THE BRIEF

武汉“封城”1月23日,武汉市新型肺炎防控指挥部在当日凌晨发布的一则通告持续引发关注。通告称,自2020年1月23日10时起,全市城市公交、地铁、轮渡、长途客运暂停运营;无特殊原因,市民不要离开武汉,机场、火车站离汉通道暂时关闭。恢复时间另行通告。     

CHANGE IS THE KEY

As long as you can find a barrier to invest against, you can make money when the barrier breaks, when change accelerates.     

REMEMBERING THE PAST: ETHICS AND THE CANADIAN CHARTERED ACCOUNTING PROFESSION, 1911–1925

The current study is an act of remembering the ethical past of the Canadian CA profession during the formative period of 1911@8a1925. Current-day, ethical discourses are positioned vis-a-vis this ethical past, usually presuming an “honourable” or even “heroic” ethical past as a method of both grounding and rationalizing current-day accounting practices. By examining this earlier period, we hope to provide a curative to the nostalgia about the CA's mythic ethical past. More specifically we argue that, during this formative period, ethics was narrowly defined with minimal ethical deliberation about the role of accountants in relation to important societal issues of the day such as World War I and bank failures. Furthermore, like current-day ethical discourses, ethical deliberation tended to be circular and self-justificatory. Terms such as honour, rectitude and objectivity had the ideological effect of obscuring the alignment of the CA profession with manufacturing capital during this period.     

THE ASSOCIATION BETWEEN ANALYSTS’ FORECAST REVISIONS AND EARNINGS COMPONENTS: THE EVIDENCE OF FRS 3

This study examines whether the earnings components as required by FRS 3 help UK analysts to predict firms’ earnings changes by investigating the statistical association between analysts’ forecast revisions and firms’ unexpected earnings components. I find that analysts’ forecast revisions made in different time horizons are consistently associated with unexpected earnings components as required by FRS 3. UK analysts are able to incorporate current-year unexpected earnings components into their current and future earnings forecasts even before firms officially release this information. However, empirical results also show that current-year unexpected earnings components are not fully incorporated into analysts’ forecasts of future earnings. Analysts appear to wait for more information releases regarding firms’ future earnings and delay their revisions of future earnings forecasts. This is consistent with the evidence that the cumulative revisions of current earnings forecasts are generally associated with prior-year unexpected earnings components, and the association appears to be stronger as time progresses. Overall, this study provides evidence suggesting that the earnings components as required by FRS 3 help UK analysts to identify firms’ permanent and transitory earnings changes over different forecast horizons. This study also provides strong evidence supporting the informativeness of earnings components for analysts’ forecasts and the information set perspective of FRS 3 that highlights the importance of earnings components in predicting a reporting entity’s future performance.     

SEARCHING THE BRITISH ACCOUNTING LITERATURE 1179–1998

Accounting has both «technological» and «scientific» components and the evolution of its literature, which can be traced back to theDialogus de Scaccario(Course of the Exchequer) of c.1179, reflects this. Broadly speaking, science is papyrocentric and technology is papyrophobic; scientists want to write but not to read, technologists want to read but not to write. The literatures of accounting techniques, such as charge and discharge and double entry, and of professional accountancy, are mainly technological. The literature of academic accounting, which was very slow to take off in the UK, aspires to be scientific. In recent years, the literatures of both accounting as a technology and accounting as a science have increased enormously, both in quantity and in quality. At the same time, the gap between the two literatures has widened.     

A CRITIQUE ON THE CLASSIFICATION OF CONTEMPORARY ACCOUNTING: TOWARDS A POLITICAL ECONOMY OF CLASSIFICATION—THE SEARCH FOR OWNERSHIP

This paper is a critique on contemporary accounting¹classification studies. It suggests that such studies have thus far provided an inadequate assessment of and explanation for extant international contemporary accounting diversity. This paper locates the discussion within a neo Marxian political economy, and explores how notions of structure and hierarchy central to the institutional traditions of economic liberalism and the social priorities of capital have increasingly invaded the classification and understanding of contemporary accounting diversity. It contends that such classification studies are a product of capitalist desires to import and assimilate increasingly distant realms of business life into the capital@8alabour value relation/contemporary accounting@8icapital relation. Furthermore, this paper suggests that such classification studies fail to recognise the impact of such social, political and economic arrangements as they are increasingly reupholstered and redistributed by the changing priorities of capital, resulting in a limited appreciation of the constitutive power of capital and its influence on contemporary accounting.     

THE LOGIC OF EARNED ECONOMIC INCOME—A REPLY

Skinner (1998) challenged the papers that had presented the theory of Earned Economic Income (EEI) and had developed it in an attempt to show how it could be applied in practice. He asserted that they were illogical, inconsistent and based on a flawed chain of reasoning. This paper contends that Skinner's arguments were probably based on confusion. Such confusion could be attributable to a misinterpretation of adequate exposition by the proponents of EEI, because of Skinner's apparent fixation on a valuation-based concept of income measurement. Alternatively, it could be an indication of inadequacies in such exposition. Due to the possibility of the latter, this response seeks very briefly to clarify some of the concepts that Skinner disputes, indicating the reasons for dismissing his contentions. It is possible that Skinner dislikes EEI because it is inconsistent with a model for which he has a prior preference, but that would not be an appropriate basis for dismissing reasoned argument.     

DERIVATIVES AND THE FASB: VISIBILITY AND TRANSPARENCY?

In June 1998, the Financial Accounting Standards Board issued its Statement No. 133 addressing the accounting for derivative instruments and for hedging activities.This Statement addresses old issues regarding the way companies report their activities in derivatives and how those instruments are used to hedge some types of risks. However, the impact of this standard could be very negative, and it could be not useful for investors and creditors for making good decisions. In fact, SFAS 133 presents serious problems and the Board doesn’t appear to have obtained its goals of increased financial statements transparency and comparability.The problems of implementing this standard are commented in this article. At the same time, an alternative is offered to improve the issue of comparability among different companies using derivatives to hedging purposes.     

CRITICAL COMMENTARYCHANGED RULES THEORY AND THE EVOLUTION OF ACCOUNTANCY — A COMMENT

In a recent article Birkin @9pet al. @2p(1997) proposed that Changed Rules Theory should provide the appropriate inner logic to drive accounting, in lieu of Social Darwinism. In this comment I take issue with the dichotomy between Darwinism and Changed Rules Theory. I show that both of Changed Rules Theory and Darwinism, when correctly presented, lead to the perspectives the authors recommend.     

AN INVESTIGATION OF AUSTRALIAN AUDITORS’ USE OF THE MANAGEMENT REPRESENTATION LETTER

Auditors’ use of the management representation letter has assumed renewed significance because Australian, UK, US and International auditing guidelines recommending that auditors obtain appropriate representations from management have now been adopted as standards. Results from this exploratory survey confirmed that auditors’ use of the representation letter to obtain audit evidence was generally consistent with the professional guidance, but two anomalies were noted. First, one-third of respondent auditors did not use the letter to provide sole audit evidence. Comments from some auditors indicated doubt about the legal acceptability of such evidence. While past litigation might justify such caution, auditors should consider whether it is efficient to neglect the use of the management representation letter to provide primary audit evidence. Second, there was evidence that some auditors use management representations as sole audit evidence when other appropriate audit evidence is available. This suggests the need to inform these auditors about the danger of over-reliance on management representations. Finally, results showed that most auditors use the representation letter to inform management of their responsibilities. This informative use is consistent with professional guidance and with the corporate governance literature that recommends clarifying management’s understanding of their responsibilities and enhancing management’s sense of accountability. This informative use is most important to auditors belonging to smaller audit firms, and suggests that these firms’ clients have greater information needs.     

WHAT DO AUDITORS DO? OBVIOUSLY THEY DO NOT SCRUTINISE THE ACCOUNTING AND REPORTING

Auditors and auditing firms are important actors in the process of institutionalising accounting standards. However, the formal and institutional requirements to de facto ensure professionalism and independence in the Swedish municipal sector have been strongly questioned. The aim of this paper is to investigate and explain how deviations from accounting standards are treated and reported by auditors. The results indicate deficiency in both competence and independence among the auditors. The institutional arrangements in Sweden do not seem to ensure that auditors facilitate and support the implementation of accounting standards.     

AUDITORS’ RECOGNITION AND DISCLOSURE MATERIALITY THRESHOLDS: THEIR MAGNITUDE AND THE EFFECTS OF INDUSTRY

Materiality thresholds are the dividing line between material and immaterial information. Recognition materiality thresholds are the dividing line between what is recorded and what is not recorded in the accounts. Disclosure materiality thresholds are the dividing line between what is separately disclosed in the financial statements and what is not separately disclosed. Auditors materiality thresholds are important because they have a significant influence on what information is recorded in the accounts and disclosed in financial statements and hence available for decision making by external parties. However, there are no research findings about recognition thresholds, and those in relation to disclosure thresholds show a lack of consensus. Hence the motivation for this research. The objective of the research is to study auditors’ recognition and disclosure thresholds within the context of industry, which is divided into the industry of the firm and the industry specialization (experience) of the auditor. The results of the study show that: (1) Recognition thresholds are significantly lower than disclosure thresholds. (2) The mean thresholds are 5·7% (recognition) and 8·7% (disclosure). These are in the 5% to 10% guideline provided by Australian accounting standards. (3) The thresholds appear to vary with industry market risk. (4) Auditors appear to use the thresholds from the industry in which they specialize, in an industry in which they do not specialize. The paper discusses the implications of these findings.     

AUDITOR CONCENTRATION AND MARKET SHARES IN THE US: 1988–1999 A DESCRIPTIVE NOTE

This paper examines from a historical perspective the effects of the Big Eight and Big Six accounting firm mergers on concentration measures and market share percentages of major accounting firms in the US large company audit market. Concentration ratios and Herfindahl indices reflect an increasingly concentrated audit market, though individual firms differ in their success at capturing market shares in the three exchanges examined, as well as in their ability to capture newly listed companies or companies switching auditors over the 1988 to 1999 period.     

DO INSTITUTIONAL INVESTORS IN THE UK ADOPT A DUAL STRATEGY FOR MANAGING FOREIGN EXCHANGE RISK?

In recent years, the gradual increase in international portfolio diversification within the UK institutional investment community has led to a growing need to manage foreign exchange (FX) risk. This paper reports on the findings of a postal questionnaire survey relating to FX risk management practices in UK institutional investment organisations. The findings demonstrate an increasing awareness of the FX risk management problem and indicate that UK investment institutions actively manage FX risk within their investment portfolios. The paper also focuses on the interesting question of whether UK institutional investors manage their own portfolio's FX risk, simultaneously concerning themselves with their investee companies’ FX risk management practices. Overall, the findings indicate that institutional investors adopt adual strategyfor managing FX risk; not only managing their own FX risk, but also requiring that their investee companies manage FX risk. There is also evidence to suggest that the institutional investors require their investee companies to disclose information relating to their FX risk management policies.     

FINANCIAL WAY 金融道，中医式经营——THE“CHINESEMEDICINE”TYPE OF MANAGEMENT

与客户一起完成资本增值。然后共享利益，这是银行服务的本质。银行若想发展，就需要具备不断为客户创造价值的能力。     

LARGE ACCOUNTING FIRMS’ SURVEY REVEALS EMERGENCE OF “TWO STANDARD” SYSTEM IN THE EUROPEAN UNION

Convergence with International Financial Reporting Standards (IFRS) as promulgated by the International Accounting Standards Board (IASB) is receiving great attention. In 2005, all listed companies domiciled in the European Union (EU) will be required to prepare consolidated accounts based on IFRS. Individual EU member states are, however, permitted to decide whether IFRS will be required or allowed for non-listed companies or for listed companies’ individual accounts. Based primarily on data collected by the six largest international accounting firms during their most recent convergence survey, this paper examines each of the 15 EU member states’ convergence plans and their perceived barriers to convergence.The findings indicate that most EU members do not plan to converge national GAAP with IFRS, thereby highlighting the great significance of the large firms’ concerns regarding emergence of a “two-standard” system in the EU. The survey indicates the majority of EU countries will continue to require or allow national GAAP for individual accounts. While Belgium is considering requiring IFRS for all consolidated accounts, other EU countries have decided to allow or are considering allowing non-listed companies to prepare IFRS consolidated accounts.In most EU countries, the link between financial accounting and tax accounting represents a major barrier to convergence. Other frequently cited barriers include disagreement with certain IFRS and the complicated nature of certain IFRS. International requirements for financial instruments are viewed as particularly problematic.     

THE CHINESE NATIONAL WHO SURFS THE SEA OF FINANCE IN ASIA——The Cover Personage incarnates the elegant Chinese national as the first Ranking Vice President of the ADB,famous economist and Financier active in the international financial arena

Lin Zexu,a patriot,thinker and national hero,who served as Governor for Hu Guang and Governor for Liang Guang and in other positions in Qing Dynasty,composed a couplet for self-motivation."Vast is the sea which embraces flows from millions of rivers;and upright is the precipice which rises single-mindedly to the zenith."He encouraged himself by this couplet to be magnanimous,receptive,and upright and to be a man of unbending principle.This is a motto which Jin Liqun has followed the first day he took office in Asian Development Bank (ADB),to guide his work and the way he conducts himself in this community.He practices in accordance with this principle as he carries out the mandate of this multilateral financial institution.Jin Liqun has won the accolade that he is