Implementing the International Public Sector Accounting Standards for consolidated financial statements: facilitators,benefits and challenges

ABSTRACT

Portugal and Spain have reformed their national standards to adapt them to the International Public Sector Accounting Standards (IPSAS). This paper explains the process of implementing the IPSAS for consolidated reporting in the two countries and the advantages and disadvantages which have emerged. The results highlight the role of the IPSAS in improving the quality and use of consolidated financial statements (CFS) and will be of interest to other countries that are intending to implement the IPSAS.     

Discerning competitive strategy through an assessment of competitive methods

This cross-sectional study of Portuguese service organizations seeks to determine the level of alignment of competitive methods with strategy typologies covered in the business literature. Surveyed firms were asked to indicate their level of utilization of several competitive methods. The results of factor analysis of the survey data indicate that 30 of the 33 competitive methods covered in this study represent seven underlying strategy dimensions. Further analysis revealed that there is some congruence between the derived strategy dimensions and established strategy typologies in the literature. Cluster analysis revealed that each of the responding firms could be classified into one of four hybrid or mixed strategy orientations. However, differences in strategy orientation were not statistically significant in explaining differences in the financial performance of these organizations. These findings are discussed in the light of their implications for strategy development, strategy choices and performance evaluation in the Portuguese service sector.     

Institutional Change of Accounting Systems: The Adoption of a Regime of Adapted International Financial Reporting Standards

Richard Mattessich, New York: Garland Publishing (New Works in Accounting History), 2000, £43.00, xii +179pp. ISBN: 0-8153-3445-1     

Optimal savings with taxable and tax-deferred accounts

We solve and estimate a life-cycle model with earnings risk and liquidity constraints in the presence of tax-deferred retirement accounts (TDAs). We explicitly consider two very different types of households (with TDAs): direct and indirect stockholders. The latter hold stocks only through TDAs and, consistent with the data, save considerably less than the former, who hold stocks both inside and outside these accounts. We find that TDAs promote higher wealth accumulation but only marginally higher net savings. Consumption increases mostly during retirement, as desired, but the effect is largest for those households with higher savings rates already.     

Stability under learning: The endogenous growth problem

A local dynamic analysis, in the neighborhood of the steady state, is developed for one and two-sector endogenous growth models. The problem differs from the conventionally assumed growth setups because one considers that expectations concerning the next period value of the control variable (consumption) are formed through adaptive learning. In such scenario, the found stability conditions reveal that convergence to the unique steady state point is feasible if a minimum requirement regarding the quality of learning in the long run equilibrium is fulfilled. Therefore, stability of growth under learning is dependent on the efficiency with which expectations are generated.     

Tourist expectations and perception of service providers: a Brazilian perspective

Service Business - This research studies the formation of tourist expectations around a tourist destination and the existence of a knowledge gap between this group and perceptions of tourism...     

A green Lewis development model

This paper develops an environmental extension of a Lewis dual economy model, in which the interaction between environmental quality and economic growth, in one of its several dimensions, is explicitly modeled to explore long-run effects of a pollution abatement rule in developing economies. The government requires the modern sector to dedicate a fraction of its output to pollution abatement, with such profitability-reducing fraction being endogenous to the level of environmental quality. Meanwhile, the level of environmental quality positively affects labor productivity, profits and, therefore, savings, which has a positive impact on capital accumulation. It is shown that this pollution abatement requirement, by affecting profitability in the modern sector both negatively and positively, makes for the emergence of an ecological development trap from which a developing dual economy, if left to the free play of its structural forces, never escapes. Fortunately, however, this economy can be released from such a trap not only through a standard Big Push, in the spirit of Rosenstein-Rodan, but also by means of what we call an Environmental Big Push.     

English mercantilist influences on the foundation of the Portuguese School of Commerce in 1759

The Portuguese School of Commerce, founded in 1759, is promoted frequently as the world's first official, government-sponsored school to offer formal instruction in commerce. This paper contends that Sebastião Carvalho e Melo (1699–1782), the Marquis of Pombal, was responsible for the transfer, from England to Portugal, of the educational “know how” instrumental to the School's success. Pombal was influenced by the English mercantilism he observed as the Portuguese ambassador to England (1738–43), particularly proposals by a writer on mercantilism, Malachy Postlethwayt, for academy-based commercial education in England. Another influence on Pombal was former East India Company employee, John Cleland. Pombal's motives were to imitate the success of British mercantilism, develop trade and economic activity in Portugal, and improve and expand Portugal's merchant class.     

Factors affecting success in the professional entry exam for accountants in Brazil

This paper explores factors that have affected the success of candidates in the professional entry exam conducted by Brazil’s Federal Council of Accounting. We analyse results of 18,948 candidates who sat for the exam in 2012, using a logistic regression model and the key indicators used by government to monitor the performance of higher education institutions (HEIs) and the characteristics of candidates. We find that success is related positively to the quality of the HEIs from which candidates graduated and to a measure of student ability that is used widely in Brazil. We find also that males perform better than females and that younger candidates perform better than older candidates. The geographical region of Brazil within which candidates completed the exam was also significant. The insights provided will help public policy-makers in Brazil, and the Brazilian accounting profession, to understand key factors associated with current low pass rates.     

Financial market models with Lévy processes and time-varying volatility

Asset management and pricing models require the proper modeling of the return distribution of financial assets. While the return distribution used in the traditional theories of asset pricing and portfolio selection is the normal distribution, numerous studies that have investigated the empirical behavior of asset returns in financial markets throughout the world reject the hypothesis that asset return distributions are normally distribution. Alternative models for describing return distributions have been proposed since the 1960s, with the strongest empirical and theoretical support being provided for the family of stable distributions (with the normal distribution being a special case of this distribution). Since the turn of the century, specific forms of the stable distribution have been proposed and tested that better fit the observed behavior of historical return distributions. More specifically, subclasses of the tempered stable distribution have been proposed. In this paper, we propose one such subclass of the tempered stable distribution which we refer to as the “KR distribution”. We empirically test this distribution as well as two other recently proposed subclasses of the tempered stable distribution: the Carr–Geman–Madan–Yor (CGMY) distribution and the modified tempered stable (MTS) distribution. The advantage of the KR distribution over the other two distributions is that it has more flexible tail parameters. For these three subclasses of the tempered stable distribution, which are infinitely divisible and have exponential moments for some neighborhood of zero, we generate the exponential Lévy market models induced from them. We then construct a new GARCH model with the infinitely divisible distributed innovation and three subclasses of that GARCH model that incorporates three observed properties of asset returns: volatility clustering, fat tails, and skewness. We formulate the algorithm to find the risk-neutral return processes for those GARCH models using the “change of measure” for the tempered stable distributions. To compare the performance of those exponential Lévy models and the GARCH models, we report the results of the parameters estimated for the S&P 500 index and investigate the out-of-sample forecasting performance for those GARCH models for the S&P 500 option prices.