Retirement planning guidelines: a Delphi study of financial planners and educators

Retirement planning guidelines were determined using a Delphi research design among 188 financial planners and educators. Consensus was found for using a 4% inflation rate, an 8.5% rate of return on investments, and a replacement ratio of 70–89% of current income when making retirement projections. Nine-tenths of the experts agreed that families should have achieved 50–60% of their retirement savings goal by age 50 and 85–90% by age 60. Regarding asset allocation, over 60% felt it was prudent to start moving toward more conservative investments about 3–5 years before retirement. Recommendations were developed on the proportion of growth-oriented equities to hold at various points prior to and after retiring. While the level of consensus was high, occupational and gender differences were noted.     

Consumer perceptions of alternative dispute resolution mechanisms in financial transactions

This research examines consumer perceptions of choices of alternative dispute resolution mechanisms (ADRM) in resolving financial services and product dissatisfaction. The paper begins with a detailed analysis of various dispute resolution mechanisms available to customers and firms in the United States. It then proceeds to highlight the salient features of ADRM. A national random sample of US consumers is used to obtain data on customer perceptions of ADRM and possible choices in using ADRM in conflict resolution. Results indicate that as the cash at risk increases, consumers indicate a preference for litigation over alternative forms of dispute resolution. The findings have strategic implications for strategy formulation in marketing of financial services and product as well as improving customer satisfaction through amicable resolutions of customer complaints.     

Cultural differences and judgment in financial reporting standards

This instructional resource provides you with the opportunity to explore how cultural differences can impact financial reporting outcomes through the judgments accountants make when interpreting and applying accounting standards. It is intended to draw your attention and awareness to culture’s impact on financial reporting judgments since financial reporting is becoming increasingly international in scope. The instructional resource begins by discussing financial reporting standards and cultural differences and then moves into presenting three accounting scenarios. The three scenarios (lease classification, contingent liability, and revenue recognition) examine how applying accounting standards requires judgment and how cultural differences can influence accountants’ judgments and the resulting financial reporting outcomes. In each scenario, you have the opportunity to identify and consider how different cultural dimensions could impact cross-cultural financial reporting outcomes. The instructional resource content allows you to consider the challenges in using and applying a uniform set of global accounting standards that require judgment across cultures.     

Individual investor perceptions and behavior during the financial crisis

Combining monthly survey data with matching trading records, we examine how individual investor perceptions change and drive trading and risk-taking behavior during the 2008–2009 financial crisis. We find that investor perceptions fluctuate significantly during the crisis, with risk tolerance and risk perceptions being less volatile than return expectations. During the worst months of the crisis, investors’ return expectations and risk tolerance decrease, while their risk perceptions increase. Towards the end of the crisis, investor perceptions recover. We document substantial swings in trading and risk-taking behavior that are driven by changes in investor perceptions. Overall, individual investors continue to trade actively and do not de-risk their investment portfolios during the crisis.     

International financial reporting standards and experts' perceptions of disclosure quality

From 2005, over 7,000 listed firms in the European Union and many more around the world are required to adopt International Financial Reporting Standards (IFRS). The introduction of a uniform accounting regime is expected to ensure greater comparability and transparency of financial reporting around the world. However, recent research has questioned the quality of financial statements prepared under IFRS standards, particularly in the presence of weak enforcement mechanisms and adverse reporting incentives ( Ball et al. , 2003 ). In this paper, we assess the quality of the financial statements of Austrian, German and Swiss firms which have already adopted internationally recognized standards (IFRS or U.S. GAAP). The study makes use of available disclosure quality scores extracted from detailed analyses of annual reports by reputed accounting scholars ('experts'). This work complements other contemporary research on the quality of IFRS financial statements where the properties of earnings are used as an evaluation metric ( Barth et al. , 2005 ). Our evidence shows that disclosure quality has increased significantly under IFRS in the three European countries we analyse. This result holds not only for firms which have voluntarily adopted IFRS or U.S. GAAP, but also for firms which mandatorily adopted such standards in response to the requirements of specific stock market segments. Although we cannot establish direct causality due to the inherent self-selection issues for most of our sample firms, the evidence shows that the quality of financial reports has increased significantly with the adoption of IFRS.     

Impact of financial and multinational operations on manager perceptions of dividends

We survey managers of firms listed on the Toronto Stock Exchange about their views on dividends. We find the perceptions of factors that influence dividend policy differ between managers of financial and non-financial firms. Industry classification also affects how managers view statements about the dividend pattern, dividend setting process, dividend policy and firm value, residual dividend theory, and explanations for paying dividends. However, we find weak, if any, multinational operations effect on manager perception of dividends. We conclude that researchers investigating dividends should partition the data by industry type and perhaps other firm characteristics to better understand the dividend puzzle.     

Generational Accounting in New Zealand: Is There Generational Balance?

This paper uses a recently-developed technique, calledgenerational accounting, to assess New Zealand's long-term fiscalposition. Generational accounting has become a popular alternativeto traditional deficit accounting, because it provides a moreaccurate picture of the intergenerational distribution of fiscalburdens and the associated macroeconomic effects, particularlyin the presence of demographic transitions and large unfundedpublic transfer programs. Past studies have suggested the existenceof significant generational imbalances in several countries.We find that behind New Zealand's projectedbudget surpluses, there is indeed a sound fiscal picture. Evenunder the base case scenario, which entails substantial short-runtax reductions, the burden on future generations (relative toincome) is projected to fall slightly below that on current newborns.New Zealand appears to have avoided the large fiscal imbalancesplaguing the United States and other OECD countries not by placinglarge tax burdens on young current generations, but by limitingthe size of its commitments.     

Sectorial differences in corporate financial behavior: an international survey

This survey-based research deals with sectorial differences in terms of three main corporate finance policies: investment, financing and dividend. We used a multinational survey that was distributed to the chief financial officers in five countries: the US, the UK, Germany, Canada and Japan. We found statistically significant differences between the nine sectors examined in terms of all the three major financial policies. These differences may be due to the following: (1) the unique financial needs and operating conditions of each sector and (2) the imitation effect according to which firms imitate the financial behavior of other firms in their sector. We found that the use of established investment appraisal techniques is most common in the construction sector and least common in the technology sector. The IRR is the most frequently used investment appraisal technique for the entire survey sample, especially in the communication sector; however, it is rarely used in the technology sector. The technology sector has the lowest level of financial leveraging, while the finance sector has the highest level. A constant sum per share is the most common dividend policy in the following sectors: retail and wholesale, services, manufacturing and transport. On the other hand, construction, energy, communication and technology sectors are characterized by a high percentage of firms that do not pay dividends at all.     

The IASB standard-setting process: Participation and perceptions of financial statement users

The interests of users of financial statements are, in theory, paramount to accounting standard-setters. However, there is a dearth of research into users' participation in, and influence on, the process of setting accounting standards. The enhanced status now accorded to the International Accounting Standards Board (IASB) offers the opportunity to examine these issues in a new regulatory context. This study reports the results of a questionnaire survey of the perceptions of, and participation in, the IASB process of a sample of UK investment management firms. The findings suggest that these firms' participation is not as low as is often inferred from the public record of comment letters. In particular, a considerable number of firms participate through representative report user organisations such as the Investment Management Association. Other findings suggest that the major factor inhibiting investment firms from participating is the cost of lobbying, not complacency that the IASB is ‘on their side’ and will naturally safeguard their interests. Moreover, the respondents consider the accounting profession and the European and US accounting standard-setters to be the dominant interest groups in the IASB standard-setting process.     

The impacts of racial differences on demand for financial assets

The purpose of this study is to examine the impacts of racial differences on the demand for financial assets by individuals. Differences in the demand for financial assets by various racial groups would have important implications not only for monetary policies but also for aggregate studies based on the representative agent model. According to the Gorman form of commodity demand, the validity of the representative model is critically dependent on the assumption that marginal propensities to hold financial assets are constant across individuals regardless of their socio-economic characteristics. Findings in this study indicate that the elasticity of wealth, marginal propensities, and the elasticity of user cost vary substantially among Whites and African Americans.     

The tone of financial news and the perceptions of stock and CDS traders

This paper applies novel sentiment analyses to Reuters news to study stock and CDS traders' differential interpretations of financial news. We construct sentiment measures to identify which news content influences investors' behavior and create dynamic word lists that reflect the divergent viewpoints of CDS and equity investors. We find that (1) equity and CDS traders focus on different content within the same news; (2) traders particularly disagree with respect to news concerning debt topics, especially regarding M&A activity; (3) the Great Recession impacted debt news content and altered the typical inverse relationship between equity and CDS markets on news days.     

Publication outlets for healthcare financial research: A study of journal quality perceptions

Publications in high quality journals often serve to indicate research productivity. However, many top‐rated journals infrequently publish cross‐disciplinary topics such as healthcare financial management (HFM). So, academic administrators and HFM researchers find it challenging to evaluate the quality of the work. Journals open to publishing HFM articles are distributed across multiple disciplines. Each field has its own journal rankings typically focused on their primary subject area. Starting with prior literature, we form a cross‐disciplinary journal list and solicit preliminary input from editors, associated editors, reviewers, and authors. We then solicit confirmatory ranking input from independent researchers in a holdout sample.     

The global financial crisis: Explaining cross-country differences in the output impact

What explains differences in the crisis impact across developing countries and emerging markets? Using cross-country regressions to assess the factors driving the growth performance in 2009 (compared to pre-crisis forecasts for that year), we find that a small set of variables explain a large share of the variation in the growth impact. Countries with more leveraged domestic financial systems, stronger credit growth, and more short-term debt tended to suffer a larger effect on economic activity, although the relative importance of these factors differs across country groups. For emerging markets, this financial channel trumps the trade channel. For a broader set of developing countries, however, the trade channel seems to have mattered, with more open countries affected more strongly and those exporting food commodities being less hard hit. Exchange-rate flexibility helped in buffering the impact of the shock, particularly for emerging markets. There is also some evidence that countries with a stronger fiscal position prior to the crisis were impacted less severely. We find little evidence for the importance of other policy variables.     

How do legal differences and experience affect financial contracts?

We analyze venture capital (VC) investments in twenty-three non-US countries and compare them to US VC investments. We describe how the contracts allocate cash flow, board, liquidation, and other control rights. In univariate analyses, contracts differ across legal regimes. However, more experienced VCs implement US style contracts regardless of legal regime. In most specifications, legal regime becomes insignificant controlling for VC experience. VC firms that do not use US style contracts fail significantly more often, even controlling for VC experience. The results are consistent with US style contracts being efficient across a wide range of legal regimes.     

Investigating international differences in financial reporting: Data problems and some proposed solutions

This paper is designed to assist researchers in international accounting by analysing a number of problems which they might meet. In particular, we focus on problems related to selecting the sample, specifying the variables, using databases and hand-collecting data. We provide examples of the problems from prior literature and, on some topics, by supplying original data. We suggest solutions to the problems discussed in the paper.     

Millionaire investors: financial advisors,attribution theory and gender differences

To date little attention has been paid to how social cognitive bias can influence how financial advisors interpret and respond to the needs of millionaire investors, and if this varies depending on the gender of the investor. This research investigates whether experienced professional financial advisors who work with millionaire investors make different attributions for the control and knowledge that investors have of their investments, and if they make different investment portfolio recommendations to equivalent male and female investors. Using methodology novel to finance, this vignette-based study that controls for gender finds evidence that professional financial advisors judge millionaire female investors to have less control over their investment portfolios relative to men. Empirical results also show that female advisors judge women to be less knowledgeable about investments than men. Despite such perceptual differences, advisors recommend equally risky portfolios to male and female investors. These results have implications for wealth management institutions and the monitoring of financial advisors for millionaire individuals.     

Cyber dudes and cyber babes: Gender differences and internet financial services

Previous research contended that men and women have different information processing tendencies, and suggested that they react differently to certain features of written communication created by financial services direct marketers. Women respond well to bright colours, photographs and images and men respond well to bold headlines, bullet points and graphs. Responses can also vary according to the amount of perceived risk involved in the transaction. This exploratory study attempted to contextualise some of these issues in terms of gender and explored how men and women used the internet, their responses to certain types of website and whether there were gender implications for web page design.     

Reporting of book-tax differences for financial and tax purposes: A case study

Recent events in financial and tax accounting have brought the issue of financial accounting for tax expenses to the forefront of both the accounting profession and academia. Complexities abound on both sides, from ASC 740/FAS 109 and ASC 740-10/FIN 48 issues on the financial accounting side to the Schedule M-3 and Schedule UTP reporting requirements on the tax side. This complexity has created a vacuum in accounting curricula, as bits and pieces of the total puzzle are covered in the intermediate accounting and tax courses, without a comprehensive, integrated review in one place.     

Commentary: A proposal for theoretical models of stakeholder perceptions of a new financial reporting system

This commentary explores the article by Fontes et al. published in this issue of Accounting Forum. They argue that the scope of IFRS continues to widen across the world, using a number of social science disciplines to discuss stakeholder perceptions of change. The commentary uses Hegel's Science of Logic to situate their arguments through four key theoretical approaches that are prominent in the accounting literature. Ultimately, this has the potential to position IASB frameworks in such a way as to challenge the economic and neoliberal logic on which modern accounting is based.