Portraying the Portuguese Foundation Sector

Foundations’ importance in the actual economy has been increasingly recognized. This work project assesses the impact of the new legal framework in the foundations’ financial reporting and offers a financial statement analysis of the Portuguese foundational sector. It unveils links between financial performance and characteristics of foundations, and profiles foundations in three clusters, each with different approaches to disclosure, volunteer workforce, and taxes. It is concluded that foundations are not respecting the benefits trusted to them, calling for a tighter control to their financial reporting, and that even though that slowly, the sector is expected to continue growing.

Corporate Social Responsibility in the Oil and Gas Industry: Environmental Management Systems as a Source of Sustainable Development

The environmental aspect of corporate social responsibility (CSR) expressed through the process of the EMS implementation in the oil and gas companies is identified as the main subject of this research. In the theoretical part, the basic attention is paid to justification of a link between CSR and environmental management. The achievement of sustainable competitive advantage as a result of environmental capital growth and inclusion of the socially responsible activities in the corporate strategy is another issue that is of special significance here. Besides, two basic forms of environmental management systems (environmental decision support systems and environmental information management systems) are explored and their role in effective stakeholder interaction is tackled. The most crucial benefits of EMS are also analyzed to underline its importance as a source of sustainable development. Further research is based on the survey of 51 sampled oil and gas companies (both publicly owned and state owned ones) originated from different countries all over the world and providing reports on sustainability issues in the open access. To analyze their approach to sustainable development, a specifically designed evaluation matrix with 37 indicators developed in accordance with the General Reporting Initiative (GRI) guidelines for non-financial reporting was prepared. Additionally, the quality of environmental information disclosure was measured on the basis of a quality – quantity matrix. According to results of research, oil and gas companies prefer implementing reactive measures to the costly and knowledge-intensive proactive techniques for elimination of the negative environmental impacts. Besides, it was identified that the environmental performance disclosure is mostly rather limited, so that the quality of non-financial reporting can be judged as quite insufficient. In spite of the fact that most of the oil and gas companies in the sample claim the EMS to be embedded currently in their structure, they often do not provide any details for the process of their implementation. As a potential for the further development of EMS, author mentions possible integration of their different forms in a single entity, extension of existing structure on the basis of consolidation of the structural and strategic precautions as well as development of a unified certification standard instead of several ones that exist today in order to enhance control on the EMS implementation.

Comparative Lessons on Corporate law and CSR: Hard Law as Solution? Do the French offer the way ahead?

This paper provides a comparative analysis of corporate law and CSR and asks whether there are lessons for Australia from corporate law and CSR developments in France. This presentation presents a summary of the provisions of the new French Act Number 2010-788 passed on 12 July 2010 – called “Grenelle 2” –. Firstly, article 225 of Law’s Grenelle 2 changes the Commercial Code to extend the reach of non-financial reporting and to ensure its pertinence. Secondly, article 227 Law’s Grenelle 2 amends certain provisions of the Commercial and Environmental Codes and incorporates into substantive law the liability of parent companies for their subsidiaries. In fine, article 224 of Law’s Grenelle 2 reinforces the pressure on the market to act in a responsible manner. It modifies article 214-12 of the Monetary and Financial Code in order to compel institutional investors (mutual funds and fund management companies) to take social, environmental and governance criteria into account in their investment policy.

Análisis del proceso de reclamos para clientes de la unidad de Negocio de Salón Profesional de Procter & Gamble Latinoamérica

Las decisiones en el mundo empresarial se basan en el supuesto de la existencia de recursos limitados. Sin importar el tamaño de las compañías, existen procesos cruciales que no pueden ser ejecutados dadas limitaciones de personal, activos físicos, financieros entre otros. Por lo anterior, propuestas como las Teoría de las Restricciones (Theory of Constraints - TOC) y el Manejo en base a Actividades (Activity-Based Management – AMB) se han posicionado como un marco de desarrollo dentro de los procesos administrativos y de producción de las compañías. En el presente proyecto se analizará el caso del proceso de reclamos presentados por los clientes en Salón Profesional, una de las Áreas de Negocio de la empresa Procter & Gamble, con el objetivo de formular una alternativa financieramente viable para mejorar el nivel de servicio en la resolución de reclamos para los clientes de Salón Profesional de Latinoamérica.

Análisis del impacto del tamaño de los activos en la cuenta de resultados mediante la utilización de espacios de fase y análisis de recurrencia

Los resultados financieros de las organizaciones son objeto de estudio y análisis permanente, predecir sus comportamientos es una tarea permanente de empresarios, inversionistas, analistas y académicos. En el presente trabajo se explora el impacto del tamaño de los activos (valor total de los activos) en la cuenta de resultados operativos y netos, analizando inicialmente la relación entre dichas variables con indicadores tradicionales del análisis financiero como es el caso de la rentabilidad operativa y neta y con elementos de estadística descriptiva que permiten calificar los datos utilizados como lineales o no lineales. Descubriendo posteriormente que los resultados financieros de las empresas vigiladas por la Superintendencia de Sociedades para el año 2012, tienen un comportamiento no lineal, de esta manera se procede a analizar la relación de los activos y los resultados con la utilización de espacios de fase y análisis de recurrencia, herramientas útiles para sistemas caóticos y complejos. Para el desarrollo de la investigación y la revisión de la relación entre las variables de activos y resultados financieros se tomó como fuente de información los reportes financieros del cierre del año 2012 de la Superintendencia de Sociedades (Superintendencia de Sociedades, 2012).

Impacto de la venta de acciones en la salud financiera y el riesgo en los grupos financieros

Esta investigación tiene como objetivo general el análisis del impacto de la venta de acciones sobre la salud financiera y el riesgo en el grupo Aval. La necesidad por este estudio nace del interés por conocer los costos y beneficios que tienen las empresas a la hora de emitir acciones, siendo ésta última una práctica común en las últimas décadas. Algunas de las motivaciones relevantes para emitir acciones, son la financiación de nuevos proyectos de la empresa, el status que le pueda dar a la misma, una manera de hacer frente a la deuda, etc. Es importante conocer las implicaciones que tienen sobre la empresa la venta de acciones en términos de sus resultados, el impacto sobre los accionistas y sobre la misma sociedad. Esta investigación busca responder a la pregunta: ¿Cuál es el impacto de la venta de acciones sobre la salud financiera y el riesgo en los grupos financieros? Nos interesaremos por la revisión bibliográfica acerca de la salud financiera abordando autores que hablan de la misma desde el punto de vista de la posición de la empresa, refiriéndonos siempre a tres indicadores relevantes para el estudio y que son utilizados en la literatura para medir la salud financiera: liquidez, rentabilidad y endeudamiento. En la revisión de la literatura se ha encontrado una relación entre la salud financiera y el riesgo, por lo tanto buscaremos identificar cuál es el riesgo que afecta a las empresas cuando se emiten acciones centrándonos en tres tipos de riesgos financieros: riesgo de mercado, de interés y riesgo operacional; se ha escogido el grupo Aval para éste estudio ya que es uno de los grupos financieros más importantes en Colombia, con varios años de gestión y que actualmente realiza la práctica de emitir acciones.

Response of the EAA FRSC to the EFRAG/ANC/FRC discussion paper: 'Towards a Disclosure Framework for the Notes'

We summarise the response of the EAA’s FRSC to Towards a Disclosure Framework for the Notes, a Discussion Paper (DP) issued jointly by EFRAG, ANC and FRC. While supportive of much of the DP, and in particular of the underlying aim to place disclosures on a sounder conceptual foundation, we identify two broad themes for further development. The first concerns the DP’s diagnosis of the problem, which is that the existing financial reporting is characterised by, on the one hand, disclosure overload and, on the other hand, an absence of a conceptual framework for organising and communicating disclosures. Our review of the literature suggests much greater support for the second of these two factors than for the first. The second broad theme is the purpose of the proposed DF, and the principles that are derived from this purpose. Here, we stress the need for the framework to better accommodate the context within which financial statement disclosures are used. In practice, this context is characterised by variation in information, incentives and enforcement, each of which has a considerable effect on the appropriate disclosure policy and practice in any given situation.

Setting UK standards on the concept of control: an analysis of lobbying behaviour

The present study aims to contribute to an understanding of the complexity of lobbying activities within the accounting standard-setting process in the UK. The paper reports detailed content analysis of submission letters to four related exposure drafts. These preceded two accounting standards that set out the concept of control used to determine the scope of consolidation in the UK, except for reporting under international standards. Regulation on the concept of control provides rich patterns of lobbying behaviour due to its controversial nature and its significance to financial reporting. Our examination is conducted by dividing lobbyists into two categories, corporate and non-corporate, which are hypothesised (and demonstrated) to lobby differently. In order to test the significance of these differences we apply ANOVA techniques and univariate regression analysis. Corporate respondents are found to devote more attention to issues of specific applicability of the concept of control, whereas non-corporate respondents tend to devote more attention to issues of general applicability of this concept. A strong association between the issues raised by corporate respondents and their line of business is revealed. Both categories of lobbyists are found to advance conceptually-based arguments more often than economic consequences-based or combined arguments. However, when economic consequences-based arguments are used, they come exclusively from the corporate category of respondents.

IFRS for SMEs: the IASB’S due process

This study explores the role of the International Accounting Standards Board’s (IASB) due process in developing its International Financial Reporting Standards for Small and Medium-sized Entities (IFRS or SMEs)standard. There were tensions between the IASB’s desire to minimise divergence from full IFRS and preserve recognition and measurement principles, and the primary reasons for undertaking the project – to meet the needs of users of financial statements of SMEs and to reduce the financial reporting burden on SMEs. Examination of events during the development of the project reveals much that was not apparent from material in the public domain. Most significantly, the IASB recognised that the final title of the standard, IFRS for SMEs, does not necessarily describe the scope of the standard. This paper also shows that the due process followed in the case of the IFRS for SMEs project barely reflected the ‘will of people’ but was more inclined towards acting as a communicative function for the IASB without any commitment to change its stance on the SME standard.

Accounting as interpretive framing

The study furthers our understanding of the persuasive and constructive aspects of accounting information. We consider it as a process of ‘interpretive framing’ in the quest for legitimacy - an attempt to justify decisions and excuse mistakes. We base our theoretical discussion on the premise that the picture reported by accounting information is an example of institutional reality and thus mediated by the social contexts in which it is constructed and interpreted. Accounting information is a matter of ‘the interpretation of interpretations’ - the provision of accounting information, which is already a result of a competitive interplay among prior interpretations of certain aspects of our economic phenomena, undergoes further interpretation by the recipients of that information. This notion applies equally to narratives and numbers. We challenge notions of rigor, accuracy and objectivity assigned to quantification in accounting and posit that numbers can be an even more powerful rhetorical device due to their image of being rational and ‘rhetoric free’. We illustrate our theoretical propositions presenting explicit references to the constructive and rhetorical aspects of financial reporting from Pacioli and his times (late 15th century) to the recent regulatory developments of FASB/IASB in 2013, i.e. from the rhetoric of double entry book-keeping to the rhetoric of 'fair value’. We acknowledge, building on these theoretical foundations, the inherent subjectivity of accounting information (influenced by perceptions and interests) without entirely denying however its informative functions. We illustrate the practical implications of this, in a situation where “shared and socially accepted” perceptions may be the nearest we can get to anything resembling a faithful representation of economic reality. The paper contributes to a broader understanding of how accounting information can be viewed as a social and humanistic construction, and challenges taken-for-granted assumptions about impartiality, neutrality and rationality in regard to the process.

For the public without the public

How is the notion of public interest operationalised in the regulatory practices of the International Public Sector Accounting Standards Board (IPSASB)? A fundamental objective in setting international accounting standards for both the private and public sector is to serve the ‘public interest’. Who or what constitutes ‘public interest’ however remains a highly complex and controversial issue. Private sector financial reporting research posits that users (of financial information) are used as a proxy for the ‘public’ and users are further refined to current and potential investors - a small proportion of the public. The debates surrounding public interest are even more contentious in public sector financial reporting which deals with ‘public’ (tax payers’) money. In our study we use Bourdieu’s notion of semi-homogenous fields to show how autonomous and heteronomous pressures from the epistemic community of the accounting profession and political/government interests compete for the right to define the public interest and determine how (by what accounting solutions) this interest is best served. This is a theoretical study grounded in the analysis of empirical data from interviews with the board members of the IPSASB. The main contribution of the paper is to further our understanding of the perceptions of the main decision makers from the ‘inner regulatory circle’ with regards to the problematic construct of public interest. The main findings suggest a paternal and un-reflexive attitude of the board members leading to the conclusion that the public have no real voice in these matters.

Numbers in motion

We explore the debates surrounding the constructive and discursive capabilities of accounting information focusing in particular on the reception volatility of numbers once they are produced and ‘exposed’ to various communities of minds. Drawing on Goffman’s (1974) frame analysis and Vollmer’s (2007) work on the three-dimensional character of numerical signs, we explore how numbers can go through gradual or instantaneous transformations, get caught up in public debates and become ‘agents’ or ‘captives’ in creating social order and in some cases social drama. In our analysis we also relate to the work of Durkheim (1993, 2002) on the sociology of morality to illustrate how numbers can become indicators of moral transgression. The study explores both historical and contemporary examples of controversies and recent accounting scandals to demonstrate how preparers (of financial information) can lose control over numbers which then acquire new meanings through social context and collective (re)framing. The main contribution of the study is to illustrate how the narratives attached to numbers are malleable and fluid across both time and space.

Accrual-based and real earnings management before and after IFRS adoption: the case of Greece

Purpose – The purpose of this study is to examine the use of accrual-based vs real earnings management (EM) by Greek firms, before and after the mandatory adoption of International Financial Reporting Standards (IFRS). The research is motivated by the fact that past studies have indicated the existence of significant levels of EM for Greece in particular before IFRS. Design/methodology/approach – Accrual-based earnings management (AEM) is examined by assessing performance-adjusted discretionary accruals, while real earnings management (REM) is defined in terms of abnormal levels of production costs, discretionary expenses, and cash flows from operations, for a three-year period before and after the adoption of IFRS in 2005. Findings – The authors find evidence on a statistically significant shift from AEM to REM after the adoption of IFRS, indicating the replacement of one form of EM with the other. Research limitations/implications – The validity of the results depends on the ability of the empirical models used to efficiently capture the existence of AEM and REM. Practical implications – IFRS adoption aims to improve accounting quality, especially in countries with high need for such an improvement; however, the tendency to substitute one form of EM with another highlights unintended consequences of IFRS adoption, which do not improve the informational content of financial statements if EM continues under different forms. Originality/value – Under the expectation that IFRS adoption should lead to improvements in accounting quality, this study examines whether IFRS actually led to a reduction of EM practices for a country with exceptionally high levels of EM before IFRS, by accounting for all possible forms of EM.

Normas internacionais de contabilidade : percepções dos profissionais quanto às barreiras para sua adoção no Brasil

O crescimento dos mercados internacionais de capitais e a redução das barreiras no mundo dos negócios fazem com que o movimento pela harmonização das práticas de contabilidade entre as nações seja irreversível. Atualmente, mais de 100 países já aplicam normas harmonizadas com as International Financial Reporting Standards (IFRS), seja nas demonstrações individuais das companhias, seja nas demonstrações consolidadas. O Brasil também está trilhando o caminho da harmonização, porém esta não é uma transição simples. Existem problemas a serem enfrentados, relativos à capacitação de pessoas, às diferenças culturais e ao sistema jurídico (no Brasil vigora o direito romano, enquanto nos países de origem anglo-saxã vigora o direito consuetudinário). A transição pressupõe ainda a substituição de um modelo baseado em normas por outro baseado em princípios, em que a essência econômica dos fatos prevalece sobre a forma jurídica e, desse modo, ganham relevância a interpretação e o julgamento praticados pelos profissionais. A literatura destaca diversos motivos para a existência de diferenças na contabilidade entre países, os quais constituem barreiras em potencial para o alcance da harmonização contábil global. Tendo-se em vista tais considerações, o objetivo neste trabalho é investigar quais as principais barreiras para a adoção das normas internacionais de contabilidade no Brasil. A investigação baseia-se na revisão de estudos recentes sobre o tema e entrevistas com profissionais da área contábil em empresas, auditorias e no meio acadêmico. Na percepção dos entrevistados, as principais barreiras a serem superadas para a adoção das IFRS no Brasil são: a) a influência da legislação fiscal; b) a transição de um sistema baseado em regras para outro baseado em princípios e, portanto, mais subjetivo e c) a qualificação da mão de obra. No que se refere a esta última, observa-se que o novo contador deverá ter um perfil mais executivo, participando ativamente das decisões da empresa, avaliando, julgando e decidindo. Deverá também mostrar-se disponível para uma aprendizagem contínua, adaptando-se a novas situações, aprimorando seus conhecimentos sobre finanças, economia e buscando compreender o negócio da companhia como um todo.