Two Views of Accounting Measurement

The two views to be addressed here are the Chambers/Sydney view that accepts only one measurement method—current net realizable price—and the Staubus/mainstream view that accepts several measurement methods in the same financial report. These two views became well-established in the literature of accounting in the 1960s and their proponents have clung tenaciously to their oft-criticized positions for some forty years. However commendable their original expositions may have been, their continuing existence does no credit to the small coterie of accountants now interested in theory.
This article is aimed at 'narrowing the areas of difference' between adherents to the two views by isolating fundamental bases for them and exposing the reasoning supporting their structures. In a nutshell, they differ in their objectives and they can be expected to survive unless their adherents agree on the objectives of financial reporting.     

REAL OPTIONS WITH COMPETITION AND REGIME SWITCHING

In this paper, we examine irreversible investment decisions in duopoly games with a variable economic climate. Integrating timing flexibility, competition, and changes in the economic environment in the form of a cash flow process with regime switching, the problem is formulated as a stopping‐time game under Stackelberg leader‐follower competition, in which both players determine their respective optimal market entry time. By extending the variational inequality approach, we solve for the free boundaries and obtain optimal investment strategies for each player. Despite the lack of regularity in the leader's obstacle and the cash flow regime uncertainty, the regime‐dependent optimal policies for both the leader and the follower are obtained. In addition, we perform comprehensive numerical experiments to demonstrate the properties of solutions and to gain insights into the implications of regime switching.     

Model misspecification effects for biased samples

The model misspecification effects on the maximum likelihood estimator are studied when a biased sample is treated as a random one as well as when a random sample is treated as a biased one. The relation between the existence of a consistent estimator under model misspecification and the completeness of the distribution is also considered. The cases of the weight invariant distribution and the scale parameter distribution are examined and finally an example is presented to illustrate the results.     

Good practices on cost – effective road infrastructure safety investments

The paper presents the findings of a research project aiming to quantify and subsequently classify several infrastructure-related road safety measures, based on the international experience attained through extensive and selected literature review and additionally on a full consultation process including questionnaire surveys addressed to experts and relevant workshops. Initially, a review of selected research reports was carried out and an exhaustive list of road safety infrastructure investments covering all types of infrastructure was compiled. Individual investments were classified according to the infrastructure investment area and the type of investment and were thereafter analysed on the basis of key safety components. These investments were subsequently ranked in relation to their safety effects and implementation costs and on the basis of this ranking, a set of five most promising investments was selected for an in-depth analysis. The results suggest that the overall cost effectiveness of a road safety infrastructure investment is not always in direct correlation with the safety effect and is recommended that cost–benefit ratios and safety effects are always examined in conjunction with each other in order to identify the optimum solution for a specific road safety problem in specific conditions and with specific objectives.     

Financial crisis and accounting quality: Evidence from five European countries

This study investigates how the economic crisis affects the scope for earnings manipulation and the value relevance of reported financial numbers for companies that are audited by a big 4 auditor. The analysis is focused on Portuguese, Irish, Italian, Greek and Spanish listed companies. The findings show that Portugal, Italy and Greece tend to engage more in earnings management in their effort to improve their lower profitability and liquidity, and accommodate their higher debt and growth. Ireland exhibits less evidence of earnings manipulation, while the findings for Spain are to some extent conflicting. Additionally, the reported financial numbers of Portuguese and Greek companies that are audited by a big 4 auditor were found to be of higher quality before the crisis. In contrast, Irish, Italian and Spanish companies report more value relevant financial numbers during the crisis. The results of this study are particularly useful for accounting regulators when preparing accounting rules that seek to reduce information asymmetry and earnings manipulation and increase the quality of reported disclosures in light of a crisis and for investors that need further assistance for the establishment of a profitable investment strategy in periods characterized by high uncertainty and volatility.     

Alan Gillie,Input-Output Economics.

Turnovsky observes that “the rational expectations hypothesis has had a profound impact on macroeconomic theory and policy during the past decade.” Tracing briefly the evolution of the ideas involved, he concludes that “… a consensus view is emerging that in fact under quite plausible conditions the policy neutrality proposition does not hold; therefore, there is still scope for policy rules to play an important role in stabilizing output.”

The mathematics used in the article is expository rather than analytical, requiring of the reader only somewhat more than the usual amount of persistence, faith in the author's interpretation of the literature, and a willingness to accept the integrity of economic models as representative of the real world. This is “required” reading for those teaching macroeconomics.