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1 – 10 of over 1000The purpose of this paper is to analyze how “New Deal” regulatory initiatives, primarily the Securities Acts and the Securities and Exchange Commission (SEC), changed US auditors’…
Abstract
Purpose
The purpose of this paper is to analyze how “New Deal” regulatory initiatives, primarily the Securities Acts and the Securities and Exchange Commission (SEC), changed US auditors’ professional knowledge conception, culminating in the 1938 expansion of the Committee on Accounting Procedure (CAP), the first US body to set accounting principles.
Design/methodology/approach
The paper combines Halliday’s (1985) knowledge mandates with Hancher and Moran’s (1989) regulatory space to attain a theory-based understanding of auditors’ changing knowledge conceptions amid regulatory pressure. It draws on a range of primary and secondary sources to examine the period from 1929 to 1938.
Findings
Following the stock market crash, the newly created SEC aimed to engage auditors as a means to regulate companies’ accounting practices based on a set of codified principles. While entailing increased status, this new role conflicted with the auditors’ knowledge conception, which was based on professional judgment and personal integrity. Pressure from the SEC and academics eventually made auditors agree to a codification of their professional knowledge and create the CAP as a cooperative regulatory solution.
Originality/value
The paper explores the role of auditors’ knowledge conceptions in the emergence of today’s standard setting. It is suggested that auditors’ incomplete control of their professional knowledge made standard setting a form of co-regulation, located between the actors occupying the regulatory space of accounting.
Details
Keywords
The purpose of this paper is to present an overview of the flash crash, and explain why and how it happened.
Abstract
Purpose
The purpose of this paper is to present an overview of the flash crash, and explain why and how it happened.
Design/methodology/approach
The author summarizes several studies suggesting various perspectives on the flash crash and its causes. Furthermore, the author highlights recently proposed and introduced improvements and regulations to reduce the risk of having similar market collapses in the future.
Findings
It is an overview paper that highlights the state of the art on the subject.
Research limitations/implications
Paper does not report any research findings of the author.
Practical implications
High-frequency trading (HFT) along with its pros and cons is the new normal for most of the current electronic trading activity in the markets. It is well recognized by the experts that HFT may have its important shortcomings whenever the rules and regulations are not up to date to match the technological progress offering faster computational and execution capabilities.
Social implications
HFT has created a societal discussion about its benefits and potential deficiencies as the common practice for trading due to potentially unequal access to market data by various categories of participants. Such arguments help the regulators to develop improvements to reduce the market risk and nurture more robust and fair markets for all.
Originality/value
The paper has a tutorial value and summarizes the current state of HFT. The readers of more interest are guided to the most relevant literature for further reading.
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Keywords
A deteriorating security situation and an increased need for defence equipment calls for new forms of collaboration between Armed Forces and the defence industry. This paper aims…
Abstract
Purpose
A deteriorating security situation and an increased need for defence equipment calls for new forms of collaboration between Armed Forces and the defence industry. This paper aims to investigate the ways in which the accelerating demand for increased security of supply of equipment and supplies to the Armed Forces requires adaptability in the procurement process that is governed by laws on public procurement (PP).
Design/methodology/approach
This paper is based on a review of current literature as well as empirical data obtained through interviews with representatives from the Swedish Defence Materiel Administration and the Swedish defence industry.
Findings
Collaboration with the globalized defence industry requires new approaches, where the PP rules make procurement of a safe supply of defence equipment difficult.
Research limitations/implications
The study's empirical data and findings are based on the Swedish context. In order to draw more general conclusions in a defence context, the study should be expanded to cover more nations.
Practical implications
The findings will enable the defence industry and the procurement authorizations to better understand the requirements of Armed Forces, and how to cooperate under applicable legal and regulatory requirements.
Originality/value
The paper extends the extant body of academic knowledge of the security of supply into the defence sector. It serves as a first step towards articulating a call for new approaches to collaboration in defence supply chains.
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Keywords
Eileen Taylor and Jennifer Riley
The purpose of this paper is to explore how non-professional investors (NPIs) with varying levels of financial sophistication interpret and perceive corporate disclosures and…
Abstract
Purpose
The purpose of this paper is to explore how non-professional investors (NPIs) with varying levels of financial sophistication interpret and perceive corporate disclosures and management credibility, specifically risk factors, when those disclosures are presented in readable and less-readable formats.
Design/methodology/approach
The paper uses an online experiment to test hypotheses related to the effects of financial sophistication (measured) and readability (manipulated) on NPIs’ equity valuations and perceptions of management credibility (competence and trustworthiness).
Findings
Increased readability appears to counteract less-sophisticated NPIs’ conservatism in equity valuations, such that they are not statistically significantly different from more-sophisticated NPIs’ equity valuations. Further, less-sophisticated NPIs judge management as less competent when disclosures are less readable, while more-sophisticated NPIs judge management as more competent when disclosures are less readable.
Research limitations/implications
The paper has important implications for the SEC’s regulations related to plain English requirements for risk factor and other corporate disclosures. Financial sophistication varies among NPIs, and readability appears to influence these individuals in different ways.
Practical implications
The SEC’s Concept Release (April 13, 2016) acknowledges the need to update and improve risk factor disclosure regulations. This study provides evidence that contributes to those decisions.
Originality/value
The paper extends the research on processing fluency, by examining readability of disclosures with a consistent tone (negative). The NPIs surveyed are directly representative of the population of interest for risk factor disclosure regulations.
Details