Understanding accounting as a career: an immersion work experience for students making career decisions

This paper reports on a project which is designed to increase the participation of high school students in accounting work experience placements. The focus of the paper is on an Australian-based project which overcomes the identified barriers to offering high school accounting work experience placements with a resultant increase in the number and quality of placements offered. The research project responds to a decline in both the number and quality of students enrolling in accounting degree programmes in Australia. The paper draws on the work experience, social psychology, careers, and accounting education literatures to design a ‘connective’ model (Guile &; Griffiths, 2001 Guile, D., &; Griffiths, T. (2001). Learning through work experience. Journal of Education and Work, 14(1), 113–131. doi: 10.1080/13639080020028738[Taylor &; Francis Online] , [Google Scholar]) of accounting work experience for high school students. The project adopts an action research methodology which engages professional accounting practice, high school career advisors, and the university sector to deliver a structured work experience programme which addresses barriers to participation in accounting work experience and improves the quality of the work experience ‘experience’ for both employers and students.     

语言认知中词汇的引申比较功效探析

语言认知过程中,词汇的识记是制约外语学习者的一大瓶颈,本文归纳了引申比较法的类型,论述了其在英语学习中功用,并希望借此能拓展教师的思路,帮助学生扩大词汇量,提高对英语语言的理解力和使用能力。     

Enhance the Effects of College English Teaching with the Application of Cooperative Learning

合作性学习(Cooperative Learning)是一种新兴教学理论与策略。对于改善学生课堂内的社会心理气氛,大面积提高学生的学业成绩,促进学生良好的非认知品质的发展起到了积极的作用,其实效令人瞩目。与人合作是一个人踏入社会所必须具备的基本素质,没有团队精神的人,必然会遭遇挫折和失败。因此合作性学习的探讨具有很重要的现实意义。本文就结合内蒙古财经学院大学英语教学现状,认识到无论教师间,师生间,生生间的合作都很欠缺,合作意识不强,且教学效果不明显的问题,就合作性学习在英语学习中的作用及运用效果展开探讨,提出可行性见解,以期对提高大学英语教学效果有所帮助。     

Political influences on the costs of banking crises in emerging market economies: testing the U-shaped veto player hypothesis

While there has been considerable research on the consequences of financial crises, there has been little empirical research on the possible effects of the role of domestic political institutions that influence a government's ability to implement crisis management policies. This paper investigates the impact of domestic institutions, characterized by a U-shaped veto player framework, on the output costs of banking crises. The analysis extends MacIntyre's qualitative study (2001 MacIntyre, Andrew. 2001. Institutions and investors: The politics of the economic crisis in Southeast Asia. International Organization, 55(1): 81–122. [Crossref], [Web of Science ®] , [Google Scholar]) of the relationship between veto players and policy risks in the Asian financial crises. For a large sample of emerging market economies, we find support for McIntyre's hypotheses that both too few and too many veto players are associated with greater costs of banking crises.     

Learning lessons: how to practice nudging around the world

Abstract

The aim of this article is to cover three things: (1) to introduce the context behind why a report prepared by the Organisation for Economic Co-operation and Development (OECD) in 2017 would be of such importance to researchers in various academic disciplines and public policy, (2) to present the details of a simple classification system that was applied to all 111 case studies of behavioural interventions (better known as nudges) referred to in the OECD (2017a OECD. 2017a. Behavioural Insights and Public Policy Lessons from Around the World.1-408 pp. OeCD Publishing. https://read.oecd-ilibrary.org/governance/behavioural-insights-and-public-policy_9789264270480-en. doi:10.1787/9789264270480-en.[Crossref] , [Google Scholar]) report, and (3) to discuss what needs to be done to help advance practitioners’ pursuit of effective behavioural interventions. This article aims to highlight the importance of accurately cataloguing the types of behavioural interventions that have been trialled/implemented across the world. By adopting an agreed classification system, researchers and practitioners can benefit from knowing what can work, and where it can work, as well as what does not work, in order to be better armed when considering the use of behavioural interventions to solve social policy issues.     

Industry cost of equity capital: European evidence for multifactor models

We estimate the costs of equity capital for 117 industries from 16 European countries employing the CAPM and 8 multifactor asset pricing models as well as a variety of different econometric techniques. In doing so, we extend previous research on cost of equity estimation in mainly two ways. First, our study involves European instead of US or UK industries, which are investigated in previous research, and we find that cost of equity estimates obtained from the CAPM or multifactor asset pricing models are as imprecise for European industries as for US and UK industries. Second, in addition to the CAPM, the Fama and French [1993 Fama, Eugene F., and Kenneth R. French. 1993. “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56. doi: 10.1016/0304-405X(93)90023-5[Crossref], [Web of Science ®] , [Google Scholar]. “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56] three-factor model, and the Carhart [1997 Carhart, Mark M. 1997. “On Persistence in Mutual Fund Performance.” The Journal of Finance 52 (1): 57–82. doi: 10.1111/j.1540-6261.1997.tb03808.x[Crossref], [Web of Science ®] , [Google Scholar]. “On Persistence in Mutual Fund Performance.” The Journal of Finance 52 (1): 57–82] four-factor model, which are usually employed, our study includes six multifactor models that have not yet been examined on their ability to provide precise estimates of the costs of equity: the five-factor model of Fama and French [1993 Fama, Eugene F., and Kenneth R. French. 1993. “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56. doi: 10.1016/0304-405X(93)90023-5[Crossref], [Web of Science ®] , [Google Scholar]. “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56] as well as the multifactor models of Pástor and Stambaugh [2003 Pástor, Lubos, and Robert F. Stambaugh. 2003. “Liquidity Risk and Expected Stock Returns.” Journal of Political Economy 111 (3): 642–685. doi: 10.1086/374184[Crossref], [Web of Science ®] , [Google Scholar]. “Liquidity Risk and Expected Stock Returns.” Journal of Political Economy 111 (3): 642–685]; Campbell and Vuolteenaho [2004 Campbell, John Y., and Tuomo Vuolteenaho. 2004. “Bad Beta, Good Beta.” American Economic Review 94 (5): 1249–1275. doi: 10.1257/0002828043052240[Crossref], [Web of Science ®] , [Google Scholar]. “Bad Beta, Good Beta.” American Economic Review 94 (5): 1249–1275]; Hahn and Lee [2006 Hahn, Jaehoon, and Hangyong Lee. 2006. “Yield Spreads as Alternative Risk Factors for Size and Book-To-Market.” Journal of Financial &; Quantitative Analysis 41 (2): 245–269. doi: 10.1017/S0022109000002052[Crossref], [Web of Science ®] , [Google Scholar]. “Yield Spreads as Alternative Risk Factors for Size and Book-To-Market.” Journal of Financial &; Quantitative Analysis 41 (2): 245–269]; Petkova [2006 Petkova, Ralitsa. 2006. “Do the Fama–French Factors Proxy for Innovations in Predictive Variables?” The Journal of Finance 61 (2): 581–612. doi: 10.1111/j.1540-6261.2006.00849.x[Crossref], [Web of Science ®] , [Google Scholar]. “Do the Fama–French Factors Proxy for Innovations in Predictive Variables?” The Journal of Finance 61 (2): 581–612]; and Koijen, Lustig, and van Nieuwerburgh [2010 Koijen, Ralph S., Hanno N. Lustig, and Stijn G. van Nieuwerburgh. 2010. “The Cross-Section and Time-Series of Stock and Bond Returns.” Working Paper, University of Chicago, University of California at Los Angeles, New York University. [Google Scholar]. “The Cross-Section and Time-Series of Stock and Bond Returns.” Working Paper, University of Chicago, University of California at Los Angeles, New York University]. Our results suggest that these models provide even more imprecise cost of equity estimates. One main reason for these inaccurate estimates is the large temporal variation of the risk loadings on the non-traded factors in these models.     

The impact of TOEFL scores on placement and performance of international students in the initial graduate accounting class

This paper examines, in a US context, the relationship between performance in the initial required graduate financial accounting class and Test of English as a Foreign Language (TOEFL) scores for a sample of international MBA students. Other variables that have been shown in the past to be associated with superior performance in that class for other samples are also considered for this international sample. These relationships have not been analysed by any previous studies. The results show that TOEFL scores are not associated with superior performance in graduate accounting for the international students. The Graduate Management Admission Test (GMAT) score is the factor most associated with superior performance in graduate-level accounting for international students. This result is consistent with the result reported in Krausz et al. (Advances in Accounting Education, 3(3), 169–177, 2000) for a sample of domestic US students.     

New development: Integration of budget and governmental accounting in Mexican states

ABSTRACT

Mexico recently introduced an accounting–budgeting framework compatible with the International Public Sector Accounting Standards (IPSAS). This article discusses the implementation of this framework, including the harmonization of information for the functional, administrative and economic budget categories for all Mexican states and for Mexico City. The author analysed public accounts and budgets prepared under the framework’s information requirements, as well as assessing the harmonization of accounts between the local, state and national levels of government. The results show an increase in both the amount and the harmonization of the public expenditure information being reported. This paper contributes to the literature of harmonization between financial reporting and budgeting processes (Dabbicco, G., & Mattei, G. (2020 Dabbicco, G. , & Mattei, G. (2020). The reconciliation of budgeting with financial reporting: A comparative study of Italy and the UK. Public Money & Management , 1–11. doi: 10.1080/09540962.2019.1708059 [Taylor & Francis Online], [Web of Science ®] , [Google Scholar]). The reconciliation of budgeting with financial reporting: A comparative study of Italy and the UK. Public Money & Management, 1–11).     

Accounting for Variation in the Explanatory Power of the Psychometric Paradigm: The Effects of Aggregation and Focus

Most psychometric studies of risk perception have used data that have been averaged over participants prior to analysis. Such aggregation obscures variation among participants and inflates the magnitude of relationships between psychometric dimensions and dependent variables such as overall riskiness. However, most studies that have not averaged data over participants have also shifted the focus of analysis from differences among hazards to differences among participants. Hence, it is unclear whether observed reductions in the explanatory power of psychometric dimensions result from the change in the level of analysis or from the change in the focus of analysis. Following Willis et al.'s (2005 Willis, H. H., DeKay, M. L., Fischhoff, B. and Morgan, M. G. 2005. Aggregate, disaggregate, and hybrid analyses of ecological risk perceptions. Risk Analysis, 25(2): 405–428. [Crossref], [PubMed], [Web of Science ®] , [Google Scholar]) analysis of ecological risk perceptions, we unconfound these two variables in a study of risk perceptions in Santiago, Chile, although we use more traditional hazards, attributes, and statistical procedures. Results confirm that psychometric dimensions explain less variation in judgments of riskiness and acceptability at the disaggregate level than at the aggregate level. However, they also explain less variation when the focus of analysis is differences among participants rather than differences among hazards. These two effects appear to be similar in magnitude. A simple hybrid analysis economically represents variation among participants' judgments of hazards' riskiness by relating those judgments to a common set of psychometric dimensions from a traditional aggregate‐level analysis.     

‘It is all about getting the volumes down’. Organizational framings of risk in relation to waste,waste management and temporality

Abstract

Drawing on an ethnographic fieldwork at a waste facility site in the northern parts of Sweden, this article investigates organizational framings of risk (Hutter and Power 2005 Hutter, B., and M. Power. 2005. “Organizational encounters with risk: An introduction.” In Organizational Encounters with Risk, edited by B. Hutter and M. Power, 1–32. Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, Sao Paulo: Cambridge University Press.[Crossref] , [Google Scholar]) in relation to waste and practices of waste management, employing the concept of temporality. The suggestion is that organizational framings of risk, as it contributes to steering the risk perception of the employees, also cater to a particular temporal register. In relation to the purposes of this article, the risks that my informants mentioned and/or perceived – as part of a particular organizational framework – were most often seen in terms of situated inconveniences and hazards that required technical, and logistic solutions. While this enabled them to take action, it also contributed to bounding risk and risk perception to a particular temporal register, intimately linked to what Barbara Adam (1998 Adam, B. 1998. Timescapes of Modernity: The Environment and Invisible Hazards. London and New York: Routledge. [Google Scholar]) refers to as the logics of industrial time. The logics of industrial time also suffuse formulations of current environmental policies and waste management plans, on a national as well as on an EU level where waste is seen primarily as a resource that continuously needs to be invented anew. As such, the logics of industrial time follow closely the beat of market fluctuations. Talking to representatives for the current waste facility site and observing some of their daily activities, potential risks with waste and practices of waste management were often weighed against other factors such as effectiveness, swiftness, and economic profits or losses: factors that also corresponded to short-time temporalities. While this reasoning, at first seemed to outperform any notion of risk, it actually conformed to the risks acknowledged by the organizational setting of which my informants were part.     

Pricing and capital requirements for with profit contracts: modelling considerations

The aim of this paper is to provide an assessment of alternative frameworks for the fair valuation of life insurance contracts with a predominant financial component, in terms of impact on the market consistent price of the contracts, the embedded options, and the capital requirements for the insurer. In particular, we model the dynamics of the log-returns of the reference fund using the so-called Merton (1976 Merton, RC. 1976. Option pricing when underlying stock returns are discontinuous. J. Finan. Econ., : 125–144.  [Google Scholar]) process, which is given by the sum of an arithmetic Brownian motion and a compound Poisson process, and the Variance Gamma (VG) process introduced by Madan and Seneta (1990 Madan, DB and Seneta, E. 1990. The variance gamma (VG) model for share market returns. J. Bus., 63: 511–524. [Crossref], [Web of Science ®] , [Google Scholar]), and further refined by Madan and Milne (1991 Madan, DB and Milne, F. 1991. Option pricing with VG martingale components. Math. Finan., 1: 39–45. [Crossref] , [Google Scholar]) and Madan et al. (1998 Madan, DB, Carr, P and Chang, E. 1998. The variance gamma process and option pricing. Eur. Finan. Rev., 2: 79–105. [Crossref] , [Google Scholar]). We conclude that, although the choice of the market model does not affect significantly the market consistent price of the overall benefit due at maturity, the consequences of a model misspecification on the capital requirements are noticeable.     

Do emerging markets with consistent returns have better future performance?

Using monthly data for 25 emerging markets around the world, it is found that emerging markets with recently consistent stock returns tend to have future returns that continue in the same direction. The effects are long-lived for negative consistency, and imply that capital flows are much more sensitive to market downturns than market upturns. Additionally, the longer a market has had consistently negative (positive) stock returns, the more negative (positive) are future returns. These results serve as confirmation that the consistency effects of Grinblatt and Moskowitz [J. Finan. Econ., 2004 Grinblatt, M and Moskowitz, T. 2004. Predicting stock price movements from the pattern of past returns. J. Finan. Econ., 71: 541–579. [Crossref], [Web of Science ®] , [Google Scholar], forthcoming] and Watkins [J. Behav. Finan., 2003 Watkins, B. 2003. Riding the wave of investor sentiment: an analysis of consistency as a predictor of future stock returns. J. Behav. Finan., 4: 1–32.  [Google Scholar], 4, 1–32] exist in emerging markets around the world.     

Risk can be good for self-esteem: beyond self-determination theory

Abstract

Despite many decades of research that has highlighted all risk-taking sport activities as a means to satisfy sensation seeking needs (e.g., Zuckerman 1979 Zuckerman, M. 1979. Sensation Seeking: Beyond the Optimal Level of Arousal. Cambridge, UK: Cambridge University Press. [Google Scholar]), recent research has challenged that view and has revealed that some high-risk activities provide opportunities for agentic emotion regulation during participation, and are not driven by sensation-seeking needs (e.g., Barlow, Woodman, and Hardy 2013 Barlow, M., T. Woodman, and L. Hardy. 2013. “Great Expectations: Different High-Risk Activities Satisfy Different Motives.” Journal of Personality & Social Psychology 105: 458–475. doi:10.1037/a0033542.[Crossref], [PubMed], [Web of Science ®] , [Google Scholar]). Participation in high-risk sports is also associated with increased self-esteem (e.g., A?çi, Demirhan, and Dinç 2007 A?çi, F. H., G. Demirhan, and S. C. Dinç. 2007. “Psychological Profile of Turkish Rock Climbers: An Examination of Climbing Experience and Route Difficulty.” Perceptual and Motor Skills 104 (3): 892–900. doi:10.2466/pms.104.3.892-900.[Crossref], [PubMed], [Web of Science ®] , [Google Scholar]). The aim of the present study was to investigate the link between the agentic and emotion regulation benefits of specific high-risk activities and any associated self-esteem benefits. We hypothesized that the emotion regulation and agency experiences in high-risk physical activities would mirror the elevated self-esteem derived from these activities. We examined high-risk activity (n?=?84), low-risk activity (n?=?65), and control (n?=?45) groups and found that the experience of agentic emotion regulation was greater during participation for high-risk sport participants. High-risk sport participants also had less post-activity difficulty with emotion regulation and higher self-esteem. This study provides the first support that activities that require greater agentic emotion regulation during participation also lead to elevated self-esteem. Basic psychological needs satisfaction did not account for the differences between groups, suggesting that people have other needs (e.g., the need to self-regulate) that are not incorporated into self-determination theory.     

Enhanced policy iteration for American options via scenario selection

Kolodko and Schoenmakers (2006 Kolodko, A and Schoenmakers, J. 2006. Iterative construction of the optimal Bermudan stopping time. Finan. Stochast., 10: 27–49. [Crossref], [Web of Science ®] , [Google Scholar]) and Bender and Schoenmakers (2006 Bender, C, Kolodko, A and Schoenmakers, J. 2006. Iterating cancelable snowballs and related exotics in a many-factor Libor model. Risk, September: 126–130.  [Google Scholar]) introduced a policy iteration that allows the achievement of a tight lower approximations of the price for early exercise options via a nested Monte Carlo simulation in a Markovian setting. In this paper we enhance the algorithm by a scenario selection method. It is demonstrated by numerical examples that the scenario selection can significantly reduce the number of inner simulations actually performed, and thus can greatly speed up the method (by up to a factor of 15 in some examples). Moreover, it is shown that the modified algorithm retains the desirable properties of the original, such as the monotone improvement property, termination after a finite number of iteration steps, and numerical stability.     

A modified Corrado test for assessing abnormal security returns

Event studies typically use the methodology developed by Fama et al. [1969 Fama, E., Fisher, L., Jensen, M. and Roll, R. 1969. The adjustment of stock prices to new information. International Economic Review, 10(1): 1–21. [Crossref] , [Google Scholar]. The adjustment of stock prices to new information. International Economic Review 10, no. 1: 1–21] to segregate a stock's return into expected and unexpected components. Moreover, conventional practice assumes that abnormal returns evolve in terms of a normal distribution. There is, however, an increasing tendency for event studies to employ non-parametric testing procedures due to the mounting empirical evidence which shows that stock returns are incompatible with the normal distribution. This paper focuses on the widely used non-parametric ranking procedure developed by Corrado [1989 Corrado, C. 1989. A nonparametric test for abnormal security price performance in event studies. Journal of Financial Economics, 23(2): 385–95. [Crossref], [Web of Science ®] , [Google Scholar]. A nonparametric test for abnormal security price performance in event studies. Journal of Financial Economics 23, no. 2: 385–95] for assessing the significance of abnormal security returns. In particular, we develop a consistent estimator for the variance of the sum of ranks of the abnormal returns, and show how this leads to a more efficient test statistic (as well as to less cumbersome computational procedures) than the test originally proposed by Corrado (1989 Corrado, C. 1989. A nonparametric test for abnormal security price performance in event studies. Journal of Financial Economics, 23(2): 385–95. [Crossref], [Web of Science ®] , [Google Scholar]). We also use the theorem of Berry [1941 Berry, A. 1941. The accuracy of the Gaussian approximation to the sum of independent variates. Transactions of the American Mathematical Society, 49(1): 122–36. [Crossref] , [Google Scholar]. The accuracy of the Gaussian approximation to the sum of independent variates. Transactions of the American Mathematical Society 49, no. 1: 122–36] and Esseen [1945 Esseen, C. 1945. Fourier analysis of distribution functions: A mathematical study of the Laplace–Gaussian law. Acta Mathematica, 77(1): 1–125. [Crossref], [Web of Science ®] , [Google Scholar]. Fourier analysis of distribution functions: A mathematical study of the Laplace–Gaussian law. Acta Mathematica 77, no. 1: 1–125] to demonstrate how the distribution of the modified Corrado test statistic developed here asymptotically converges towards the normal distribution. This shows that describing the distributional properties of the sum of the ranks in terms of the normal distribution is highly problematic for small sample sizes and small event windows. In these circumstances, we show that a second-order Edgeworth expansion provides a good approximation to the actual probability distribution of the modified Corrado test statistic. The application of the modified Corrado test developed here is illustrated using data for the purchase and sale by UK directors of shares in their own companies.     

Optimal execution strategies in limit order books with general shape functions

We consider optimal execution strategies for block market orders placed in a limit order book (LOB). We build on the resilience model proposed by Obizhaeva and Wang (2005 Obizhaeva, A and Wang, J. 2005. Optimal trading strategy and supply/demand dynamics, Preprint Available online at: http://www.rhsmith.umd.edu/faculty/obizhaeva/OW060408.pdf (accessed 16 February 2009)[Crossref] , [Google Scholar]) but allow for a general shape of the LOB defined via a given density function. Thus, we can allow for empirically observed LOB shapes and obtain a nonlinear price impact of market orders. We distinguish two possibilities for modelling the resilience of the LOB after a large market order: the exponential recovery of the number of limit orders, i.e. of the volume of the LOB, or the exponential recovery of the bid–ask spread. We consider both of these resilience modes and, in each case, derive explicit optimal execution strategies in discrete time. Applying our results to a block-shaped LOB, we obtain a new closed-form representation for the optimal strategy of a risk-neutral investor, which explicitly solves the recursive scheme given in Obizhaeva and Wang (2005 Obizhaeva, A and Wang, J. 2005. Optimal trading strategy and supply/demand dynamics, Preprint Available online at: http://www.rhsmith.umd.edu/faculty/obizhaeva/OW060408.pdf (accessed 16 February 2009)[Crossref] , [Google Scholar]). We also provide some evidence for the robustness of optimal strategies with respect to the choice of the shape function and the resilience-type.     

There's more to volatility than volume

It is widely believed that fluctuations in transaction volume, as reflected in the number of transactions and to a lesser extent their size, are the main cause of clustered volatility. Under this view bursts of rapid or slow price diffusion reflect bursts of frequent or less frequent trading, which cause both clustered volatility and heavy tails in price returns. We investigate this hypothesis using tick by tick data from the New York and London Stock Exchanges and show that only a small fraction of volatility fluctuations are explained in this manner. Clustered volatility is still very strong even if price changes are recorded on intervals in which the total transaction volume or number of transactions is held constant. In addition the distribution of price returns conditioned on volume or transaction frequency being held constant is similar to that in real time, making it clear that neither of these are the principal cause of heavy tails in price returns. We analyse recent results of Ane and Geman (2000 Ane, T and Geman, H. 2000. Order flow, transaction clock, and normality of asset returns. J. Finance, 55(5): 2259–2284. [Crossref], [Web of Science ®] , [Google Scholar]: J. Finance, 55, 2259–2284) and Gabaix et al. (2003 Gabaix, X, Gopikrishnan, P, Plerou, V and Stanley, H.E. 2003. A theory of power-law distributions in financial market fluctuations. Nature, 423: 267–270. [Crossref], [PubMed], [Web of Science ®] , [Google Scholar]: Nature, 423, 267–270), and discuss the reasons why their conclusions differ from ours. Based on a cross-sectional analysis we show that the long-memory of volatility is dominated by factors other than transaction frequency or total trading volume.     

Nonlinear dynamics in economics and finance and unit root testing

The recent financial crisis exposed the inability of traditional theoretical and empirical models to parsimoniously capture the rich dynamics of the economic environment. This has stimulated the interest of both academics and practitioners in the development and application of more sophisticated models. By allowing for the presence of nonlinearities, complex dynamics, multiple equilibria, structural breaks and spurious trends, these latter models resemble more closely the properties of economic and financial time series. In this article, we illustrate the flexibility of a family of econometric models, namely the exponential smooth transition autoregressive (ESTAR), to encompass several of the above characteristics. We then re-assess the power of the ESTAR unit root test developed by Kapetanios, Shin and Snell ((2003) Kapetanios, G., Shin, Y. and Snell, A. 2003. Testing for a unit root in the nonlinear STAR framework. Journal of Econometrics, 112(2): 359–79. (doi:10.1016/S0304-4076(02)00202-6)[Crossref], [Web of Science ®] , [Google Scholar]) in the presence of nuisance parameters typically encountered in the literature and compare its performance with that of the augmented Dickey-Fuller and the Enders and Granger ((1998) Enders, W. and Granger, C. W.J. 1998. Unit-root tests and asymmetric adjustment with an example using the term structure of interest rates. Journal of Business & Economic Statistics, 16(3): 304–11. [Taylor & Francis Online], [Web of Science ®] , [Google Scholar]) tests. Our results show the lack of dominance of any particular test and that the power is not independent to priors about the nuisance parameters. Finally, we examine several asset price deviations from fundamentals and one hyper-inflation series and find contradictory results between the nonlinear fitted models and unit root tests. The findings highlight that new testing procedures with higher power are desirable in order to shed light on the behavior of financial and economic series.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Romania

Abstract

Romanian accounting rules (RAR) had followed a convergence process with International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) since 1999, and the level of convergence has increased over time. The Romanian accounting regulator continues to follow IAS/IFRS in internalizing the Accounting Directive 2013 Directive 2013/34/EU. Directive 2013/34/EU of the European Parliament and of the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, Official Journal of the European Union, L 182/19. [Google Scholar]/34/EU. Only a few major differences still exist (some of them due the restrictions in the Accounting Directive 2013 Directive 2013/34/EU. Directive 2013/34/EU of the European Parliament and of the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, Official Journal of the European Union, L 182/19. [Google Scholar]/34/EU) between RAR and IFRS. However, RAR lack the level of detail existing in IFRS, and IFRS cannot be used in practice as a source of guidance and interpretation. While major stakeholders have a positive attitude towards the convergence with IAS/IFRS, the Romanian accounting regulator intends to keep the control over RAR and avoid differences in interpretations that might have tax consequences. Despite the good level of convergence of RAR with IFRS, practitioners tend to continue to utilize the tax approach as a source of guidance and interpretation.