of the analysis are used in the selection of information processing facilities and in evaluating the effectiveness of existing and projected subsystems.

This paper aims to solve the problem of Risk assessment for enterprise merger and acquisition (M&A), which is an important problem in modern company management. Firstly, we design an index system to assess risks of enterprise M&A behavior, and six risks are considered: 1) Systemic risk, 2) Law risk, 3) Financial risk, 4) Intermediary risk, 5) Integrated risk, and 6) Information risk. Furthermore, 18 indexes are chosen to cover these six aspects. Secondly, we illustrate how to utilize the proposed risk assessment in the decision system for enterprise M&A risk assessment. We separate the M&A risk assessment process to three steps, that is, 1) Before M&A, and 2) In M&A, and 3) After M&A. Particularly, after the risk assessment process, there are three decisions for enterprise managers, that is, 1) implement the original M&A plan, 2) modify the original M&A plan, and 3) refuse it. Thirdly, we propose the multiple classifier fusion based risk assessment algorithm, which aims to effectively combine the six support vector machines. To relax the limitation of the SVM classifier, we introduce the fuzzy theory in the multiple classifier fusion algorithm, and the category label assignment is determined by utilizing a maximum membership rule. Finally, we conduct an experiment to make performance evaluation by constructing a dataset which includes the M&A data of 200 enterprises, among which 185 enterprises are used as training dataset and others are regarded as testing dataset. Using ROC curve, MAE and MAPE as evaluation criterions, performance of the proposed method is compared with single SVM scheme. Experimental results demonstrate that combining multiple the SVM classifiers together, accuracy of M&A risk assessment is greatly enhanced.

This paper contributes to the corporate governance and capital market literature by documenting the association between board co-option and the cost of equity capital. We argue that board co-option facilitates better CEO-director counselling and better coordination of the CEO-director relationship, which signals future earnings predictability and reduces information risk, resulting in a lower cost of equity capital. Using data from Australian listed companies from 2001 to 2015, our analyses reveal that board co-option is associated, significantly and negatively, with firms’ cost of equity and, thus, supports the beneficial view of board co-option.

This paper examines the effects of audit partner busyness on the cost of equity capital. We argue that audit partner busyness affects auditors' work processing accuracy negatively and reduces professional skepticism, thus resulting in higher information risk and, hence, an increased cost of equity capital. Using data from Australian listed companies, we find that the cost of equity capital is indeed higher for firms audited by busy audit partners. However, an additional test documents that this effect is primarily driven by non‐Big 4 observations. Our mediation test results indicate that this positive association is mediated through poor quality financial reporting but is driven by non‐Big 4 observations. Our results are robust to endogeneity concerns emanating from firms' deliberate decisions to choose audit partners. Our study contributes to both the auditing and to the cost of capital literature.

“Risk management” is the process of weighing policy alternatives in consultation with all interested parties, considering risk assessment and other factors relevant for the protection of consumers' health and for the promotion of fair trade practices as well as, if necessary, selecting appropriate prevention and control options. It is the decision-making stage of the risk assessment process and can be defined as the process of deciding what actions to take in response to an identified risk. Risk assessment is based on a set of basic principles and follows a well-defined structure. The risk assessment component involves hazard identification, hazard characterization, exposure assessment, and risk characterization. This chapter describes the basis of risk assessment, the typical structure of the risk assessment process, and how it is practically applied at different points during the development and release of GM (genetic modification) crops.

The long-term accumulated brand notability of fresh food e-commerce platforms has brought the advantages of fresh product and customer resources to the platform-based fresh e-commerce supply chain, effectively solving the problem of unsmooth connection between production and sales in China's traditional fresh food industry. However, the unique freshness activity, and perishability of fresh products as well as the complex dynamics of supply chain make the platform-based fresh food e-commerce supply chain face uncertain risks and restrict the operation of the supply chain. On the basis of consulting related literature, this paper summarizes the supply chain risks as quality risk, logistics risk, information risk, cooperation risk and after-sales risk, uses analytic hierarchy process to carry out risk assessment, and finally puts forward corresponding control countermeasures to effectively prevent and avoid the above risks.