ACCOUNTABILITY AND GOVERNMENTAL FINANCIAL REPORTING

Accountability is the cornerstone of Governmental Generally Accepted Accounting Principles (GGAAP) in the United States according to the Governmental Accounting Standards Board (GASB). This paper analyzes the implications of alternative definitions of the concept of accountability for GGAAP and for GASB. It also discusses the costs and benefits of accountability information, the effect of diverse users of governmental reports, and alternative mechanisms for achieving accountability in governments. Finally, a governmental accounting research agenda based on accountability is proposed for the future.     

ESTABLISHING A CONCEPTUAL FRAMEWORK FOR REGULATED INDUSTRIES'ACCOUNTING AND ACCOUNTABILITY

The regulation of monopoly utilities represents one of the'new frontiers'between the state and the private sector. Conceptual frameworks developed for profit-making companies are relevant to several of the central issues facing regulatory accounting. However, the role of regulation as a surrogate for the market place brings with it additional complexities for the clear attribution of accountability between the regulated company and the regulator with regard to the investor and the public. This means that key issues on procedures, confidentiality and public access to financial information on the regulated companies, and on the basis of regulatory decisions, must also be addressed within a conceptual framework for regulated industries. Without a general clarification of these issues, the process of regulation will increasingly be judged to be simply discretionary, rather than as publicly accountable.     

DIFFERENTIATING FINANCIAL ACCOUNTABILITY AND MANAGEMENT IN GOVERNMENTS, PUBLIC SERVICES AND CHARITIES

This paper illustrates many types of not-for-profit organisations (NFPOs) whose characteristics of financial accountability and management differentiate them as suitable for study in this journal. It also more briefly introduces some of the distinctive characteristics of the environment of financial accountability and management in NFPOs. Its purpose is to give readers the flavour of the intended future coverage of FAM , which should include a wider range of disciplinary insights than appear in this first paper. The editor hopes that academics, practitioners and others will be stimulated to submit authoritative papers relating to any of the relevant organisations, characteristics or problems.     

THE CHARITIES SECTOR IN VICTORIA -CHARACTERISTICS AND PUBLIC ACCOUNTABILITY*

The paper presents the results of a survey conducted to provide a background paper for the Victorian Government Interdepartmental Working Party on the Administration of Charities. The paper is the first attempt to provide an overview of the size and structure of the charity sector in Victoria. Extrapolated for Australia, the survey shows that charities in 1978 commanded receipts representing approximately 3.56 per cent of Australia's Gross Domestic Product. Difficulties in obtaining data for the study raise questions regarding whether the government presently adequately discharges its responsibilities with regard to controlling the reporting of charities and assessing their performance.     

ACCOUNTABILITY AND VALUE FOR MONEY IN PRIVATE FINANCE INITIATIVE CONTRACTS

Within the context of New Public Management (NPM), successive UK governments have claimed that PFI projects provide more accountability, and arguably, more value for money (VFM) than conventional procurement for the public ( HM Treasury 1995, 2000, 2003a and 2003b ). However, recent empirical research in the UK on PFI has indicated its potential limitations for accountability and VFM ( Broadbent, Gill and Laughlin, 2004 ; Edwards, Shaoul, Stafford and Arblaster, 2004 ; Shaoul, 2005 ; and Ismail and Pendlebury, 2006 ) albeit these are based on either published accounts or a limited number of key stakeholders. This paper attempts to partially redress this gap in the literature by presenting an interesting case of the impact of PFI on accountability and VFM in Northern Ireland's education sector. The findings of this research, based on forty two interviews with a wide range of key stakeholders, suggest that stakeholders have different and often conflicting expectations and the actual PFI accountability and VFM benefits are much more obfuscated than those claimed in Government publications.     

CONTINGENT CAPITAL: INTEGRATING CORPORATE FINANCING AND RISK MANAGEMENT DECISIONS

Financial executives of companies that face a sharp increase in business or financial risks have two basic ways of protecting the solvency and strategic viability of their organizations: they can transfer those risks using insurance or derivatives; or they can raise additional capital, typically by issuing equity, to cushion the firm against the higher expected volatility. But CFOs now also have a third means of managing risk, known as "contingent capital," that effectively combines capital raising and risk management.
A contingent capital facility gives a company the right to raise capital after the realization of a loss arising from one or more specified risks, thus ensuring access to capital in potentially difficult times. For example, Swiss Re recently granted Michelin a five-year right to issue ten-year subordinated debt at a fixed spread over LIBOR, though only under conditions in which the tire maker expects its own earnings to be down. To the extent that it eliminates the need to keep more capital on the balance sheet, the use of such contingent capital has the potential to increase shareholder value by reducing a company's overall cost of capital. This article provides an introduction to some recent innovations in contingent capital, along with discussion of their role in integrating corporate finance and risk management.     

ACCOUNTABILITY AND THE PUBLIC INTEREST IN THE NONPROFIT SECTOR: A CONCEPTUAL FRAMEWORK

This paper clarifies the nature of nonprofit accountability by distinguishing between the substantive and processual understandings of the public interest. The major theories of the nonprofit sector are shown to imply that this sector's activities correspond to the public interest only in its processual understanding, but not in the substantive one. Policy and management implications of this argument are discussed.     

RAISING CONTINGENT CAPITAL: THE CASE OF CEPHALON

In early 1997, Cephalon, Inc., a biotechnology firm, purchased 2.5 million capped call options on its own stock, with a potential value of as much as $45 million, in exchange for $9.8 million worth of its common shares. Cephalon's first major drug, Myotrophin, was under review by the U.S. Food and Drug Administration, and Cephalon's management reasoned that, upon FDA approval, the company's stock would rise in value to reflect the future value of the drug, in which case the call options would pay off and the firm could use the proceeds to help fund commercialization of the drug. The managers thus viewed the call options as a form of “contingent capital,” capital that would be available only if and when the firm needed it. The availability and cost of financing constitute major uncertainties for any company and perhaps even more so for a biotech firm. But was the options transaction a cost‐effective way to raise capital? The authors' analysis suggests that the cost of the capped calls—underwriting fees, expenses, underpricing, and market impact—was quite high compared to alternative sources of financing that may have been available to Cephalon in the wake of a favorable decision by the FDA. An equally interesting aspect of this case is that the size of Cephalon's funding requirements was determined in large part by accounting rules and management's desire to report higher (non‐cash) earnings.     

2007年1月商业银行大事记

国家审计署将对金融机构展开审计1．08国家审计署2007年将对国家开发银行等金融机构的财务状况进行审计。列入审计名单的其他机构还包括光大银行、中国再保险(集团)公司以及中国人保控股公司、四大资产管理公司等。此轮审计的目标主要集中于那些计划进行首次公开募股或正在进行股份制改革的金融机构。     

VALUATION OF EVENT‐CONTINGENT OPTIONS

I study a new class of investment options, event‐contingent options. These are options to invest and divest in projects that are dependent on other projects of the same firm or that are conditioned by projects of other firms in its value chain. I construct payoff functions and derive closed‐form solutions for the value of options to invest contingent on investment (OICI), options to invest contingent on divestment (OICD), options to divest contingent on divestment (ODCD), and options to divest contingent on investment (ODCI). I also derive analytical comparative statics for these option valuation equations and examine their implications on the firm's wealth. I offer examples of event‐contingent options in a global context.