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1 – 10 of over 2000S.P.J. von Wielligh and J.P. van den Berg
The objective of this study was to identify the impact of a perceived inadequacy of authoritative South African financial reporting guidance for long‐term insurers, on the basic…
Abstract
The objective of this study was to identify the impact of a perceived inadequacy of authoritative South African financial reporting guidance for long‐term insurers, on the basic financial statement characteristic of comparability. The authors attempted to identify areas of non‐comparable presentation and disclosure and to suggest relevant guidance. To assess comparability, the financial statements of five insurers were evaluated using a checklist specifically developed for this study. This process identified seven main categories of significant non‐comparable presentation and disclosure practices. Solutions were proposed for these areas, based inter alia on existing international literature and guidance.
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Audits of long‐term insurers are complex, high‐risk engagements. The auditor’s consideration of materiality has a direct impact on the quality of such audits. So far, however, no…
Abstract
Audits of long‐term insurers are complex, high‐risk engagements. The auditor’s consideration of materiality has a direct impact on the quality of such audits. So far, however, no research has been published on the application of materiality in audits of long‐term insurers. This study examines various aspects of planning materiality in the audits of listed South African long‐term insurers on the basis of responses to a questionnaire, taking into account issues identified from the literature reviewed. A number of recommendations are made on the basis of the findings. Largely on the basis of the results of this study, the South African Institute of Chartered Accountants has commissioned a project to revise existing guidance for auditors.
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Boris Urban and Eric Wood
Innovation is a multi-dimensional phenomenon and at the firm level incorporates the behaviors and interactions of individuals and various organizational factors. Not only are…
Abstract
Purpose
Innovation is a multi-dimensional phenomenon and at the firm level incorporates the behaviors and interactions of individuals and various organizational factors. Not only are entrepreneurship and innovation complementary, but a combination of the two is vital to organizational success. The purpose of this paper is to respond directly to research calls to provide an integrated model of corporate entrepreneurship (CE) which encompasses both organizational- and individual-level factors.
Design/methodology/approach
A model was formulated in accordance with the study hypotheses and statistically tested. A sample of 784 responses from the South African financial sector was surveyed. Structural equation modeling (SEM) was used to test for model fit.
Findings
The results support the hypotheses that it is through the interaction of the firm (in establishing corporate building blocks), and the individual (through entrepreneurial alertness and metacognitions) that CE activity is realized. SEM results showed that entrepreneurial alertness had the greatest direct path impact on CE.
Practical implications
Managers need to understand and leverage corporate building blocks in a manner that influences employee’s respective levels of entrepreneurial alertness and metacognitions in order to foster CE.
Originality/value
The study is one of the first to model and empirically test causal links between corporate building blocks, entrepreneurial alertness, metacognitions, and CE at the firm level. Moreover, the study takes place in an under-researched African context, allowing for fresh insights to evolve.
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Gaining an understanding of the business and accounting processes of the insurers concerned is a key element of the complex, high‐risk external audits1 of listed South African…
Abstract
Gaining an understanding of the business and accounting processes of the insurers concerned is a key element of the complex, high‐risk external audits1 of listed South African long‐term insurers. In this empirical study, the value chain concept developed by Porter in the 1980s is customised for listed South African long‐term insurers. Furthermore, the accounting support processes that affect the high‐risk components of policy liabilities and the related earnings of these insurers are identified. The generic value chain and list of accounting support processes developed in this study are useful tools to assist auditors in gaining an understanding of the business and accounting processes of these insurers.
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As a result of the significant influence of actuaries on policy liabilities and the related earnings in the financial statements of a listed South African long‐term insurer…
Abstract
As a result of the significant influence of actuaries on policy liabilities and the related earnings in the financial statements of a listed South African long‐term insurer, auditors encounter a number of key issues and considerations relating to the incorporation of actuarial expertise in the audit process. Guidance for auditors to address these issues and considerations is discussed in this study. The guidance was developed as a significant element of a wider research project, the objective of which was the development of a best practice framework for the formulation of overall audit strategies for insurance contracts and the related earnings of listed South African long‐term insurers.
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The objective of this research is to identify those industry‐specific elements of the financial statements of listed South African long‐term insurers that are potentially exposed…
Abstract
The objective of this research is to identify those industry‐specific elements of the financial statements of listed South African long‐term insurers that are potentially exposed to the highest level of inherent risk. Auditors of these companies should focus on these elements to ensure effective and efficient audits. An exploratory literature study was conducted. A questionnaire was subsequently used to identify significant accounts potentially exposed to the highest level of inherent risk. Relative levels of inherent risk were measured using a “Relative Inherent Risk Index” that had been specifically developed as part of this research. The research indicates that policy liabilities and operating profit from long‐term insurance activities are potentially exposed to a significantly higher level of inherent risk than the other industry‐specific elements of the financial statements of long‐term insurers.
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The purpose of this study was to determine current practices for two salient aspects of the audits1 of listed South African long‐term insurers by empirically analysing prevailing…
Abstract
The purpose of this study was to determine current practices for two salient aspects of the audits1 of listed South African long‐term insurers by empirically analysing prevailing practices. First, current practices for the composition of the audit teams responsible for these audits are determined. Thereafter current practice is determined for the proportion of audit time spent by the different specialists on audit teams on the audit of the high‐risk components of policy liabilities and the related earnings. When allocating audit staff and establishing continuing professional development plans for staff the auditors of all listed and unlisted South African long‐term insurers could use the findings of the study as benchmarks.
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The purpose of this paper is to study the sensitivity of foreign exchange exposure through the cash flow estimation method using a sample of 59 UK insurance companies. This…
Abstract
Purpose
The purpose of this paper is to study the sensitivity of foreign exchange exposure through the cash flow estimation method using a sample of 59 UK insurance companies. This approach allows a decomposition of exposures into short- and long-term components. By revealing the nature of their cash flow exposures, companies can evaluate the effectiveness of their hedging programmes and focus their hedging efforts according to the nature of their exposures.
Design/methodology/approach
Martin and Mauer’s (2003, 2005) three-stage model is used to estimate foreign exchange rate transaction exposures for the sample of 65 UK insurance companies over the period 2004-2013. However, this paper has one important innovation to this method. Instead of the model used in previous papers, the paper uses a model from the actuarial field that was proposed by Blum et al. (2001) for modelling foreign exchange rates with their relevant constituents (inflation and interest rate).
Findings
The evidence shows that the currency transaction exposure for non-life insurers is greater than that of life insurers. Moreover, the author finds that large insurers exhibit lower frequencies of foreign exchange transaction exposure than small insurers.
Originality/value
The value of this paper comes from the fact that revealing the nature of cash flow exposures, companies can evaluate the effectiveness of their hedging programmes and focus their hedging efforts according to the nature of their exposures.
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– The purpose of this paper is to investigate the efficiency of Korean insurers that have adopted enterprise resource planning (ERP) system to improve their efficiency.
Abstract
Purpose
The purpose of this paper is to investigate the efficiency of Korean insurers that have adopted enterprise resource planning (ERP) system to improve their efficiency.
Design/methodology/approach
The study uses Data Envelopment Analysis (DEA) with several inputs and outputs to measure both technical and scale efficiency. With the efficiency measures and using the ordinary least square with the hetereoscedacity consistent standard errors, the study further investigates the factors affecting efficiency, and the association between ERP and efficiency.
Findings
This study finds a strong positive association between ERP implementation and the insurers’ efficiency and profitability. However, firms may experience a decrease in efficiency and profitability during the first and second year after ERP implementation.
Research limitations/implications
Although the findings of this study are consistent with extant studies, the study’s findings may lack generalizability because the samples are limited small Korean Property/Casualty (P/C) insurers.
Originality/value
This study investigates the impact of ERP implementation on P/C insurers in an emerging market.
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The pressure for change is increasing, to stimulate infrastructure investment, but the authorities need still to protect policyholders’ interests. The Bank of England -- via the…