Earnings Management in Belgium. a Review of the Empirical Evidence

Earnings are an extensively used summary statistic of a firm’s financial performance. Various corporate reporting scandals (such as Enron and Lernout & Hauspie) have raised concerns regarding the credibility of this performance measure. This paper first discusses the empirical evidence on earnings management practices by Belgian companies. This review indicates that Belgian companies manage earnings to avoid declines in earnings or losses, to influence relations with external financiers and to reduce taxes. Belgian companies quoted on the Brussels Stock Exchange also report significantly less income-decreasing earnings management than their non-quoted counterparts, presumably to meet or beat market expectations. Belgian earnings management studies further report that larger boards and Big6 auditors may constrain the extent of incomedecreasing earnings management.

De informatiewaarde van het Belgische auditrapport onder de loep. evolutie vanaf vier jaar vóór faling

In een omgeving met weinig rechtsvervolgingen, zoals België, blijkt het verslag van de commissaris tot 3 jaar vóór falen een adequaat signaal te zijn voor het voorspellen van de kans op faillissement. De commissaris gebruikt de aard van het verslag als signaal. Eerst drukt zij haar bezorgdheid uit aan de hand van een verslag met voorbehoud voor de waarderingsregels (GAAP). Naarmate het faillissement nadert en de problemen acuter worden, schakelt zij over naar een verslag met opmerkingen over de continuïteit eventueel aangevuld met voorbehoud voor de waarderingsregels.

Monitoring international migration flows in Europe. Towards a statistical data base combining data from different sources

The paper reviews techniques developed in demography, geography and statistics that are useful for bridging the gap between available data on international migration flows and the information required for policy making and research. The basic idea of the paper is as follows: to establish a coherent and consistent data base that contains sufficiently detailed, up-to-date and accurate information, data from several sources should be combined. That raises issues of definition and measurement, and of how to combine data from different origins properly. The issues may be tackled more easily if the statistics that are being compiled are viewed as different outcomes or manifestations of underlying stochastic processes governing migration. The link between the processes and their outcomes is described by models, the parameters of which must be estimated from the available data. That may be done within the context of socio-demographic accounting. The paper discusses the experience of the U.S. Bureau of the Census in combining migration data from several sources. It also summarizes the many efforts in Europe to establish a coherent and consistent data base on international migration. The paper was written at IIASA. It is part of the Migration Estimation Study, which is a collaborative IIASA-University of Groningen project, funded by the Netherlands Organization for Scientific Research (NWO). The project aims at developing techniques to obtain improved estimates of international migration flows by country of origin and country of destination

Comparing migration in Britain and Australia: Harmonisation through use of age-time plans

Differences in the way migration is measured impede cross-national comparisons of internal migration. In this paper we utilise age-time diagrams to elucidate these problems for Australia and the United Kingdom and present solutions which generate time series of interregional migration for the two countries, harmonised with respect to age-time plans. We achieve this through estimation of the numbers of migration transitions (Australia) or migration events (Britain) for common age-period-cohort (APC) spaces. We derive appropriate population stocks for computation of transition probabilities or occurrence-exposure rates. In the final section of the paper we present a series of migration-intensity calculations based on varying combinations of period-cohort, period-age, and age-period-cohort perspectives, to demonstrate the significance of the variations, and the errors that can arise without harmonisation

Convergence of the all-time supremum of a L\'evy process in the heavy-traffic regime

In this paper we derive a technique of obtaining limit theorems for suprema of L\'evy processes from their random walk counterparts. For each $a>0$, let $\{Y^{(a)}_n:n\ge 1\}$ be a sequence of independent and identically distributed random variables and $\{X^{(a)}_t:t\ge 0\}$ be a L\'evy processes such that $X_1^{(a)}\stackrel{d}{=} Y_1^{(a)}$, $\mathbb E X_1^{(a)}<0$ and $\mathbb E X_1^{(a)}\uparrow0$ as $a\downarrow0$. Let $S^{(a)}_n=\sum_{k=1}^n Y^{(a)}_k$. Then, under some mild assumptions, $\Delta(a)\max_{n\ge 0} S_n^{(a)}\stackrel{d}{\to} R\iff\Delta(a)\sup_{t\ge 0} X^{(a)}_t\stackrel{d}{\to} R$, for some random variable $R$ and some function $\Delta(\cdot)$. We utilize this result to present a number of limit theorems for suprema of L\'evy processes in the heavy-traffic regime