Eduardo Flores, Elionor Farah Jreige Weffort, Aldy Fernandes da Silva and L. Nelson G. Carvalho
The purpose of this paper is to investigate whether macroeconomic crises are a motivational factor for earnings management practices by the companies listed in the capital markets…
Abstract
Purpose
The purpose of this paper is to investigate whether macroeconomic crises are a motivational factor for earnings management practices by the companies listed in the capital markets of Brazil and the USA.
Design/methodology/approach
The sample consisted of 7,932 firm-quarter observations from listed Brazilian companies and 99,931 from listed US companies, covering a 13-year period (1998-2010). The authors developed regression models for the panel data, taking into account discretionary accruals as an earnings management proxy (dependent variable), while crises were regarded as a macroeconomic factor (dummy variable of interest). Also considered were return on assets, market-to-book ratio, size, leverage, foreign direct investment, income taxes, quarters, and sectors, which were treated as control variables.
Findings
The results corroborate the conceptual issues involved in undertaking this study, and they demonstrate that in periods of macroeconomic crises, companies are more motivated to employ earnings management practices both in Brazil and in the USA.
Originality/value
Unlike previous studies, the model developed in our research includes multiple macroeconomic crises simultaneously. Furthermore, it was applied in two markets at different stages of development and operating in distinct institutional contexts, which indicates its viability for replication for a large number of countries.
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Fernando Chiqueto, Ricardo Luiz Menezes Silva, Guilherme Colossal and L. Nelson G. Carvalho
– The purpose of this paper is to seek to clarify whether the fair value (FV) of Brazilian banks securities is relevant for investors in times of crisis.
Abstract
Purpose
The purpose of this paper is to seek to clarify whether the fair value (FV) of Brazilian banks securities is relevant for investors in times of crisis.
Design/methodology/approach
The information gathered for 14 quarters, 2007-2010, of a cross-sectional sample of banks was used for the purpose of explaining the value of shares based on amortized cost and the FV of securities, the book value of equity and the financial crisis. The return on shares was regressed based on the realized and unrealized gains and losses on securities, adjusted income and the crisis.
Findings
The results indicated that the FV is relevant. The results also corroborated the hypothesis that, during the crisis, there was a decrease in the relevance of the FV of securities since the accounting practices adopted in Brazil did not specify how to estimate FV, as required by SFAS 157, neither did they require disclosure of the FV hierarchy, as established International Financial Reporting Standards (IFRS) 7. It was concluded that FV has incremental explanatory power over equity, but not over amortized cost. Furthermore it possible to conclude that quarterly unrealized gains and losses on securities are not relevant, which could be explained by possible tax planning practices, since, in Brazil, the mark-to-market adjustment of securities is only deductible, or taxable, when settled. However, the realized and unrealized gains and losses are value-relevant during the period of financial crisis.
Originality/value
This study provides empirical evidence about the relevance of FV during the financial crisis in Brazil.
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The strategic management literature emphasizes the concept of business intelligence (BI) as an essential competitive tool. Yet the sustainability of the firms’ competitive…
Abstract
The strategic management literature emphasizes the concept of business intelligence (BI) as an essential competitive tool. Yet the sustainability of the firms’ competitive advantage provided by BI capability is not well researched. To fill this gap, this study attempts to develop a model for successful BI deployment and empirically examines the association between BI deployment and sustainable competitive advantage. Taking the telecommunications industry in Malaysia as a case example, the research particularly focuses on the influencing perceptions held by telecommunications decision makers and executives on factors that impact successful BI deployment. The research further investigates the relationship between successful BI deployment and sustainable competitive advantage of the telecommunications organizations. Another important aim of this study is to determine the effect of moderating factors such as organization culture, business strategy, and use of BI tools on BI deployment and the sustainability of firm’s competitive advantage.
This research uses combination of resource-based theory and diffusion of innovation (DOI) theory to examine BI success and its relationship with firm’s sustainability. The research adopts the positivist paradigm and a two-phase sequential mixed method consisting of qualitative and quantitative approaches are employed. A tentative research model is developed first based on extensive literature review. The chapter presents a qualitative field study to fine tune the initial research model. Findings from the qualitative method are also used to develop measures and instruments for the next phase of quantitative method. The study includes a survey study with sample of business analysts and decision makers in telecommunications firms and is analyzed by partial least square-based structural equation modeling.
The findings reveal that some internal resources of the organizations such as BI governance and the perceptions of BI’s characteristics influence the successful deployment of BI. Organizations that practice good BI governance with strong moral and financial support from upper management have an opportunity to realize the dream of having successful BI initiatives in place. The scope of BI governance includes providing sufficient support and commitment in BI funding and implementation, laying out proper BI infrastructure and staffing and establishing a corporate-wide policy and procedures regarding BI. The perceptions about the characteristics of BI such as its relative advantage, complexity, compatibility, and observability are also significant in ensuring BI success. The most important results of this study indicated that with BI successfully deployed, executives would use the knowledge provided for their necessary actions in sustaining the organizations’ competitive advantage in terms of economics, social, and environmental issues.
This study contributes significantly to the existing literature that will assist future BI researchers especially in achieving sustainable competitive advantage. In particular, the model will help practitioners to consider the resources that they are likely to consider when deploying BI. Finally, the applications of this study can be extended through further adaptation in other industries and various geographic contexts.
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Noel Scott, Brent Moyle, Ana Cláudia Campos, Liubov Skavronskaya and Biqiang Liu
This article is a shortened version of a Master’s dissertation for the Liverpool University Centre for Archive Studies. It deals with issues of appraisal. Such issues involve…
Abstract
This article is a shortened version of a Master’s dissertation for the Liverpool University Centre for Archive Studies. It deals with issues of appraisal. Such issues involve fundamental concepts on what records are, why they are kept, and their life cycle. The answers to these questions were sought and found in the history of archives, and in the specialist literature. The theory and the methodology adopted were then applied to a case study of a recently established organisation in Lisbon, which has, at the core of its business, information in electronic format.
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Barbara de Lima Voss, David Bernard Carter and Bruno Meirelles Salotti
We present a critical literature review debating Brazilian research on social and environmental accounting (SEA). The aim of this study is to understand the role of politics in…
Abstract
We present a critical literature review debating Brazilian research on social and environmental accounting (SEA). The aim of this study is to understand the role of politics in the construction of hegemonies in SEA research in Brazil. In particular, we examine the role of hegemony in relation to the co-option of SEA literature and sustainability in the Brazilian context by the logic of development for economic growth in emerging economies. The methodological approach adopts a post-structural perspective that reflects Laclau and Mouffe’s discourse theory. The study employs a hermeneutical, rhetorical approach to understand and classify 352 Brazilian research articles on SEA. We employ Brown and Fraser’s (2006) categorizations of SEA literature to help in our analysis: the business case, the stakeholder–accountability approach, and the critical case. We argue that the business case is prominent in Brazilian studies. Second-stage analysis suggests that the major themes under discussion include measurement, consulting, and descriptive approach. We argue that these themes illustrate the degree of influence of the hegemonic politics relevant to emerging economics, as these themes predominantly concern economic growth and a capitalist context. This paper discusses trends and practices in the Brazilian literature on SEA and argues that the focus means that SEA avoids critical debates of the role of capitalist logics in an emerging economy concerning sustainability. We urge the Brazilian academy to understand the implications of its reifying agenda and engage, counter-hegemonically, in a social and political agenda beyond the hegemonic support of a particular set of capitalist interests.