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We have designed this in-class exercise to benefit undergraduate or graduate students enrolled in courses in auditing. This in-class exercise involves six short independent analytical procedures scenarios, two each for three different accounts: Payroll Expense; Depreciation Expense; and Interest Expense. The scenarios require students to perform substantive analytical procedures for each of the financial statement accounts. Students must use their accounting knowledge, analytical thinking skills, and problem-solving ability in order to compute an estimated expectation for an account balance. Following computing an estimate of the expected balance, students must then compare the result to the client-recorded balance and determine if the difference is within tolerable limits established for the audit. The primary learning objectives for the in-class analytical procedures exercise involve the following:

1. Understanding when it might be appropriate for the auditor to perform substantive analytical procedures,

2. Understanding how to form an expectation of an account balance when performing analytical procedures, and

3. Understanding how to evaluate the results of a substantive analytical procedure.

Understanding when it might be appropriate for the auditor to perform substantive analytical procedures,

Understanding how to form an expectation of an account balance when performing analytical procedures, and

Understanding how to evaluate the results of a substantive analytical procedure.

In cooperation with KPMG, we believe that the analytical procedures exercise gives students a better understanding of performing substantive analytical procedures. ¹ As identified by Auditing Standard AU-C 520, PCAOB Standard AS 2305, and in the academic literature (e.g., Hirst & Koonce, 1996), analytical procedures are an important part of the audit process. Understanding when and how to perform substantive analytical procedures, combined with how to evaluate the results, will aid in student knowledge of the audit process.

As is true for all areas of financial management, working capital management is more complex for the multinational corporation (MNC) than for firms engaged in only domestic operations. Such incremental complexity is due to a number of reasons related to the effects of operating in diverse economic and political climates and tax jurisdictions. This article is concerned with selected aspects of how foreign exchange risk—the potential impact on a MNC's profitability, net cash flows, and market value of a change in exchange rates—may affect working capital management.

This study analyses the threshold for debt of corporations under the debt-bias corporate tax system. We adopt a contingent claim model of the corporation to reflect the incentive effect of the debt-bias corporate tax system. This framework is based on aspiration level theory and the required probability for the successful completion of a project that is identical to decision weight probability in prospect theory. The proposed framework incorporates the debt-bias tax regulations prevailing in Organization for Economic Co-operation and Development (OECD) countries. When the OECD countries’ financial and non-financial corporation data were applied into framework, we observe that the government achieve equilibrium by employing contradictory corporate tax regulations. Moreover, we observe that corporations are intrinsically equity-loving, although the debt-bias corporate tax system stimulates corporations toward debt. This situation makes the government corporate revenue sensitive by placing it at the disposal of corporations’ financing choice instead of corporate profitability. The corporations’ threshold for debt assists in distinguishing between debt and equity-loving corporations. Moreover, corporations’ threshold for debt assists policy makers in deciding the appropriate combination of such reform policies as the Allowance on Corporate Equity and Comprehensive Business Income Tax. A transition from debt-oriented capital structure to equity-oriented capital structure may play an important role in promoting Islamic finance.

This paper examines the changes in the length of commercial property leases over the last decade and presents an analysis of the consequent investment and occupational pricing implications for commercial property investments. It is argued that the pricing implications of a short lease to an investor are contingent upon the expected costs of the letting termination to the investor, the probability that the letting will be terminated and the volatility of rental values. The paper examines the key factors influencing these variables and presents a framework for incorporating their effects into pricing models. Approaches to their valuation derived from option pricing are critically assessed. Simulation methododology is applied to the rental and capital valuations of short leases and properties with break clauses. It is concluded that in addition to the rigour of its internal logic, the success of any methodology is predicated upon the accuracy of the inputs.

This paper reassesses the center-periphery relationship in light of recent developments in the international monetary system and the currency hierarchy in a geopolitical economy framework. The center-periphery relationship has historically been examined in relation to the international division of labor, the pace and diffusion of technical progress associated with it, and the pattern of consumption it embodies. As conceived by structuralists and dependentistas, it is not seen as the result of the uneven and combined development of capitalism: it does not take into account the struggle between the dominant States (center), which want to reproduce the current order and the contender States (periphery) which aim to accelerate capitalist development to reduce the unevenness, and even to undermine the imperial project of dominant states. In a geopolitical economy framework, a powerful obstacle peripheral countries face in their efforts at combined development is the international monetary system, something that the theorists of the center-periphery relationship have perhaps overlooked. Because of its subordinate position in the currency hierarchy, the periphery is subject to greater external vulnerability, greater instability of exchange and interest rates, and as a result, enjoys a more restricted policy space. In this sense, the chapter shows that, beyond macroeconomic policies, the currency hierarchy in a context of high capital mobility limits a range of developmental policies of peripheral countries, reinforcing the unevenness of world economy and constraining combined development.

The purpose of this paper is to analyze the performance and the relationship between competitiveness, real gross domestic product (GDP) growth and human development in 20 countries of the Latin America and Caribbean region during the 2006-2015 period. The main argument to uphold here is that – from the perspective of virtuous circle – countries with better conditions of competitiveness are those with better economic performance and with better conditions for human development.

Time series data were organized at three levels: individual countries, groups of nations and Latin America and Caribbean as a whole. Indicators used were: index of competitiveness, rates of change in real GDP and Human Development Index. Cluster analysis tests were performed: data ranges were determined and quintiles were established. Countries were ranked in five categories and comparative position matrices were determined for each variable. Linear correlations between indexes were calculated. Linear correlation coefficients were determined in terms of groups of countries and considering Latin America and Caribbean as a whole.

Findings revealed that decreasing conditions in competitiveness and economic growth indicators are the representative situation since 2009. The most competitive country in the region is Chile, and the weakest is Venezuela. Nevertheless, all Latin American and Caribbean countries analyzed seem to have made progress in terms of human, economic and social development. Regarding correlations, Dominican Republic showed an inverse relationship between competitiveness and economic growth, while Jamaica and Venezuela showed inverse relationships between competitiveness and human development. At the individual country level, no statistically significant relationship between economic growth and human development was detected.

Findings highlight the necessity of future research that result in a deeper understanding of the transmission mechanisms between economic and social performance in Latin American and Caribbean countries. Particular reasons at the micro level that explain improvements or deteriorations in competitiveness and human development must also be analyzed. Based on the degrees of freedom, time series could have included more years, but a lack of information was found for some countries. It would also be necessary to observe each particular case considering the type of economy, production characteristics and export/import composition.

Results complement the existing literature by exploring competitiveness and its relationship with economic and social variables in developing countries. The authors also believe that this paper is relevant for macroeconomic and social policy debates involving competitiveness and human well-being in this region of the world.

This paper supports an important argument: human well-being and national development must be the ultimate goal of competitiveness. Traditional literature focuses on levels and determinants of competitiveness in developed countries, but it usually does not take into account social and human aspects of the process in developing countries. Little attention has been paid to analyze the relationship between competitiveness and socioeconomic variables in developing countries. Methods and findings of this paper complement the existing literature by studying the relationships among competitiveness, real GDP growth and human development in Latin American and Caribbean countries, using correlation analysis.

The paper aims to address concerns that valuers' choice of depreciation models in their cost approach to value is not sustainable (is incapable of preserving patronage in present and future generations).

The paper draws up conceptual expectations regarding how seven UK and US depreciation models pass or fail four identified sustainability indicators: reliability, consistency, usability and separate treatment of depreciation components. Valuation surveyors in Nigeria were offered as a case study of how valuers in one country respond to such conceptual investigations.

The study found that cross‐sectional models, the breakdown model and hedonic modeling are the depreciation models perceived as most sustainable. However, popular model use follows easiest models rather than most sustainable models.

The paper suggests that the pursuit of sustainability in valuation modeling should involve provision of institutionalized best practice guidance beyond that currently provided so as to assist valuers/appraisers in more sustainable choices.

The paper is probably the first to address both UK and US depreciation models and to assess each using defined sustainability criteria.