Margin Requirements in the Security Market and Public Policy

The paper examines the problem of losses beyond margin in the stock market and Us probable solution assuming that the present regime of margin regulations continues. In Canada, the severity of losses in the stock market has been enhanced by inadequate legislation in the margin-related area, ambiguous rules and regulations of the stock exchanges in this regard, and conflicting court decisions in establishing liabilities for losses due to violations of margin regulations. This paper will focus on the nature of the problems in the above three areas and suggest measures, largely legislative in nature, to reduce the losses incurred by the public through trading in margin accounts. The analysis of losses in margin accounts is supported by two court cases arising out of the 1980–82 recession and high interest rates during this period. Résumé Cette étude examine le problème des pertes boursières engagées au-delà de la marge et sa solution probable en supposant que le présent régime de réglementation des marges se poursuive. Au Canada, l'importance des pertes boursières est accentuée par une législation relative aux marges inadéquate, une réglementation boursière ambiguë et des décisions judiciaires contradictoires quant à la responsabilité des pertes causées par des transgressions des règles sur les marges. La présente étude vise à éclaircir la nature des problèmes dans les trois secteurs précédement mentionnés et à suggérer des mesures de nature principalement législative afin de réduire les penes engagées par le public dans les comptes de marge. L'analyse de ces pertes est appuyée ici par deux causes judiciaires survenues pendant la période de la récession en 1980–82 et caractérisée par taux d'intérět élevés.     

The role of accountancy firms in tax avoidance: Some evidence and issues

As entrepreneurial businesses, accountancy firms have supplemented their traditional trade of selling accounting and auditing services by diversifying into a variety of other products and services. They have developed organisational structures and strategies to sell tax avoidance schemes to corporations and wealthy individuals. The sale of such services shifts tax burdens to less mobile capital and less well-off citizens. It also erodes the tax base and brings the firms into direct conflict with the state. This paper provides some evidence of the strategies and tactics used by accountancy firms to sell schemes that enable their clients to avoid corporate, sales and payroll taxes. Such strategies stimulate reflections upon the possible trajectories in the development of accountancy firms and social consequences of their trade.     

The adoption of international accounting standards by small and closely held companies: evidence from Bahrain

This study examines the accounting practices and the degree of adoption of international accounting standards (IASs) by small and closely held companies in Bahrain. It finds that 86% (31) of the 36 companies responding to the questionnaire applied IASs and they considered IASs to be very relevant for them. All firms prepare balance sheets, and the majority prepares income statements and cash flow statements. They also duly audit these statements. The data collected also revealed that the quotient influence on whether or not a firm adopted IAS was exerted by their external auditors. External auditors exerted the greatest influence on getting firms to adopt IASs. Banks and company partners were the primary users of company financial statements; inventories, depreciation, disclosure on financial statements, and the presentation of current assets and liabilities. The main IASs followed by a majority of firms are those pertaining so. Some of the standards were considered totally irrelevant, contrary to the prevailing idea that adoption of IASs creates an information overload for small and closely held companies. The results of this study indicate that a majority of our respondents did not find that it was costly to adopt or interpret IASs. Those few firms that experienced some difficulties sought clarification from their external auditors. About 84% of those who adopted IASs strongly agreed that using IASs improves their organization's ability to financial assistance from the banking sector. Also, about 90% of the respondents fully agreed that IASs help to achieve the objectives and improve the effectiveness of financial reporting.     

Financial crisis and the silence of the auditors

Against the backdrop of the current financial crisis, this paper seeks to stimulate debates about contemporary auditing practices. It notes that many financial enterprises have sought state support within a short period of receiving unqualified audit opinion. Auditors collected large amounts in audit and non-audit fees. The events raise questions about the value of company audits, auditor independence and quality of audit work, economic incentives for good audits and the knowledge base of auditors.     

Notes on the structure of production: Market oriented and Soviet-type economies

Zusammenfassung Bemerkungen zur Produktionsstruktur: Marktorientierte Volkswirtschaften und solche sowjetischen Typs. — Der Aufsatz berichtet über einen Vergleich der Produktionsstruktur von 21 entwickelten L?ndern, von denen einige marktwirtschaftlich orientiert und andere vom sowjetischen Typ sind. Die Autoren lehnen das Verfahren, mittels der Triangulation einer Matrix die intersektoralen Abh?ngigkeiten zu studieren, ab und verwenden statt dessen Rasmussens Analyse mit Hilfe von ?Schlüssel?- Sektoren. Sie erarbeiten einen Gesamtindex der strukturellen Interdependenz, der ihnen eine direkte und konsistente Rangordnung der Industrien unter den untersuchten Volkswirtschaften erlaubt. Von den verschiedenen L?ndern sind die Vereinigten Staaten am st?rksten integriert, w?hrend die sowjetische Volkswirtschaft am wenigsten integriert ist. Au\erdem weisen die überwiegend marktwirtschaftlich orientierten Volkswirtschaften einen h?heren Interdependenzgrad als die sozialistischen Volkswirtschaften auf. Unabh?ngig vom Typ der Volkswirtschaft sind Landwirtschaft, Nahrungsmittelindustrie und Maschinenbau in fast allen L?ndern die führenden Sektoren. Die Autoren finden keine Unterstützung für Colin Clarks Klassifikation der Industrien.

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Résumé Notes sur la structure de production: Economies orientées au marché et de type soviétiques. — Le papier reporte une comparaison de la structure de production sur vingt et un pays développés, quelques orientés au marché et quelques de type soviétique. L’auteur rejete la triangulation de l’approche de matrice à l’étude de l’interdépendance intersectorielle en faveur de l’analyse de Rasmussen par des secteurs de ?clé?. Les auteurs présentent un indice global de l’interdépendance structurale qui les permet de classer les industries parmi les économies analysées directement et consistantement. Parmi les pays différents l’économie des Etats Unis est laquelle qui est la plus intégrée, et l’économie soviétique est laquelle qui est la moins intégrée. Aussi les prédominantement économies de marché ont un degré plus haut de l’interdépendance en comparaison avec les économies socialistes. Mais indépendamment du type de l’économie, l’agriculture, la préparation alimentaire et la manufacture des machines sont les secteurs dominants dans presque tous les pays. Les auteurs ne trouvent pas un support pour la classification des industrie de Colin Clark.

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Resumen Notas sobre la estructura de la producción. Economías de tipo soviético y de orientación de mercado. — En el artfculo se hace un reportaje sobre la comparación de la estructura de producción a través de 21 países desarrollados, algunos de orientación de mercado y otros de tipo soviético. Los autores rechazan la triangularización del acercamiento matricial para el estudio de la interdependencia interseccional en favor del análisis de Rasmussen a traves de sectores ?claves?. Los autores proveen un index general de la interdependencia estructural que les permite confeccionar un ordenamiento de industrias entre las economías analizadas. De los distintos países, los EEUU constituyen la economía más integrada y la economía soviética, la menos integrada. También las economías predominantemente de mercado muestran un mayor grado de interdependencia comparadas con las economías socialistas. Pero irrespectivamente del tipo de la economía, la agricultura, el procesamiento de alimentos y la construcción de maquinaria son los sectores lídres en casi todos los países. Los autores no encuentran sustento para la clasificación de industrias de Colin Clark.

     

Income redistribution,interdependent consumers’ preferences and aggregate consumption

Conclusion In the above discussion we have taken a particular view of the emulation process, its relation to the movement from one level of living to another level of living and the process of such a movement itself. One may disagree with some elements in this framework but this analysis suggests, nonetheless, that a number of factors are involved in determining the effect of income redistribution on aggregate consumption expenditure. The manner and the force of emulation, the number of consumers in various income groups, their nearness to another level, the extent to which they increase or decrease their savings or consumption as a result of income redistribution appear to be some of the important factors. Unless one has sufficient information on these factors it seems difficult to conclude one way or the other about the effect of income redistribution on aggregate consumption. It becomes still more difficult to come to a definite conclusion if we consider that the consumers desire not only a better standard of living but also larger financial reserves.     

Mediating Interests: The Accountancy Bodies' Responses to the McFarlane Report

There is now a considerable literature on the significance for accountants of their being accepted as a profession. The claim that they have regard to ‘the public interest’ in their activities is a central feature of the accountancy bodies’ claims to being accepted as a ‘profession’. This, they argue, distinguishes them from trade associations and trade unions. The claim is significant for both their economic and symbolic value. This paper examines the accountancy bodies’ claims by examining their responses to the 1992 publication of a discussion document The Future of Auditing by the Auditing Practices Board. Responses by four major professional bodies are analysed in detail. It is concluded that most of them do not attempt to redeem the claim to have regard to the public interest. Instead, they are mainly concerned to promote their members' private interests, frequently by advocating policy measures that will advance their own members' interests at the expense of those of other accountancy bodies. The significance of the contradiction between the transparency of this advocacy and the considerable effort expended in claiming to act in the public interest is discussed.     

Cross-sectional association between abnormal returns and firm specific variables

Abnormal returns (market model prediction errors) are the subject of many event studies in accounting and finance literature. Conditional on the event of interest, researchers have recently used cross-sectional regressions to examine relations between abnormal returns and firm specific variables. This paper demostrates that non-constant variences and covariances in market model residuals across firms introduced bias in the estimated slope coefficients of the independent variables, i.e., the expected signs of the estimated slope coefficients can be predicted a priori. A method is develope to removed the bias in the estimated slope coefficiets and is found to be effective. This method explicitly takes the dependence among abnormal returns across firms into account. Methods that assume abnormal returns across firms to be independent do not control for such bias.