Accounting Regulation and Management Discretion in a British Building Society, Circa 1960

This article explores the manipulation of published financial reports in order to counter the potentially unfavourable impact of newly introduced regulation. In this case the reported capital ratio of a major building society was enhanced using a sale and leaseback transaction with a related party and a change in depreciation policy, methods which reflected limited alternatives. Analysis of the case is set in the context of the mid-term performance of the building society sector and addresses the questions of whether the manipulations involved were within then-prevailing generally accepted accounting principles and why, despite disclosure in the society’s financial statements, these failed to attract public comment or concern, regulatory action or an audit qualification. In examining a major British mutual financial organisation we depart from traditional analyses of managerial discretion in accounting choices in manufacturing, mining and transport companies prior to the watershed Companies Act 1948.Accounting manipulation; Creative accounting; Sale and leaseback; Depreciation; Building societies; United Kingdom

New perspectives on not-for-profit financial institutions: organisational form, performance and governance

Post-print version. Final version published by Routledge; available online at http://www.tandfonline.com/The guest editors discuss the context for this special edition, introduce the contributions, consider a number of key themes which link the articles and suggest areas for future research, in particular they make a case for the link of organisational diversity and the stability of the financial system

The Content of Several Measures of Social Desirability

The question of whether to remove socially desirable responding (SDR) variance from self-report personality inventories, or to treat it as a facet of personality, has been the center of a debate spanning the last 25 years (Furnham, 1986). Recently, this controversy again came to the forefront of the literature via an exchange between a group of researchers (Block, 1990; Edwards, 1990; Nicholson & Hogan, 1990; Walsh, 1990). The essence of this debate is whether the correlation between a SDR scale and a personality scale indicated that the personality scale is contaminated by SDR bias, or if it merely indicates that there is content overlap between the two types of scales

Financial Reporting, Banking and Financial Crisis: Past, Present and Future

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Transparency and financial reporting in mid-twentieth century British banking

Post-print draft dated 30 November 2007. Final version published by Elsevier; available online at http://www.journals.elsevier.com/Until 1970, British banks were firm believers in the merits of ‘non-disclosure’, which obscured their ‘true’ profits and capital through profits smoothing and the use of hidden reserves. Many other companies adopted the same view for as long as legislation permitted, but there were special reasons why non-disclosure endured for longer in banking. This paper examines the persistence and demise of non-disclosure in banking, placing it in the context of the wider development of financial reporting in Britain, and highlights similarities and differences in financial reporting between banks and other types of company

Comparative performance of UK mutual building societies and stock retail banks: further evidence: a comment

Shiwakoti et al. (2008) concluded that four of the largest UK mutual societies which converted to listed bank status in 1997 outperformed, on a variety of measures, those societies which did not convert in the four-year periods both before and after conversion. All four converting societies have since been subject to ownership change, suggesting that this out-performance failed to persist, or was perhaps illusory. We do not criticise the results obtained by the authors, but suggest that they leave unanswered important questions, such as how to measure ‘superior’ performance and the appropriate time frame over which to evaluate this

Accounting Regulation and Management Discretion in a British Building Society, Circa 1960

This article explores the manipulation of published financial reports in order to counter the potentially unfavourable impact of newly introduced regulation. In this case the reported capital ratio of a major building society was enhanced using a sale and leaseback transaction with a related party and a change in depreciation policy, methods which reflected limited alternatives. Analysis of the case is set in the context of the mid-term performance of the building society sector and addresses the questions of whether the manipulations involved were within then-prevailing generally accepted accounting principles and why, despite disclosure in the society’s financial statements, these failed to attract public comment or concern, regulatory action or an audit qualification. In examining a major British mutual financial organisation we depart from traditional analyses of managerial discretion in accounting choices in manufacturing, mining and transport companies prior to the watershed Companies Act 1948

Schools, Neighborhoods, and the Long-Run Effect of Crime-Prone Peers

PublicFinanceThere is a large and growing literature on how childhood peers shape outcomes. However, within this literature little is known about the effects of the different neighborhood factors, such as the relative importance of school versus neighborhood peers. This paper, authored by Stephen B. Billings and Mark Hoekstra, examines the effect of elementary-aged peers on adult crime and other outcomes by exploiting cohort variation in the proportion of peers with an arrested parent. Importantly, this data enables the authors to distinguish between the effect of school and neighborhood peers. Results indicate that a five percentage point increase in school and neighborhood crime-prone peers increases adult arrest rates by 6.5 and 2.6 percent, respectively. Additional evidence indicates that adult crime is primarily driven by inter-actions in schools rather than in neighborhoods. This paper also documents how school and neighborhood peers affect cognitive and non-cognitive outcomes during adolescence

Comparative performance of UK mutual building societies and stock retail banks: further evidence: a comment

Shiwakoti et al. (2008) concluded that four of the largest UK mutual societies which converted to listed bank status in 1997 outperformed, on a variety of measures, those societies which did not convert in the four-year periods both before and after conversion. All four converting societies have since been subject to ownership change, suggesting that this out-performance failed to persist, or was perhaps illusory. We do not criticise the results obtained by the authors, but suggest that they leave unanswered important questions, such as how to measure ‘superior’ performance and the appropriate time frame over which to evaluate this

Accounting Regulation and Management Discretion in a British Building Society, Circa 1960

This article explores the manipulation of published financial reports in order to counter the potentially unfavourable impact of newly introduced regulation. In this case the reported capital ratio of a major building society was enhanced using a sale and leaseback transaction with a related party and a change in depreciation policy, methods which reflected limited alternatives. Analysis of the case is set in the context of the mid-term performance of the building society sector and addresses the questions of whether the manipulations involved were within then-prevailing generally accepted accounting principles and why, despite disclosure in the society’s financial statements, these failed to attract public comment or concern, regulatory action or an audit qualification. In examining a major British mutual financial organisation we depart from traditional analyses of managerial discretion in accounting choices in manufacturing, mining and transport companies prior to the watershed Companies Act 1948