An Analysis of Concepts and Evidence on the Question of Whether IFRS Should be Conservative

Do international accounting standards require conservative accounting? The IASB's conceptual framework suggests that they should not, while the research literature is largely silent on the matter, typically presuming conservatism to be an outcome of private contracting rather than standardized, public, general purpose financial reporting. In this paper, we analyze the actual requirements of IFRS. We find multiple examples of recognition requirements that lead to unconditional conservatism, measurement requirements that lead to conditional conservatism, and also presentation/disclosure requirements that further support a conservative reporting environment. These findings complement, support and deepen existing evidence in the empirical literature that accounting is in practice conservative. We show, however, that the requirements for conservatism in IFRS conflict with, first, the IASB's stated position in its conceptual framework that accounting should not be conservative and, second, the private contracting explanation for conservatism that is generally accepted in the literature. What is missing, and lies behind both conflicts, is an acknowledgement and understanding of the role of an agency/contracting perspective in enhancing the decision‐usefulness of general purpose accounting standards, given the information/incentive asymmetry and uncertainty that characterizes the real‐world context in which those standards operate. From a policy perspective, such an understanding would reconcile the IASB's conceptual framework with the actual requirements of IFRS. From a research literature perspective, such an understanding would re‐position accounting standards as central to the practice of accounting conservatism, which would in turn require revision to the generally accepted theory of a private contracting explanation for the empirical evidence of conservative accounting practice.     

Does asymmetric information affect the premium in mergers and acquisitions?

We test the influence of information asymmetry on the premium paid for an acquisition. We analyze mergers and acquisitions as English auctions. The theory of dynamic auctions with private and common value predicts that more informed bidders may pay a lower price. We test that prediction with a sample of 1,026 acquisitions in the United States between 1990 and 2007. We assume that blockholders of the target's shares are better informed than other bidders because they possess privileged information on the target. Our empirical results show that blockholders pay a much lower premium than do other buyers     

On the Credibility Determinants of a Quality Label: a Quasi-Natural Experiment Using the Example of <Emphasis Type="Italic">Stiftung Warentest</Emphasis>

In 2013, Stiftung Warentest, which is one of the most important consumer organizations in Germany, tested hazelnut chocolate for their leading magazine called test. The hazelnut chocolate of Ritter Sport, which is a high-quality producer of chocolate in Germany, failed the test and received the grade “unsatisfactory.” Stiftung Warentest accused Ritter Sport of labelling an artificial flavouring as a natural flavouring. Ritter Sport rejected the accusation, went to court, and won the trial. Stiftung Warentest had to withdraw the issue in question of test magazine. The affair received broad media coverage from December 2013 to September 2014. Using the case Ritter Sport versus Stiftung Warentest, it is analysed whether negative headlines really undermine the credibility of a quality label by examining Stiftung Warentest and their quality label called test. In addition, it is examined what can be done to restore or, more generally, increase the credibility of a quality label. Based on a quasi-natural experiment, it is found that the negative headlines regarding Stiftung Warentest have undermined the credibility of the test label. It is also found that the credibility of the test label can be increased by providing reference values to the tests, strengthening the independence of Stiftung Warentest, and using laboratory methods for the tests. For the most part, the same holds true for any quality label. High-quality producers, quality-conscious consumers, and the awarding organization of the quality label can benefit from an increased credibility of a quality label.     

“My Fifty Shoes Are All Different!” Exploring,Defining, and Characterizing Acquisitive Buying

Why does someone buy the tenth pair of black shoes or the fourteenth white t‐shirt? Typically, extreme buying is associated with negative feelings and consequences: issues of self‐control, guilt, and financial problems are common among compulsive, impulsive, excessive buying, fixated buying, and hoarding. However, through two studies, the authors describe “acquisitive buyers,” who exhibit an extreme yet controlled acquisition process for items in a chosen product category. In his/her mind, these items are minutely differentiated and enrich the inventory, and there is logical justification that every purchase enhances his/her preparedness for anticipated specific product use occasions. Materialism, positive perfectionism and variety‐seeking in a particular product category are some of the characteristics of these buyers. The studies also help distinguish acquisitive buying from other types of extreme buying and mainstream buying.     

Altruism in individual and joint-giving decisions: What's gender got to do with it?

Abstract

This paper uses dictator experiments to examine gender differences in altruistic behavior in the United States when decisions are made individually and jointly. In anonymous individual giving to charity, women give substantially more than men, and in paired settings, mixed-sex groups give the most while all male pairs give the least. Evidence supports social information and negotiation effects as participants change giving toward that of their partners. Social image effects are found only in mixed-sex groups, indicating a gender-based component to the value of the social signal sent. Although men and women appear to have similar influence, the positive social image effect pushes giving in mixed-sex pairs above the sum of the members' individual gifts because the less altruistic partners (usually men) adjust their giving upward more than the more altruistic partners (usually women) reduce giving. Therefore, increasing women's participation in traditionally male spheres of decision making may result in more altruistic economic behavior.     

Does private-label production by national-brand manufacturers create discounter goodwill?

Discount stores have a private-label dominated assortment where national brands have only limited shelf access. These limited spots are in high demand by national-brand manufacturers. We examine whether private-label production by leading national-brand manufacturers for two important discounters (one hard and one soft) creates discounter goodwill. We estimate a selection model that is based on a sample of 450 manufacturer-category combinations from two leading discounters (Aldi in Germany and Mercadona in Spain), and we show that private-label production is indeed rewarded: national-brand manufacturers that are involved in such practices have a higher likelihood of procuring shelf presence for their brands. Moreover, while powerful manufacturers are intrinsically more likely to obtain shelf presence with soft discounters, manufacturers with less power can compensate for this by producing private labels. No such dependence on power exists for hard discounters.However, not all national-brand manufacturers are equally likely to produce private labels for discounters. We find that national-brand manufacturers are less likely to do so when: (a) they experience more sales growth, (b) it is more difficult to produce high-quality products in a specific category, (c) they invest more advertising support into their brands, and (d) they introduce more innovations. Moreover, a higher price differential relative to the discounter's private labels makes national-brand manufacturers less likely to engage in private-label production for hard discounters.     

Role Theory and the Management of Service Encounters

In this article, the contribution of role theory to our understanding and management of service encounters is highlighted. In the first section of the article the focus on social exchange within role theory is identified and commonalities between relational approaches to marketing and a role theoretical perspective are outlined. Thereafter the article outlines the specific contribution of role theory to our understanding of service encounters. Role theory, it is argued, permits better management of the interactive features of service provider-client interface and a clearer focus on role performance and the interpersonal dimensions of service quality. Role analysis offers both focus on role consistency in service provision and a framework for dealing with the uncertainty and evolution in long term service relationships. In services marketing, role can be incorporated as a factor in successful service performance and form a central framework for good service encounter management.     

The Importance of Store Operator on Superstore Employment Levels

Information from 175 superstores, operated by three companies, is used to investigate the importance of store operator in setting superstore employment levels and types of employment. Store operator is shown to be a significant factor determining employment numbers and types in British superstores.