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Open Access
Article
Publication date: 15 August 2019

Muhammad Mohsin Hakeem

The purpose of this paper is to indicate an innovative solution to address the financing issues faced by “Micro-, Small and Medium Enterprises” (MSME) in emerging economies.

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Abstract

Purpose

The purpose of this paper is to indicate an innovative solution to address the financing issues faced by “Micro-, Small and Medium Enterprises” (MSME) in emerging economies.

Design/methodology/approach

Islamic Financial Institutions (IFIs) especially Islamic banks are competing for high net worth individuals, whereas the MSME sector is largely untapped. A collaborative model for IFIs is suggested, to explore the MSME sector. Islamic Non-Banking Financial Institutions (NBFIs) are operating in these markets through their extensive gross route networks. The multistep collaborative model proposes “Special Purpose Entity (SPE)” partially owned by a single Islamic Bank or consortium and NBFI/s. SPEs can be incorporated with a defined scope, focus areas, risk profile, budget and shareholding patterns.

Findings

Risk and profit sharing instruments also known as Musharakah and Mudarabah have less than 6 percent share within total financing offered by Islamic banks globally. Risk sharing products offered by Islamic banks are not targeting this sector due to the underdevelopment of instruments, lack of knowledge and resources. Proposed SPEs can operate regionally with a concentration on specific business sectors.

Originality/value

The SPE model would enable Islamic banks to enter the huge MSME market while mitigating risk. On the contrary, it would enable the large segments of emerging economies (bottom 40 percent population of developing nations) to get involved and actively play their role to attain long-term development goals.

Article
Publication date: 1 August 2003

C. Richard Baker

The bankruptcy of Enron Corp. has evolved into a scandal of enormous proportions involving allegations of fraud, corruption and unethical practices on the part of Enron’s…

9722

Abstract

The bankruptcy of Enron Corp. has evolved into a scandal of enormous proportions involving allegations of fraud, corruption and unethical practices on the part of Enron’s corporate executives, members of its board of directors, external auditors, and high government officials in the USA. No doubt there will be many articles written about various aspects of the Enron scandal. The focus of this paper is on the relationships between Enron’s business model and the deregulatory phase of the American economy during the 1980s and 1990s. It is the argument of this paper that deregulation in the US electricity and natural gas industries fostered the creation of the Enron business model, and that this model was unsustainable, resulting in the demise of Enron Corp. Furthermore, while Enron can be viewed as an example of capitalistic excess, the paper reveals how the Enron business model developed as an American form of a public private partnership, similar to the types of public private partnerships that have been created in recent years in the UK. Investigating Enron as a public private partnership may help us to better understand the role of public private partnerships in contemporary capitalism and shed some light on the advisability of deregulatory schemes and the unintended consequences that can result from such schemes.

Details

Accounting, Auditing & Accountability Journal, vol. 16 no. 3
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 1 October 2004

Jack G. Kaikati

Synthetic leases, used by some retailers to finance rapid expansion, could be ticking time bombs that might blow up anytime in the USA. This paper has three objectives. First, it…

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Abstract

Synthetic leases, used by some retailers to finance rapid expansion, could be ticking time bombs that might blow up anytime in the USA. This paper has three objectives. First, it provides an overview of the financing technique in the USA by tracing its origin and pin‐pointing its advantages and drawbacks. It shows that the drawbacks tend to outweigh the benefits. Second, it discusses how some retailers were red‐flagged for using it and how they responded to such undesirable exposure. The third objective is to highlight the more stringent accounting regulations recently imposed by the Financial Accounting Standards Board (FASB) on synthetic leases in the USA.

Details

International Journal of Retail & Distribution Management, vol. 32 no. 10
Type: Research Article
ISSN: 0959-0552

Keywords

Article
Publication date: 1 March 2003

Arlette Wilson and Walter Campbell

The authors look at the way in which Enron used hedging techniques before the corporate collapse of the organization triggered a crisis of confidence in US business practices and…

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Abstract

The authors look at the way in which Enron used hedging techniques before the corporate collapse of the organization triggered a crisis of confidence in US business practices and standards. They provide an analysis of how the system was structured and show how the transactions worked before analysing the roots of the company’s downfall.

Details

Balance Sheet, vol. 11 no. 1
Type: Research Article
ISSN: 0965-7967

Keywords

Article
Publication date: 27 July 2012

Charles B. Moss, Danny A. Klinefelter and Michael A. Gunderson

The purpose of this research is to examine the effect of accounting for complex organizational forms on data collection with the Agricultural Resource Management Survey (ARMS).

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Abstract

Purpose

The purpose of this research is to examine the effect of accounting for complex organizational forms on data collection with the Agricultural Resource Management Survey (ARMS).

Design/methodology/approach

This research reviews the literature from accounting theory along with the goals of data collection for policy analysis to draw conclusions about the applicability of accounting pronouncements.

Findings

Historically, the financial data collected in ARMS were based on financial accounting standards which were adequate for most purposes. However, this study develops the fact that many of these financial accounting standards were created to provide information for equity market transactions. The complexities of accounting for consolidations will provide valuable information, but implementing these standards will require accounting sophistication that is not prevalent in agriculture.

Originality/value

By drawing accounting theory together with the targeted use of data, this study offers guidelines to improve the data quality for a growing complex US agriculture.

Book part
Publication date: 15 November 2021

C. Richard Baker and Martin E. Persson

It has been said that standards issued by the International Accounting Standards Board (IASB) are more congruent with a principles-based approach to standards setting than those…

Abstract

It has been said that standards issued by the International Accounting Standards Board (IASB) are more congruent with a principles-based approach to standards setting than those of the Financial Accounting Standards Board (FASB). Revelations concerning accounting manipulations at Enron Corp., and the ensuing scandal resulting from these revelations, have prompted the FASB to reassess its approach to accounting standards setting with the possible intent of moving FASB standards-setting processes closer to a principles-based approach. One area that IASB standards tend to emphasize more than FASB standards is the concept of substance over form. The bankruptcy of Enron Corp. provides a vivid illustration of how companies may use the legal form of transactions to obscure their economic substance. The purpose of this chapter is to examine the concept of substance over form by investigating Enron’s use of misleading accounting practices in the following areas: (1) off-balance sheet financing; (2) revenue recognition; and (3) financial statements disclosures. In these three areas of accounting concern, the chapter sets forth the relevant US Generally Accepted Accounting Principles (US GAAP) requirements, along with the ways in which Enron manipulated GAAP while concealing the economic substance underlying the transactions. It is the argument of this chapter that had the concept of substance over form been properly applied at Enron, investors and creditors would have been provided with a more realistic view of the company’s financial position and its results of operations, perhaps avoiding what became the one of the largest corporate bankruptcies in US history. The conclusion is that the FASB should focus on the concept of substance over form as it contemplates moving toward a principles-based approach to accounting standards setting.

Details

Historical Developments in the Accountancy Profession, Financial Reporting, and Accounting Theory
Type: Book
ISBN: 978-1-80117-805-1

Article
Publication date: 2 September 2021

Fang Zhao, Abhijit Barua and Jung Hoon Kim

The purpose of this study is to examine the effect of consolidating off-balance sheet entities on firm-level investment efficiency. Financial Accounting Standards Board…

Abstract

Purpose

The purpose of this study is to examine the effect of consolidating off-balance sheet entities on firm-level investment efficiency. Financial Accounting Standards Board Interpretation No. 46, consolidation of variable interest entities – an Interpretation of ARB No. 51 (FIN 46) is used as a quasi-exogenous shock to financial reporting in this study.

Design/methodology/approach

The authors empirically test the change of investment efficiency for a sample of firms affected by FIN 46 in the post-FIN 46 periods. In the regression, a group of matched pairs selected from unaffected firms is used as the control sample and firm characteristics are used as control variables.

Findings

The authors find that firms affected by FIN 46 experience improvement in investment efficiency after adopting the standard compared to unaffected firms. The authors also document that FIN 46 firms’ level of investment decreases after FIN 46 compared to unaffected firms. These empirical results suggest that the improvement in investment efficiency is likely to be achieved by the reduction in over-investment. Further analyses show that amongst the affected firms, firms consolidating off-balance sheet special purpose entities (SPEs) improve investment efficiency mainly by reducing over-investment, whereas firms avoiding the consolidation of SPEs do not display such tendency.

Originality/value

This study contributes to the literature on the relation between financial reporting and investment efficiency, as well as the literature on the impact of FIN 46. To the best of the authors’ knowledge, this study is the first to examine the relation between the consolidation of off-balance sheet entities and investment efficiency.

Details

Accounting Research Journal, vol. 35 no. 3
Type: Research Article
ISSN: 1030-9616

Keywords

Book part
Publication date: 20 January 2010

Steven M. Mintz

This chapter explores the link between virtue and representational faithfulness in making judgments in a principles-based environment. The motivation for the chapter is the…

Abstract

This chapter explores the link between virtue and representational faithfulness in making judgments in a principles-based environment. The motivation for the chapter is the impending adoption of International Financial Reporting Standards (IFRS) in the United States and its principles-based approach to accounting. Even in a rules-based system, there are principles that provide a foundation for making decisions about the selection and implementation of accounting standards, financial statement presentation, estimates, and the sufficiency of evidence. A model is presented that reflects these judgments informed by virtue considerations that support substance over form decisions and a true and fair view. Implications for accounting education are discussed including the readiness of faculty to incorporate IFRS into the curriculum.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-84950-722-6

Book part
Publication date: 20 June 2003

Mark Hirschey

During recent years, financial economists have made a significant contribution to the rapid development of a vibrant and growing literature on organization structure and corporate…

Abstract

During recent years, financial economists have made a significant contribution to the rapid development of a vibrant and growing literature on organization structure and corporate governance. In reviewing the development of this literature, it becomes easy to see how the seminal contributions of Ronald Coase (awarded the Nobel Prize in Economics in 1991) have become the cornerstone of a new institutional economics. In particular, researchers following in Coase’s footsteps have clarified the conditions under which voluntary contracts between private agents can resolve a wide variety of so-called “agency problems.” More than just representing an important discovery of the significance of transaction costs and property rights for the institutional structure and functioning of the economy, Coase’s work has become an important foundation for the theory of contracts and for the whole field of “organization economics.”

Details

Advances in Financial Economics
Type: Book
ISBN: 978-1-84950-214-6

Article
Publication date: 9 February 2021

Dinesh Shenoy and Biswajit Mahanty

A vast proportion of global megaprojects have not performed up to the expectations of their stakeholders. A failed megaproject has the potential even to derail the economy of a…

Abstract

Purpose

A vast proportion of global megaprojects have not performed up to the expectations of their stakeholders. A failed megaproject has the potential even to derail the economy of a country where it was implemented. Stakeholders must, therefore, ensure that they do not invest in megaprojects that are bound to fail. But, how can stakeholders consistently identify such megaprojects? This paper develops a framework for a metric that can help stakeholders measure the readiness of a megaproject.

Design/methodology/approach

A comprehensive literature review identified 19 critical success factors of megaprojects. These success factors were integrated into a fuzzy-based model to develop the megaproject readiness metric. An assessment team studied the levels of presence and importance of these success factors in a candidate megaproject to derive its readiness.

Findings

The readiness-based model provides stakeholders valuable insights into the strong and weak areas of a megaproject. It can help stakeholders prioritize and systematically eliminate the identified weaknesses and improve megaproject readiness. While the model was tested on a metro rail megaproject, it can be used on any megaproject across domains.

Originality/value

This paper adopts the concept of readiness for the domain of megaprojects. Besides the readiness measurement framework, a vital contribution of this research is its application to a real-life case. Future research can include more granular success factors to improve the estimate of megaproject readiness.

Details

International Journal of Managing Projects in Business, vol. 14 no. 4
Type: Research Article
ISSN: 1753-8378

Keywords

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