The effectiveness of a complaint-based ethics enforcement system: Evidence from the accounting profession

Many professions, in order to enforce their ethics codes, rely on a complaint-based system, whereby persons who observe or discover ethics violations may file a complaint with an authoritative body. The authors assume that this type of system may encourage ethical behavior when practitioners believe that a punishment is likely to result from a failure to adhere to the rules. This perceived likelihood of punishment has three components: detection risk, reporting risk, and sanction risk. A survey of potential violation witnesses related to the accounting profession revealed that the profession's complaint-based enforcement system may not provide practitioners with the necessary disincentive to refrain from code violations.S. Douglas Beets is an Assistant Professor of Accounting at Wake Forest University. He is also a Certified Public Accountant, licensed in the state of Tennessee. Dr. Beets served on the accounting staffs of Armco Steel Corporation, Eastman Kodak Company, and Russell and Purkey, CPAs. Recently, he was selected as a faculty intern for Arthur Andersen and Co.Larry N. Killough is the Peat Marwick Professor of Accounting at Virginia Polytechnic Institute and State University. Dr. Killough is a Certified Public Accountant and served on the staff of Arthur Young and Company. His articles have appeared in numerous academic and practitioner journals.     

Optimal Tax Deductions for Net Losses Under Private Insurance With an Upper Limit

Kaplow (1992b) shows that governments should not provide a tax deduction for net losses when a private insurance contract is available. However, his findings rest on the assumption that the private insurance is proportional coverage. We find that Kaplow's conclusions may not hold when the private insurance contract contains an upper limit. The findings of our article show that Kaplow's conclusions are sensitive to the assumption that the insurance contract is available in the private market.     

Market Power in the Philippine Retail and Processed Food Industry

Various models have been employed to analyze market power in the food industry but none has explored combining these models to reinforce their strengths and minimize their weaknesses. This article illustrates an application of these models in a multistage framework using the case of the Philippine retail and processed food industry. Price transmission is examined in the first stage of analysis using cointegration and price asymmetry models. Conjectural variation and bargaining models are employed in the second and third stages of analysis. Results indicate that market power exists in industries where price transmission is asymmetric.     

Planning through the Socialization of Property Rights: The Community Reinvestment Act

This paper reassesses themes developed in the authors' Economic Abundance: An Introduction (Dugger and Peach 2009) in the context of the so-called "Great Recession." In this paper, we make several arguments. First, there is always a substantial gap between actual production and the capacity of the economy to produce. Second, the great recession widened the production gap, but did not change the basic relationship. Third, the anti-recessionary policies, adopted during the recession, were anti-abundance policies, for the most part. Fourth, almost by definition, short-term (cyclical) fiscal and monetary policy regimes do not address longer-term structural issues or the creation of widely shared abundance. Last, but not least, despite the great recession, and the myopic policy responses it generated, the abundant economy — based on a largely undamaged joint stock of knowledge — remains a genuine possibility.     

Measuring productivity in an imperfect world

Most measures of multifactor productivity (MFP) assume constant returns to scale and perfect competition. Using a general aggregate production function together with duality theory and allowing for the possibilities of disequilibrium, markups and economies of scale, the study derives a more generalized MFP measure. The model was used to assess the economic performance in US manufacturing for the 1949 to 1988 period. The results suggest that scale and markups have substantial power in explaining MFP growth for all periods and that half of the measured MFP growth (as measured within the conventional framework) comes from biases due to scale economies, market power, and interaction effects.     

Incentives for experimenting agents

We examine a repeated interaction between an agent who undertakes experiments and a principal who provides the requisite funding. A dynamic agency cost arises—the more lucrative the agent's stream of rents following a failure, the more costly are current incentives, giving the principal a motivation to reduce the project's continuation value. We characterize the set of recursive Markov equilibria. Efficient equilibria front‐load the agent's effort, inducing maximum experimentation over an initial period, until switching to the worst possible continuation equilibrium. The initial phase concentrates effort near the beginning, when most valuable, whereas the switch attenuates the dynamic agency cost.     

Measuring the Costs of Custom Products through Better Technology Utilization

This case study details the process of determining the economic feasibility of implementing lean manufacturing in a small mass customization manufacturing company in the medical industry. The case study investigates the information required for a lean implementation and proposes a number of changes to the work procedures (including instrumentation) to obtain the data. A large number of enterprise resource planning systems were evaluated for their suitability to track data in the mass customization environment and the top candidates are compared in the article. The current labor and materials costs are estimated to determine the magnitude of potential savings to support the changes. Based on the analysis the recommended solution has a payback period of approximately two years.     

BUYING LOCALLY

‘‘Buy local” arrangements encourage members of a community or group to patronize one another instead of the external economy. They range from formal mechanisms such as local currencies to informal “I'll buy from you if you buy from me” arrangements and are often championed on social or environmental grounds. We show that in a monopolistically competitive economy, buy local arrangements can have salutary effects even for selfish agents immune to social or environmental considerations. Buy local arrangements effectively allow firms to exploit the equilibrium price–cost gap to profitably expand their sales at the going price.     

Achieving destination competitiveness: an importance–performance analysis of Serbia

As a relatively new and under-researched tourism destination, Serbia provides an interesting context to assess destination competitiveness in conditions of global environmental changes and the additional challenges of transition from a socialist economy to a market-based economy. This article uses importance–performance analysis (IPA) to assess the importance of different activities to underpin tourism development in Serbia, as well as the industry's perceived performance in respect of these activities. There are a number of areas in which Serbian tourism industry considers itself to be underperforming in the implementation of activities to maintain destination competitiveness. This article analyses these results in detail using IPA as a diagnostic tool. Particular attention is paid to investigating the implications of the findings for both destination managers and private tourism operators in Serbia that can assist them to develop a focused action agenda to achieve and maintain destination competitive advantage. The approach can be used in other destinations to assess tourism ability to meet the challenges of global trends.