Quality-related costing: Findings from an industry-based research study

With the support of the Science and Engineering Research Council and the cooperation of several manufacturing organisations the authors have carried out a major study of the collection and use of quality-related costs in manufacturing industry. The paper summarises the main limitations and omissions of the literature on quality costing and provides guidance on the most authoritative reading on the subject. Experience acquired whilst carrying out the investigations at collaborating companies is reviewed and some of the major issues are discussed, including definitions of quality cost categories and elements, collection and reporting of quality cost data and the uses of quality costs. Alternatives are suggested to (or may be used to complement) the usual prevention-appraisal- failure approach to categorisation of quality-related costs which is so firmly entrenched in both management thinking and the literature on the subject.     

The state of global environmental reporting: Lessons from the global 100

Global economic corporations have global environmental responsibilities that include reporting that extends to their entire global operation. The 1999 Benchmark Survey of The State of Global Environmental Reporting surveys and compares the global reporting practices of the largest one hundred corporations in the world. Global environmental reporting is increasing and is now standard among firms in the electronics, automobile manufacturing, and chemicals sectors. From the 1998 survey to the present, the number of global environmental reporters rose from thiry-nine to forty-four firms. If one discounts the minimal reporting among financial services firms, sixty percent of the Global 100 produced a global environmental report (GER). The quality of reporting also increased dramatically in key areas as Global environmental management system (EMS) standards and specifications and global use of Design for Environment (DfE) and Life Cycle Analysis (LCA) tools increased.     

Einfluss der Mandatsdauer des Abschlussprüfers auf ergebniszielgr??enorientierte Bilanzpolitik

This study examines whether the length of auditor-client-relationship affects audit quality. It is motivated by recent calls for mandatory auditor rotation in Europe which are based on concerns that a longer auditor tenure reduces audit quality. Earnings management is used as proxy for audit quality. It is measured by the firms’ success to achieve earnings benchmark targets. A situation in which an abnormal high proportion of firms just meet the benchmark and an abnormal low proportion of firms just miss the benchmark is interpreted as earnings management. Analysed benchmark targets are the reporting of small profits (loss avoidance) and the reporting of small positive earnings increases. Multivariate analyses indicate a higher success for benchmark beating with longer auditor tenure. This result suggests that, in the current environment, mandatory limitations on the length of auditor-client-relationship could result in higher audit quality.     

捆绑策略对于低性能产品引入的价值

如何将低性能产品(低吸引力产品)引入现有高性能产品进行销售已成为企业关注的重要问题,尤其是当低性能产品具有各种边际成本结构以及顾客表现为在更长时间域理性选择购买时机的行为时.研究了捆绑策略对于低性能产品引入的价值,考虑了不引入低性能产品(只销售高性能产品)的基准策略以及引入低性能产品(同时销售两种产品)的完全捆绑策略、分开销售策略与混合捆绑策略.结论显示:当低性能产品的边际成本较低以及与高性能产品之间的竞食性较强时,不引入低性能产品对企业更有利.当低性能产品具有中等(较低)边际成本且与高性能产品之间的竞食性较弱时,企业应当采用混合捆绑策略引入低性能产品.此外,还分析了完全捆绑策略与分开销售策略的适用范围.     

Implementing ISO 14001—An International Survey Assessing the Benefits of Certification

The costs and benefits of ISO 14001 certification result in firms choosing this route as a tool for proactive environmental management, according to a survey of 131 companies across the world. The following paper examines the motivation to pursue ISO 14001 certification for companies in developed and developing countries. While the costs of ISO 14001 certification vary widely, almost all respondents report substantial cost savings as a result of implementation. This was especially the case in developing countries, where enthusiasm about the standard (among certified firms) is very high. Contrary to the concerns voiced by skeptics, many firms stated that they decided to implement an ISO 14001 in order to “be a good neighbor” and to raise their employee's level of environmental awareness. Surprisingly, very few respondents stated that their primary motivations for implementation were profit-related. The majority of firms appear to be using ISO 14001 as a tool for proactive environmental management, as its creators intended.     

管理层持股、领导权结构与财务重述

本文以我国2005-2009年间A股市场补充与更正报告中出现"会计差错更正"项目的公司为研究对象,以是否发生财务重述为因变量,采用配对样本分析的Logit回归方法研究了管理层持股、领导权结构与财务重述之间的关系。本研究发现,管理层持股比例与财务重述之间存在显著的U型关系,领导权结构对财务重述没有显著影响,然而管理层持股的利益协同效应(堑壕效应)在两职分离(两职合一)的公司中更容易得到发挥。本研究发展了财务重述、管理层持股以及领导权结构的研究内容,为完善公司治理机制、防范会计错报提供了相应的思路。     

The impact of related party transactions on earnings management: some insights from the Italian context

Related party transactions have become a key issue as a result of recent financial scandals. This study examines whether firms use related party transactions for earnings management, and then, whether they try to minimize detection through the format of related party transactions disclosure. Firstly, we analyze the association between related party transactions structure (types and parties involved) and the probability of reporting small earnings increase. Related party transactions may have significant impact on, and implications for, earnings management. According to the agency theory, related party transactions are used opportunistically, while the efficient transaction hypothesis argues that related party transactions meet the economic needs of the business. We next investigate the association between the probability of reporting small earnings increases through related party transactions and disclosure quality. Disclosure quality should be studied in relation to impression management and investor attention; this approach takes account of the idea that earnings management behavior may influence the quality of disclosure as a possible way of lowering conflict of interest. In line with the agency theory, our findings show that revenue related party transactions are more likely to be used to manage earnings than other types of transaction; related party transactions with ultimate parents are associated with lower probability of reporting small earnings increases compared to operations with other related parties. Lastly, our results confirm that the decision to engage in earnings management is related to lower disclosure quality.     

Collusion With Persistent Cost Shocks

We consider a dynamic Bertrand game in which prices are publicly observed and each firm receives a privately observed cost shock in each period. Although cost shocks are independent across firms, within a firm costs follow a first‐order Markov process. We analyze the set of collusive equilibria available to firms, emphasizing the best collusive scheme for the firms at the start of the game. In general, there is a trade‐off between productive efficiency, whereby the low‐cost firm serves the market in a given period, and high prices. We show that when costs are perfectly correlated over time within a firm, if the distribution of costs is log‐concave and firms are sufficiently patient, then the optimal collusive scheme entails price rigidity: firms set the same price and share the market equally, regardless of their respective costs. When serial correlation of costs is imperfect, partial productive efficiency is optimal. For the case of two cost types, first‐best collusion is possible if the firms are patient relative to the persistence of cost shocks, but not otherwise. We present numerical examples of first‐best collusive schemes.     

An Empirical Analysis of the Decision to Train Apprentices

Abstract. It is a widely held belief that apprenticeship training represents a net investment for training firms, the cost of which needs to be recouped after the training period. A new firm‐level data set for Switzerland reveals large variation in net costs across firms and, remarkably, negative net costs for 60 per cent of all firms. We use these data to estimate the effect of net costs on the number of apprentices hired by a firm. The results show that the costs have a significant impact on the training decision but no significant influence on the number of apprentices, once the firm has decided to train. For policy purposes, these results indicate that subsidies for firms that already train apprentices would not boost the number of available training places.     

上市公司内部控制缺陷与财务报告信息质量

企业内部控制的主要目标之一是提高财务报告信息质量,如果上市公司的内部控制存在缺陷,无论是管理层无意识的误报财务信息还是出于自身利益的目的故意操纵财务信息,都会降低财务报告的信息质量.利用 2007年～2008年中国A股上市公司财务数据,从会计稳健性、应计质量和财务信息价值相关性3个视角,考察内部控制缺陷对财务报告信息质量的影响.研究结果表明,在控制公司的经营特征和行业特征以及公司是否为国有控股和是否为ST公司后,发现存在内部控制缺陷的公司其会计稳健性和应计质量均显著低于不存在内部控制缺陷的公司,但是这两类公司财务信息价值相关性的差别并没有得到很好证实.     

上市公司信息披露与资本成本：来自中国证券市场的经验证据

以沪深股市502家公司为研究对象,对上市公司信息披露与资本成本的相关性进行了实证检验。研究表明,对于采取保守盈余政策的366家公司,盈余保守度与资本成本显著负相关,而对于采取激进盈余政策的136家公司,盈余激进度与资本成本没有显著关联。结论:高质量的信息披露可以降低上市公司的资本成本,良好的公司治理有助于提高经营绩效。     

Squeezing or cuddling? The impact of economic crises on management control and stakeholder management

This paper analyzes the effects of economic crises on firms’ use of management control mechanisms and on their management of stakeholder relations. Moreover, the association between stakeholder management and management control system use is analyzed. In the wake of the economic crisis of 2008/2009, many firms were faced with severe threats that called for immediate short-term action to ensure firm survival. However, short-term action like massive cost-cutting and cash generation often are blamed for going at the expense of long-term health as key stakeholder relations may be irreversibly harmed. Hence, three interrelated questions are addressed theoretically and empirically: First, we analyze the impact of the recent economic crisis on firms’ control strategies. More specifically, we investigate whether a high crisis impact on firms is associated with a shortening of reporting cycles, a more interactive use of control-relevant information, restriction of employee autonomy and a focus on liquidity and cost-cutting. Second, we examine from the viewpoint of stakeholder theory how firms can make use of active stakeholder management for crisis management. Third, we explore whether firms can take short-term measures for ensuring liquidity and cutting costs and at the same time pursue a stakeholder strategy aiming at the long-term survival of the firm. Using survey data from 204 major Austrian corporations, we provide evidence that firms significantly adjusted their control systems as a response to the economic crisis. Our data do not indicate an immanent contradiction between a “short-term finance focus” and the pursuit of a sustainable stakeholder strategy.     

What is Driving Corporate Environmentalism: Opportunity or Threat?

Environmental management systems (EMSs) can differ considerably in the mix of practices and the number of practices adopted by firms. This paper explores the various incentives motivating adoption of different types of practices by a sample of Standard & Poor's 500 firms and provides an explanation for why firms adopt practices selectively. Observable firm characteristics, proxies for the incentives faced by firms, are used to determine the types of firms more likely to adopt certain types of practices. We find that practices, such as having an internal environmental policy, corporate environmental standards and environmental auditing are motivated more strongly by regulatory pressures, while practices such as total quality environmental management and environmental reporting are motivated more strongly by the potential for gaining competitive advantage and improving relations with stakeholders.     

Prices,Markups, and Trade Reform

This paper examines how prices, markups, and marginal costs respond to trade liberalization. We develop a framework to estimate markups from production data with multi‐product firms. This approach does not require assumptions on the market structure or demand curves faced by firms, nor assumptions on how firms allocate their inputs across products. We exploit quantity and price information to disentangle markups from quantity‐based productivity, and then compute marginal costs by dividing observed prices by the estimated markups. We use India's trade liberalization episode to examine how firms adjust these performance measures. Not surprisingly, we find that trade liberalization lowers factory‐gate prices and that output tariff declines have the expected pro‐competitive effects. However, the price declines are small relative to the declines in marginal costs, which fall predominantly because of the input tariff liberalization. The reason for this incomplete cost pass‐through to prices is that firms offset their reductions in marginal costs by raising markups. Our results demonstrate substantial heterogeneity and variability in markups across firms and time and suggest that producers benefited relative to consumers, at least immediately after the reforms.     

The Value of Production Schedule Integration in Supply Chains

This study explores the value of integrated production schedules for reducing the negative effects of schedule revisions in supply chains involving buyer and supplier firms. A stochastic cost model is developed to evaluate the total supply chain cost with integrated purchasing and scheduling policies. The model minimizes the costs associated with assembly rate adjustment, safety stock, and schedule changes for all supply chain members. Through experimentation, the paper examines the impact of several environmental factors on the value of schedule integration. This study finds that schedule integration can lead to overall cost savings in a supply chain, but some firms may have to absorb costs in excess of those they would incur with independent scheduling. Environments with high inventory holding costs and long supplier lead times may not find it beneficial to adopt an integrated schedule. Forecast effectiveness plays a critical role in realizing the benefits of schedule integration. The paper concludes with suggestions for future research.     

Capacity Sharing and Cost Allocation among Independent Firms with Congestion

We analyze the benefit of production/service capacity sharing for a set of independent firms. Firms have the choice of either operating their own production/service facilities or investing in a facility that is shared. Facilities are modeled as queueing systems with finite service rates. Firms decide on capacity levels (the service rate) to minimize delay costs and capacity investment costs possibly subject to service‐level constraints on delay. If firms decide to operate a shared facility they must also decide on a scheme for sharing the capacity cost. We formulate the problem as a cooperative game and identify settings under which capacity sharing is beneficial and there is a cost allocation that is in the core under either the first‐come, first‐served policy or an optimal priority policy. We show that capacity sharing may not be beneficial in settings where firms have heterogeneous work contents and service variabilities. In such cases, we specify conditions under which capacity sharing may still be beneficial for a subset of the firms.     

Corporate risk management and pension investment policy

In this paper, we study whether firms manage their pension risk exposures within an integrated corporate risk management framework or they manage their pension and firm risk exposures independently following the adoption of fair value pension reporting regulation (IAS 19). Controlling for known factors affecting the risk-taking in pension plan investments, we document a robust negative association both at the cross-section and over time between pension risk and firm systematic risk and operating asset risk during the post-IAS 19 adoption period. The findings suggest that firms manage pension risk as an integral part of firm risk, consistent with a coordinated risk management explanation. Overall, our evidence highlights that pension investment strategy is a dynamic process that is ultimately determined by sponsoring firms' strategic corporate risk management considerations and the important role that changing pension reporting regulation plays in shaping these dynamics. Our conclusions have potential wider implications for ongoing reforms in financial reporting and disclosure policy settings.     

实报还是谎报——双边信息激励与供应链效率

探讨了双边不对称信息下供应链信息真实分享和谎报对效率的影响。首先,给出完全信息下的最优商品交易量和供应链利润作为比较基准。其次,构建双方信息真实分享的激励模型。研究发现激励双方信息真实共享所需的信息租金降低交易量和供应链利润。再次,构建允许信息谎报的交易量谈判模型。研究发现,供销双方都偏好高报自己的信息类型。个体谎报信息的幅度随着谈判力增加而减小。拥有绝对谈判力的一方不会谎报信息。供应链效率与谎报信息的幅度、成本上界以及销售价格相关。最后,通过数值算例对实报信息和谎报信息下交易量、供应链个体利润及效率进行对比分析。研究结果为管理实践提供一定的洞见:供应链企业是否激励双边信息分享可根据双方成本大小进行选择。     

Capacity Investment and Product Line Decisions of a Multiproduct Leader and a Focus Strategy Entrant

In this article, I investigate the capacity investment cost conditions where a multiproduct market leader may respond to a focus strategy entrant by using different strategies such as changing the product mix, production volumes, quality levels, and/or by investing in more capacity. The products offered in the market are quality differentiated and customers are heterogeneous in their willingness to pay for quality. The capacity investment costs of the two firms (i.e., the leader and the entrant) may also be different. The classical Stackelberg model predicts that an incumbent does not change its position in response to entry. However, when heterogeneous customer base, product differentiation, and capacity costs are taken into consideration, I find that the leader with a low capacity cost may choose to expand its product line and increase its production. The leader with low capacity cost may introduce a product that it was holding back when the entrant has to bear the high‐capacity cost and cannibalization threat is relatively small. Nevertheless, the extent of production volume strategies reduces as the capacity cost increases for the leader. I also find that when the leader has the power to set the industry standards by deciding the quality levels, as a response to a high‐quality focused entrant, the leader increases both levels of quality and production of the low‐quality product. Moreover, when the capacity investment cost is high for both the entrant and the leader, I find that market prices may increase with entry.     

Simultaneous determination of production lot size and process parameters under process deterioration and process breakdown

The purpose of this study is to combine production-inventory management with process-quality design for determining production lot size and process parameters under the possibility of process deterioration and breakdown. The total cost of such an integrated model includes: the combined setup cost (production setup and process resetting), the costs of quality loss, tolerance and mean costs for processes established, a penalty cost for process breakdown and carrying costs for cumulated inventory. The quadratic quality loss function is introduced to assess quality loss within the system. Decision variables include the initial setting (process mean) and process tolerance for process parameters determination, and production lot size for production-inventory management. The cycle time for production-inventory management is assumed to be the same as the resetting cycle for the new process-quality system. The contribution of this study lies in its development of an integrated model that enables process parameters, production lot size, and cycle time to be determined concurrently for quality and economic considerations, and at an earlier time in the process design and production management stage. An example is presented to demonstrate the proposed model.