The accounting valuation of bank stocks in Europe

In this study we examine the validity of the earnings-book value capitalization model in the pricing of bank stocks in Europe. We perform cross-sectional tests using a sample of banks operating in 21 European Union countries. We split our sample into code and common law countries to control for the influence of the financial reporting system upon the pricing of earnings and book value. Our empirical findings suggest that disaggregating total reported clean surplus income into reported gains and losses from securities and other income increases the explanatory power of the accounting valuation model. Indeed, reported gains and losses from securities are priced lower than other income, irrespective of whether the financial reporting system is classified as a code or a common law system, probably because the market considers the former as a less stable source of income. Additionally, we observe that the pricing of both earnings and book value is influenced by the financial reporting system. We conclude that earnings announced under a common law financial reporting system are priced differently from those reported under the respective code law system. Finally, we provide evidence that comprehensive and dirty surplus income are two value relevant variables for banks reporting earnings under the code law system, although dirty surplus income is priced lower than clean surplus income.     

Fair value accounting under financial crisis

The recent financial crisis has led to a vigorous debate about the pros and cons of fair-value accounting （FVA）. This debate presents a major challenge for FVA going forward and standard setters＇ push to extend FVA into other areas. In this article, we highlight three important issues as an attempt to make sense of the debate. First, much of the controversy results from confusion about what is new and different about FVA. Second, while there are legitimate concerns about marking to market （or pure FVA） in times of financial crisis, it is less clear that these problems apply to FVA as stipulated by the accounting standards, be it IFRS or U.S. GAAP. Third, historical cost accounting （HCA） is unlikely to be the remedy. There are a number of concerns about HCA as well and these problems could be larger than those with FVA.     

Impact of mergers on the corporate performance of acquirer and target companies in India

Mergers and acquisitions become the major force in the changing environment. The policy of liberalization, decontrol and globalization of the economy has exposed the corporate sector to domestic and global competition. It is true that there is little scope for companies to learn from their past experience. Therefore, to determine the success of a merger, it is to be ascertained if there is financial gain from mergers. It is very important to study the liquidity performance of those companies to test whether those companies have sufficient liquid assets to meet its current obligations. The present study is limited to a sample of companies which underwent merger in the same industry during the period of 2002-2005 listed in one of the Indian stock exchange namely Bombay Stock Exchange. It is proposed to compare the liquidity performance of the thirteen sample acquirer and target companies before and after the period of mergers by using ratio analysis and t-test during the study period of three years. The study found that the shareholders of the acquirer companies increased their liquidity performance after the merger event.     

Financial statements in less developed countries： What do preparers demand？

This study reports on an empirical investigation of the characteristics, attitudes, and beliefs of preparers of external financial reports in a less developed country. The basic research instrument consisted of a questionnaire in two parts： the first addressing attitudes of professional accountants toward annual financial reports generally; the second, more specifically measuring the importance of the information items to preparers. Our results suggest that the independent auditor is the most influential group in decision-making processes. As in many developed countries, the auditor＇s report and the regulatory framework are considered to have a major influence on financial reporting practices. Preparers believe that a lack of knowledge of external users＇ needs and lack of reporting standards and accepted accounting principles are the main concerns with corporate financial reports in Iran. The results showed that the balance sheet, auditors＇ report, and income statement in that order are the three most important parts of the annual reports.     

Accounting regulation and IPSAS implementation： Efforts of transition countries toward IPSAS compliance

The need for high quality standards to enhance sound and consistent financial reporting and the fact that the inefficiency and ineffectiveness of public sector extended to a belief that public and private sectors did not have to be managed in fundamentally different ways, fostered a wide-ranging discussion about the harmonization of public sector accounting systems and their convergence towards the private sector financial reporting standards. This paper discusses the state and perspective of public sector accounting and financial reporting in transition countries. Precisely, this paper aims to examine the adequacy of governmental accounting and financial reporting model, reflecting the existing accounting regulation and financial reporting framework in Slovenia, Croatia and Bosnia and Herzegovina. The motivation for this paper emerges from international discussions about IPSASs development and adoption, and the fact that the topic is becoming more and more relevant as many countries are moving towards adopting full accrual accounting using IPSASs as their method of financial reporting. Our results show that the degree and dynamics of government accounting systems＇ transformation in transition countries depends upon several specific factors which have to be taken into account when evaluating the systems and making comparison between government accounting system reforms in countries in the analysis. Thus, the study distinguishes certain similarities but also discrepancies regarding the status and possible further development of governmental accounting in countries examined.     

The web-based financial reporting adopted by the listed companies in the Athens Stock Exchange

Web-based corporate reporting is the provision of financial information through the Internet. Other companies prefer to disclose their financial information in order to satisfy their investors and to attract new ones while others prefer to provide as less information as possible. The purpose of this paper is twofold： first it provides a critical examination of the main reporting criteria followed by the Greek listed companies, in order to point out how many of these companies present these criteria. Second, it considers how the industry sector of the listed companies or their capitalization category is related with their disclosure degree of financial reporting.     

From risk society to audit society

Contrary to what is sometimes claimed, the 2008 banking crisis occurred in an ultra-regulated environment. Legislative and regulatory financial-security regimes have in fact multiplied in recent years. The economic crisis is accelerating the transition of the risk society towards the audit society. But the G20 （Group of Twenty） declarations in Washington and London also reveal a managerial utopia： the march towards a society of confidence or harmony that would make controls superfluous. In this context, the article seeks to call upon philosophical, sociological and managerial references to risk, from Foucault to Power by way of Beck, Giddens ＆ Ewald, to shed light on the official declarations of the leaders of the world＇s main economies. The documentary corpus examined includes all the G20 works published between November 8, 2008 （preparation for the Washington Summit） and April 2, 2009 （conclusions of the London Summit）. The political philosophy underlying the G20＇s works remains fundamentally liberal, even though saving the worldwide market economy involves established security systems as well as self-control and control of others. In the end, the leaders do not decide between reinforcing the existing tools and inventing new systems. The updating of security technologies is meant to serve the preservation of the capitalist managerial utopia. This gives rise to a new variant of Beck＇s risk-society paradigm, too often confined to environmental threats alone, in three phases： （1） The crisis is a consequence of financial modernity and in particular of the inefficiency of regulation in the face of growing sophistication in techniques; （2） To restore confidence, the states and international institutions want, paradoxically, both to reinforce regulation and promote flexibility; （3） Thereupon, flexi-security controlled by worldwide economic governance characterizes the second financial modernity.     

Risk signal, financial derivatives transactions and the Indonesian GAAP

Motivated by the accounting events of firm＇s default related to derivatives and other financial instruments transactions, this study is aimed to investigate the capability of accounting information to signal the risks associated with the use of financial derivatives for hedging. Hypothesis are developed based on the theory and empirical evidences of manager＇s motive to use derivatives for hedging （Berkman ＆ Bradbury, 1968; Dune, et al., 2003） as well as signaling theory of accounting information （Ball ＆ Brown, 1968; Beaver ＆ Dukes, 1972; Jensen ＆ Meckling, 1976; Megginson, 1997）. The hypotheses are formulated in the Ordinary Least Square model. The study uses Statistical Product and Service Solutions （SPSS） version 14 as software to conduct the statistical tests. Non-bank and non-financial institutions firms with financial derivatives transactions listed in Indonesian Stock Exchange during 2001 to 2006 are chosen as the sample. Determinations of the time frame has considered the timing of introduction of revisions of accounting standard on derivatives and other financial instruments in Indonesia PSAK 50 Financial Instruments： Presentations and Disclosures which was published in July, 1998, as well as PSAK 55 Financial Instruments： Recognition and Measurements which was published in 1998. Based on the sample selections procedure and the completeness of the data required by the model, 24 firms listed during 2001-2006 or equal to 66 firm-years observations were identified as the data to be tested. Empirical evidences suggests that Indonesian GAAP is capable of providing signal associated with： （1） Fair value exposures related to manager＇s motive to reduce the cost of financial distress; （2） Cash flow exposures related to manager＇s motive to practice tax arbitrage as well as to overcome underinvestment problems; （3） Interest rate risks related to manager＇s motive to avoid the risk default due to limitations of debt covenants; （4） Forex risk related to manager＇s motive to control forex exposures caused by foreign operations as well as foreign sales.     

Controversies over fair value accounting： The case of SMEs

This study analyses IASB＇s stipulations on fair value usage in its standard designed for SMEs and the reactions of national standard setters, preparers and users of financial reporting in this respect. It tries to clarify fair value applications such as market value and value in use and the appropriateness of their usage for the case on hand. This research determines the inconsistencies within IASB ED IFRSfor SMEs （2007） related to the usage of fair value, underlined by the respondents＇ comment letters. The content analysis of all the above, conducted according to the type of economy and nature of respondent, along with the statistical techniques applied, indicates a partial approval of fair value usage under the following conditions： clarification of the concept, details on its usage in relation to market liquidity and the nature of the asset, additional guidance regarding the measurement methods. We advocate for the value in use, an application of the fair value based on internal valuations, which offers an adequate cost-benefit rate. The final version ofIFRSfor SMEs highlights both the preference of market information over the internal valuations and the insufficient information regarding solutions suited for non-liquid markets. It may be appropriate for the IASB, maybe in collaboration with the IVSC, to provide guidance and details regarding the implementation and disclosure of the valuation techniques applicable to this type of entities.     

Determinants of international joint venture performance measurement： A theoretical framework

International joint ventures （IJVs） have increasingly their role in business world and also in research field of international business. There have been a lot of studies related to determinant factors of IJV performance. However, there are very few studies focusing on the measurement of I Jr performance. Especially, researchers have ignored how foreign parent firms really choose their measures in the evaluation of their IJV performance. This research investigates determinant factors of performance measures of 1JVs. Determinant factors of IJV performance measures include motives for establishment, establishment mode, location of IJVs, distribution of ownership in IJVs, cultural background of parent firms, and trust between partners, IJV life stages, parent firms＇ international experience, and relatedness of the IJVs to their parents. Performance measures are divided into financial measures and non-financial measures. The paper shows how different determinant factors are expected to lead foreign parent firms preferring one kind of measure over the other.     

Accounting treatment and internal controls in financial shared services ofmultinational corporations

Financial shared services （FSS） play an important role in multinational corporations for the effective cost management. FSS also can reduce errors and fraud so as to achieve perfect internal controls by standardized and procedural business processes which are important parts of internal controls. This paper emphasizes on two popular procedures and methods in multinational corporations. One is balance sheet reconciliation. It can illustrate the situation of accounts on an accrual basis which are the focus of internal audit and external audit. The other is Interco-Sop （Intercompany-standard operating procedure） which are important for to ensure the accuracy and effectiveness of accounting system and internal controls.     

Banking crises and financial system in Turkey

The important part of the macroeconomic policies is related to financial sector. Banking, which is a portion of this sector, takes the most important place in both the operation of economic system and the realization of the institutional or individual activities. It is well known that the foundation of banking system is based on trust, stability and strong capital formation. The birth and development of the banking sector in Turkey is relatively new. If the roots of the Turkish banking are traced, it is seen that the history goes back to the middle of the nineteenth century. Since the establishment of the Republic of Turkey, the targets of the economic development have been tried to be reached through supporting the industry and banking in the leadership of the State. But the obstacles in the financial system have limited the development of the Turkish banking sector. Since the application of the liberalization policies in the markets, particularly after 1980＇s, the banking sector has been one of the most affected sectors from the liberalization. When the fundamental problems of the Turkish banking sector have been analyzed, they can be enumerated as economic instability, being the financier of the public deficits, being too sensitive to the market risks and being fragile, high input costs, inefficient use of capital, defects in the booking system or weaknesses in the control, problems with restructuring, defects in domestic control, lack of risk management and institutional inner-management. In this study, the development of banking sector will be briefly analyzed for determined periods since 1923. The analysis will include the developments which create economic crises, the role of banks in this process, the defects of the banking sector and the financial system, and the effects of crises on the banking sector on the basis of the cause and effect relation. Economic crisis of February 2001 and the banking crisis will be examined in detail. The new arrangements after the 2001 crisis in the banking sector have been overviewed.     

Harmonization of financial reporting of small and medium-sized enterprises in the Czech Republic

A current problem of the present-day accounting and financial reporting consists in aligning the accounting in small and medium enterprises. In July 2009 the International Financial Reporting Standard for small and medium-sized enterprises was issued, which extended the aligning possibilities also to small and medium enterprises considerably. If the standard is adopted by the national legislation, problems connected with the standard implementation in the national legislation will have to be solved as well as practical issues connected with making financial statements. At present the yields and the problems which can arise in connection with the standard application have to be focused on. A contribution of the standard application will be a better informative ability of financial statements on the international level. At small and medium enterprises this can contribute to better comanunication with banks, with investors, rating application are： parallel reporting according to national agencies etc. The problems connected with the standard regulations, differences between the national legislation and the standard, wide practice at keeping accounts and making financial statements and limited approach of small and medium enterprises to obtaining information and to training of their employees. Another problem can be a tight link between the trading income and the tax base, when small companies prefer rather the tax point of view.     

The impact of financial sector development on the economic growth of emerging countries： An empirical study for E-7 countries

Globalization, financial liberalization, financial integration, financial sector, and economic growth have been significant issues for many researchers. The studies have investigated the effects of the above issues to the economic growth of countries both theoretically and empirically. Since there has been conducted an enormous body of work, each of them may be grouped and studied separately. This paper focuses on the impact of financial sector development to economic growth and empirically studies the potential effect on the emerging E-7 countries, consisting of Brazil, China, India, Indonesia, Mexico, the Russian Federation, and Turkey. The study employs panel regression methodology and the data set for modeling Gross Domestic Product （GDP） comprises annual data over 2001-2007, using basic variables which resemble financial sector development, namely market capitalization of listed companies （stock market capitalization）, bank capital to asset ratio, stocks traded, total debt service, foreign direct investments, portfolio investments, real interest rates, and claims on private sector. The analysis indicates that the GDP may be modeled using the above stated macroeconomic variables with considerably high explanatory power, except for the real interest rates and bank capital to asset ratios.     

The role of self-accounting and financial capability in consumer credit decisions

The role of financial capability in the consumers＇ financial behaviour has been widely analyzed by the literature. The same happened for the relationship between debt and financial capability. The consensus about the benefits of an increase in the levels of financial literacy collides with a diversity of opinions on what the best solutions to increase financial capability. While methods based on traditional teaching may not be an effective solutions and they could not provide results in the short term, solutions oriented to support consumers in important financial decisions （requests for funding, choice of retirement solutions, etc.） may show greater effectiveness. Studies in literature have shown the tendency of subjects with high levels of financial capability to adopt a long term view and to upgrade their daily financial behaviour with attitudes and practices related to self-finance （budget, financial check-up, saving for goals, etc.） The paper focuses on the relationship between financial capability and self-accounting practices, interpreting the latter as evidence of conduct financially aware. After a review of the literature designed to emphasize the role of self-accounting in the context of personal finance, a financial check-up based tool is proposed, pointing out how the financial accounts＇ schemes and logics （regular budget, estimates and forecasts checking targets） may find useful application in the context of personal finance.     

Major historical events affecting the accounting profession： An overview

The accounting result from science and technology innovation and the development of productivity, with management modes and financial reforms as its opportunity and the operation of international capital, as well as economic integration helping improve it. An invention, a president, the occurrence of an organization, a historical lesson may directly or indirectly change accounting regulations, and even trigger an accounting revolution. We will put a variety of significant impacts on an accounting, so as to get a fundamental understanding of the close relationship between such events and accounting events, including innovation of accounting theory, and accounting practice; we adopted the ＂table-style＂ form of papers, with many self-evident and intuitive tables, we compile a series of major historical events reasonably. Only in accordance with evolution of objective environment, can we design proper accounting practice, and thus innovate and develop accounting.     

The embedded financial governance system based on COSO framework A new method of integration

The global financial crisis is spreading at an alarming rate across the world. The speed of the spreading and its tremendous impacts to economic is unprecedented in half a century. Through researching its impacts to finance, the authors can clearly find that to a large extent most enterprises went bankrupt and closed down because of the weak financial governance system and lack of effective control to internal financial operation Based on this background, the authors analyzed the problems of the traditional financial governance, and tried to find solutions. Applying the concept of COSO （The Committee of Sponsoring Organizations of The National Commission of Fraudulent Financial Reporting） framework into the financial governance system, the authors can reconstruct the embedded financial governance system based on COSO framework, and better control the company＇s financial activities. In this way, the enterprise can effectively improve its management level and operational efficiency, and promote its sound and sustainable development.     

Impact of IFRS adoption on accounting quality in European firms

In this paper it is examined whether firms following International Financial Reporting Standards （IFRS） exhibit higher accounting quality. While IFRS are supposed to improve international comparisons by harmonisation and definition of strong principles, Ball （2006） and Nobes （2006） were concerned about differences in the application of IFRS cross-countries and firms. Barth, Landsman ＆ Lang （2008） stated that the flexibility of principles- based International Accounting Standards （IAS） could create incentives for firms to manage earnings. This paper contributes to analyse the impact of IFRS on accounting quality for European firms. The findings show that for firms in the European Union （EU） IFRS produce a negative effect on accounting quality that continues after 2005, when IFRS becomes mandatory. By contrast, for European firms which are not EU members the IFRS adoption increases accounting quality. These results support the concerns about IFRS application and flexibility and indicate that accounting quality does not improve just because the adoption of IFRS is mandatory.     

Teachers＇ teaching innovation abilities in financial management courses

Teachers＇ teaching innovation abilities in financial management courses are very important to train the major of financial management undergraduate students＇ innovation sense, spirits and abilities. This paper firstly explores the structure of teaching innovation abilities, characteristics of creative teachers. Secondly, combined with teaching practice, this paper inquires into how to explore students＇ innovative abilities, how to teach differently according to different students, and how to guide correctly. Finally, from the perspective of department and office environments, continuing education and teachers＇ self-questioning, this paper probes into how to train professional teachers＇ teaching innovation abilities in financial management courses.