An Empirical Investigation of Firm Longevity: A Model of the Ex Ante Predictors of Financial Distress

Empirical models of a potential failure process that incorporate distress states between the extremes of corporate health and bankruptcy are uncommon. We depict financial distress as a series of financial events that reflect varied stages of corporate adversity. Our intent is to provide information regarding the influence of certain risk dimensions and firm-specific attributes on distressed firm survival over time. Within a theorized distress framework, we utilize the techniques of survival analysis to longitudinally track firms, grouped a priori according to an initial decline in operating cash flows. We find that the event of default has a significant positive association with business failure. Further, we document that the significant accounting covariates tend to change conditional on a firm having progressed through the diverse stages of distress. These findings accentuate the heterogeneous nature of financial distress and potential business failure.     

Business process semi-automation based on business model management

It is important to respond to customers' requirements more rapidly than ever before due to the recent trend in e-business and its technologies. In order to achieve an agile response, we have to manage business models, to reflect the changes in the models and to develop or modify IT systems for further chances. This paper proposes a management framework of layered enterprise models. The proposed framework consists of a business model repository and a software repository, and defines three different grain sizes of modeling layers, namely business modeling, business process modeling and business application modeling, in order to support business modeling and application development. This framework helps us to develop business application in incremental deployment of analysis, design, and implementation to execute business processes. We have implemented a prototype environment using Java. Each repository's contents are described using XML so that the repositories are interoperable. Copyright © 2003 John Wiley & Sons, Ltd.     

An accountability framework for financial statement auditors and related research questions

We address the following overarching questions: What kind of accountability framework could regulators use to (a) motivate auditors to improve audit quality, and (b) evaluate how well auditors have carried out their duties? We draw on research in accounting, economics, psychology, and neuroscience to critique the accountabilities, incentives, and learning opportunities embedded in auditors’ extant regulatory environment. We first establish that forward-looking estimates are the basis for most financial statement information and that some of these estimates are highly uncertain, which increases the challenges faced by auditors. We propose an accountability framework with two dimensions: rewards versus penalties and processes versus outcomes. We show that auditors’ current regulatory accountabilities generally are in the form of penalties rather than rewards and primarily depend on audit outcomes rather than attributes of auditors’ judgment processes. We provide evidence from a range of disciplines that questions the suitability of the present system for improving the quality of auditors’ judgments and the quality of evaluations of those judgments made by inspectors. We identify four potential changes for improvement in audit quality based on our framework. Each of these identified changes has an impact on one or both of the two dimensions in our framework. For each of these changes, we outline JDM research questions that could be addressed to inform our overarching questions and to provide empirical evidence to help refine our accountability framework and improve audit quality.     

Development of a case‐based decision support system for process modeling in BPR

This paper presents a knowledge‐based methodology for business process reengineering that uses a case‐based reasoning paradigm to provide decision support to its users in the modeling of a current problem and a redesign of critical business processes. As a process modeling tool for representing the business process, the event process chain (EPC) modeling method is used in this paper. We developed a CAPMOSS (CAse‐based Process MOdeling Supporting System) to support our proposed methodology. To reengineer a new business process problem, CAPMOSS retrieves from its case base the case that is most similar to the current problem. CAPMOSS uses a retrieved case to guide the structuring of AS‐IS models and TO‐BE models of a target business process. Using the transformational knowledge of a retrieved case, CAPMOSS helps the user to transform an AS‐IS model into a TO‐BE model for the target process with ease and the purchasing process in a government R&D institute is explained as an application of this approach. Copyright © 2000 John Wiley & Sons, Ltd.     

The influence of power strategies in AIS implementation processes

This study is based on a longitudinal in-depth case study, conducted in a Portuguese public-sector organization, where the accountants adopted a strategic business partner role and promoted the implementation of two new accounting information systems (AIS), under the context of increasing business competition. Given their role, we examined how the implementation processes of such AIS were influenced by the accountants’ power strategies, adopting an organizational power narrative inquiry grounded on the four power dimensions proposed in Hardy’s (1996) framework: power over resources, power over decision-making processes, power over meanings and power of the system. As a result, this study contributes to the literature available on AIS by discussing the strategic business partner role of (management) accountants in a specific case; and by offering new insights into AIS research under the topic of accounting change through the exercise of power. Our research also contributes to the literature on organizational power by providing theoretical developments to Hardy’s (1996) power framework.     

Business risk perspectives on information systems outsourcing

Information systems (IS) outsourcing research has continued to evolve over the past decade to reflect changes in its practice and a deeper understanding of its business impact. Typically, the drivers of outsourcing decisions are both internal and external to the outsourcing organization and have been the basis for such studies. Since IS essentially represents an organization's implementation of its business processes, this paper approaches IS outsourcing by explicitly integrating issues related to business process outsourcing. The resulting business risk management framework provides a basis for effective IS outsourcing. The framework is further discussed within the context of outsourcing in e-business. By adopting a risk management perspective, this paper provides a strategic direction to further the field of IS outsourcing research.     

Measuring the effects of business intelligence systems: The relationship between business process and organizational performance

Business intelligence (BI) systems provide the ability to analyse business information in order to support and improve management decision making across a broad range of business activities. They leverage the large data infrastructure investments (e.g. ERP systems) made by firms, and have the potential to realise the substantial value locked up in a firm's data resources. While substantial business investment in BI systems is continuing to accelerate, there is a complete absence of a specific and rigorous method to measure the realised business value, if any. By exploiting the lessons learned from prior attempts to measure business value of IT-intensive systems, we develop a new measure that is based on an understanding of the characteristics of BI systems in a process-oriented framework. We then employ the measure in an examination of the relationship between the business process performance and organizational performance, finding significant differences in the strength of the relationship between industry sectors. This study reinforces the need to consider the specific context of use when designing performance measurement for IT-intensive systems, and highlights the need for further research examining contextual moderators to the realisation of such performance benefits.     

会计改革与会计信息质量——来自中国证券市场的经验证据

本文以股份公司会计制度改革为例 ,从会计改革的目标出发 ,运用会计信息的市场反应 ,分别从信息观和计量观的角度 ,就会计信息的质量进行定量研究 ,对其改革效果做出实证性的评价 ,籍此观察《企业会计制度》改革的合理性。研究表明会计信息质量的提高不仅有赖于会计改革建立高质量的会计准则 ,而且离不开执行机制的改革提供有效的准则执行支撑系统。《企业会计制度》面对缺乏效率的准则执行机制 ,出台尽可能回避按“公允价值”计价的改革政策 ,无疑是考虑会计准则与经济环境的融合性而做出的明智之举     

Measuring corporate environmental performance

As shareholders, government regulators, consumers, employees, and the general public pay more attention to companies' environmental performance, measurement issues are becoming increasingly important and demand is growing for relevant information to assist stakeholders in making key decisions. Despite the enhanced interest in and attention to companies' environmental activities, the accounting profession has been slow to take on the role of defining, measuring, and controlling this broad corporate domain. Thus, measures of environmental performance have proliferated in the absence of clear, generally accepted guidelines as to what constitutes good and bad environmental performance. As a result, the public is becoming increasingly confused and cynical about interpretation of such data. In this paper, we use theoretical and empirical approaches to define corporate environmental performance and consider how well existing measures operationalize the construct. Interestingly, some popular environmental rating schemes seem to rely more heavily on public reaction to environmental events than on more precise and measurable outcome or process dimensions. Our findings suggest a need for explicit environmental performance metrics in order to provide stakeholders with more reliable, consistent, and accurate information for comparing companies and making key strategic decisions. We argue that the accounting profession is an obvious candidate for establishing such metrics since the domain of accounting typically includes measuring, communicating, and regulating information about company performance. Expanding accountants' domain to include environmental performance can greatly contribute to the usefulness of environmental performance metrics.     

Contextual issues of the convergence of International Financial Reporting Standards: The case of Germany

The objective of this paper, using Germany as a case study, is to show that accounting as the language of business is deeply embedded in a country's social, political and economic environment and that these contextual factors cannot be ignored in the process of convergence. Specifically, by invoking the accounting ecology framework and interviewing selected stakeholders, this study critically examines the unique features of accounting in Germany and raises issues related to the adoption of IFRS. The findings of this study provide evidence of the importance of considering the contextual influences in successful adoption of IFRS in a country.     

Using Goals,Rules and Methods to Support Reasoning in Business Process Reengineering

One step towards a more systematic approach to the design of business processes is to develop models that provide appropriate representations of the knowledge that is needed for understanding and for reasoning about business processes. We present a modelling framework which uses goals, rules and methods to support the systematic analysis and design of business processes. The frame-work consists of two main components—a Strategic Dependency model that describes a process organization in terms of intentional dependencies among actors, and a Strategic Rationale model that supports reasoning during process redesign. Formal representation of these models allows computer-based tools to be developed as extensions to, and eventually integrated with, other tools for supporting information systems development.     

The FASB exposure draft on accounting for business combinations and intangible assets: an instructional assignment

Accounting standards are constantly evolving to meet the needs of a rapidly changing business environment and changes in accounting theory. Accounting students need to be familiar with the content of Exposure Drafts, since these documents reflect the Financial Accounting Standards Board's (FASB) position on current financial reporting issues. Students are generally not well versed on the standard setting process and how contextual factors affect this process. The purpose of this instructional assignment is to enhance students' understanding of how contextual factors affect the standard setting process within the context of the Exposure Draft on “Business Combinations and Intangible Assets.” The assignment requires that students examine the Exposure Draft and answer questions designed to elicit responses as to why the FASB is considering a new standard and the impact the standard would have on current accounting procedures and financial statements.     

The influence of a business-process focus on category knowledge and internal control evaluation

This study examines whether organizing information about internal controls around business processes instead of control objectives produces stronger category knowledge during training and improves decision performance during internal control evaluation. Novices who were trained to evaluate internal controls using business-process-focused materials developed stronger category knowledge. After training, novices who evaluated internal controls using materials organized around a process focus identified more control issues during a control evaluation task. Findings suggest that the process focus may be a more effective framework for organizing internal control evaluation tasks.     

The Influence of Integrated Reporting on Business Model and Strategy Disclosures

Business model (BM) and strategy disclosures could provide investors with relevant information. This study offers a platform for future research on BM and strategy disclosure and is the first to analyse the change in BM and strategy disclosures after the introduction of an integrated reporting (IR) requirement, to propose a framework for disclosure quality analyses, and to analyse how companies disclose the relationship between their BM and strategy. The findings show that BMs and strategy were not disclosed before the requirement to publish an integrated report in South Africa, but were disclosed thereafter. By 2014, companies used diagrams, flow charts, and informative narratives of business plans and value chains. Companies now disclose their strategic goals more transparently, but still do not link these goals to BMs, key performance indicators, risks or opportunities. The findings provide insight into disclosures that improved since the IR requirement and matters that are still not fully disclosed, which would be of interest to regulators tasked with investor protection.     

Strategic performance management: A balanced approach to performance management issues in local government

The drive for reform in the public sector worldwide has focussed attention on the measurement of performance in public sector organizations. This is particularly true in local government. Local government has traditionally been concerned with measuring the delivery of primary objectives, or results, at the expense of secondary objectives, or the determinants of organizational performance. Current strategic management literature suggests that there should be a strong linkage between strategic plans and performance measures.Kaplan and Norton’s (1992) balanced scorecard and Fitzgeraldet al. ’s (1991) results and determinants framework can provide this linkage. This paper reports on research into performance management systems in local government using the four dimensions of the balanced scorecard: financial, community, internal business processes and innovation and learning. It shows how the focus in this system of local government has been on the results of council work, ie. financial performance and to a lesser extent on how the community views performance. Local government performance measurement pays much less attention to the determinants, or means of achieving long-term, sustained organizational improvement in internal business processes, and innovation and learning. Whilst these issues are recognized as important, there are few measurement processes in place to manage performance in these areas. Strategic performance management demands an approach that recognizes the importance of a focus on both results and the means of achieving these results. This paper highlights a suggested framework for strategic and balanced local government performance measurement.     

The process audit

Few executives question the idea that by redesigning business processes--work that runs from end to end across an enterprise--they can achieve extraordinary improvements in cost, quality, speed, profitability, and other key areas Yet in spite of their intentions and investments, many executives flounder, unsure about what exactly needs to be changed, by how much, and when. As a result, many organizations make little progress--if any at all--in their attempts to transform business processes. Michael Hammer has spent the past five years working with a group of leading companies to develop the Process and Enterprise Maturity Model (PEMM), a new framework that helps executives comprehend, formulate, and assess process-based transformation efforts. He has identified two distinct groups of characteristics that are needed for business processes to perform exceptionally well over a long period of time. Process enablers, which affect individual processes, determine how well a process is able to function. They are mutually interdependent--if any are missing, the others will be ineffective. However, enablers are not enough to develop high-performance processes; they only provide the potential to deliver high performance. A company must also possess or establish organizational capabilities that allow the business to offer a supportive environment. Together, the enablers and the capabilities provide an effective way for companies to plan and evaluate process-based transformations. PEMM is different from other frameworks, such as Capability Maturity Model Integration (CMMI), because it applies to all industries and all processes. The author describes how several companies--including Michelin, CSAA, Tetra Pak, Shell, Clorox, and Schneider National--have successfully used PEMM in various ways and at different stages to evaluate the progress of their process-based transformation efforts.     

基于保险业务流程的知识管理问题——以团体健康保险新契约核保业务流程为例

保险行业是一个流程导向性的行业,也是一个高度知识密集型的行业。保险公司员工需要在某个专业领域多年的知识积累,包括流程知识、业务领域的技术、复杂问题的应急能力等经验知识,这些都是为了高效地完成工作。而这些类型的知识普遍存在于人们的大脑中,并且具有不稳定易变的特征,所以迫切地需要挖掘这类知识,并进行知识共享。保险公司的运行...