Implications of FIN 46 for Accruals Quality and Investment Efficiency

The Financial Accounting Standards Board (FASB) issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities – An Interpretation of ARB No. 51, in January 2003 and revised it in December 2003, with the objective to improve the transparency of financial information. Under FIN 46, companies are required to consolidate variable interest entities (VIEs) on financial statements if they are the primary beneficiaries of the VIEs. This dissertation empirically examines whether the implementation of this new financial reporting guidance affects firms’ accruals quality and investment efficiency. A manually collected sample comprised of firms affected by FIN 46 and firms disclosing no material impact from FIN 46 is used in the empirical analyses.The first part of the dissertation investigates the effects of FIN 46 on accruals quality. By using different accrual quality measures in prior studies, this study found that firms affected by FIN 46 experienced a decrease in accrual quality compared to firms reporting no material impact from FIN 46. Among the firms affected by FIN 46, firms consolidating VIEs were compared with firms terminating or restructuring VIEs. The accruals quality of firms consolidating VIEs was found to be lower than that of firms terminating or restructuring VIEs. These results are consistent in tests using alternative control samples.The second part of this dissertation examines the effects of FIN 46 on investment efficiency. Mixed results were found from using two different proxies used in prior literature. Using the investment-cash flow sensitivity to proxy for investment efficiency, firms affected by FIN 46 experienced a decrease in investment efficiency compared to firms reporting no material impact. It was also found that higher investment-cash flow sensitivity for firms consolidating VIEs during post-FIN 46 periods compared to both the no-impact firms and the matched pair control sample. Contrasting results were found when the deviation from expected investment is used as another proxy for investment efficiency. Empirical analyses show that FIN 46 firms experienced improved investment efficiency measured by the deviation from expected investment after their adoption of FIN 46. This study also provides explanations for the opposite results from the two different proxies.

The peculiar nova V1309 Scorpii/nova Scorpii 2008 A candidate twin of V838 Monocerotis

Aims. Nova Scorpii 2008 was the target of our Director Discretionary Time proposal at VLT+UVES in order to study the evolution, origin and abundances of the heavy-element absorption system recently discovered in 80% of classical novae in outburst. Methods. The early decline of nova Scorpii 2008 was monitored with high resolution echelle spectroscopy at 5 different epochs. The analysis of the absorption and the emission lines show many unusual characteristics. Results. Nova Scorpii 2008 is confirmed to differ from a common classical nova as well as a symbiotic recurrent nova, and it shows characteristics which are common to the so called, yet debated, red-novae. The origin of this new nova remains uncertain.

Medication prescribing and administration in nursing homes

Objective: to examine the key determinants of pharmaco-epidemiology in Australian nursing homes. Design: a cross-sectional survey of medication use in 998 residents in 15 nursing homes in Southern Queensland and Northern New South Wales, Results: the total, laxative, digoxin/diuretic, benzodiazepine and psycholeptic medication prescribed and administered to residents of nursing homes was affected to differing extents by age and gender, the nursing home, resident functional disability and medical practitioner. Resident Classification Instrument (RCI) category and nursing home were the dominant determinants for prescribing and administration of the total drugs, laxative, benzodiazepine and psycholeptic medications. In contrast, the resident use of digoxin and/or diuretics was dependent on the resident age and on the functional disability (RCI category) of the resident but not medical practitioner or nursing home. Approximately 30% of medications were prescribed on a pro re nata (p.r.n.) basis and administered at the discretion of registered nurses. Conclusion: nursing home culture is a major determinant of the variability in medication use between residents, particularly for those medications often prescribed for p.r.n. use. The nursing home does not account for variation in the use of digoxin and/or diuretics which are prescribed on a non-discretionary basis.

Forced emigration, favourable outcomes

The discipline of public health and preventive medicine in Australia and New Zealand had its genesis in the advocacy of 18th and 19th century military pioneers. Military (Royal Navy and British Army) surgeons were posted to Australia as part of their non-discretionary duty. Civilian doctors emigrated variously for adventure, escapism and gold fever. One group, a particularly influential group disproportionate to their numbers, came in one sense as forced emigrants because of chronic respiratory disease in general, and tuberculosis in particular. Tuberculosis was an occupational hazard of 19th century medical and surgical practice throughout western Europe. This paper analyses six examples of such emigration which had, perhaps unforeseen at the time, significant results in the advancement of public health. Such emigration was in one sense voluntary, but in another was forced upon the victims in their quest for personal survival. In Australia, such medical individuals became leading advocates and successful catalysts for change in such diverse fields as social welfare, public health, the preventive aspects of medical practice, child health, nutrition and medical education. A number of such public health pioneers today have no physical memorials; but their influence is to be seen in the ethos of medical practice in Australia and New Zealand today. Their memory is further perpetuated in the names of Australian native wildflowers and trees that symbolise not only a healthy environment but the longterm investment, accrued with interest, of the institution of public health measures for which their advocacy achieved much success.

Auditor conservatism and voluntary disclosure: Evidence from the Year 2000 systems issue

This study further examines the phenomenon of conservative auditor behaviour by considering the level of voluntary disclosure of Year 2000 remediation information in company annual reports. Previous studies have provided evidence of conservative auditor behaviour by examining the link between Big 6 auditor choice and accruals (Francis and Krishnan 1999; Becker et al., 1998; Defond and Subramanyam 1998). Protecting their reputation capital increases Big 6 auditor incentives to act conservatively to avoid litigation risk. We propose and find that Big 6 auditor clients disclose more Year 2000 remediation information than non–Big 6 auditor clients.

A reforma administrativa da Nova Zel??ndia nos anos 80-90: controle estrat??gico, efici??ncia gerencial e accountability

O artigo discute o processo de reforma administrativa implementada na Nova Zel??ndia a partir de 1984, com a chegada do Partido Trabalhista ao poder, abordando seus principais desdobramentos nos anos 90. Parte de uma apresenta????o do modelo administrativo em vigor na Nova Zel??ndia antes das reformas empreendidas em 1984, delimitando dessa forma o quadro referencial para comparar a situa????o anterior com a atual, de maneira que proporcione uma avalia????o sobre os impactos das medidas empreendidas. Em seguida, apresenta uma descri????o dos objetivos e princ??pios norteadores da reforma tais como, separa????o das fun????es comerciais das n??o-comerciais; separa????o entre as fun????es administrativas e de assessoria; princ??pio do ???quem usa paga???, user pays; transpar??ncia na concess??o de subs??dios; neutralidade competitiva, descentraliza????o e aumento do poder discricion??rio do administrador; melhoramento da accountability, entre outros. A seguir, s??o apresentadas as principais medidas empreendidas pelo governo trabalhista entre 1984 e 1990, dando ??nfase ?? metodologia adotada para a implementa????o e accountability dos contratos de gest??o firmados entre os executivos- chefe e os ministros. Posteriormente, o autor apresenta as modifica????es introduzidas nas regras de contrata????o de pessoal no servi??o p??blico neozeland??s e, de um modo mais geral, na pol??tica de recursos humanos. Finalmente, ?? tra??ado um perfil da situa????o atual da Nova Zel??ndia, bem como ?? feita a apresenta????o sucinta daqueles que o autor considera como sendo os ???suportes conceituais da reforma???: o movimento gerencialista, a teoria do Public Choice e a teoria Principal-Agente.

Avan??os desiguais e inten????es indefinidas: a reforma do estado do M??xico e a estrat??gia de gerenciamento

Este paper defende duas id??ias. A primeira, ?? apresentar os diferentes processos da reforma do Estado mexicano, analisados sob as prioridades diversas no decorrer do tempo. As reformas econ??mica, pol??tica, social e administrativa tiveram prioridades e objetivos divergentes. A reforma econ??mica foi sistem??tica e congruente, a pol??tica foi defensiva e pouco abrangente, e a social foi problem??tica e confusa. A reforma administrativa foi, comparativamente, limitada. Uma proposta para desenvolver um sistema administrativo respons??vel pelo servi??o p??blico foi postergada nos ??ltimos 12 anos at?? que, em maio de 1997, finalmente a atual administra????o prop??s um programa de moderniza????o. A segunda id??ia ?? que, mesmo que a atual administra????o tenha a inten????o de desenvolver um novo sistema de accountability e um plano de carreira para o servi??o p??blico, parece plaus??vel que a tradicional pol??tica de controle, atrav??s da estrutura administrativa, possa ser prejudicada se essas propostas realmente reduzirem o poder discricion??rio dos altos cargos p??blicos e submeterem reservas p??blicas a um esquema de controle social mais aberto e formal. Logo, ?? poss??vel dizer que a alternativa escolhida pelos reformistas foi usar uma abordagem gerenciadora, onde a melhoria dos procedimentos e a implementa????o de algumas t??cnicas administrativas avan??adas substituem, pelo menos at?? agora, uma transforma????o mais profunda da estrutura administrativa. Uma estrat??gia de gerenciamento permite, pelo menos at?? o momento, a melhoria dos servi??os atrav??s do aumento da participa????o de servidores p??blicos, sem prejudicar a atual administra????o, como um instrumento para implementar diferentes agendas pol??ticas usando recursos p??blicos. Nosso argumento ?? que, como o programa de moderniza????o est?? sendo implantado, ?? importante estudar minuciosamente as possibilidades de se implementar a reforma do servi??o p??blico e melhorar a responsabilidade do sistema, dada a particular rela????o que existe entre a administra????o p??blica e o sistema pol??tico no M??xico.

Book-tax differences e gerenciamento de resultados no mercado de ações do Brasil

Este estudo verifica a relação entre book-tax differences (BTD) e gerenciamento de resultado em companhias listadas na BM&FBovespa no período de 2005 a 2009. Metodologicamente, foram empregadas duas abordagens: (i) distribuição de frequências e (ii) accruals discricionários - Modelo Jones Modificado. Os achados indicam uma relação diretamente proporcional entre a BTD e os accruals discricionários. Foram identificadas evidências de que as entidades preponderantemente gerenciam seus resultados na mesma direção do sinal observado da BTD, além de buscarem apresentar o montante de BTD em nível e em variação em torno do ponto zero e desta forma evitar sinalizar baixa qualidade do lucro. Adicionalmente, foram encontradas evidências de que o tamanho da firma e a adoção do regime tributário de transição estão relacionados de forma inversamente proporcional ao nível dos accruals discricionários.

A JOINT EXPERIMENTAL ANALYSIS OF INVESTOR BEHAVIOR IN IPO PRICING METHODS

This article jointly examines the differences of laboratory versions of the Dutch clock open auction, a sealed-bid auction to represent book building, and a two-stage sealed bid auction to proxy for the “competitive IPO”, a recent innovation used in a few European equity initial public offerings. We investigate pricing, seller allocation, and buyer welfare allocation efficiency and conclude that the book building emulation seems to be as price efficient as the Dutch auction, even after investor learning, whereas the competitive IPO is not price efficient, regardless of learning. The competitive IPO is the most seller allocative efficient method because it maximizes offer proceeds. The Dutch auction emerges as the most buyer welfare allocative efficient method. Underwriters are probably seeking pricing efficiency rather than seller or buyer welfare allocative efficiency and their discretionary pricing and allocation must be important since book building is prominent worldwide.

Monetary and fiscal policies interactions in a monetary union with country-size asymmetry

Within a country-size asymmetric monetary union, idiosyncratic shocks and national fiscal stabilization policies cause asymmetric cross-border effects. These effects are a source of strategic interactions between noncoordinated fiscal and monetary policies: on the one hand, due to larger externalities imposed on the union, large countries face less incentives to develop free-riding fiscal policies; on the other hand, a larger strategic position vis-à-vis the central bank incentives the use of fiscal policy to, deliberately, influence monetary policy. Additionally, the existence of non-distortionary government financing may also shape policy interactions. As a result, optimal policy regimes may diverge not only across the union members, but also between the latter and the monetary union. In a two-country micro-founded New-Keynesian model for a monetary union, we consider two fiscal policy scenarios: (i) lump-sum taxes are raised to fully finance the government budget and (ii) lump-sum taxes do not ensure balanced budgets in each period; therefore, fiscal and monetary policies are expected to impinge on debt sustainability. For several degrees of country-size asymmetry, we compute optimal discretionary and dynamic non-cooperative policy games and compare their stabilization performance using a union-wide welfare measure. We also assess whether these outcomes could be improved, for the monetary union, through institutional policy arrangements. We find that, in the presence of government indebtedness, monetary policy optimally deviates from macroeconomic to debt stabilization. We also find that policy cooperation is always welfare increasing for the monetary union as a whole; however, indebted large countries may strongly oppose to this arrangement in favour of fiscal leadership. In this case, delegation of monetary policy to a conservative central bank proves to be fruitful to improve the union’s welfare.

Do economic and financial firm's situation affect the quality if financial reports?

We investigate whether firms’ economic and financial situation influence the Quality of their Financial Reports (FRQ). FRQ is fundamental for investors and it affects the international capital movements [Bradshaw et al. (2004)] and Gelos and Wei (2005)]. Following Schipper and Vicent (2003) we use two issues to access earnings quality: abnormal accruals and earnings persistence. For seventeen European countries, we find evidence that the economic performance affects FRQ. Big firms and those with high current earnings exhibit better financial information. These results are robust since they don’t depend on FRQ proxy and we have the same evidence when we estimate regression with economical and financial factors separately or together. About financial situation, it seems not to affect FRQ. However, in high leveraged firms, the capital structure becomes determinant.

The effect of financial reports’ auality on Ffrm’s rerformance

We analyse whether the quality of firms’ Financial Reports (FRQ) produces any effect on their performance. Bradshaw et al. (2004) and Gelos and Wei (2005) call attention to the fact that the international capital movements is affected by FRQ. Following Schipper and Vicent (2003) we use the abnormal accruals to access earnings quality. For seventeen European countries, we found evidence that FRQ produces a positive impact on firm’s performance. This finding indicates that mangers are not opportunists and tends to make decisions to defend the firm’s best interests. This result is robust since it does not depend on the accounting firms’ performance proxy (ROA/ROE). In addition, it is also consistent when we use data in time series and in cross-sectional and when we estimate regression with lagged or the current year information about abnormal accruals.

Stabilization constraints from different-average public debt levels in a Monetary Union with country-size asymmetry

In the sequence of the recent financial and economic crisis, the recent public debt accumulation is expected to hamper considerably business cycle stabilization, by enlarging the budgetary consequences of the shocks. This paper analyses how the average level of public debt in a monetary union shapes optimal discretionary fiscal and monetary stabilization policies and affects stabilization welfare. We use a two-country micro-founded New-Keynesian model, where a benevolent central bank and the fiscal authorities play discretionary policy games under different union-average debt-constrained scenarios. We find that high debt levels shift monetary policy assignment from inflation to debt stabilization, making cooperation welfare superior to noncooperation. Moreover, when average debt is too high, welfare moves directly (inversely) with debt-to-output ratios for the union and the large country (small country) under cooperation. However, under non-cooperation, higher average debt levels benefit only the large country.

A divulgação de informação financeira no relato intercalar : uma análise às entidades cotadas no PSI geral

Mestrado em Auditoria

Manipulação de resultados

Dissertação de Mestrado apresentado ao Instituto Superior de Contabilidade e Administração do Porto para a obtenção do grau de Mestre em Auditoria, sob orientação de Doutora Alcina de Sena Portugal Dias Esta versão contém as críticas e sugestões de elementos do júri