The impact of firms' internationalization on financial statement presentation: Some French evidence

Historically, the format of financial statements has varied from one country to another. Recently, due to the attractiveness of their capital markets, the strength of their accounting professions and the influence of their institutional investors, Anglo-American countries have seen a steady increase in the impact of their accounting practices on other nations, even influencing the actual format of financial statements. Given that French accounting regulations allow a certain degree of choice in consolidated balance sheet format (‘by nature’ or ‘by term’) and income statement format (‘by nature’ or ‘by function’), this study examines a sample of 199 large French listed firms in an attempt to understand why some of these firms choose not to use the traditional French formats (‘by nature’ for the balance sheet and ‘by nature’ for the income statement), instead preferring Anglo-American practices that we call ‘alternative’ (‘by term’ format for the balance sheet and ‘by function’ format for the income statement). We first analyze the balance sheet and income statement formats separately using a logit model, then combine the two and enrich the research design with a generalized ordered logit model. Our results confirm that opting for one or two alternative formats is related to internationalization, influenced by several factors: size, international auditor, accounting standards, foreign listing and international sales. When distinguishing the decision to adopt at least one versus two alternative-format financial statements, our findings also provide evidence that not all variables play the same role: ‘Accounting standards’ and ‘Foreign listing’, which are important in explaining the use of at least one alternative format, are irrelevant in explaining the use of two alternative-format financial statements.     

Coping with extreme climate events: Institutional flocking

The article explores the governance structures that would be needed to cope with extreme and unpredictable climate change. The impacts on the Netherlands of a Gulf Stream collapse in the Northern Atlantic are taken as a case. This hypothetical situation of serious risks and high uncertainties requires governance arrangements with high potentials for rapid and radical change. Using the metaphor of the flocking of birds, we characterize these arrangements as ‘institutional flocking’. Main features of institutional flocking are: (1) flexible opportunities for actors to swiftly respond to change through creative forms of collaboration and participation; (2) rapid and pervasive processes of learning and institutionalization of new knowledge among actors; (3) strong and institutionalized care for coherence and solidarity, to bind the various parts of the ‘flock’. We illustrate and articulate these features for two sectors in Dutch society, urban infrastructure and rural planning.     

Locating audit expectations gap within a cultural context: The case of Saudi Arabia

This paper offers an insight into the types of ‘audit expectations gap’ that exist within a cultural context. Specifically, it investigates if the business and social environment affect the perceptions of audit performance of users and auditors. Using a combination of mail questionnaires and semi-structured interviews, the study reveals the existence of a ‘performance gap’ with respect to the roles specified in the statutory pronouncements and those that can reasonably be expected of auditors in Saudi Arabia. The results further indicate the ‘performance gap’ arises from four factors in the environment within which auditing is practiced: licensing policy, recruitment process, the political and legal structure, and dominant societal values. Interview results reveal the influence of institutional and cultural settings on the audit expectations gap and indicate that the inclusion of Islamic principles in auditing standards and the code of ethics would help reduce the expectations gap that exists in Saudi Arabia.     

How futuring bush mechanics seek to transform the world

In today's complex and turbulent world it is vital to have futurists who can collaborate on collective projects, focus on action codified in exemplar projects and validate actions towards a better world. Unfortunately, current ‘education’ systems focus almost exclusively on the individual learner and have separated the learner from the praxis of the lived life. Furthermore, classrooms separate the learner from design, production and integration of learning into community life. The author argues that overcoming this separation of thinking and doing is one of the key challenges for modernity in future, in particular.This paper argues that a way in which we may be able to meet this challenge is known by the term ‘bush mechanics’ in Australia—innovative individuals who look forward wisely and solve collective problems today through applying their ingenuity with what is available, thus integrating thinking, doing and being in what in ancient times was called poiesis and in Medieval times ‘artificing’ and today can be seen in action learning and the bush mechanic. The four principles, as well as examples, of the bush mechanic approach are discussed including their exemplar projects. Finally, the importance of the bush mechanic approach to ‘futuring’ and creating living breathing examples today of a future our children can live with is emphasised and collaboration sought.     

Has science ever been normal? On the need and impossibility of a sustainability science

In this article, I develop a constructive critique of ‘post-normal science’ by challenging the underlying conception of ‘normal science’. Invoking Bruno Latour's constructivist approach, I change focus from a representationalist understanding to a practice-inspired account of science in which the composition of a matter of fact necessarily implies a politically significant differentiation between internalities and externalities. Contending that science has never been normal in that it has always already been political, I further elaborate on this political dimension by connecting Latour's concepts of matters of fact and matters of concern with Rudolf Boehm's distinction between logical and topical truth. Whereas logical truth is a measure of the validity of matters of fact, topical truth is a measure of the relevance and adequacy of scientific knowledge regarding a particular matter of concern. This allows me to argue that any attempt to install a new ‘post-normal science’ with a higher topical truth vis-à-vis sustainability issues neglects the irreducible political moment situated at the point of determining who and what we should be concerned about. Finally, I draw on the notion of ‘forms of life’ to suggest a ‘politics of the imaginable’ that takes socio-material practices as primary matters of a concern for sustainability.     

The post-normal science of precaution

Science now finds itself in a new and troubled situation. The traditional optimistic picture is problematic and compromised at every turn. The scientific system now faces a crisis of confidence, of legitimacy and ultimately of power. We can usefully distinguish two sorts of science. The ‘mainstream’ is reductionist in style, and increasingly linked to industry. By contrast, the ‘post-normal’ approach embodies the precautionary principle. It depends on public debate, and involves an essential role for the ‘extended peer community’. It is based on the recent recognition of the influence of values on all research, even including the basic statistical tests of significance. It is the appropriate methodology when either systems uncertainties or decision stakes are high; under those conditions the puzzle-solving approach of ‘normal science’ is obsolete. This is a drastic cultural change for science, which many scientists will difficult to accept. But there is no turning back; we can understand post-normal science as the extension of democracy appropriate to the conditions of our age.     

Interpretation and application of “new” and “complex” international financial reporting standards in Fiji: Implications for convergence of accounting standards

This study extends prior research on accounting judgment and decision making research by examining the effects of ‘new’ and ‘complex’ accounting standards on judgments of professional accountants. It examines whether there are differences in judgments of professional accountants in Fiji when interpreting and applying selected International Financial Reporting Standards (IFRSs). A significant within-country difference in judgments of professional accountants has serious implications for convergence of accounting standards. The results show that interpretation and application of accounting standards are affected by complexity of the accounting standard and professional accountant's familiarity with the standard. The study also finds strong support for an interactive effect of familiarity with the accounting standards and complexity in accounting standards on judgments of professional accountants. Furthermore, the results show that differences in judgments exist between the Big 4 and non-Big 4 professional accountants when provided with new accounting standards that require complex judgments. The results of this study are of interest to stakeholders at a time when IFRSs are increasingly being adopted throughout the world and standard setters are struggling to promote compliance with those standards.     

Governance,tax and folk tales

This paper develops a particular narratological approach to analyse a common category of narratives: individuals’ accounts of their organization’s context and purpose. In two phases of interview research with 45 senior UK accounting professionals (tax officials, tax advisors to, and tax directors of, multinational companies) we focus on a pivotal period in the governance of UK taxation. We advocate analysing what ordinarily could be called ‘real world’ narratives about this context (‘tax tales’) as if they were folk tales. This approach draws on an influential analysis of folk tales by Propp. Our theoretical contribution is to show how features of strong or dominant plots, of the kind that structure folk tales, also help accounting professionals to make sense of this complex governance environment. This helps us understand personal projects of sense making in a context that is technically, legally and morally complex and has implications for governance, for policy, and for accounting as a professional project.     

A productivity analysis of Central and Eastern European banking taking into account risk decomposition and environmental variables

This paper develops a Luenberger productivity index that is applied to a technology where desirable and undesirable outputs are jointly produced and are possibly negative. The components of this Luenberger productivity index - the efficiency change and the components of the technological shift - are then decomposed into factors determined by the technology, adjusted and then for ‘risk and environment’, ‘risk management’ and ‘environmental effects’. The method is applied to Central and Eastern European banks operating during 1998-2003 utilising three alternative input/output methodologies (intermediation, production and profit/revenue). Additionally, the comparative analysis of the sensitivity of the productivity indices in the choice of the methodologies is undertaken using statistical and kernel density tests. It is found that the main driver of productivity change in Central and Eastern European banks is technological improvement. That is, in the beginning of the analysed period, the results hinged on the banks ability to capitalise on advanced technology and successfully take into account ‘risk and environmental’ factors. Whereas, in later periods, one of the most important factors of technological improvement/decline was ‘risk management’. Finally, the tests employed confirm previous findings, such as Pasiouras (2008)in this journal, that different input/output methodologies produce statistically different productivity results. Finally, we find that external factors, such as ‘risk in the economy’ and banking production, and a ‘corruption perception’ affect the productivity of banks.     

The future of Scotland's international tourism markets

This paper explains the rationale behind a tourism marketing strategy prepared for Scotland, as an example of a small-nation destination. In 1985, a typical international tourist to Scotland would have been be described as ‘American, over-50 and interested in heritage’, whereas today the typical tourist is ‘European, under-35 and interested in culture’. The change can be explained within the context of global tourism trends, which provide an insightful explanation of this transformation. Looking to the future, the prospects up to 2025 are assessed in this paper, based upon future trends and UN WTO projections. Is that future to be based upon arrivals from North America, European or the Rest of the World? Whatever the scenario, a strategy is presented that captures the essence of Scotland's international tourism expectations based upon key drivers and market prospects. In a highly competitive market, Scotland should focus on markets that it can win and that can contribute towards the industry's ambition to grow the economic value of tourism by 50% by the year 2015 through strong branding and a focused marketing proposition.     

Problematizing international business futures through a ‘critical scenario method’

This paper proposes the need for change in how managers in international business (IB) determine organisational objectives and what criteria they use in addressing complex problems. We propose a move from a largely firm-centric focus; on profit maximization and shareholder value; to a broader societal and environmental view. We see the educational context as the locus for initiating such a shift. However, we see obstacles within the canon of mainstream IB textbooks, with their focus on exposition of normative models of managerial action, illustrated by case studies of successful multinational enterprises (MNEs). Whilst we acknowledge their incorporation of critical issues, we view the lack of substantive critical reflection on the wider implications of IB activity as underpinned by an implicit assumption of the ‘good’ of IB. We posit that the normative structure of mainstream texts militates against students understanding the full range of possible futures for IB practice, and against developing the capability to cope with situations of uncertainty and ambiguity. Seeking to promote a critical pedagogy that accommodates consideration of both mainstream approaches and critical responses to these, we propose one approach to teaching and learning about IB futures that is based upon development of what we term ‘critical scenario method’. This offers a basis for active investigation of complex problems in the ‘real’ world from a range of perspectives, beyond that of profit maximization. We provide a worked, case example of our new method and demonstrate how it will enhance perceptions/understandings of involved and affected actors’ interests and their likely (re)actions as a particular scenario unfolds. The theoretical grounding for this approach is based upon contemporary social science interpretation of the Aristotelian concept of phronēsis, or ‘practical wisdom’.     

How we talk when we talk about nano: The future in laypeople's talk

Nanotechnology is an example of postnormal technoscience ‘in the making’: its concrete products and applications are currently only starting to trickle into the marketplace. In this paper I use nanotechnology as a case to examine how uncertain technoscientific futures are represented in lay talk. I engage with this question through a close analysis of focus group discussion around nanotechnology, describing the cultural and linguistic resources that participants draw upon in doing this, including personal experience and expertise, analogies and comparisons, and fiction and popular culture. These are, I suggest, the key discursive tools with which laypeople can weigh up and evaluate emerging technologies. However, I also argue that these are used flexibly to create different kinds of arguments in different conversational contexts, and use the example of nanotechnology as ‘the same’/’different’ to illustrate this. In concluding I reflect on the implications of these findings for scholars of public opinion and attitude and for those who frame policy on emerging and uncertain science and technology.     

The aftermath of public attention on accounting improprieties: Effects on securities class action settlements

This research examines the effect on securities case settlements from the public focus on accounting fraud immediately following Enron and other large accounting debacles. In addition, to the extent that an ‘Enron-effect’ occurred, behavioral theory suggests that such an effect would likely dissipate over time. Therefore, I also investigate whether in very recent years an impact from the prior attention on accounting fraud diminishes with the passage of time. Results indicate that following the increased media and public attention upon accounting fraud, characteristics of securities cases that were the focus of this increased attention are associated with incrementally higher settlement amounts - specifically large cases involving financial restatements and cases involving intentional misstatements, i.e., accounting irregularities.Findings regarding whether an ‘Enron-effect’ has dissipated with the passage of time are mixed. Overall, results contrast with prior research, which did not find support for an ‘Enron-effect’ on securities case settlements, and suggest that future events that capture public attention may cause defendants in certain securities cases to pay higher amounts, not necessarily because of their own culpability.     

IPOs,trade sales and liquidations: Modelling venture capital exits using survival analysis

This paper examines the dynamics of exit options for US venture capital funds. Using a sample of more than 20,000 investment rounds, we analyze the time to ‘IPO’, ‘trade sale’ and ‘liquidation’ for 6000 VC-backed firms. We model these exit times using competing risks models, which allow for a joint analysis of exit type and exit timing. The hazard rate for IPOs are clearly non-monotonic with respect to time. As time flows, VC-backed firms first exhibit an increased likelihood of exiting to an IPO. However, after having reached a plateau, non-exited investments have fewer possibilities of IPO exits as time increases. This sharply contrasts with trade sale exits, where the hazard rate is less time-varying. We further provide evidence on the impact of economic factors such as syndicate size and composition, geographical location and VC value adding, on exit outcomes.     

Health transitions in a globalising world: towards more disease or sustained health?

In this paper, we argue that the concept of transitions is a useful way to address future changes in the health status of the world due to the processes of globalisation. To that end, we discuss the current forces affecting human health and the health transitions we have seen in the past. Next, we describe developments in the health status of populations according to three potential future ‘ages’: the age of emerging infectious diseases, the age of medical technology and the age of sustained health. Future health transitions are explored along the lines of four development paths (scenario groups), defined along two dimensions (global versus regional dynamics and emphasising economic objectives versus environmental and equity objectives). We conclude that managing the health transition effectively will require a micro- and macro-approach, taking into account the social, cultural and behavioural determinants of health.     

The effectiveness of the mandatory disclosure of independent directors’ opinions: Empirical evidence from China

Since 2001, the regulatory authority of the Chinese stock market has required the independent directors of listed firms to disclose their opinions on important board decisions. Using a novel dataset of independent directors’ opinions, this study examines the effectiveness of that mandatory disclosure requirement. We find that the stock market reacts negatively to announcements of independent directors saying ‘no’. Firms with more severe agency problems are prone to experiencing independent directors saying ‘no’. Independent directors are also more likely to say ‘no’ when they have multiple directorships, longer tenure, financial expertise, or live in places other than where the firms they serve are located. Consequently, firms with independent directors who say ‘no’ tend to experience cuts in inter-corporate lending, a lower propensity to pay dividends, reduced bank loans, and greater turnover of top executives. In addition, these firms are more likely to receive a modified audit opinion, obtain ‘special treatment’, or be subject to regulatory enforcement action in the year after independent directors say ‘no’. Overall, the results indicate that independent directors saying ‘no’ can help to protect the interests of outside investors, and thus lend support to regulations mandating the disclosure of independent directors’ opinions.     

Post-normal science in postnormal times

Post-normal science (PNS) was a herald of postnormal times. For Functowicz and Ravetz contemporary issues in which ‘facts are uncertain, values in dispute, stakes high and decisions urgent’ necessitate PNS. PNS deals with the postnormal character of contemporary challenges by bringing the contextualised insights of non-scientific stakeholders to bear through the formulation of ‘extended facts’. However, while the contextual content of ‘extended facts’ caters to the indeterminate character of postnormal issues this remains in tension with an implicit assumption that outcomes reflect the quality of the ‘facts’ informing them. This paper takes the claim that postnormal times involves ‘that we abandon…ideas of ‘control and management” seriously by arguing that science should be the servant of outcomes framed in, primarily, societal terms, rather than the other way around. This argument is illustrated using the example of fashioning an effective response to climate change.     

Anticipating the future: ‘Biotechnology for the poor’ as unrealized promise?

This article analyses visions of the future articulated by proponents of ‘biotechnology for the poor’, those who claim that an embrace of transgenic technology in agriculture is critical to alleviating poverty in developing countries. Specifically, we analyse how such ‘biotechnology for the poor’ proponents represent a future with or without transgenic crops. Such representations include visions of a beckoning (promising) future, where much is to be gained from an embrace of transgenic technology in agriculture, and an onrushing (threatening) future, where much will be lost if the technology is not embraced. The article shows that claims about a beckoning or onrushing future by ‘biotechnology for the poor’ proponents are based upon unexamined or problematic assumptions about the poor and poverty. As such, poverty becomes merely a moral backdrop against which visions of a future are articulated. Furthermore, ‘biotechnology for the poor’ writings do not engage in dialogue with alternative voices in articulating their perspectives on the future, losing a key opportunity to democratize debate about this crucial issue. We conclude by considering the policy consequences (in regulatory and institutional terms) of ‘biotechnology for the poor’ depictions of the future, particularly for the global South where such consequences will be felt.     

Towards a bioregional approach to tropical forest conservation: Costa Rica's Greater Osa Bioregion

Even by neotropical standards, the Osa Peninsula on the Southwest Pacific coast of Costa Rica contains extraordinary levels of biodiversity and endemism. Despite a 40-year history of conservation in a country known for its conservation efforts, the greater Osa Bioregion and its complex of protected areas face an uncertain future. Habitat fragmentation and genetic isolation threaten the long-term survival of the Osa's signature species, while Osa policymakers with limited resources struggle to address dilemmas posed by illegal resource extraction and uncertain and changing land tenure. More recently, the socio-political landscape has changed with the emergence of a ‘landed conservation gentry,’ sharing the Osa's ecological wealth with the poor frontier campesino. A review of conservation efforts in the Osa through the political ecology construct of bioregionalism provides an opportunity to further define this construct in the distinct context of neotropical forest conservation. In this article we review the theoretical underpinnings of bioregionalism, focusing on its value for neotropical forest conservation, and apply it to the mosaic of public and private lands that encompass the Greater Osa Bioregion. We characterize the complex and shifting governance framework for Osa conservation focusing on the current conservation initiative, the Osa Biological Corridor project. We conclude with the suggestion that bioregionalism's emphasis on reconciliation of humans and their environment—‘reinhabitation’—an implicit goal of the Osa Biological Corridor project, may offer the best hope for the future.