THE IMPACT OF INTANGIBLE ASSETS ON FINANCIAL PERFORMANCE : THE MODERATING ROLE OF AUDIT STATUS IN LISTED SPORTS CLUBS WORLDWIDE
Keywords:
Intangible assets, financial performance, Tobin’s Q, audit status, sports clubs, listed companies
Abstract
This research investigates the impact of intangible assets within the context of the financial performance of the sports clubs quoted on the stock market worldwide, focusing on the moderating effect of the audit status. Concerning financial performance, this study uses Tobin's Q. It assesses whether or not intangible assets that include brand equity, fan bases, control over players, and ownership of media rights are relevant for increasing the value of the market and the stability of the club. Reviewing a sample of 310 data of sports clubs covering a period of 2014 to 2023, the study introduces the audit status as a moderating variable, postulating that it is likely that high audit status will increase the validity of firm financial report information. The research results show a significant positive impact between intangible assets and firm financial performance. Besides, audit status moderated this relationship, whereby clubs with higher audit status achieved better financial performance due to raised audit integrity and investor prerequisite greater transparency. These findings emphasize the importance of intangible assets and audit status in improving the financial performance of the sports clubs and provide a better understanding of the management, the investors, and the auditors in the sports industry.
References
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Elliott, W. B., Fanning, K., & Peecher, M. E. (2020). Do Investors Value Higher Financial-Reporting Quality, and Can Expanded Audit Reports Unlock This Value? Accounting Review, 95(2), 141–165.
Faccia, A., Mataruna-Dos-santos, L. J., Helù, H. M., & Range, D. (2020). Measuring and monitoring sustainability in listed european football clubs: A value-added reporting perspective. Sustainability (Switzerland), 12(23), 1–13. https://doi.org/10.3390/su12239853
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Gazzola, P., Amelio, S., Papagiannis, F., & Vatamanescu, E.-M. (2020). Financial Reporting in European Football Teams: A Disclosure Analysis of Player Registrations. International Journal of Academic Research in Accounting, Finance and Management Sciences, 9(4). https://doi.org/10.6007/ijarafms/v9-i4/6829
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Kaser, Ken., & Oelkers, D. Boen. (2008). Sports and entertainment marketing. Ohio: Thomson South-Western.
L’Abate, V., Raimo, N., Rubino, M., & Vitolla, F. (2024). Social media visibility and intellectual capital disclosure. An empirical analysis in the basketball clubs. Measuring Business Excellence, 28(1), 52–68. https://doi.org/10.1108/MBE-04-2023-0054
Lin, Y., & Wu, L. Y. (2014). Exploring the role of dynamic capabilities in firm performance under the resource-based view framework. Journal of Business Research, 67(3), 407–413. https://doi.org/10.1016/j.jbusres.2012.12.019
Lozano, F. J. M., & Carrasco Gallego, A. (2011). Deficits of accounting in the valuation of rights to exploit the performance of professional players in football clubs. A case study. Journal of Management Control, 22(3), 335–357. https://doi.org/10.1007/s00187-011-0135-6
Mohammadzadeh, H. (2020). The Impact of Intangible Assets and Intellectual Capital on Audit Risk. Iranian Journal of Accounting, Auditing and Finance, 4(1), 35–47. https://doi.org/10.22067/ijaaf.2020.39257
Moroney, R., Phang, S. Y., & Xiao, X. (2021). When Do Investors Value Key Audit Matters? European Accounting Review, 30(1), 63–82. https://doi.org/10.1080/09638180.2020.1733040
Pınar Gürel, S., & Ekmekci, A. (2013). Measuring Intellectual Capital For Football Clubs; Evidence From First Division Football League. Pamukkale Journal of Sport Sciences, 4(1), 36–41. Retrieved from https://www.researchgate.net/publication/311071594
Prabhawa, A. A., & Nasih, M. (2021). Intangible assets, risk management committee, and audit fee. Cogent Economics and Finance, 9(1). https://doi.org/10.1080/23322039.2021.1956140
Puspitasari, K., Budisusetyo, S., & Zakiah, Z. (2019). An accounting review of athletes in ownership of basketball club assets. The Indonesian Accounting Review, 9(2), 169–180. https://doi.org/10.14414/tiar.v9i2.1770
Puspitawati, L. (2016). The analysis of effectiveness measurement in Accounting Information Systems through competence factor of information system user (Research on higher education in Bandung). IJABER, 14(1), 313–339. Retrieved from https://www.researchgate.net/publication/305267036
Rochmah Ika, S., Udin, K., Nugroho, J. P., & Koenti, I. J. (2020). Assessing the Financial Performance of English Football Clubs: Arsenal and Manchester City. Advances in Economics, Business and Management Research, 169.
Tahat, Y. A., Ahmed, A. H., & Alhadab, M. M. (2018). The impact of intangibles on firms’ financial and market performance: UK evidence. Review of Quantitative Finance and Accounting, 50(4), 1147–1168. https://doi.org/10.1007/s11156-017-0657-6
Tarmidi, D., Fitria, G. N., & Ahmad, Z. (2019). Financial Performance and Audit Quality: Comparative Study of Investor Reaction. Scholars Bulletin, 05(12), 828–833. https://doi.org/10.36348/sb.2019.v05i12.019
Thoma, G. (2021). Composite value index of trademark indicators: A market value analysis using Tobin’s Q. World Patent Information, 66. https://doi.org/10.1016/j.wpi.2021.102064
Villalonga, B. (2004). Intangible resources, Tobin’s q, and sustainability of performance differences. Journal of Economic Behavior and Organization, 54(2), 205–230. https://doi.org/10.1016/j.jebo.2003.07.001
Visvanathan, G. (2017). Intangible assets on the balance sheet and audit fees. International Journal of Disclosure and Governance, 14(3), 241–250. https://doi.org/10.1057/s41310-017-0023-x
Winfree, J. A., Rosentraub, M. S., Mills, B. M., & Zondlak, M. P. (2019). Sports Finance and Management: Real Estate, Media and the New Business of Sport. New York: Routledge.
Zhang, L., Ge, C., & Su, W.-H. (2018). Auditing Quality, Investor Sentiment and Earnings Response---Evidence from the Chinese A-Share Market. Accounting and Finance Research, 7(2), 110. https://doi.org/10.5430/afr.v7n2p110
Zulkarnaen, W., Fitriani, I., & Yuningsih, N. (2020). Pengembangan Supply Chain Management Dalam Pengelolaan Distribusi Logistik Pemilu Yang Lebih Tepat Jenis, Tepat Jumlah Dan Tepat Waktu Berbasis Human Resources Competency Development Di KPU Jawa Barat. Jurnal Ilmiah MEA (Manajemen, Ekonomi, & Akuntansi), 4(2), 222-243. https://doi.org/10.31955/mea.vol4.iss2.pp222-243
Almendra, R., Silva, D., Silva, T., Russo, S., França, A. K., & Silva-Mann, R. (2020). Innovation and performance in brazilian football clubs. International Journal for Innovation Education and Research, 8(5), 01–20. https://doi.org/10.31686/ijier.vol8.iss5.2216
Andrikopoulos, A., & Kaimenakis, N. (2009). Introducing FOrNeX: a composite index for the intangible resources of the football club. Int. J. Sport Management and Marketing, 5(3), 251–266.
Badlaoui, A. El, Cherqaoui, M., & Er-Rami, I. (2023). Market Reaction To Modified Audit Opinions: A Systematic Literature Review In Both Developed And Developing Countries. Asian Academy of Management Journal of Accounting and Finance, 19(1), 287–317. https://doi.org/10.21315/aamjaf2023.19.1.10
Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1), 99–120. https://doi.org/https://doi.org/10.1177/014920639101700108
Barney, J. B. (1995). Looking inside for competitive advantage. Academy of Management Perspectives, 9(4), 49–61. https://doi.org/10.5465/ame.1995.9512032192
Barney, Jay B. (2021). The Emergence of Resource-Based Theory: A Personal Journey. Journal of Management, 47(7), 1663–1676. https://doi.org/10.1177/01492063211015272
Datta, S., Jha, A., & Kulchania, M. (2020). On accounting’s twenty-first century challenge: evidence on the relation between intangible assets and audit fees. Review of Quantitative Finance and Accounting, 55(1), 123–162. https://doi.org/10.1007/s11156-019-00839-y
Deheshti, M., Azimzadeh, S. M., Mirzazadeh, Z., & Alimohammadi, H. (2019). Modeling the competitive advantage of Iranian soccer clubs based on the team reputation considering the satisfaction level of fans of the selected teams. Annals of Applied Sport Science, 7(2), 63–71. https://doi.org/10.29252/aassjournal.7.2.63
Elliott, W. B., Fanning, K., & Peecher, M. E. (2020). Do Investors Value Higher Financial-Reporting Quality, and Can Expanded Audit Reports Unlock This Value? Accounting Review, 95(2), 141–165.
Faccia, A., Mataruna-Dos-santos, L. J., Helù, H. M., & Range, D. (2020). Measuring and monitoring sustainability in listed european football clubs: A value-added reporting perspective. Sustainability (Switzerland), 12(23), 1–13. https://doi.org/10.3390/su12239853
Galariotis, E., Germain, C., & Zopounidis, C. (2018). A combined methodology for the concurrent evaluation of the business, financial and sports performance of football clubs: the case of France. Annals of Operations Research, 266(1–2), 589–612. https://doi.org/10.1007/s10479-017-2631-z
Gazzola, P., Amelio, S., Papagiannis, F., & Vatamanescu, E.-M. (2020). Financial Reporting in European Football Teams: A Disclosure Analysis of Player Registrations. International Journal of Academic Research in Accounting, Finance and Management Sciences, 9(4). https://doi.org/10.6007/ijarafms/v9-i4/6829
Grant, R. M. (1991). The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation. California Management Review, 33(3), 114–135. https://doi.org/https://doi.org/10.2307/41166664
Hammerschmidt, J., Durst, S., Kraus, S., & Puumalainen, K. (2021). Professional football clubs and empirical evidence from the COVID-19 crisis: Time for sport entrepreneurship? Technological Forecasting and Social Change, 165. https://doi.org/10.1016/j.techfore.2021.120572
Handoko, B. L., & Michaela, C. (2021). How Audit Opinion Increase Value Added in Indonesian Sustainability Index Corporation. ACM International Conference Proceeding Series, 101–110. Association for Computing Machinery. https://doi.org/10.1145/3457640.3457663
Jawad, M. A. (2019). The Extent To Which Auditors Can Audit Intangible Assets In Accordance With The Objectives Of The Economic Units (A Proposed Model For The Adoption Of The International Standard Of Auditing 300 Planning And 500 Evidence In The Iraqi Environment). Transylvanian Review, XXVII(42). Retrieved from http://transylvanianreviewjournal.org/index.php/TR/article/view/3845
Kapoor, A. (2023). Economic Aspects of Sports and Entertainment. International Journal of Social Science and Economic Research, 08(10), 3282–3294. https://doi.org/10.46609/ijsser.2023.v08i10.019
Kaser, Ken., & Oelkers, D. Boen. (2008). Sports and entertainment marketing. Ohio: Thomson South-Western.
L’Abate, V., Raimo, N., Rubino, M., & Vitolla, F. (2024). Social media visibility and intellectual capital disclosure. An empirical analysis in the basketball clubs. Measuring Business Excellence, 28(1), 52–68. https://doi.org/10.1108/MBE-04-2023-0054
Lin, Y., & Wu, L. Y. (2014). Exploring the role of dynamic capabilities in firm performance under the resource-based view framework. Journal of Business Research, 67(3), 407–413. https://doi.org/10.1016/j.jbusres.2012.12.019
Lozano, F. J. M., & Carrasco Gallego, A. (2011). Deficits of accounting in the valuation of rights to exploit the performance of professional players in football clubs. A case study. Journal of Management Control, 22(3), 335–357. https://doi.org/10.1007/s00187-011-0135-6
Mohammadzadeh, H. (2020). The Impact of Intangible Assets and Intellectual Capital on Audit Risk. Iranian Journal of Accounting, Auditing and Finance, 4(1), 35–47. https://doi.org/10.22067/ijaaf.2020.39257
Moroney, R., Phang, S. Y., & Xiao, X. (2021). When Do Investors Value Key Audit Matters? European Accounting Review, 30(1), 63–82. https://doi.org/10.1080/09638180.2020.1733040
Pınar Gürel, S., & Ekmekci, A. (2013). Measuring Intellectual Capital For Football Clubs; Evidence From First Division Football League. Pamukkale Journal of Sport Sciences, 4(1), 36–41. Retrieved from https://www.researchgate.net/publication/311071594
Prabhawa, A. A., & Nasih, M. (2021). Intangible assets, risk management committee, and audit fee. Cogent Economics and Finance, 9(1). https://doi.org/10.1080/23322039.2021.1956140
Puspitasari, K., Budisusetyo, S., & Zakiah, Z. (2019). An accounting review of athletes in ownership of basketball club assets. The Indonesian Accounting Review, 9(2), 169–180. https://doi.org/10.14414/tiar.v9i2.1770
Puspitawati, L. (2016). The analysis of effectiveness measurement in Accounting Information Systems through competence factor of information system user (Research on higher education in Bandung). IJABER, 14(1), 313–339. Retrieved from https://www.researchgate.net/publication/305267036
Rochmah Ika, S., Udin, K., Nugroho, J. P., & Koenti, I. J. (2020). Assessing the Financial Performance of English Football Clubs: Arsenal and Manchester City. Advances in Economics, Business and Management Research, 169.
Tahat, Y. A., Ahmed, A. H., & Alhadab, M. M. (2018). The impact of intangibles on firms’ financial and market performance: UK evidence. Review of Quantitative Finance and Accounting, 50(4), 1147–1168. https://doi.org/10.1007/s11156-017-0657-6
Tarmidi, D., Fitria, G. N., & Ahmad, Z. (2019). Financial Performance and Audit Quality: Comparative Study of Investor Reaction. Scholars Bulletin, 05(12), 828–833. https://doi.org/10.36348/sb.2019.v05i12.019
Thoma, G. (2021). Composite value index of trademark indicators: A market value analysis using Tobin’s Q. World Patent Information, 66. https://doi.org/10.1016/j.wpi.2021.102064
Villalonga, B. (2004). Intangible resources, Tobin’s q, and sustainability of performance differences. Journal of Economic Behavior and Organization, 54(2), 205–230. https://doi.org/10.1016/j.jebo.2003.07.001
Visvanathan, G. (2017). Intangible assets on the balance sheet and audit fees. International Journal of Disclosure and Governance, 14(3), 241–250. https://doi.org/10.1057/s41310-017-0023-x
Winfree, J. A., Rosentraub, M. S., Mills, B. M., & Zondlak, M. P. (2019). Sports Finance and Management: Real Estate, Media and the New Business of Sport. New York: Routledge.
Zhang, L., Ge, C., & Su, W.-H. (2018). Auditing Quality, Investor Sentiment and Earnings Response---Evidence from the Chinese A-Share Market. Accounting and Finance Research, 7(2), 110. https://doi.org/10.5430/afr.v7n2p110
Zulkarnaen, W., Fitriani, I., & Yuningsih, N. (2020). Pengembangan Supply Chain Management Dalam Pengelolaan Distribusi Logistik Pemilu Yang Lebih Tepat Jenis, Tepat Jumlah Dan Tepat Waktu Berbasis Human Resources Competency Development Di KPU Jawa Barat. Jurnal Ilmiah MEA (Manajemen, Ekonomi, & Akuntansi), 4(2), 222-243. https://doi.org/10.31955/mea.vol4.iss2.pp222-243
Published
2024-12-23
How to Cite
Herbert, G., Magdalena, R., Wijaya, C. J., & Emanuel, C. (2024). THE IMPACT OF INTANGIBLE ASSETS ON FINANCIAL PERFORMANCE : THE MODERATING ROLE OF AUDIT STATUS IN LISTED SPORTS CLUBS WORLDWIDE. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 8(3), 2752-2765. https://doi.org/10.31955/mea.v8i3.4819
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