Pressure and politics in financial accounting regulation

This study examines the political process of promulgating the draft laws 22169 and 22896, which pertained to the reporting of financial conglomerates, the lobbying efforts observed during the process, and the interaction between the government, the supervisors of banks and insurance companies, the industry and its associations, and the users and auditors of annual reports of bancassurance firms. Pluralism is used to derive predictions on the regulation process. These predictions are then tested and compared with hypotheses which are comparable in terms of explanatory power and which were based on elite theory, neo-corporatism and Marxism. Pluralism seemed to provide fairly accurate predictions, in this particular case.Financial Accounting;Accounting Law;accountancy

Effort and Selection Effects of Incentive Contracts

We show that the improved effort of employees associated with incentive contracts depends on the properties of the performance measures used in the contract.We also find that the power of incentives in the contract is only indirectly related to any improved employee effort.High powered incentive increase the selection effect of the incentive contract and attract better employees to the firm.The selection effect of the incentive contract depends, in turn, on the (perceived) properties of the performance measures specified in the contract.These results hold after controlling for an array of incentive contract design characteristics and for differences in organizational context.Data is from a third party survey on compensation practices among Chief Executive Officers.Our estimation procedures address several known problems with using secondary datasets.incentives;contracts;performance measurement;employees

The Endogeneity Bias in the Relation Between Cost-of-Debt Capital and Corporate Disclosure Policy

The purpose of this paper is twofold.First, we provide a discussion of the problems associated with endogeneity in empirical accounting research.We emphasize problems arising when endogeneity is caused by (1) unobservable firm specific factors and (2) omitted variables and discuss the merits and drawbacks of using panel data techniques to address these causes.Second, we investigate the magnitude of endogeneity bias in Ordinary Least Squares regressions of cost-of-debt capital on firm disclosure policy.We document how including a set of variables which theory suggests to be related with both cost-of-debt capital and disclosure and using fixed effects estimation in a panel dataset reduces the endogeneity bias and produces consistent results.This analysis reveals that the effect of disclosure policy on cost-of-debt capital is 200% higher than what is found in Ordinary Least Squares estimation.Finally, we provide direct evidence that disclosure is impacted by unobservable firm-specific factors that are also correlated with cost-of-capital.Disclosure policy;cost-of-debt capital;endogeneity

Management accounting en stroomsgewijze produktie

Production;Management Accounting;Organizational Structure;accountancy

Onderzoek op het gebied van de externe verslaggeving

Scientific Research;Financial Accounting;accountancy

De winst is asoluut belangrijk!

Profit;business economics