Is More Information a Good Thing? Bias Nonmonotonicity in Stochastic Difference Equations

It is shown that the bias of estimated parameters in autoregressive models can increase as the sample size grows. This bias is also a nonmonotonic function of the largest autoregressive root, contrary to what asymptotic approximations had indicated so far in the literature. These unusual results are due to the effect of the initial sample observations that are typically neglected in theoretical asymptotic analysis, in spite of their empirical relevance. Implications for practical economic modelling are considered, including a comparison of the likely inaccuracies of parameter estimates in alternative models based on competing macroeconomic theories.     

The Relationship Between Government Policy and Financial Performance： A Study on the SMEs in Iraq

The study examined the relationship between government policies and financial performance in small and medium enterprises （SMEs） in Iraq. The study aimed at establishing the relationship between government policies and financial performance of SMEs. In the Republic of Iraq, it is estimated that 99% of the business entities are SMEs. They also contribute to GDP and provide employment. Notwithstanding the recognition of the important roles SMEs play in Iraq, their development is largely constrained by a number of factors, such as the existence of laws, regulations, and rules that impede the development of the sector. The study provided some relevant recommendations to policy makers, development agencies, entrepreneurs, and SME managers to ascertain the appropriate strategy to improve the SME sector in Iraq.     

An Empirical Examination of the Pricing of Seasoned Equity Offerings: A Test of the Signaling Hypothesis

This paper tests the predictions made by Signaling Theory against the competing Price–Irrelevance Hypothesis (Eckbo and Masulis, 1992). Signaling Theory suggests that the issue price of a security provides a signal of quality of the issuing firm. In contrast, the Price–Irrelevance Hypothesis suggests that equity pricing does not possess information content. This paper investigates the pricing of seasoned equity offerings by examining the role of firm quality and relative firm valuation on issue price discounts. Additionally, this paper investigates the relationship between the issue price discount and the market reaction at the issuance of seasoned equity offerings. The results indicate that firm quality does not have a significant impact on the degree of price discounting by the issuing firm. Relative firm market valuation does appear to be a determinant of the magnitude of discounting in setting the issue price. This paper also provides evidence that seasoned equity offerings firms that provide a lower issue-price discount experience a lower stock-price decline following the issuance as compared to firms offering a higher price discount.     

Navigating Ambivalence: Perceived Organizational Prestige–Support Discrepancy and Its Relation to Employee Cynicism and Silence

Drawing on the social identity literature, this study offers theoretical arguments and empirical evidence to understand reactions to divergent perceptions of organizational external prestige (PEP) and organizational support (POS) – two crucial bases of employees’ social worth. Across three studies, using both experimental and field data, we find that PEP‐POS discrepancy contributes to employees’ perceptions of organizational cynicism and silence behaviour, especially when PEP is high and POS is low (rather than the reverse). Consistent with our social identity perspective, we find that ambivalent identification, that is, the simultaneous identification and disidentification of an individual with an organization, is a key mediating mechanism that transfers the interactive relationship of PEP and POS to cynicism and silence. These findings contribute to a more comprehensive understanding of the dynamics of individuals’ social worth at work.     

An unprecedented privatisation of mandatory standard-setting: The case of European accounting policy

The EU-member States have long intended to harmonise their respective accounting rules in order to facilitate the comparison between European companies. This process was brutally accelerated by a 2002 regulation announcing that as of 2005, listed companies would be required to comply with the accounting standards enacted by the IASB (International Accounting Standards Board), a private body which, until then, had no public mandate.After having tried to harmonise internally the respective standards of its members, the EU has thus decided to resort to private subcontracting, an even more puzzling decision when one realizes that at the time, the EU had simply no statutory control means on the IASB.Building on this striking episode of privatisation of the regulatory process, we first examine the structure and governance of the IASB, and the process leading to the transplantation of its norms into EU law. In a second part, we argue that while diverse, the reasons behind such relinquishment of public authority lie primarily within the EU itself. In a third part, we show that in the area of accounting, such transfer of competences went well beyond known forms of delegation to private sector. In a final part, we discuss the subsequent—and so far successful attempt of the EU to reassert its authority as well as its agenda in this area.     

Can Auditors Predict the Choices Made by Other Auditors?

An implicit assumption of prior literature on strategic behavior of auditors is that auditors know the preferences of their colleagues. In this study, we conduct an experiment to investigate the validity of this assumption. In our experiment, we match a manager with a pair of top and mediocre audit seniors, as assessed by their firm. Each auditor predicts the choices that will be made by other auditors on two tasks that differ in their level of ambiguity. Our results show no difference in the accuracy among managers, top seniors, and mediocre seniors when they predict the choices made by specific individual auditors for both tasks. When predicting the number of managers and seniors who will choose a specific option on the high-ambiguity task, managers outperform top seniors, who in turn outperform mediocre seniors. For the low-ambiguity task, we find no difference among managers, top seniors, and mediocre seniors. Our results provide some limited support for models of strategic auditor behavior, and indicate that the ability to predict the choices of others is a dimension of an auditor's expertise.     

Monitoring basic characteristics of various economic-geographic regions for economic integration possibility

Motivation of virtually all regional economic integration initiatives has been prospect of enhanced economic growth. Lower transaction costs for business, lower risks associated with investment, expansion of markets, pooling of regional resources, better utilization of economies of scale in production, and more efficient allocation of resources, are part of benefits of economic integration. However, it is indisputable that in order to achieve some of these benefits, strong national economic policies will need to be made by collecting accuracy and pure information about the possible economic partner region. Therefore in this study, the basic characteristics of various economic-geographic regions such as demographic trends, economic performance, structure of trade, technology diffusion ＆ creation and energy sources are investigated for economic integration possibility of these regions.     

Forum: Teaching Professional Judgement in Accounting

In May 2005, the University of Lethbridge and the Institute of Chartered Accountants of Alberta sponsored the Banff Education Conference entitled Professional Judgement: Can It Be Taught? The opening forum at the conference was a panel discussion on the topic presented by academics and practitioners. The session included an overview of the research literature on expertise as a basis for considering the nature of professional judgement and the implications of various attributes of expertise for accounting education. Past practices and current pressures facing practitioners in exercising good judgement were addressed, including increased complexity of transactions and decreased time to assess problems. The forum also included a discussion of the need for educators to help guide students to develop an understanding of a problem rather than simply seek the answer. There was a discussion of particularly challenging topics for students to grasp in a principlesbased environment. The forum culminated in a question‐and‐answer session involving the panelists and the attendees at the conference. This paper summarizes the presentations and the discussion that took place during the forum. En mai 2005, l'Université de Lethbridge et l'Institut des comptables agréés de l'Alberta commanditaient le congrès de Banff sur l'éducation ayant pour thème la question suivante: le jugement professionnel s'enseigne‐t‐il? Le forum d'ouverture a consisté en une table ronde sur cette question au cours de laquelle enseignants et praticiens ont effectué un survol des publications de recherche sur la compétence qui a servi de point de départ à l'étude de la nature du jugement professionnel et des répercussions de diverses caractéristiques de la compétence sur la formation comptable. Les panélistes se sont penchés sur les méthodes passées et sur les pressions auxquelles sont actuellement soumis les praticiens dans l'exercice d'un jugement éclairé, notamment les difficultés occasionnées par la complexité accrue des transactions et la réduction du temps dévolu à l'évaluation des problèmes. Les panélistes ont également discuté de la nécessité pour les enseignants d'amener les étudiants à mieux comprendre les tenants et les aboutissants d'un problème plutôt que de simplement en chercher la solution. Ils ont également discuté d'enjeux particulièrement importants pour les étudiants dans un environnement axé sur les principes. Le forum s'est terminé par une période d'échange entre panélistes et participants au congrès. Le texte qui suit est un résumé des exposés présentés dans le cadre de ce forum et des discussions qui s'y sont déroulées.