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INTERNATIONAL ACCOUNTING ABSTRACTS"Chapter 5 What’s Wrong with Corporate Governance ‘Best’ Practices?"
SHANN TURNBULL, International Institute for Self-Governance This chapter critiques corporate governance practices widely promoted as being “best� for Publicly Traded Corporations (PTCs). The criteria used to identify good governance are those that minimize the involvement of Regulators or Law Makers with PTCs. The different drivers of corporate evolution in Europe and the United States explain the development of some of the counterproductive practices in Anglophone countries. These include directors obtaining inappropriate powers and conflicts of interests for directors and auditors. These intrinsically flawed practices have become enshrined as “best� practices in governance codes, governance metrics, regulations, securities exchanges, and the law. This chapter uses the natural laws of requisite variety, identified by mathematicians who founded the science of governance in the 1940’s to explain why current practices are not “best�. Natural laws explain why the communication and control architecture of PTCs and corporate regulators do not permit executives, directors, and regulators to directly monitor or control on a reliable basis the complex workings of modern firms without co-regulators.
KIM P. HUYNH, Indiana University Bloomington - Department of Economics The recent economic and financial crisis highlights the role of balance sheets on firm survival. This paper considers the role of initial financial leverage (debt-to-asset ratio) on the survival of entrant Canadian manufacturing firms. Due to limited data availability, little is known about how financing affects the performance of young, private firms. This study utilizes a unique administrative dataset, T2LEAP, which contains employment and balance sheet information for all incorporated Canadian firms. We find that there is a non-monotonic relationship between leverage and firm exit (hazard) rate. The hazard rate decreases as leverage increases up to the four quintile of the leverage distribution and then increases for firms in the top leverage quintile. These effects are present while controlling for: firm characteristics, such as size and labour productivity; industry conditions, such as the real exchange rate, the differential US-Canada tariff rates, entry penetration, and the capital-labour ratio; and aggregate conditions in terms of the yield gap. "IFRS and the Need for Non-Financial Information"
TRISTAN BOYER, Universite du Luxembourg - School of Finance We aim at giving a general view of the context in which appears the latest accounting evolutions, linked with the actual financialization of the financial market. Isn’t there a risk that the new IFRS standards and their concern about transparency and comparability impoverish the information by giving to accounting, with the application of the right value, the function of capital fundamental evaluation? We also show the importance of non-financial information able to supplement the provision of information, which is useful for the economic players in order to take decisions, and described on the reworking of the financial information by the players led to use it. "The Securitisation of Receivables - Romanian Legal Framework"
FLORENTIN GIURGEA, affiliation not provided to SSRN This article provides the reader with a general understanding of the legal framework of securitisation of receivables in Romania. Moreover, the authors identify several possible issues of the Romanian Law on Securitisation of Receivables and propose legal and economic solutions so as to mitigate the risks. Generally speaking, securitisation is a modality of financing against receivables used by companies in order to allow them to raise liquidities from lenders otherwise inaccessible and to lower rates of interest than those on the originator’s own securities. Securitisation changes the security holder’s dependence on the company for payment by separating the source of payment from the company itself. The improvement of the legal framework undertook by the Romanian authorities in 2006 included “the securitisation package� which comprises the Law no. 31/2006 on Securitisation of Receivables, the Law no. 32/2006 on Covered Bonds and the Law no. 33/2006 regulating the Mortgage Banks (repealed by the GEO no. 99/2006 on Credit Institutions and Capital Adequacy). "Management Accounting Practices in the Greek Hospitality Industry"
ODYSSEAS PAVLATOS, Athens University of Economics and Business - Department of Accounting and Finance The purpose of this paper is to report the level of adoption and the benefits derived from traditional and contemporary management accounting practices in the Greek hospitality industry. An empirical survey via questionnaires was conducted on a sample of 85 Greek leading hotels enterprises in Greece. Descriptive statistics on the adoption level, the relative benefits and future emphasis of individual practices provide the basis for discussion. Results showed that the adoption rates for many recently developed practices were very satisfactory, overall traditional management accounting techniques (e.g. budgeting practices, profitability measures, product profitability analysis, customer profitability analysis absorption costing, and non–financial measures for performance evaluation) were found to be more widely adopted than recently developed tools. We conclude that traditional management accounting is very much alive and well. Many hotels intended to place greater emphasis on newer techniques in the future, particularly in activity based costing techniques (ABC, ABB, and ABM), balanced scorecard and benchmarking. | |||||||
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