Does Mandatory IFRS Adoption Improve the Information Environment?*

More than 120 countries require or permit the use of International Financial Reporting Standards (IFRS) by publicly listed companies on the basis of higher information quality and accounting comparability from IFRS application. However, the empirical evidence about these presumed benefits is often conflicting and fails to distinguish between information quality and comparability. In this paper we examine the effect of mandatory IFRS adoption on firms’ information environment. We find that after mandatory IFRS adoption consensus forecast errors decrease for firms that mandatorily adopt IFRS relative to forecast errors of other firms. We also find decreasing forecast errors for voluntary adopters, but this effect is smaller and not robust. Moreover, we show that the magnitude of the forecast error decrease is associated with the firm‐specific differences between local GAAP and IFRS. This finding suggests that it is IFRS adoption rather than a correlated unobservable factor that is causing forecast errors to decrease. Exploiting individual analyst level data and isolating settings where analysts would benefit more from either increased comparability or higher quality information, we document that the improvement in the information environment is driven both by information and comparability effects. These results suggest that mandatory IFRS adoption has improved the quality of information intermediation in capital markets, and as a result firms’ information environment, by increasing both information quality and accounting comparability.     

Crude Oil Futures as an Indicator of Market Changes: A Graphical Analysis

This study investigates the changing relationship between price and volume traded of short- and long-maturity NYMEX light sweet crude oil futures contracts and major changes in the physical crude oil market during the last decade. Monthly series for the #1-month to 84-month out maturity contracts are generated from daily price and volume data for NYMEX West Texas Intermediate (WTI) futures contracts for the period from January 2000 to the middle of 2009. 3-D graphical analysis of the futures prices, contract volumes, maturity dates, and time is used to demonstrate the changing trading volume pattern and evolution of the shape of futures price term structure across various contract maturities in different market regimes. The study observes the impacts of both May 2004, when excess production capacity reached nearly zero, and September 2006, when electronic trading was implemented on the NYMEX WTI futures markets. This analysis will be used to determine if futures contract information can provide an early indication of market regime shifts and improve short-run crude oil spot price forecast models.     

The Scottish Highland Games: evolution,development and role as a community event

This article provides an in-depth review of the Highland Games as an event that has achieved worldwide recognition, staged not just in Scotland but across the globe where Scottish Diasporas exist, although the focus here is on Scotland. Highland Games events are complex to categorise and conceptualise considering their multi-layered nature and scope, encompassing a multitude of activities each based on diverse local histories and traditions. The article commences with a detailed historical analysis of the Highland Games in Scotland to illustrate the distinctiveness and uniqueness of this type of event. A review of the event literature follows to illustrate the complexities and problems that conventional event typologies pose for seeking to classify or categorise the Highland Games, emphasising the community basis of such events as a starting point for understanding this phenomenon. The article reports the results of an empirical study of Highland Games events in Scotland and addresses a number of the current concerns and debates associated with the staging of Highland Games, including the challenges that non-profit Games organisations face in continuing the community tradition of event hosting. One particular issue that features is an acknowledgement of the dangers posed by the more commercial priorities of contemporary event management to the rich cultural heritage that underpins the Highland Games which could easily become neglected or even eradicated through more professional organisation.     

Factors Affecting Retirement Mortality

Abstract

As many countries consider mandatory individual retirement accounts as their answer to a secure social security system, the question arises as to whether all workers can get true “market value” annuities when they retire. It is clear today that private-sector life annuities are priced assuming that the applicant is healthy—very healthy. Very little underwriting or risk classification now exists in the individual annuity marketplace. However, if a large percentage of the population were looking to annuitize their social security accounts upon retirement, there would be strong pressure for more risk classes in the annuity-pricing structure.

Even without the advent of individual accounts for social security, the authors of this paper feel there may be real market opportunities for more risk classification in the individual annuity market and the offering of “impaired life annuities.” Given that this pressure does or might soon exist, this paper reviews 45 recent research papers that look at factors that affect mortality after retirement. In particular, factors that seem to be important in predicting retirement mortality include age, gender, race and ethnicity, education, income, occupation, marital status, religion, health behaviors, smoking, alcohol, and obesity. for each factor, this paper gives highlights relative to the named factor of the impact expected from that variable as described in the 45 reviewed research papers.

The authors believe there is a wealth of information contained in the summaries that follow, and it is our sincere hope that this paper will cause an increased interest in a more broadly based risk classification structure for individual annuities.

Summaries of the 45 papers can be found at www.soa.org/sections/farm/farm.html.     

‘Deprival value’ vs. ‘fair value’ measurement for contract liabilities: how to resolve the ‘revenue recognition’ conundrum?

Revenue recognition and measurement principles can conflict with liability recognition and measurement principles. We explore here under different market conditions when the two measurement approaches coincide and when they conflict. We show that where entities expect to earn ‘super profits’ (residual income) the conceptual conflict is exacerbated by the adoption of ‘fair value’ (FV) as the measurement basis for assets and liabilities rather than the more theoretically grounded approach of ‘deprival value/relief value’ (DV/RV) which better reflects the impact of, and rational management response to, varying market conditions. However, while the problems of balance sheet liability and revenue recognition, and the related problems of income statement presentation, can be resolved by the application of DV/RV reasoning, this is not sufficient fully to resolve issues of the appropriate timing of profit recognition. Performance measurement issues still need to be addressed directly. The standard setters' current projects on ‘revenue recognition’, ‘insurance contracts’ and ‘measurement’ therefore need broadening to consider the pervasive issue of accounting for internally generated intangibles.     

Active and Adjusted: Investigating the Contribution of Leisure,Health and Psychosocial Factors to Retirement Adjustment

Engagement in leisure activities during retirement and its relationship to retirement adjustment were investigated. Psychosocial mediators included mastery, self-efficacy for retirement (SE-R) and activities (SE-A), positive (PA) and negative affect (NA). Resources investigated included physical health and finances. Leisure activities examined were social, home entertainment, chores, light exercise, vigorous exercise, and education. Data were gathered from a sample consisting of 243 retirees. Direct predictors of retirement adjustment included finances, health, mastery, SE-R and SE-A. Social activities were the best predictor of a wide range of positive outcomes, including PA, mastery, SE-R and SE-A. Educational activities improved SE-R. Being involved in a broader range of activities was associated with PA, mastery and SE-A. Familiarity and enjoyment of activities were implicated in the maintenance and continuation of activities at post-retirement. Research findings have implications for aged-care and other retirement service providers, as well as for individuals.     

Revisiting Determinants of Convention Participation Decision Making

In the midst of the unprecedented economic downturn, attracting a large number of attendees at annual conventions is more challenging than ever for associations and meeting planners. In order to boost attendance, an organization must understand what would be the factors affecting convention participation decision of potential delegates, and what would be the reasons to put a particular convention on the top of their must-attend list. This article empirically validated the key determinants of convention participation decision making that had arisen from previous studies, and further examined the relative influence of each factor on the convention participation intention. Four determinants were identified (networking, destination, travelability, education), and they are largely in line with the major factors that had been suggested in the extant literature. The findings of the study showed that “networking” and “travelability” factors significantly influenced the convention participation intention of the survey respondents. Several implications and convention marketing strategies for associations and meeting planners were discussed.     

Entrepreneurial Feminists: Perspectives About Opportunity Recognition and Governance

Interviews were conducted with 15 entrepreneurial feminists to explore how feminist values are enacted in opportunity recognition and organizational structures within the venture-creation process. Results suggest that opportunity recognition aligned with the needs and values of the entrepreneurial feminists. Opportunity construction was defined as ‘I am the market’, ‘building community with women like me’, ‘enabling others’, ‘do more with my life’, and ‘opportunity knocked’. Organizational structures and governance reflected cooperative, collaborative and ethical principles. Implications to feminist theory are discussed.     

Comparing the content of regulatory impact assessments in the UK and the EU

The need for effective leadership in the UK public sector has been a prominent discourse in recent years. One aspect of this is a growing interest in talent management. This article examines the evolution of processes used for managing talent and developing leaders in the UK's National Health Service (NHS) by applying human resource management theory to an empirical case study. Our aim was to provide a constructive, but critical, analysis of the current role of managerial talent management and to comment on the suitability of the adopted approach in the NHS. Over the past three decades the NHS has come to adopt an increasingly ‘hard’ approach to talent management, i.e. rationalistic, managerial and narrowly focused on leadership competencies and senior management roles. This parallels a more general shift in the NHS from its traditional public sector ethos and humanistic values to more business-oriented values and ways of working.     

Mixed Embeddedness: (In)formal Economic Activities and Immigrant Businesses in the Netherlands

Immigrants from non-industrialized countries have become part and parcel of the social fabric of many advanced urban economies, including those in the Netherlands. A significant number of these migrants opt for setting up shop themselves. Lacking access to large financial resources and mostly lacking in educational qualifications, they are funnelled towards the lower end of the opportunity structure of these urban economies. To survive in these cut-throat markets, many migrant entrepreneurs revert to informal economic activities that are strongly dependent on specific social networks – mostly consisting of co-ethnics – to sustain these activities on a more permanent basis. To understand the social position of these migrant entrepreneurs and their chances of upward social mobility, one has to look beyond these co-ethnic networks and focus on their insertion in the wider society in terms of customers, suppliers and various kinds of business organizations. To deal with this latter type of insertion, we propose the use of a more comprehensive concept of mixed embeddedness that aims at incorporating both the co-ethnic social networks as well as the linkages (or lack of linkages) between migrant entrepreneurs and the economic and institutional context of the host society. We illustrate this concept by presenting a case study of Islamic butchers in the Netherlands. — Les immigrants des pays pas industrialisés sont devenus une part intégrale du tissu social de nombreuses économies urbaines développées, y compris celles des Pays-Bas. Un nombre significatif de migrants choisissent de s’établir à leur compte. N’ayant pas accès à des ressources financières importantes et ayant peu de qualifications académiques, ils sont entraînés vers le bas des structures de débouchés de ces économies. Pour survivre dans ces économies très dures, beaucoup d’entrepreneurs immigrants retournent aux activités économiques informelles qui dépendent fortement des réseaux sociaux spécifiques – principalement co-ethniques – pour soutenir ces activités de façon plus permanente. Afin de comprendre la position sociale de ces migrants entrepreneurs et leurs possibilités de mobilité sociale vers le haut, il faut regarder plus loin que ces réseaux co-ethniques et explorer leur insertion dans la société en général par rapport aux clients, fournisseurs et divers types d’organisation commerciales. Pour traiter de ce type d’insertion, nous proposons d’utiliser un concept d’incorporation mélangée plus compréhensif qui a pour but d’intégrer à la fois les réseaux sociaux co-ethniques et les liens (ou manque de liens) entre les migrants entrepreneurs et le contexte économique et institutionnel de la société d’acceuil. Nous illustrons ce concept par un cas d’étude de bouchers islamiques aux Pays-Bas.