Companies’ Use of Whistle-Blowing to Detect Fraud: An Examination of Corporate Whistle-Blowing Policies

In order to provide an effective whistle-blowing system, it is expected that companies would provide employees with a high level of disclosure regarding the whistle-blowing process. This study investigates variation in the extent of whistle-blowing disclosures. As a measure of whistle-blowing implementation, this study further examines the provision of a hotline channel. The results suggest that the extent of whistle-blowing disclosures is positively associated with the permissibility of anonymous reporting and organisational support for whistle-blowing, the number of external directors on the audit committee, and the existence of concentrated shareholdings. The mere existence of whistle-blowing disclosures could simply be symbolic. The findings also indicate a greater likelihood of the provision of hotlines when companies are larger in size, have a higher level of current inventory, are cross-listed in the US, and permit anonymous reporting.     

A Contribution to the Theory of Welfare Accounting

A kind of "unified theory" is proposed as a dynamic generalization of the standard consumer-surplus methodology for evaluating welfare changes. The "unified theory" allows rigorous dynamic welfare comparisons to be inferred between any two economic situations—from just knowing current incomes and observing a short-run market demand schedule. Essentially, the change in present discounted future utility is exactly captured by the formula: difference in current income plus consumer surplus . This well-known formula is thereby shown to cover a far wider class of welfare comparisons than is customarily treated in the textbook static case.     

New Zealand's Financial Management System: Implications for Democracy

This article examines the continuing debate about, and inter-relationship between, the NHS, decentralization and local participation. The focus of the article is the experience of decentralization and participation over the past 25 years and, drawing on a new conceptualization of decentralization, it identifies the extent to which the NHS supports decentralized approaches to participation.     

Decentralization, Integration and the Post-Bureaucratic Organization: The Case of R&d

We assess the relevance of theories of increased decentralization in post-bureaucratic organizations for understanding changes in the organization of the research and development (R&D) function. Analysis of a sample of companies shows that R&D is less decentralized than contemporary accounts suggest, and there are few signs of it becoming more decentralized. We present evidence on the organization of R&D in two sectors (mechanical engineering, and food and drink), which suggests: (1) most firms remain centralized in their approach to R&D, relative to other functions; (2) firms that adopt a more decentralized approach to R&D do so for more complex reasons than have been recognized; (3) inter-functional integration remains a critical issue, for centralized and decentralized organizations alike; (4) introducing market principles into R&D brings risks of market failure.     

Understanding the Behavior and Hedging of Segregated Funds Offering the Reset Feature

Abstract

Segregated funds have become an extremely popular Canadian investment vehicle. These instruments provide long-term maturity guarantees and often include complex option features. One controversial aspect is the reset feature, which provides the ability to lock in market gains. Recently, regulators have announced that firms offering these products will be subject to new capital requirements. This paper discusses the effects of volatility, interest rates, investor optimality, and product design on the cost of providing a segregated fund guarantee. For each scenario, the authors provide the appropriate management expense ratio (MER) that should be charged and demonstrate the current liability using a given fixed MER. The paper also investigates intuitive reasons that cause the reset feature to require such a dramatic increase in the hedging costs. Finally, an approximate method for handling the reset feature is presented that can be computed very efficiently, provided the correct proportional fee is charged.