The Recognition and Timing of Deferred Tax Liabilities

Abstract:   This paper examines the characteristics of firms that account for deferred tax liabilities related to government investment grants under an extended adoption timing period. Not only the recognition but also the timing decision is associated with changes in future performance and changes in the debt structure. Recognisers outperform non‐recognisers in the future, while early recognition is related to post recognition performance but only for those firms that currently perform well. Changes in the balance sheet structure are also related to both decisions. Firms with recent increases in the debt level tend to postpone recognition, while currently well‐performing firms that increase their future debt level are less likely to recognise deferred taxes.     

Corporate moral agency: A case from literature

I analyze a well-known and moving passage from John Steinbeck's novelThe Grapes of Wrath. This passage provides an excellent illustration of one of the central questions about corporate moral agency: Is corporate moral agency anything over and above the agency of individual human beings? The passage in question is a debate about whether or not the actions of a particular company are anything over and above the actions of individual human beings.     

Voting Rights and Market Reaction to Dual Class Common Stock Issues

This paper examines the return of the original class of common stock around the announcement of the creation of a second class of stock. As in previous studies, this one finds a generally ambiguous market reaction on the first public announcement. However, this paper offers new evidence that both the voting rights and the compensation for loss of voting rights are important determinants of the market's reaction. Specifically, it demonstrates that a second class stock issue that contains no compensation for the lost voting rights results in negative returns. When the original stockholders are compensated for lost voting rights, they experience positive abnormal returns.     

THEORY AND PRACTICE IN THE CLASSROOM: A REPEATED GAME OF MULTIMARKET OLIGOPOLY

This article describes a repeated game of multimarket contact, designed to be played throughout an entire term. Besides enjoying reciprocal advantages in their home markets, firms are perfectly informed after every round about each other's decisions. For most of the game, it appears there is always a future in which to punish deviations, and (with the game's parameters) zero-cost punishments can always be implemented. Thus the game provides all the elements for an escape from the prisoner's dilemma. Theoretical foundations, predictions, and some results are also discussed.     

Risk Management by Securities Settlement Agents

As developing countries search for ways to promote capital formation through the establishment of organized exchanges, they will need to pay more attention to the role of risk management in the securities settlement process. The delivery-versus-payment (DVP) agents that facilitate the process of exchanging securities for funds in most world markets have both the incentive and comparative informational advantage to monitor, measure, and manage risks inherent in the securities settlement system.
Unfortunately, most DVP agents have accomplished this task to date through the cumbersome use of position and net debit limits, capital requirements, and collateral requirements. Such limits and requirements are almost everywhere based on relatively arbitrary criteria that may have no relation to the actual replacement cost, principal, or liquidity risk of the transaction, portfolio, or participant on which they are imposed.
To remedy this shortcoming in the current state of risk management at DVP agents, this article holds out the possibility of integrated, comprehensive risk management processes that emphasize and rely on forward-looking measures of risk for individual brokers and across brokers. Many risk measures could serve the settlement agent's purposes, including "value at risk" (or "VaR"), "below target risk,""below-target probability," and "downside semi-variance." The actual summary risk measure used for risk monitoring and control is not as important as the methodology used to generate that risk measure. "The goal of such a process," as the authors put it, "is to ensure that the risks to which a settlement agent and its residual claimants are exposed are those risks to which the agent's shareholders think they are and want to be exposed."     

The Internet, Intel and the Vigilante Stakeholder

The Internet furore over Intel's flawed Pentium chip provides an important case study of the ethical ambiguity of internet communications and the legitimacy of certain forms of "electronic activism". Joseph Badaracco, Jr., is John Shad Professor of Business Ethics at the Harvard Business School and his co-author is a former Research Associate at Harvard and currently on the editorial staff of Inc . magazine.     

Critical thinking and communication skills: Integration and implementation issues

This article describes issues associated with implementing an integrated approach to critical thinking and communication skills within accounting courses. The article builds on the work of Hirsch and Collins (1988) and discusses the following issues: (a) the collaboration of accounting and English faculty, (b) types of assignments, (c) assignment design, (d) the feedback process, (e) revisions in courses to accommodate a communication skills program, and (f) resources and motivation. The examples offered are from management/cost accounting courses, but our experience suggests that such an integrated approach to teaching critical thinking and both oral and written communication skills works well within most accounting and other business courses. However, individual programs will need to be tailored in order to address the issues defined here in ways that best fit their mission, goals, and resources.     

AN EVALUATION OF PROCESS‐ORIENTED SUPPLY CHAIN MANAGEMENT FRAMEWORKS

Supply chain management (SCM) is implemented by integrating corporate functions using business processes within and across companies. Several process‐oriented frameworks for SCM have been proposed but only two of these provide sufficient detail to enable implementation. We evaluate the Supply‐Chain Operations Reference (SCOR) framework and The Global Supply Chain Forum (GSCF) framework using four criteria and identify their relative strengths and weaknesses.     

University-Provided Retirement Planning Support and Retiree Financial Satisfaction During Retirement: Differences by Gender, Job Classification, and Planning Behavior

Sound financial planning and financial advice is necessary to achieve retirement income adequacy. The shift from defined benefit to defined contribution pension plans and the recent bankruptcy of Enron Corporation underscore the importance of managing retirement accumulation and liquidation risks. This study analyzes the effectiveness and adequacy of institutional-provided information and advice on employees' retirement planning decisions and their satisfaction with financial resources during retirement. Results suggest that retirement planning should begin earlier in an employee's career and that employer-provided retirement information and advice is a highly valued service. Gender, planning practices, job classification, and age are all significant predictors of satisfaction with financial resources during retirement. Targeting women and union employees with retirement information and advice that focuses on allocating contributions using a balanced portfolio approach should result in significant increases in satisfaction with financial resources during retirement. Regulatory objectives should focus on reducing retirement accumulation and liquidation risks, improving the delivery of professional financial advice to plan participants, and expanding qualified retirement plan choice for all labor force participants. To encourage employer participation in employee retirement planning, employers acting in "good faith" should be federally protected from liability for providing retirement planning information and advice to employees.