A true and fair view of the principles/rules debate

The nature of 'reality' in the context of financial reporting is, at best, a generally agreed, inter-subjective human construction. This article considers the nature, and alternative perceptions, of the notions of principles and rules, exploring the idea of true and fair view presentation as a meaningful requirement in its own right, and as an override. An overview of the standard setting process in the United States from the historical perspective identifies factors fostering the rules-based accounting system. We then analyse recent developments in the United States regarding the adoption of a principles-based accounting system, and in the U.K. arising from the introduction of IAS in Europe. Both support the conclusions that: The purpose of financial reporting is to give an understanding, which is not misleading, of the underlying economics of an enterprise; the 'underlying economics' represents an inherently subjective construct; rules, by themselves, are inadequate, whether or not they are based on principles; major and fundamental differences exist between various players on the world regulatory scene; much of the debate at the regulatory and policy level is at best vague and confused, more likely disingenuous, possibly intellectually dishonest; interested parties will interpret words, concepts and agreements differently; significant limitations for international standardization are implied by the above points. Further, no one player, construct or culture can impose its will at a global level.
In 1942 the U.S. SEC aptly captured the appropriate sentiment: 'The basic question [is] whether the financial statements performed the function of enlightenment, which is their only reason for existence'.     

Consumer Adaptation Strategies: From Austrian Shilling to the Euro

On 1st January 2002, in 12 countries of the European Union, euro notes and coins replaced existing national currencies. The currency changeover required citizens to adapt in various ways. They had to learn to handle new coins and notes, and evaluate prices in the new currency. Data on how these tasks were performed by Austrians are presented. In particular, Austrian consumers applied four different strategies to establish price intuition for the euro: a conversion strategy, an intuitive strategy, an anchor strategy, and a marker value strategy. Data on these strategies show that their application varies across socio-demographic characteristics, differs with purchase situations, relates to euro attitudes, and changes over time. Although the introduction of the euro took place about 5 years ago, the adaptation process is still ongoing.     

China＇s Role in Purchasing Chain

In current world market,＂Made-in-China＂often means good price and competitive quality.In terms of China＇s trade pattern,more than half of Chinese exporting products belong to processing trade industry according to the demands and requirements of international orders.On the purchasing chain,China is learning from its international partners.Safety and quality always tops all issues.[第一段]     

Disclosing Celebrity Endorsement in a Television Program to Mitigate Persuasion: How Disclosure Type and Celebrity Credibility Interact

This experiment (N = 165) examined the effects of two aspects of in-program celebrity endorsement on brand attitudes and product claim acceptance: credibility of the celebrity and the effects of disclosure types. Although there is an increasing call for endorsement disclosures, the effects of these disclosures remained unstudied. This study, conducted in The Netherlands, showed that disclosure of the persuasive intent of in-program celebrity endorsements only resulted in reduced acceptance of product claims among viewers who did not perceive the celebrity in the endorsement as credible. This study has important implications for legislators.     

Maximum an Mundhygiene

Mund- und Zahnpflege – darauf kommt es an - Vor allem schwer pflegebedürftige Patienten sind bei der Mundhygiene auf professionelle Unterstützung angewiesen. Bezüglich der notwendigen und sinnvollen Ma?nahmen gibt es jedoch viele Unsicherheiten.     

Sustainability practices: trends in New Zealand businesses

This paper reports on the sustainability practices of New Zealand businesses based on two national surveys and a series of focus groups and interviews. There was an average increase of 10% in the number of companies adopting environmental practices from 2003 to 2006. There was less of an increase for social practices, although still more commonly adopted by companies than environmental practices. Values and beliefs of management were the overwhelming driver for the adoption of sustainability practices with reputation and brand also significant drivers. Costs, management time, and knowledge/skills were the three most commonly reported barriers to adoption of sustainability initiatives. The implications of the study are that for New Zealand business, there is a strong link with the business case for sustainability. For policymakers interested in achieving sustainability goals, the results suggest that a ‘soft’ approach to business practices may be in order in New Zealand. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

‘Do versus Buy’ Decisions in the Demand for Knowledge Intensive Business Services

The search for the maximum use of scale and agglomeration economies and the need to operate firms in the most flexible way have provided a strong impulse for companies to increase their use of external intermediate services. Because of their strategic role, the use of business services that are intensive both in labour qualification and in technological requirements is key for these policies. The purpose of this paper is to analyse the patterns followed by companies in the two relevant decisions on this issue: firstly, whether to use knowledge intensive business services or not and, secondly, whether (and to what extent) to buy these services from another firm or to provide them inside the organisation. In both cases, we intend to identify the factors that affect the ‘do versus buy’ decision with respect to total KIBS as well as particular categories. A specific feature in our study is that it focuses on the behaviour of firms working in a region without a well-developed supply of KIBS. Applying discrete response models to the data obtained in a survey elaborated by the authors, the most relevant variables for the use of KIBS are satisfaction with previous outsourcing experiences and location of the firm in a large urban centre, but they do not affect their external provision. The size of the firm, its export orientation and its technological complexity have opposite effects on use and outsourcing.     

Macroeconomic implications of financial policy

This paper studies the effects of financial policy in a model with heterogeneous agents, incomplete markets and portfolio restrictions. For an economy calibrated to replicate key aspects of the U.S. wealth distribution, we find that the quantitative effects of financial policy are relatively small. The reason is that the households determining aggregate behavior are relatively well insured and can therefore offset the actions of the firm by modifying their portfolio allocations. However, financial policy has important effects on asset prices. Whereas a higher level of debt in the capital structure of the firm introduces more risk into the economy by increasing the volatility of the equity return, it enhances the liquidity of households by increasing the supply of bonds. In an economy with a substantial amount of heterogeneity, this last effect dominates and leverage leads to a decrease in the equity premium. This is in contrast to the findings in representative agent models, in which leverage unambiguously increases the premium through a higher equity return volatility.     

Knowledge codification and technological innovation success: Empirical evidence from Spanish biotech companies

This paper analyzes the influence of knowledge codification on technological innovation in a sample of Spanish firms from the biotechnology sector. It tests how codification affects firms' development of incremental and radical innovations and their attempts to keep their investments exclusive by building barriers to imitation and to substitution. The work also considers the incorporation of legal protection measures. The results show, on the one hand, that knowledge codification is only beneficial for developing incremental innovations and, on the other, that firms must incorporate systems of legal protection into their codification practices if they want to keep their innovations exclusive.