Standard Business Reporting in Australia: efficiency,effectiveness, or both?

The benefits of using eXtensible Business Reporting Language (XBRL) as a business reporting standard have been widely canvassed in the extant literature, in particular, as the enabling technology for standard business reporting tools. One of the key benefits noted is the ability of standard business reporting to create significant efficiencies in the regulatory reporting process. Efficiency‐driven cost reductions are highly desirable by data and report producers. However, they may not have the same potential to create long‐term firm value as improved effectiveness of decision making. This study assesses the perceptions of Australian business stakeholders in relation to the benefits of the Australian standard business reporting instantiation (SBR) for financial reporting. These perceptions were drawn from interviews of persons knowledgeable in XBRL‐based standard business reporting and submissions to Treasury relative to SBR reporting options. The combination of interviews and submissions permit insights into the views of various groups of stakeholders in relation to the potential benefits. In line with predictions based on a transaction‐cost economics perspective, interviewees who primarily came from a data and report‐producer background mentioned benefits that centre largely on asset specificity and efficiency. The interviewees who principally came from a data and report‐consumer background mentioned benefits that centre on reducing decision‐making uncertainty and decision‐making effectiveness. The data and report consumers also took a broader view of the benefits of SBR to the financial reporting supply chain. Our research suggests that advocates of SBR have successfully promoted its efficiency benefits to potential users. However, the effectiveness benefits of SBR, for example, the decision‐making benefits offered to investors via standardised reports, while becoming more broadly acknowledged, remain not a priority for all stakeholders.     

Earnings Management in Business Groups: Tax Incentives or Expropriation Concealment?

This study provides evidence that Belgian firms affiliated to a business group (holding) manage their earnings more than stand-alone firms. Earnings management is especially more prevalent in fully owned group firms compared to group firms with minority shareholders. This evidence is consistent with the hypothesis that controlling shareholders face fewer constraints to manage earnings if opportunistic earnings management cannot adversely affect the value of minority shareholders and is inconsistent with the claim that group firms would engage in earnings management to hide controlling shareholders' self-serving transactions. On the incentive part, we find that group firms strategically manage earnings in response to tax incentives. More specifically, we show that signed discretionary accruals of group firms depend significantly more on the marginal tax rate status of the firm as compared to independent firms. Finally, we document that earnings management is particularly facilitated through intra-group transactions.     

Ethical Profit: An Agenda for Consolidation or for Radical Change?

The article considers that conceptual frameworks exist not to portray truth as an absolute, but rather to provide order and guidance to actions and behavior. From such perspective, the article considers that ethical frameworks assist in our attempt to balance the instinct that we have to look out for our own individual welfare with the conscience of obligation that we have to care for a wider community. In this light, the development of ethical frameworks may be interpreted in terms of a process of natural selection with regard to the mutual interdependence of the individual and the community. Thereby, the article argues that corporate and financial ethics do not exist ``to do good'', but rather to act reflexively to *I$Lconsolidate$L and *I$Lsanction$L internal activity, with the consequence that the employee is called on to be ethical not on the individual's own terms, but on the profit- motivated terms of the institution. The net outcome is that institutionalized activity may be co-ordinated to function under the banner of ethical codes of practice, while broader ethical issues for the institution as a whole remain suppressed. We illustrate these arguments with reference to the financial ethics of the Grameen Bank of Professor Muhammad Yunus. Notwithstanding, the example holds out the possibility that ethical concerns for the whole of society might ultimately be compatible with the profit motives of our institutionalised society.     

Socially responsible investing: Is it for real or just for show?

Many mutual funds declare themselves as socially responsible investment (SRI) funds. However, it is unclear whether this rhetoric is simply window-dressing to attract capital inflows or reflects genuine concern. We show that companies with better environmental, social, and governance (ESG) performance are more attractive to SRI mutual funds. More importantly, SRI mutual funds positively affect their investee firms' ESG performance after controlling for firm characteristics, possible endogeneity issues, and omitted variables. Furthermore, ownership structure, board members' international experience, and social media attention are important channels through which SRI mutual funds influence their investee firms' ESG performance.     

Value-driven health care--pipe dream, placebo or prescription for excellence?

The Value-Driven Health Care initiative and the Executive Order (EO) that underpins it invert the cost/quality equation and proceed from the premise that improving quality first--in terms of both care and system management--will reduce costs and elevate value. Equally essential to the success of the initiative is transparency: access to information that will empower consumers to save on quality care. This article describes the four cornerstones of the EO and explains how they will translate into corporate action and value.     

Global or Domestic? Which Shocks Drive Inflation in European Small Open Economies?

We investigate which shocks drive inflation in small open economies. In the first step, we use the structural vector autoregressive (SVAR) approach to identify the global shocks. Second, we regress the disaggregated price indices for selected European economies on the global shocks controlling for the domestic variables. We find that the fluctuations of inflation in the analyzed countries are to large extent determined by the cyclical movements of the domestic output gap however the commodity shock also contributes strongly to inflation variability. The role of the non-commodity global supply shock is less prominent, however, interpreted to some extent as a globalization shock, for most of the analyzed period lowers the inflation. Nonetheless, in the aftermath of the global financial crisis, this shock reversed what may be interpreted as the weakening of the globalization process.     

Screening Talent for Task Assignment: Absolute or Percentile Thresholds?

Matching talents to tasks is an important part of job design. Organizations routinely use performance thresholds to group agents by talent. We see thresholds defined both in terms of an individual's own performance (absolute value) and in terms of peer performance (percentile). Intuition suggests a preference for percentile thresholds because the resulting rank-order statistic is sufficient to assess relative talent. Yet, in the context of a task assignment problem in which the objective is to match talent with task type (using two agents and two task types), we show that absolute thresholds can dominate percentile thresholds under either of two conditions. First, flexibility in task assignment tilts the balance toward absolute thresholds. Second, performance manipulation can adversely affect the inherent advantage of percentile thresholds because they motivate agents to invest relatively more in personally costly influence activities to cast their performance in a favorable light. We examine how these results hold up when there are countably large number of agents and discuss empirical implications.     

Financial reporting for employee stock options: liabilities or equity?

This study seeks to determine whether employee stock options share key characteristics of liabilities or equity. Consistent with warrant pricing theory, we find that common equity risk and expected return are negatively associated with the extent to which a firm has outstanding employee stock options, which is opposite to the association for liabilities. We also find the following. (1) The association is positive for firms that reprice options and less negative for firms that have options with longer remaining terms to maturity, which indicates that some employee stock options have characteristics that make them more similar to liabilities. (2) Leverage measured based on treating options as equity has a stronger positive relation with common equity risk than leverage measured based on treating options as liabilities. (3) The sensitivity of employee stock option value to changes in asset value mirrors that of common equity value and is opposite to that of liability value. Also, we find that, unlike liabilities, employee stock options have substantially higher risk and expected return than common equity. Our findings are not consistent with classifying employee stock options as liabilities for financial reporting if classification were based on the directional association of a claim with common equity risk and expected return. Rather, our findings suggest the options act more like another type of equity.     

Do Firms Use M&A Business to Pay for Analyst Coverage?

We find that acquirers in merger and acquisition (M&A) transactions are more likely to hire as advisors investment banks that provided analyst coverage for the acquirer prior to the transaction. We also find that compared to a matched control group of banks, the advisor banks are less likely to terminate and more likely to initiate analyst coverage of the acquirer after the transaction. Finally, the advisor banks that initiate coverage after the transaction collect higher fees. These findings suggest that firms value analyst coverage and use M&A advisor appointments and advisor fees to compensate for it.     

The US financial crisis and corporate dividend reactions: for better or for worse?

Review of Quantitative Finance and Accounting - We examine how changes in dividend policy in 2008 as the financial crisis was unfolding influenced firm risk-adjusted returns in the following years....     

Managerial compensation: Luck,skill or labor markets?

Luck, skill and labor markets all have empirical support as determinants of managerial compensation. We examine the relative importance of pay for luck, managerial skill and labor market opportunities in determining compensation. We measure luck as the predictable component of firm performance, measure skill using managerial fixed effects and measure labor market opportunities as the compensation of executives at matched firms. Our results imply that managerial skill is the most important determinant of managers' compensation, followed by firm size and labor market opportunities, and that luck is not an important determinant of managerial compensation.     

Pivot tables for mortality analysis, or who needs life tables anyway?

Actuarial life-table analysis has long been used by life insurance medical directors for mortality abstraction from clinical studies. Ironically, today's life actuary instead uses pivot tables to analyze mortality. Pivot tables (a feature/function in MS Excel) collapse various dimensions of data that were previously arranged in an "experience study" format. Summary statistics such as actual deaths, actual and expected mortality (usually measured in dollars), and calculated results such as actual to expected ratios, are then displayed in a 2-dimensional grid. The same analytic process, excluding the dollar focus, can be used for clinical mortality studies. For raw survival data, especially large datasets, this combination of experience study data and pivot tables has clear advantages over life-table analysis in both accuracy and flexibility. Using the SEER breast cancer data, we compare the results of life-table analysis and pivot-table analysis.     

红肉,吃or不吃?

随着物质生活水平的提高,我国居民肉类食品摄入量逐年增高,已经成为人们日常膳食的重要组成部分。但自从世界卫生组织下属国际癌症研究组织(IARC)在2015年12月宣布将红肉列为"致癌可能性较高"的食物之后,不仅舆论哗然,众多食肉爱好者们也感到迷惘不安,难道无肉不欢的朋友们,真的要与红肉"绝缘"?难道热闹红火的年夜饭餐桌上真的要全是素食?红肉会致癌?所谓红肉,通常是红色肌肉纤维比白色肌肉纤     

Tourism in the future: Cycles, waves or wheels?

Those who have studied tourism over the last few decades will be well aware that the pace of change in some areas has been phenomenal, while in other aspects of the field, there has been relatively little change. The rather confused pattern of tourism development and growth illustrates a major dichotomy which exists in tourism, namely, that between its dynamism and its inertia, and the tension between these two attributes accounts in part for a general difficulty in being able to predict the future patterns of tourism. This paper reviews some of the approaches used to describe and predict the future nature and scale of tourism and argues that few have been effective or accurate, and that this is due in part to the heterogeneous nature of tourism, in both its demand and supply, and that the role of external agents is constantly altering the anticipated pattern of growth and development. Particular attention is paid to the life cycle model which has been used for a quarter of a century to describe the process of development of tourist destinations, whether such a model can be used to predict future patterns, and whether cycles, waves or wheels are suitable analogies for the pattern of tourism growth. The paper argues for a blending of both evolutionary and revolutionary predictions in the case of tourism destinations, an approach which allows for the incorporation of ideas such as chaos theory and chance into the equation of growth, in order to reflect both the inertia and dynamism that are inherent in tourism.