Assurance Services and Associated Research Opportunities

Discussions on research opportunities in the assurance services area have so far originated in North America. Two of the better known research perspectives have been those presented by Elliott (1995) and Kinney (1998). These have tended to emphasise the changing landscape for assurance services and the changing relationship between the assurance provider and the user. This paper provides a further consideration of future research opportunities from both an economic and behavioural perspective.     

Children's participation in household tasks as portrayed by national television advertisements in the U.S.A.

This paper provides a content analysis of portrayals of children's participation in household tasks in national television advertisements within the U.S.A. The analysis indicates that children are rarely shown working in the home, even when they could help. Furthermore, parents are shown routinely performing tasks children could have done for themselves. The resulting stereotypes are clearly drawn: children are shown to be non-productive and parents are portrayed as servants. Such portrayals may be counter-productive in the context of growing time pressures in the household and the potential benefits that families might realize by working together towards common goals.     

Goodwill — An Example of Puzzle-Solving in Accounting

The nature of goodwill continues to be misunderstood by most accountants and confusion surrounding the measurement and reporting of goodwill persists. The rejection of official accounting standards on goodwill is a common occurrence. A dynamic open system perspective is used in this paper to re-examine the nature of goodwill. It is found that a meaningful economic interpretation can be developed for internally generated goodwill but not for 'purchased goodwill'. There is an inability to identify the stream of benefits specifically associated with goodwill arising on acquisition.     

Expectations of Exchange Rates and Differential Inflation Rates: Further Evidence on Purchasing Power Parity in Efficient Markets

The paper tests the null hypothesis of ex ante purchasing power parity. The empirical evidence obtained is inconsistent with the null for major industrialized countries over the current floating exchange rate regime. Expected nominal exchange rate changes appear to deviate systematically from expected inflation rate differentials over the same holding period even though real exchange rate changes appear to be serially uncorrelated. This supports the presence of time-varying risk premia in foreign exchange markets and real determinants of exchange rate movements as suggested by equilibrium theories of international asset markets.     

An Analysis of Intertemporal Pricing for Forward Foreign Exchange Contracts

An asset-pricing model with an unobservable time-varying risk premium is used to price forward foreign exchange contracts. Specifically, the term spectrum of forward foreign exchange contracts is examined in order to focus on country-specific and maturity-specific information. The testable restrictions imposed by the model are consistent with both cross-country and cross-maturity forward contracts except at the short end of the maturity spectrum for cross-country forward exchange rates. This indicates that the intertemporal model is relatively robust in valuing forward contracts of different maturities and for different exchange rates but that it may fail when there are significant short-term country-specific shocks.