Corporate governance and accounting irregularities: Canadian evidence

This study examines the extent to which corporate governance acts as an efficient means of protecting investors against accounting irregularities. It is grounded in the literatures on public enforcement of securities laws by market authorities, governance, and fraudulent financial statements. A unique feature of the Canadian tracking and enforcement system for reporting issuers in default is used to refine the definitions of accounting irregularities or fraudulent financial statements used in other studies. We test and find that the governance mechanisms of firms found in default of financial reporting regulations during the first 5 years of existence of the Canadian system are weak compared to a sample of no-default firms. For instance, they have fewer independent and financial expert directors on their boards and audit committees, are more prone to have recently changed auditor and to having their CEO as chair of the board. They also appear to fulfill their financing requirements through private rather than public funds, which is consistent with the fact that default firms are less likely to be in a position to return to the public market to fulfill their needs. This study offers evidence relevant to policy makers and others who are concerned with the potential role of market authorities and governance in protecting investors against accounting irregularities.     

A specific accounting approach for public universities

Many universities in Germany and other countries have introduced financial (or commercial) accounting to manage effectively their finances. It aligns with so-called new public sector management reforms worldwide. In this paper we analyze whether the components of this type of financial accounting reform suit the nature and objectives of German public universities. While the analysis mainly relates to the German situation, there are likely to be implications for public universities universally. Drawing on an analysis of the reports of two well known German-speaking universities, Heidelberg and Vienna, we analyze whether the components of the new financial accounting reforms suit the nature and objectives of those public universities. While we argue that cash-flow statements and balance sheets remain important, it is shown that it is necessary for state-run educational institutions to change several key elements of traditional commercial accounting. Because the success goals of such universities are non-profit-oriented, their financial accounting should be augmented by a ‘change in value statement’, replacing the traditional income statement. As their valuation cannot be correlated with the definition of profit in (German) public universities this term is suggested. By change in value we mean specifically that assets may experience a total loss or a decrease in value. In management accounting output measures and performance indicators should substitute revenues as the counterpart of costs. Furthermore, long-term financial decisions play a crucial role in universities. Therefore, a form of investment accounting is very important for them. The conventional form has to be modified by ‘investment statements’ and ‘knowledge balances’ of their intellectual capital. In this paper we also show how the concept of a balanced scorecard can be applied to public universities and how specific accounting instruments can be integrated into it.     

公司会计年报中社会责任信息的价值研究——基于内容的专家问卷分析

在本研究中,我们选取了会计年报中有代表性特征的17条社会责任信息作为项目,对参加2006年中国会计学会学术年会的专业学者就会计年报中的社会责任信息的决策价值和公共关系价值进行了问卷调查,通过深入的分析我们得出了有意义的结论。本文为该调查的研究报告。     

The Impact of Ethical Tools on Aggressiveness in Financial Reporting

The proposed adoption of International Financial Reporting Standards (IFRS) in the United States has ignited a debate as to whether the principles‐based nature of these standards better serves the interests of investors. While it is argued that these principled‐based standards will encourage more transparent financial reporting than the current rules‐based U.S. standards, critics argue that IFRS will invite more aggressive financial reporting through the liberal exercising of professional judgment. This empirical study aims to understand what individual and organizational factors may affect aggressiveness when making accounting judgments. In particular, we examine the influence that prior ethics training, codes of ethics and an individual's predominant moral reasoning schema have on adherence to company policy in an accounting‐related (depreciation) judgment. Results of the study show that respondents with prior ethics training are more likely to adhere to company accounting policy than those who have not had formal ethics education. Respondents presented with a company ethics code also were less aggressive in their accounting judgments than those who were not presented with a code prior to reading the scenario. Finally, decision aggressiveness was moderated by individuals who used conventional moral reasoning schemas.     

Stepping Stones to Permanent Employment in the Public Service

Abstract. Labour force transitions are investigated using a longitudinal database covering staff movements in the Queensland public service. The database covers those who have entered the public service through traditional recruitment methods as well as those who have entered through temporary and casual appointments. The analysis is based on a new methodology of cumulative incidence function testing and competing risks regression analysis. Interest is centred on entry by non‐standard employees and their subsequent transition through the public service. It was found that non‐standard employment can be a stepping stone to permanent employment but only for about one in four new non‐standard employees.     

Belief in Public Efficacy, Trust, and Attitudes Toward Modern Genetic Science

Government and policymakers want to engage the public in a dialogue about the conduct and consequences of science and increasingly seek to actively involve citizens in decision-making processes. Implicit in this thinking is that greater transparency and public inclusion will help dispel fears associated with new scientific advancements, foster greater public trust in those accountable, and ultimately increase the acceptability of new technologies. Less understood, however, are public perceptions about such high-level involvement in science and how these map onto public trust and attitudes within a diverse population. This article uses the concept of public efficacy -- the extent to which people believe that the public might be able to affect the course of decision making -- to explore differences in trust, attentiveness, and attitudes toward modern genetic science. Using nationally representative data from the 2003 British Social Attitudes Survey, we begin by examining the characteristics of those who have a positive belief about public involvement in this area of scientific inquiry. We then focus on how this belief maps on to indicators of public trust in key stakeholder groups, including the government and genetic scientists. Finally, we consider the relationship between public efficacy and trust and attitudes toward different applications of genetic technology. Our findings run contrary to assumptions that public involvement in science will foster greater trust and lead to a climate of greater acceptance for genetic technology. A belief in public efficacy does not uniformly equate with more trusting attitudes toward stakeholders but is associated with less trust in government rules. Whereas trust is positively correlated with more permissive attitudes about technologies such as cloning and gene therapy, people who believe in high-level public involvement are less likely to think that these technologies should be allowed than those who do not.     

THE BASIC PUBLIC FINANCE OF PUBLIC–PRIVATE PARTNERSHIPS

Public–private partnerships (PPPs) have been justified because they release public funds or save on distortionary taxes. However, the resources saved by a government that does not finance the upfront investment are offset by giving up future revenue flows to the concessionaire. If a PPP can be justified on efficiency grounds, the PPP contract that optimally balances demand risk, user‐fee distortions, and the opportunity cost of public funds has a minimum revenue guarantee and a revenue cap. The optimal contract can be implemented via a competitive auction with reasonable informational requirements. The optimal revenue guarantees, revenue sharing agreements, and auction mechanisms are different from those observed in the real world. In particular, the optimal contract duration is shorter in demand states where the revenue cap binds. These results also have implications for budgetary accounting of PPPs, as they show that their fiscal impact resembles that of public provision, rather than privatization.     

Doppik und Produkthaushalte als Instrumente strategischen Managements in Kommunen – Eine vergleichende Fallstudie

This study aims at answering the question whether currently adopted approaches of accrual accounting and product-based budgeting are appropriate for strategic management in local government. A comparative case study is undertaken in Nordrhein-Westfalen as one of the leading federal states in Germany to reform its municipalities?? financial management. Generated insights allow deriving determinants of a successful change to accrual accounting and product-based budgeting thus contributing to a research framework for strategic management in local government. Furthermore, implications on how to deal with this paradigm shift are generated for public managers.     

手机App列表信息在信用风险评价中的应用——基于互联网借贷平台的实证研究

随着互联网的发展和智能手机的普及，用户手机数据被用来评估借款人的信用风险，使用到的数据有通讯记录、短信息接发、移动轨迹、用户行为数据等，而本文研究了手机上所安装的App列表和借款人信用风险之间的关系。通过对某大型互联网借贷平台上的个人借贷数据以及借款人手机上安装的App列表数据的分析发现，手机上安装的App和借款人的信用状况存在关联关系。安装生活类、金融类和买房买车类App的借款人比没有安装这些App的借款人信用风险低；其中，记账类App、外卖类App、股票类App和买房类App对借款人的信用风险有较强的识别能力。把手机App列表信息加入信用风险评价模型之后，信用风险评价模型的区分能力得到显著提高。     

Cui bono? Depicting the benefits of the new municipal budgeting and accounting regime in Germany

The new budgeting and accounting regime for the public sector (Doppik), which is based on private sector accounting standards, has been the subject of numerous discussions in research and practice in Germany for the last 20 years. However, those discussions were mostly characterized by assertions, unproven statements and logical arguments. The objective of this paper is to empirically analyze the perceived benefits of a reformed municipal accrual budgeting and accounting system by using a structural equation model. Our results show that improved management capabilities are an important indirect factor, whereas efficiency, intergenerational equity, and transparency are direct determinants of benefit. The consistent implementation of the new output-/outcome-oriented management rationality and the necessity of harmonizing budget laws are revealed as prerequisites for further development.     

Will retiree health benefits survive FAS 106?

Recent months have seen dramatic public announcements about retiree health care coverage. General Motors recorded a $24 billion quarterly loss this year, due almost entirely to a one-time charge for future retiree health care costs. Other major employers have also reported sudden staggering losses, along with plans to decrease or stop retiree health coverage entirely. Some of these companies have been taken to court. The headlines also identify a culprit--an obscure accounting requirement, Financial Accounting Standard 106. To understand how an accounting rule can have such a profound effect on both the health care of our seniors and the financial strength of American industry, it is necessary to understand how employers pay for their retirees' care, how new accounting rules governing these costs can threaten a company's survival, and how employers are changing their employees' health coverage to meet these threats.     

Disentangling the Influence of Value Predispositions and Risk/Benefit Perceptions on Support for Nanotechnology Among the American Public

Using nanotechnology as a case study, this article explores (1) how people's perceptions of benefits and risks are related to their approval of nanotechnology, (2) which information‐processing factors contribute to public risk/benefit perceptions, and (3) whether individuals’ predispositions (i.e., deference to scientific authority and ideology) may moderate the relationship between cognitive processing and risk perceptions of the technology. Results indicate that benefit perceptions positively affect public support for nanotechnology; perceptions of risk tend to be more influenced by systematic processing than by heuristic cues, whereas both heuristic and systematic processing influence benefit perceptions. People who are more liberal‐minded tend to be more affected by systematic processing when thinking about the benefits of nanotechnology than those who are more conservative. Compared to less deferent individuals, those who are more deferent to scientific authority tend to be less influenced by systematic processing when making judgments about the benefits and risks of nanotechnology. Implications are discussed.     

The effect of outside directors’ and auditors’ incentives on managers’ ability to manage cash bonuses

This paper investigates the impact of outside directors’ and auditors’ monetary incentives on the association between discretionary accounting and managers’ cash bonuses in a two-tier system. For a sample of German stock corporations from 2005 to 2007 we expect and find that outside directors who receive compensation based on accounting income and auditors who receive high non-audit fees have the incentive to tolerate managers’ bonus-increasing accounting choices. More specifically, we show that positive discretionary accruals are more strongly associated with managers’ cash bonuses than negative discretionary accruals if outside directors receive accounting-based compensation and/or if auditors receive high non-audit fees. Our results suggest that executives’ ability to manage their cash bonuses depends on the monitoring institutions’ monetary incentives.     

Cost performance of public infrastructure projects: the nemesis and nirvana of change-orders

The cost performance of a wide range of public sector infrastructure projects completed by a contractor are analysed and discussed. Change-orders after a contract to construct an asset was signed were, on average, found to contribute to a 23.75% increase in project costs. A positive association between an increase in change orders and the contractor’s margin were identified. Taxpayers pay for this additional cost, while those charged with constructing assets are rewarded with an increase in their margins. As the public sector embraces an era of digitisation, there is a need to improve the integration of design and construction activities and engender collaboration to ensure assets can be delivered cost effectively and future-proofed. The research paper provides empirical evidence for the public sector to re-consider the processes that are used to deliver their infrastructure assets so as to reduce the propensity for cost overruns and enable future-proofing to occur.     

Mental Models of Flash Floods and Landslides

Perceptions of flash floods and landslides were analyzed in four communities of the Bavarian Alps using the mental model approach. Thirty-eight qualitative interviews, two telephone surveys with 600 respondents, and two onsite interviews (74/95 respondents) were conducted. Mental models concerning flash floods are much better developed than those for landslides because the key physical processes for flash floods are easier for the general public to recognize and understand. Mental models are influenced by the local conditions. People who have a better knowledge about the hazards are those who use many different sources to inform themselves, express fear about natural hazards, or have previous experience with hazards. Conclusions for how to improve information for the general public are discussed.     

Does Board Ethnic Diversity Impact Board Monitoring Outcomes?

This study investigates whether board ethnic diversity is associated with stronger board monitoring outcomes. We explore a range of outcomes – CEO compensation, accounting misstatements, CEO turnover–performance sensitivity and acquisition performance – but find no evidence to support this. We also find no evidence that board ethnic diversity improves overall firm performance, even for those firms with higher agency problems. Our results are robust across different methodologies and have important practical implications, by informing the current public policy debate on board ethnic diversity.     

The politics of family leave

There are many who would insist that the best laws from Washington, D.C., are those that aren't passed. A singular problem with many of the laws that are placed on the books is that their intended achievements are frequently largely overcome by unintended results. Such may be the case with the Family and Medical Leave Act of 1993. For all the good this law has done for those who need to take leaves of absence, it has added greatly to the woes of those who remain behind, the author says. Managers, she insists, will have to work diligently with the reactions of those who must accept additional workloads to accommodate the leaves of their colleagues.     

会计估计的准确性、行业共识信息与个体投资者的决策

会计信息在投资者的投资决策过程中发挥着十分重要的作用,其质量直接影响着投资者的判断和决策.会计估计在提高会计信息相关性的同时,也为公司管理层提供了盈余管理的空间.本文实验检验了对会计估计的准确性进行事后披露这一机制是否有助于个体投资者做出正确的判断和决策,以及行业共识信息对这一机制发挥作用的影响.研究发现:(1)事后披露会计估计准确性的信息只有通过行业共识信息的辅助才能有效发挥作用,即只有在两者的共同作用下,个体投资者才能够正确识别会计估计准确的原因,也才能够进行正确的归因,并做出正确的判断和决策;(2)投资者对会计估计的准确性会产生不同的归因,投资者的归因进一步影响了其对管理层评价,而对管理层的评价影响了其对公司市盈率的评价,对公司市盈率的评价进一步影响了投资者对其投资可能性的判断.     

Financial reporting in Europe: Prospects for research

This paper is a commentary on the future of financial reporting in Europe and on how research into accounting issues can be relevant to policy makers. Combining scholarship in accounting with scholarship in management can offer insight into national and global issues where accounting communicates information that affects managerial decisions at the microeconomic level and political decisions at the macroeconomic level. The paper cites examples of recent research in financial reporting and points to the current work plans of leading policy makers to illustrate the potential for researchers to influence policy directions. The context of financial reporting, nationally and globally, and the data available in the public domain, provide continued opportunities for researchers investigating accounting issues in the private sector and the public sector.     

AN UPDATE ON THE APPLICABILITY OF AN OCCUPATIONAL GOAL-EXPECTANCY MODEL IN PROFESSIONAL ACCOUNTING ORGANIZATIONS

The validity of an occupation goal-expectancy model was evaluated using the actual position attainment behavior of professional public accounting firm employees. Actual position attainment behavior was monitored over a four-year period. The hypothesized model relationships between the model variables, goal choice behavior, and position attainment were tested using linear multiple discriminant analysis and simple classification matrices. A within-subject analysis was undertaken. The findings generally support the hypothesized relationships between expected utility, goal choice, and position attainment and the model's applicability within large public accounting firms.