International Journal of Critical Accounting (22 papers in press)
Ponzi Schemes and California Pyramids Ponzi Schemes and Home-Stake
by Tony Tinker, Adeoye Afolabi, Abdelkader Derbali, Aida Sy
Abstract: In this paper, we investigate the cases of accounting and business fraud known as Ponzi Schemes. These cases studies have been done several decades ago by Professor Tony Tinker. But, notwithstanding Tinkers warning, some corporations and some corporate executives still believe, they are above the law and are using accounting to mislead shareholders and mismanage the corporate finances. The case of Bernard Madoff, a CPA, is an example. rnrn
Keywords: Keywords: Ponzi schemes; critical analysis of accounting; fraud; audits of corporations; California; US economiesrnrn.
A Competition of Crooked Deeds
by Rita Koyame-Marsh
Abstract: The poem focuses on fraud and corruption in the global market of sports. It shows the pervasive state of payment of bribes, money laundering, and accounting fraud. All parties involved seem to be motivated by greed and lack of business ethics. The global nature of the criminal activities is unsettling. A reform of the internal management process is necessary in addition to the institution of an external third party monitoring system.
Keywords: Corruption; Accounting Fraud; bribes; sport management; international sport.
Role of Doctoral Education in Shaping Minds and Thinking: Reflection on My Doctoral Education at Case Western Reserve University
by Khalid Aladeem
Abstract: Earning a doctorate entails the learning of skills necessary to investigate the underlying truth of issues and exposure to epistemology that portrays reality. Subscribing to a certain epistemology and training plays a pivotal role in the perception students develop once they become an accounting academic. Doctoral studies, generally, focus on pre-setting students minds to utility and convincing them of the usability of prescribed meta-theory. However, preparing a thoughtful and independent scholar mandates multiplicity in research methodologies and methods to broaden the academics ontological horizon. Thus, in addition to discussing the philosophies of running a PhD program in accounting, in this essay, I highlight a PhD program that broadens students perspectives.
Keywords: Accounting doctoral education; Paradigm; Positive accounting science; Publishing; Journals; Multiplicity in Research Methodologies and Methods; Philosophy; Research; Kuhnian interpretation; Case Western Reserve University.
Irreconcilable differences? The FASBs Conceptual Framework and the public interest.
by Wm. Dennis Huber
Abstract: Recently, the Financial Accounting Standards Board (FASB) revised its Conceptual Framework. The FASBs Conceptual Framework is intended to serve the public interest by providing structure and direction to financial accounting and reporting to facilitate the provision of unbiased financial and related information [which] helps capital and other markets to function efficiently in allocating scarce resources in the economy and society (emphasis added). However, it is not the mission of either the FAF (Financial Accounting Foundation, the parent of the FASB), or the FASB to serve the public interest. Therefore, whether the FASBs Conceptual Framework can serve the public interest as intended, or whether the Conceptual Framework is reconcilable with the public interest is questionable.rnThis paper explores the question of whether the Conceptual Framework is compatible with the public interest. The question is important to consider because if the Conceptual Framework cannot serve the public interest as intended, then it will be necessary to revise the Conceptual Framework in order to achieve its intended purpose of serving the public interest.
Keywords: FASB; conceptual framework; public interest.
The role of accounting conservatism on the relationship between ownership structure and firm performance
by Allam Mohammed Hamdan
Abstract: The study aims to discover the moderating role of accounting conservatism in the relation between ownership structure and performance of Gulf Cooperation Council (GCC) firms. Sample of the study comprised of 215 firms from six GCC countries during the period 2013-2015. Ownership structure was explained through three dimensions: ownership concentration, managerial ownership, and institutional ownership. As for performance, it was measured by two variables: ROA and Tobins Q. The study used panel regression and realized that accounting conservatism plays a positive role in reducing the negative impact of ownership concentration on firm performance and consolidating the positive role of managerial and institutional ownerships in firm performance. The increase of accounting conservatism in the financial reports of GCC firms reduced asymmetrical information and the intensity of agency problems, besides providing credibility to investors in financial reports.
Keywords: Ownership structure; Firm performance; Accounting conservatism; Agency theory; Gulf Cooperation Council (GCC) countries.
Dynamic development of carbon reduction strategy and performance measurement systems
by Winnie O'Grady, Sharlene Sheetal Biswas
The association between Corporate Social Responsibility and Dividend pay-outs
by Charl De Villiers, Diandian Ma
Impact of Corporate Social Responsibility Disclosures on Financial Performance A Jordanian Case Study
by Huthaifa Hazaima, Mary Low, Jackie Allen
The Development of Carbon Management as a Strategic Practice: An Australian Study
by Sumit Lodhia
A Judicial Approach to Accounting and Accountability for Sustainability: A New Zealand Case Study of the Impacts of Commercial Hydroelectric Operations
by Murugesh Arunachalam, Andrea McLachlan
Climate change accounting: The challenge of uncertainty in Pacific Islands
by Umesh Sharma, Vida Botes, Dani Foo, Ram Karan, Ruvendra Nandan
Great Expectations: A Regulatory Promise Unfulfilled
by Murray Bryant, Mary Claire Mahaney
Abstract: The primary goal of the U.S. Securities and Exchange Commission (SEC) is to protect investors by deterring wrongdoing that results in investor loss. The SEC tries to deter wrongdoing in two ways: by inhibiting it through threat of penalty, and by signaling illegal behavior. If the SEC does not hold individuals accountable for illegal behavior, or if it is unclear what actions are illegal, wrongdoing will continue.rnrnConsent decrees have become the SECs enforcement norm in that through negotiation both the defendant and the agency avoid costs and save time. However, the consent decree, by its use of neither-admit-nor-deny provisions, has meant that individuals responsible for wrongdoing have largely avoided personal accountability.rnrnMany firms have responded to this lack of personal accountability by introducing clawback provisions into executive contracts. Empirical evidence has shown that boards largely have not activated clawbacks. We argue that those whose job it is to be accountable for wrongdoing be held personally responsible by boards of directors who, by virtue of their own fiduciary responsibilities, must answer to shareholders.rnrnNo longer can the market and Main Street rely on regulation alone. Boards must design executive contracts that clearly state the rationale for clawbacks and a means by which the amount of clawbacks can be established that is both fair and in the best interests of the corporation.
Keywords: SEC; clawbacks; consent decrees—neither admit nor deny; corporate governance; directors—fiduciary responsibilities; wrongdoing; riskrn rn.
How controlling shareholders tunnel under a strong legal system: a Hong Kong case
by Yuying Xie
Abstract: It is widely believed that common-law legal systems are more protective of minority shareholders than are code-law legal systems. However, even in countries with high quality common-law legal systems and accounting standards, suspicious transactions between a firm and its controlling shareholder are reported every now and again. This study examines an alleged tunnelling transaction in Hong Kong market and aims to answer that how controlling shareholders circumvent a strong legal system to tunnel resources from firms. The results show that controlling shareholders carefully choose the timing and the content of disclosure to affect views of investors. The close relationship between controlling shareholders and inside directors also plays a key role in wining majority votes. The findings suggest that the legal systems per se, without an appropriate property rights structure, may not provide effective investor protection as expected.
Keywords: tunnelling; legal system; accounting standard; property rights; controlling shareholder; investor protection; Hong Kong; case study.
Empirical evidence on the validity of using accounting research subjects' self-reported GPA as a proxy measure of actual GPA
by Robert Marley, Steve Platau
Abstract: This study investigates the association between accounting subjects' self-reported GPA and their actual GPA. Using accounting seniors as a proxy for accounting research subjects, we administered a survey instrument to obtain self-reported GPAs and then compared subjects' self-reported values to official GPA records. Finding a strong correlation, this study provides empirical evidence suggesting that accounting subjects' self-reported GPA is a valid proxy for accounting subjects' actual GPA. We also find evidence that some accounting subjects systematically misreport their GPA predictable ways. This study should be of interest to accounting behaviourists, who frequently rely on accounting subjects' self-reported GPA in place of obtaining accounting subjects' actual GPA. The practical implications of this study's results are discussed.
Keywords: behavioural accounting research; classical test theory; grade point average; GPA; measurement validity; proxy measures; self-reported GPA.
The disconnect between tax laws, public opinion and taxpayer compliance: a study of the taxation of gambling winnings
by Karl Bryan Menk, Brian Nagle, David L. Coss
Abstract: The taxation of gambling winnings was considered unfair to taxpayers and regressive. The tax reporting intentions of casino patrons are rarely based on legal requirements, but instead on the amount of winnings and perception of tax laws. The underreporting of tax liabilities contribute to the 'tax gap'. This study examines materiality, casino patrons' tax knowledge, perception of taxation and perception of taxation of winnings as predictors of tax reporting intentions. Using regression, these variables contribute to predictive models of tax reporting intentions. The study found that materiality, overall tax perception and tax knowledge were significant predictors. The perception of the taxation of winnings was not a significant to the model. This study adds to tax evasion and compliance literature by providing information about the reporting intentions of casino patrons. A unique dataset using respondents that have not previously been included in tax studies was developed for the study.
Keywords: tax evasion; tax laws; taxpayer compliance; gambling income; tax perception.
A reconcilable duo
by Amelia Correa, Romar Correa
Abstract: Passari and Rey (2015) have proposed that the impossible trinity no longer applies and offer, instead, an 'irreconcilable duo'. That is, independent of the exchange rate regime, it is not possible to sustain autonomous monetary policy and perfect capital mobility at the same time. We suggest otherwise within a stock-flow-consistent framework. Identities and definitions are manipulated to write down a series of dynamic systems models. The policy parameters are the tax rates in the 'domestic' and the 'foreign' country, the rates of interest on government bills, the rates of interest charged by commercial banks at home and abroad, and the cash ratios in both countries. Different institutional mixes offer different combinations of the control variables to deliver stability of the state vector.
Keywords: a possible trinity; domestic monetary and fiscal coordination; international policy coordination.
Tax avoidance and earnings management of firms in Ghana: does the funding strategy matter?
by Mohammed Amidu, Sally Mingle Yorke
Abstract: The agency perspective of tax avoidance suggests a complementary relationship between tax avoidance and earnings management. Thus, this paper seeks to evaluate how the firm's financial policy affects the relationship between corporate tax avoidance (CTA) and earnings management (EM) using a sample of 119 firms from emerging and developing countries over a four-year period 2010-2013. We employ system methods of moments (GMM) and find that the financing structure of a firm plays little role on the firm's incentives to engage in avoidance activities and/or manage their earnings. The results imply that monitoring managerial diversionary behaviour by relying on external monitoring mechanism provided by debt holders does not lead to a reduction in EM associated with increased tax avoidance activities.
Keywords: earnings management; corporate tax avoidance; CTA; funding strategy; developing country; Ghana.
Special Issue on: ACCOUNTING AND MANAGEMENT IN ITALY PAST, PRESENT AND FUTURE
MANAGEMENT LESSONS FROM ITALY: A BIBLIOMETRIC ANALYSIS OF TOP ITALIAN BASED SCHOLARS AND STUDIES PUBLISHED FROM 1985 TO 2015.
by Giacomo Marzi
Turnaround Management and Systemic Approach: A Historical Review of the Florentine Management School Contribution
by Massimiliano M. Pellegrini
Evolution of the Substance Over Form Principle in the Italian GAAP from a Comparative and International Perspective
by Francesco De Luca
Goodwill and value creation: insights from Italian pioneers
by Salvatore Ferri
The impact of accrual accounting adoption on budgeting system: evidence from Italian universities
by Antonella Paolini