Kazbi Soonawalla is a Senior Research Fellow in Accounting; her particular expertise is in financial reporting. She has examined issues such as disclosure requirements under various accounting standards to understand the factors that make for greater levels of compliance; she has also investigated the effectiveness of requirements for greater disclosure in relation to forecasts made by equity analysts and investors.
From 2002–13, Kazbi was Lecturer in Accounting at the London School of Economics, where she also directed the MSc Accounting and Finance Programme from 2011–13. She has a BA in Economics and Mathematics from Boston University, an MS (Statistics), MA (Economics) and PhD (Business) from Stanford University; her PhD dissertation was on Financial Reporting for Interests in Joint Ventures.
IFRS accounting rules became mandatory in the European Union in 2005. This study, with L Goh and P Joos, looks at a sample of listed French firms in 2005 to investigate the determinants of disclosure compliance of stock option expenses under IFRS 2, Share-Based Payment. It finds that overall compliance with IFRS 2 disclosure requirements increases with US and UK institutional ownership, US cross-listing, provision of English language statements; it decreases with CEO and family ownership of the firm. The study further investigates the market valuation impact of stock options disclosures and finds that investors value option expenses positively, especially when accompanied by high disclosure compliance, suggesting that investors incorporate disclosures into their valuation. The findings have implications for other jurisdictions in the process of adopting or converging to IFRS.
This study, with W Landsman and B Rountree, looks at the introduction of accounting standard SFAS 157 to try to understand if the quality of information available to analysts and investors improves as a result. Specifically, it examines whether the amount of information gleaned by bank equity and analysts and investors from bank fair value gains and losses has changed following its introduction. Looking at sample periods before and after SFAS 157 became effective, it finds that, on average, changes in cumulative fair value gains and losses on investments are positively associated with analysts’ consensus earnings forecast revisions and contemporaneous stock returns. Findings from regressions that permit coefficients to differ pre-and post-SFAS 157 indicate that analysts’ forecast revisions and contemporaneous stock returns are significantly positively related with changes in investment securities’ cumulative fair value gains and losses only in the post-SFAS 157 sample years. These findings suggest that the introduction of SFAS 157 has improved the quality of information available to analysts and investors.
Accounting for financial instruments has been controversial, especially since the financial crisis. Opponents of far value accounting argue that fair values are unreliable, distort financial statements and exacerbate cyclicality. Proponents of fair value accounting suggest that the fair value amounts help reflect of the economic reality of future performance. We investigate these claims by examining the association between fair value amounts and future operating performance for a sample of US banks and financial institutions. Preliminary findings suggest that mapping a direct association between fair values and operating cash flows is not straightforward and that better understanding of reporting practices is needed.
Kazbi has presented papers at the European Accounting Association Annual meeting and at Columbia University, Emory Univsity, the London School of Economics, London Business School, Oxford University, University of California at Berkeley, University of Lancaster and the University of Washington. She has also participated in a number of conferences on accounting and finance, including the LSE/ Manchester Business School Conference, the Journal of Business Finance and Accounting Capital Markets Conference and the Journal of Accounting and Economics Conference, Massachusetts Institute of Technology.
Kazbi teaches on the Finals Accounting elective; she also gives first year general management tutorials and GOTO tutorials. She provides project supervision for the Oxford Diploma in Financial Strategy. At LSE, she taught on Financial Reporting in Capital Markets and Business Combinations as well as Accounting in the Global Economy. She has also taught on Executive Education programmes covering business analysis, valuation and accounting.
Kazbi’s classes and tutorials are designed to be interactive and to encourage members of the class to participate and share their thoughts and ideas. Her aim is to make students informed users of accounting information, whether as external investors and users or internally, as preparers of financial statements or as decision- and policy-makers. She encourages students to enjoy mapping accounting information to the underlying economics driving decision-making at all levels within an organisation. To help achieve this, she exposes students to a wide range of readings, encompassing academic articles, business case studies, popular press articles, original text accounting standards, as well as other teaching aids and texts.
Saïd Business School
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