The First Quarter Century of the GASB (1984–2009): A Perspective on Standard Setting (Part Two)

The Governmental Accounting Standards Board (hereafter GASB or Board) was established in April 1984 as the authoritative accounting standard‐setting body for state and local governmental entities in the United States. There are over 87,000 state and local entities in the country and for the most part these entities are required to comply with the generally accepted accounting principles established by the GASB; hence, the standards promulgated by the GASB are significant. On 30 June 2009, the GASB completed its twenty‐fifth year of standard setting. Because of the Board's influence and the importance of its mission, an increased understanding of the GASB and its accomplishments during its first 25 years of existence is important. This is the second of two papers which together provide a complete sequential treatment of the GASB's operational history through the end of its first quarter century. The first part provided an historical perspective about municipal accounting issues from colonial times to 2009 and included appendix materials identifying the composition of the Board and biographical material on key personnel. The first paper concluded with a review of the relationship of other governmental standard setting bodies at the Federal and the International level. This paper provides an overview of the future challenges faced by the Board and supplies a digest of the standards including appendix and a synoptic summary of the standards the Board has promulgated by topic and by standard number.     

Emission rights: From costless activity to market operations

This paper examines the issues surrounding the aborted attempt by the International Accounting Standards Board in early 2005 to regulate the accounting for the European Union’s new Emissions Trading Scheme under the Kyoto Protocol. The paper argues that the features that made the trading scheme attractive to governments were precisely the ones that created difficulties for accountants to capture under existing standards. After showing why the challenge has to be faced, the paper suggests a possible way forward that the IASB might consider when it revisits the subject, as it is expected to do in the near future.     

The future quantified

The results reported in this paper demonstrate that the qualitative (group) research and quantitative (individual) survey techniques that have been developed now offer a viable means for mapping current expectations and the possible future directions these will take. Sensible use of these should provide governments, and large organisations in general, with a powerful new set of tools for positively managing the future. In terms of the issues themselves, the group which emerged most strongly from the quantified responses of the individuals are those which might be seen as relating to the ‘green' environment. On the other hand, our qualitative groups looked upon these key issues as representing matters of survival for humanity as a whole. Such a focus on survival may seem selfish, but it can also be seen as altruistic not concerned with personal survival. It also represents a sound, rational approach to long-term planning, where the respondents focused instead on how governments might positively, and safely, manage all the long-term issues threatening the future of humankind. If we move away from ‘green' issues, it is also clear that even individuals recognize the globalisation of issues in particular the globalisation of business, the possibility of a global financial crash and the (threat of) domination by Pacific Rim countries. At the opposite end of the spectrum are worries about the significant problems faced by the underclasses—and, in turn, the significant threat these present to society as a whole. In general though, apart from technological issues, the emphasis was—across almost all areas—on survival in the face of events ranging down from catastrophes to mere crises and stresses!     

A study of auditor-client relationships and problems in the Bahraini audit environment

We report on a survey study of auditor-client relationship problems in an under-developed audit market in Bahrain. The study investigates client perspectives and views on important auditing process issues, value added audit activities for client organizations, and auditor rotation. Clients viewed high fees, excessive audit time requirements, difficulty in meeting auditor's requests, and audit personnel difficulties in understanding the business due to a lack of adequate audit professionals' experience as problems. From the audit firm perspective, the study explores audit client acceptance factors, independence issues, and common problems encountered with the clients. Auditor respondents indicated the major process problems to be associated with the client's culture, lack of access to information, and poor accounting systems. Auditors reported problems in collecting evidence. The audit process and evidence problems reported indicate possible audit quality problems faced by audit firms in Bahraini environment when conducting external audits, indicating the need for future research on auditor-client relationships in emerging economies.     

Editor's note

Earlier versions of the following three papers were presented at the Third Manufacturing Accounting Research Conference held in Edinburgh in June 1997. Several papers from this conference were subsequently submitted to Management Accounting Research and reviewed in the normal way. As these three papers were accepted for publication at approximately the same time, they are now published together in this issue. A paper by Mouritsen and Bekke, presented at the same conference, was published in the June 1999 issue of Management Accounting Research. Other papers from the conference are currently under review and may appear in subsequent issues. It is hoped that papers from the Fourth Manufacturing Accounting Research Conference held in the University of Southern Denmark, Kolding, Denmark in June 1999 will be submitted to Management Accounting Research$L and published in future volumes.     

我国区域金融中心研究进展与展望

近年来我国一些城市先后提出建设区域金融中心的构想,深入区域金融中心相关问题的研究具有极强的现实意义。本文对国内外区域金融中心的相关文献进行梳理,并在此基础上对未来的研究课题进行展望,期望能为区域金融中心问题的相关研究拓宽研究视角,为各地的金融中心建设实践提供比较和借鉴的可能思路。     

The four and five year old's understanding of the future: A preliminary study

A significant imbalance exists in the lack of research on young children's understandings of the future. Recent studies highlight the difficulties experienced by young people in coming to terms with the future, which is generally viewed with trepidation and ambivalence by children as young as ten years of age. While there is a growing body of research in this area, there has been very little undertaken on how younger children think about these issues. To focus our attention on younger children's understandings and attitudes in this area would improve our understanding on the development of young children's thinking on time and the future and assist us to implement strategies to counteract the negativity and pessimism experienced at later years.     

Accountants in organisational networks

Using four case studies carried out in the UK clothing and textiles industry, this paper explores how accounting might be differentially implicated in the co-ordination of activity as organisations face higher or lower degrees of uncertainty. It is argued that one of the difficulties faced by many of the contingency studies that have addressed this problem is their conceptualisation of accounting. The present study suggests that accounting, as a tool for organisational control, exists not as a collection of techniques, but as on-going processes. As such, the individuals involved with such processes might be expected to play a substantial role in shaping them. Social network analysis forms the basis of an attempt to understand these issues.     

Causal mapping and scenario building with multiple organisations

Thinking and planning for the future is critical in a competitive business world. Scenarios are a common technique for investigating the future, but can be time consuming and challenging to develop, particularly when more than a single organisation is involved. An approach is presented here which shifts the focus of scenario building from the company level to the sector level, whereby a range of organisations engage collectively on a topic of mutual importance. A rapid technique was developed, with simple scenarios being constructed in 2-4 h. This process was implemented in 13 multi-organisational workshops with participants from the construction and building industries, sectors which are traditionally short-term and reactive in their outlook. The resulting feedback, observations and experiences are discussed, together with examples of how the resultant scenarios have been applied. An example of causal map reflection (exposing an individual's causal map to others) is also presented, described and critiqued. It was found that the process was successful in engaging participants in thinking about and discussing the future, appreciating the interconnectivities of the related issues, and understanding the collective implications of their potential decisions, as well as facilitating the socialisation of participant thinking and the construction of collective futures.     

A Proposal to Improve the VAT Treatment of Housing in the European Union*

The treatment of housing is one of the most difficult issues under the VATs in the EU. Ideally, rents and rental values should be taxed just like other consumer goods and services, but doing so would present formidable practical and political difficulties. Under a second‐best approach, the value of newly created residential (and other) property is taxed as a proxy for the VAT that should be payable on the flow of housing (building) services. This implies, however, that future increases (and decreases) in the value of the exempt property are left out of the VAT base. To remedy this defect, this paper recommends taxing the increases (refunding the tax related to decreases) realised at the time of sale of the exempt used property. This VAT should replace the current transfer, registration and stamp duties, which are highly distortionary. Beyond that, the VATs in various member states can be improved by limiting the exemption for all used immovable property to housing, by taxing land and by applying the standard rate more widely than is currently the case.     

The Asset Pricing Palette: Cash Flows, Returns and Trading Behavior

Asset pricing is the topic of the 2001 Eastern Finance Association Symposium and the five papers selected for this collection, which are summarized below, span a broad range of subjects that fall under the umbrella of the determinants of market prices. For example, the Schwartz and Moon article that introduces the symposium uses real options methodology to value firms whose cash flows are subject to multiple sources of uncertainty while the Luders and Peisl and Mixon analytical models that close the selections incorporate dual stochastic processes to derive relationships between information flow, trading volume and price volatility that are consistent with empirical evidence. In between, Mishra and O'Brien present new evidence on the important of index and factor selection when estimating the required return on equity and Spahr and Schwebach revisit the issue of time diversification by reintroducing a statistical construct from earlier times. Each of the works included here makes an important contribution to our understanding of the asset pricing process in a distinct area and opens new doors onto avenues for future research.     

完善我国税收激励政策帮助中小企业渡过难关

我国中小企业在国民经济发展过程中扮演越来越重要的角色,但大部分中小企业在激烈的市场竞争中面临着巨大压力,现有对中小企业的扶持性税收政策尚存诸多不足。本文从中小企业面临的问题与现行税收政策存在的不足两个方面出发,提出了完善促进中小企业发展的税收政策与相关建议。     

Capital market integration

This special issue is dedicated to a topic of great interest in international financial economics — Capital Market Integration. The topic remains live and vigorously examined, as evidenced by the nine papers presented here. These papers divide into three themes: integration and markets, integration and policy, and integration and crisis. Collectively, the papers highlight the importance of market- and policy-induced phenomena for understanding the nature and consequences of capital market integration.     

保险市场道德风险实证研究评述

本文梳理了近年来国内外学者关于保险市场道德风险实证研究的文献,分别从理论基础、实证方法、实证结果三个方面进行评述,总结了目前该领域相关研究尚存在的问题,同时对保险市场道德风险实证研究的未来发展方向提出了相关看法和建议.     

Aquaculture: an emerging issue for public concern

The present paper reviews the literature on the risks and benefits of aquaculture. By bringing together sources from both natural sciences and social sciences, we provide a synthesis of perspectives on the relatively novel activity of modern aquaculture. This review consists of three parts: first, a background to aquaculture; second, an overview of the scientific risks and benefits; and third, an introduction to the related public perception issues. We establish five main risk‐related areas: human health, environment, organizational, fish welfare, and social issues and utilize these to highlight potential divergences in expert and lay perceptions. Drawing on findings from the risk perception literature, particularly those related to previous food‐related controversies, it is argued that aquaculture incorporates a range of issues, which have already been shown to be a catalyst for public concern. As such, we conclude that, in addition to natural science studies, aquaculture requires a social science approach in order to be able to anticipate and address future controversies in a timely and efficient manner. However, to date, only few articles address aquaculture from a social science perspective, and the present paper is offered as a step in this direction.     

Survival analysis of pension scheme mortality when data are missing

Missing data is a problem that may be faced by actuaries when analysing mortality data. In this paper we deal with pension scheme data, where the future lifetime of each member is modelled by means of parametric survival models incorporating covariates, which may be missing for some individuals. Parameters are estimated by likelihood-based techniques. We analyse statistical issues, such as parameter identifiability, and propose an algorithm to handle the estimation task. Finally, we analyse the financial impact of including covariates maximally, compared with excluding parts of the mortality experience where data are missing; in particular we consider annuity factors and mis-estimation risk capital requirements.     

Financial challenges for the new millennium

This article highlights the main issues raised in 13 articles that were selected from papers presented at the 12th Australasian Finance and Banking Conference held in Sydney in December 1999. It also analyses the issues related to global financial coordination and integration for the new millennium. It highlights the cost associated with foreign exchange volatility and the significance of macroeconomic coordination at the global level for further integration of the financial market. It also highlights the challenges facing international institutions such as the International Monetary Fund (IMF) and the need for global financial institutions with greater influence, which could address the major financial challenges facing the new millennium.     

Accounting for financial instruments with characteristics of debt and equity: finding a way forward

Accounting for compound financial instruments, that is those with characteristics of both debt and equity, has challenged accounting standard setters for decades. The principles developed to distinguish liabilities and equity and the application of these principles in IAS 32 have been widely criticised. In 2016–2017, the IASB was engaged in a project to improve IAS 32. Our study presents research that is relevant to the issues faced by standard setters, related to improving the definitions and enhancing presentation and disclosure of liabilities and equity. We discuss studies investigating the effects of the accounting classification requirements on firms’ financing choices and on users’ decision‐making, to examine the question, ‘Does the distinction matter?’ We then explore various approaches that may be pursued by the standard setters to improve accounting in this area and identify areas for future research.     

The future sign and its three dimensions

The topic of weak signals has raised its interest especially in Finland in recent years. Weak signals are current oddities, strange issues that are thought to be in key position in anticipating future changes in organizational environments. Scanning for them and using them in scenario work is thought to be successful for looking to the future. However, defining weak signals is problematic, and various authors term the concept differently. The debate about the characteristics of weak signals has been active especially in Finland. The article aims to develop a deeper theoretical understanding of weak signals. For this purpose, a semiotic approach, Peirce's triadic model of sign in particular, is used. The article introduces a new starting point for defining weak signals (signs) by using the novel concept future sign, which consists of three dimensions: the signal, the issue and the interpretation.     

Using the standard-setting process to demystify the concepts statements: The case of SFAS 76

To illustrate the accounting standard-setting process and how conceptual consistency is lost during the negotiations involved in that process, Statement of Financial Accounting Standards (SFAS) 76 Extinguishment of Debt is used as a case study. Excerpts from actual “Comment Letters” sent to the FASB are used to highlight issues and stimulate discussion. Classroom results, wherein SFAS 76 was used, are summarized. While SFAS 76 as a case study was found to be an excellent vehicle for illustrating the problems faced by standard-setters and the role of the Conceptual Framework, any pronouncement could be used. The SFAS 76 case takes 20 or more minutes to use. However, the case can be substituted for some of the lecture on standard-setting so it does not have to expand the time needed to cover the topic.