Bankruptcy practice in India

The bankruptcy framework prevailing in India, traces its roots back to colonial rule. That framework has undergone a number of amendments over the past 200 years, creating a plethora of overlapping and sometimes conflicting articles. The latest attempt at reconciliation of these various Acts was made under the Companies Act, 2013. This paper drives through the land mark amendments in the history of India, leading to the current bankruptcy framework. Each Act is discussed based on the requirements, procedures and outcomes post enactment. Also, the major pros and cons of the different Acts are identified, and a critical analysis is presented of the latest Act, Companies Act, 2013. Moreover, the provisions of Chapter 7 and Chapter 11 of the U.S Bankruptcy Framework are compared against the provisions of these Acts. The paper then presents a diluted, easy to understand, step by step procedure of the current bankruptcy framework. Followed by a case analysis of a recent prominent Bankruptcy, to elicit the issues in the current framework. In conclusion, a list of recommendations is presented, to improve the Bankruptcy Framework in India.     

Accounting Regulation in Malta

This paper considers the development of accounting rules in Malta, and traces the changing de jure requirement of a ‘true and fair view’ (TFV) in national legislation. This is done in three phases. The initial phase discusses financial reporting issues arising from the then ambiguous TFV wording in the Companies Act 1995. The changing TFV wording is compared to the UK Companies Act 1948 and to the European Community Directives being the basis of national company legislation. Due to the ever-increasing conflicts between IFRS and national legislation, ways how the local accounting profession has applied the TFV principle are then illustrated. The impact on the audit reports, arising from implementation of the IAS Regulation (1606/2002/EC) is discussed in the second phase. It is found that the IAS Regulation brought about a lack of clarity as to the applicable regulatory financial reporting framework for listed entities. In the third phase, the practical difficulties and issues that led to the recent development of a national financial reporting standard for smaller entities are examined in an international context. The possible implications of a second de jure imposition of a TFV, in this national standard, are put forward.     

澳大利亚关于市场操纵的认定及处罚

澳大利亚联邦<公司法>和<澳大利亚证券与投资委员会法>的颁布,确立了澳大利亚对市场操纵行为监管的基本法律框架.本文对澳大利亚市场操纵的认定、监管体制、调查与处罚机制进行了初步研究,总结出澳大利亚市场操纵监管的规律和趋势,以期对中国证券市场的监管实践提供有益的经验.     

Mandatory CSR expenditure and firm performance

India has recently mandated corporate social responsibility (CSR) expenditure under section 135 of the Indian Companies Act 2013 – the first national jurisdiction to do so. In line with the “shareholder value maximization” concept, we document the positive impacts of CSR expenditure on firm performance measured by return on asset and cash flow from operations. Additionally, we find that, despite the regulatory requirement, mandated CSR legislation is a significant but not the sole determinant of actual CSR spending by firms; rather, firm-specific economic factors such as size, level of cash balance and cash flow from operations have a moderating effect. We also observe that CSR expenditure contributes to firm performance irrespective of the level of actual CSR expenditure relative to the level of mandatory CSR expenditure. Our findings potentially reconcile conflicting results presented in the literature and provide valuable information for governments and regulatory authorities that are considering the mandatory implementation of CSR expenditure.     

Whose rights? Professional discipline and the incorporation of a (human) rights framework: The case of ICAS

Professions typically develop disciplinary systems that allow them to caution, fine or expel members whose conduct falls below expected standards. The Institute of Chartered Accountants of Scotland (ICAS) has amended its disciplinary procedures following challenge under the UK's Human Rights Act 1998. This paper aims to explore the implications of the incorporation of a (human) rights’ framework on ICAS's professional discipline. Disciplinary procedures are located in the context of the nature of professions and professionalism. Human rights legislation relevant to professional discipline is examined and its impact in the context of the nature of rights in general, and human rights in particular, is explored. The ICAS disciplinary changes are discussed in the context of a Hohfeldian-type framework of a range of types of rights. ICAS's procedures are shown to be multifaceted and, when examined in terms of rights (and, where relevant, duties) provide added insight into the nature of accountancy's professional discipline, but deficiencies remain, with the public interest continuing to be subservient to the private interest of accountants and their professional body.     

On the value relevance of information on environmental and social activities and performance – Some evidence from the UK stock market

Motivated by the requirements of the UK Companies Act 2006 for a Strategic Report introduced in late 2013, and the subsequent Directive 2014/95/EU of the European Parliament and of the Council, we investigate the relationship between the levels of disclosures on environmental and social activities and performance (analyst following) and subsequent analyst following (subsequent levels of disclosures on environmental and social activities and performance). We do so to investigate the value relevance of information about environmental and social activities and performance. Our evidence is consistent with their value relevance and an associated demand for, or general interest in, such disclosures from informed market participants. We also argue that our results suggest positive links between analyst following and the quality of environmental and social disclosure.     

The Court's Power of Discretionary Relief in Actions Against Auditors

Since 1929, successive Companies Acts have empowered the courts to relieve a company auditor, wholly or partly, from liability for negligence having regard to all the circumstances of the case and if the auditor has acted ‘honestly and reasonably’. This power is now contained within section 727 of the Companies Act 1985. By reference to decided cases in the UK and in those Commonwealth countries where similar legislation exists this article reviews the manner in which the courts have interpreted this section and explores the reasons why they have rarely, if ever, chosen to use their powers under this section in favour of auditors.     

Distance still matters. The hard reality of global expansion

Companies routinely overestimate the attractiveness of foreign markets. Dazzled by the sheer size of untapped markets, they lose sight of the difficulties of pioneering new, often very different territories. The problem is rooted in the analytic tools (the most prominent being country portfolio analysis, or CPA) that managers use to judge international investments. By focusing on national wealth, consumer income, and people's propensity to consume, CPA emphasizes potential sales, ignoring the costs and risks of doing business in a new market. Most of these costs and risks result from the barriers created by distance. "Distance," however, does not refer only to geography; its other dimensions can make foreign markets considerably more or less attractive. The CAGE framework of distance presented here considers four attributes: cultural distance (religious beliefs, race, social norms, and language that are different for the target country and the country of the company considering expansion); administrative or political distance (colony-colonizer links, common currency, and trade arrangements); geographic distance (the physical distance between the two countries, the size of the target country, access to waterways and the ocean, internal topography, and transportation and communications infrastructures); and economic distance (disparities in the two countries' wealth or consumer income and variations in the cost and quality of financial and other resources). This framework can help to identify the ways in which potential markets may be distant from existing ones. The article explores how (and by how much) various types of distance can affect different types of industries and shows how dramatically an explicit consideration of distance can change a company's picture of its strategic options.     

The innovation value chain

The challenges of coming up with fresh ideas and realizing profits from them are different for every company. One firm may excel at finding good ideas but may have weak systems for bringing them to market. Another organization may have a terrific process for funding and rolling out new products and services but a shortage of concepts to develop. In this article, Hansen and Birkinshaw caution executives against using the latest and greatest innovation approaches and tools without understanding the unique deficiencies in their companies' innovation systems. They offer a framework for evaluating innovation performance: the innovation value chain. It comprises the three main phases of innovation (idea generation, conversion, and diffusion) as well as the critical activities performed during those phases (looking for ideas inside your unit; looking for them in other units; looking for them externally; selecting ideas; funding them; and promoting and spreading ideas companywide). Using this framework, managers get an end-to-end view of their innovation efforts. They can pinpoint their weakest links and tailor innovation best practices appropriately to strengthen those links. Companies typically succumb to one of three broad "weakest-link" scenarios. They are idea poor, conversion poor, or diffusion poor. The article looks at the ways smart companies - including Intuit, P&G, Sara Lee, Shell, and Siemens- modify the best innovation practices and apply them to address those organizations' individual needs and flaws. The authors warn that adopting the chain-based view of innovation requires new measures of what can be delivered by each link in the chain. The approach also entails new roles for employees "external scouts" and "internal evangelists," for example. Indeed, in their search for new hires, companies should seek out those candidates who can help address particular weaknesses in the innovation value chain.     

The Significance of the Profit and Loss Account in Nineteenth-Century Britain: A Reassessment

This article presents a reassessment of the development of regulated financial disclosure in nineteenth-century British companies legislation. Most accounting historians have emphasized the importance of the balance sheet under the disclosure requirements of various Acts. The relative importance of the profit and loss account has been largely neglected by historians. This paper contends that the profit and loss account was a considerably more important document in the financial regulation of companies than previously contemplated. In fact, the profit and loss account was required in the disclosure regulations of numerous Acts, including the Joint Stock Banks Act (1844), the Regulation of Railways Act (1868), the Life Assurance Companies Act (1870) and the Building and Friendly Societies Act (1874).     

The role of the Securities and Exchange Commission in a developing economy: Implications for IFRS

Due to the widespread adoption of IFRSs throughout the world and little research on IFRS implementation in developing countries, this study investigates the role of the Securities & Exchange Commission (SEC) regarding IFRS implementation in a developing country. Adopting a mixed methodology (39 interviews and 1647 enforcement documents); the findings have raised concerns as to the adequacy of enforcement mechanisms in implementing IFRSs in Bangladesh. More specifically, only 2.6% of enforcement actions were issued over the period of 1998 to 2010. Political connectedness is the major contributing factor for uneven enforcement activities in Bangladesh. The study also finds that inconsistencies with accounting regulatory framework (Companies Act, BSEC ordinances and IFRSs), multiple regulators, and donor agencies' influence impede the effective implementation of IFRSs. The study also provides policy implications for local and national policy makers namely, IASB, the World Bank and the IMF to rethink about the regulation of IFRSs in developing countries.     

Annual reporting disclosures 1970-90: an exemplification

This case study examines the annual report disclosures in a UK listed company, Bulmers, from 1970 to 1990. While mandatory disclosure increased sharply, primarily because of the 1981 Companies Act, the even steeper increase in voluntary disclosure was part of a wide-ranging package of measures which Bulmers' chairman, Peter Prior, introduced to reflect a new corporate philosophy. In 1974, Bulmers provided a statement of company objectives, the first known British example, a year before this practice was recommended in The Corporate Report (Accounting Standards Steering Committee, 1975). In 1982, Esmond Bulmer MP introduced a Private Member's Bill on employee consultation and information, the basic aims of which were eventually enshrined in the 1985 Companies Act.     

Derivatives Use, Corporate Governance, and Legislative Change: An Empirical Analysis of New Zealand Listed Companies

Abstract:   This paper examines if board composition has any systematic bearing on derivatives usage by New Zealand listed companies. We also test if derivative usage changed following the introduction of the new 1993 Companies Act. The Act raised expectations of directors' fiduciary responsibilities and the perceived risk of liability on outside directors for poor investment decisions. Using a dataset of listed New Zealand companies in 1994 and 1997, we find companies with higher growth opportunities and a greater proportion of outside directors were less likely to use financial derivatives following the introduction of the new Act. Our results supplement the US‐based literature on derivatives usage by illustrating that internal governance mechanisms can play a role in corporate derivatives policy, and that the legislative and regulatory environment may affect this role.     

日本非上市公众公司监管经验与借鉴

日本金融商品交易法实施后,对非上市公众公司的监管规定更加清晰明确。日本通过对股份公司向50名以上的一般投资者发行或转让股票且金额超过1亿日元的行为,以及最近5年内达到资本金5亿日元及1000名以上股东人数的公司纳入监管等规定,来实施对1000家非上市公众公司的监管。日本的相关做法对我国探索建立非上市公众公司适度监管制度具有借鉴意义。     

The legacy of Eleanora Masini: Reflections from Latin America

This article discusses the influence of the Latin American work and school of human and social futures studies. Reference is made to the thought of Eleonora Masini and its cultural and educative implications, in particular the depth of her lessons for the leaders and government officials, in a context of global change and multicultural conflict, are emphasised. Further emphasis is given to the importance of the concept of future vision and the ethical formation to build the formation of futurists.     

THE TIMELINESS OF CORPORATE REPORTING: A COMPARATIVE STUDY OF SOUTH ASIA

This study examines the timeliness of corporate annual reporting in three South Asian countries, namely, Bangladesh, India and Pakistan. Based on a large sample of 558 annual reports for the year 1998, it is found that around 90% of the companies’ balance sheet end date falls in June and December in Bangladesh, March in India, and June and September in Pakistan. The audit lag is 162 days, 92 days and 145 days in Bangladesh, India and Pakistan, respectively. While the audit lag, preliminary lag and total lag are significantly lower in India compared to Bangladesh and Pakistan, a substantial proportion of companies take more time than allowed by the Companies Act in each country. A multivariate regression analysis indicates that financial year-end date is a significant determinant in each country. The size of the audit firm, as measured by the factor loading of audit fees, number of reporting entity audited by an audit firm and international linkage, indicates large audit firms take significantly less time in India and Pakistan. Profitability and corporate size are significant determinants only in Pakistan. There is no statistical evidence to support monitoring hypothesis, as proxied by Zmijeski’s financial condition index. The 2nd stage regression results suggests that only audit lag is significantly associated with the time taken by companies to submit their annual reports to the Stock Exchange and to hold the annual general meeting in each country. The results suggest that timeliness can be improved by reducing the delays in verifying the year-end accounts. Possible explanations for these findings along with limitations and implications are provided.     

Mergers in India. A Response to Regulatory Shocks

Recent empirical research shows that industry and regulatory shocks play a key role in determining merger activity in developed countries. We use this framework to analyze merger activity in India, using a comprehensive database spanning a thirty-year period, from 1973-74 to 2002-3. At the industry level, we identify clustering of merger activity in India, indicating that mergers may be a response to industry and regulatory shocks. At the firm level, the 1991 amendments to the Monopolies and Restrictive Trade Practices (MRTP) Act, which removed premerger scrutiny, are found to have a positive and significant effect on merger behavior of firms that had been under its purview. After the 1991 amendments, firms underwent mergers that would have been scrutinized by the MRTP Act otherwise. These mergers were undertaken for expansionary reasons.     

The Development of Legal Disclosure Requirements: the Case of Charitable Donations

The requirement that companies disclose the extent of their charitable contributions is an unusual feature of British company law. The purpose of this paper is to trace the development of the requirement from the opinion of the Jenkins Committee on company law reform, that no separate requirement be introduced, through to its appearance in the Companies Act 1967. Drawing on records of Parliamentary debates for the details of the views expressed and the arguments advanced, the paper demonstrates how a Labour Government's desire to have political donations revealed led to the introduction of mandatory disclosure of charitable contributions. The paper is thus a case study of the making of the law relating to financial disclosure.     

The customer experience ecosystem in two cultural contexts

This study focuses on the development of a customer experience ecosystem during a journey which is embedded in meso- and macro-layers. Using the critical incident technique, the author collected in-depth interview data from bank customers in Switzerland and Iran to empirically study this ecosystem, including customer–company interaction in the micro-layer and social context of the meso-layer. Moreover, in a macro-layer analysis, the Hofstede cultural dimension was employed to show the role of cultural context in this ecosystem. The findings indicate that customer experience in the pre-encounter stage is mostly shaped by customer past experience and social context rather than company touchpoint. The importance of these factors is different in the two cultural contexts. Although customer experience in the encounter stage is mainly the result of customer and company interactions, other people have a role in this stage and cultural differences between the two countries largely explain these differences. Moreover, in the post-encounter stage, customers in different cultural contexts use various factors to evaluate their experiences and the effects on their emotional and behavioral responses. The findings provide key managerial implications for national and international companies with respect to the role of multiple layers in customer experience management.