AN ACCOUNTING PERSPECTIVE ON A CRISIS PERPETUATED THORUGH THE CAPITAL MARKET

Our paper analyzes the current financial crisis starting with some recent developments and reactions in the field of accounting. We find that involved parties within the financial system naturally look for a “scapegoat” instead of dealing with reality. Moreover, they try to avoid regulations that would reflect their current financial position and performance. Meanwhile, what reality reveals us is that we are dealing with a crisis of value, or better said valuation, framed by significant changes of paradigms. Starting with thoughts and reactions within trade literature and financial environment, we analyze some mechanisms of credit derivatives that propagated the crisis within the global financial system. Finally, we prove our point in defending fair value accounting and identify key aspects that allow future improvements. The need for informational transparency is emphasized through the whole paper.Financial crisis, fair value, derivatives, mortgages, informational transparency, capital markets

Fair Value Accounting for Financial Instruments – Conceptual Approach and Implications

This study complements the growing literature on the value relevance of fair value by examining the validity of the hypothesis that fair value is more informative than historical cost as a financial reporting standard for financial instruments. We therefore compare the relative explanatory power of fair value and historical cost in explaining equity values. In order to reflect fair values’ role in offering the fair view where financial instruments are concerned we briefly reviewed capital market studies that examine the usefulness of fair value accounting to investors, and discuss marking-to-market implementation issues of determining financial instruments’ fair values. In doing so, we identified several key issues, which need to be analyzed. More importantly, our results suggest that simply requiring fair value, as the reported measure for financial instruments may not improve the quality of information unless appropriate estimation methods or guidance for financial instruments that are not traded in active markets can be established. In contrast, fair value of available-for-sale securities, which are more actively traded in well-established markets, explains equity values more than historical cost. Taken together, our results are consistent with the notion that fair value is more (less) value relevant when objective market- determined fair value measures are (not) available.

SEARCHING FOR THE FAIR STORY BEHIND FAIR VALUE FOR FINANCIAL INSTRUMENTS

Our paper aims at telling the whole story where fair value accounting is concerned. Harsh criticism has been brought to this concept under current circumstances that motivated out research. Without arguing for fair value as something it is not, we brieflyFair value accounting, standards setting bodies, financial crisis

RECENT DEVELOPMENTS OF THE FINANCIAL REPORTING MODEL: THEORETICAL STUDIES IN REVIEW

Our paper analyzes the manner in which the financial reporting model evolved towards fair value accounting. After a brief introduction into the context of financial reporting at international level, the analysis focuses on the accounting model of fair value. This is done by synthesizing main studies in accounting research literature that analyze fair value accounting through a theoretical approach. The analysis being developed relies on literature review methodology. The main purpose of the developed analysis is to synthesize main pros and cons as being documented through accounting research literature. Our findings underline both the advantages and shortcomings of fair value accounting and of the recent mixed attribute in nowadays financial reporting practices. The concluding remarks synthesize the obtained results and possible future developments of our analysis.fair value, accounting research literature, mixed attribute, pros, cons

AN ACCOUNTING PERSPECTIVE ON A CRISIS PERPETUATED THORUGH THE CAPITAL MARKET

Abstract: Our paper analyzes the current financial crisis starting with some recent developments and reactions in the field of accounting. We find that involved parties within the financial system naturally look for a "scapegoat" instead of dealing with reality. Moreover, they try to avoid regulations that would reflect their current financial position and performance. Meanwhile, what reality reveals us is that we are dealing with a crisis of value, or better said valuation, framed by significant changes of paradigms. Starting with thoughts and reactions within trade literature and financial environment, we analyze some mechanisms of credit derivatives that propagated the crisis within the global financial system. Finally, we prove our point in defending fair value accounting and identify key aspects that allow future improvements. The need for informational transparency is emphasized through the whole paper. Keywords: Financial crisis, fair value, derivatives, mortgages, informational transparency, capital markets. JEL Classification: A12, G01, M40, M41 * Carmen G. Bonaci earned her Master Degree at the Babeş-Bolyai University, Cluj-Napoca, Romania. Currently she is a Ph.D. Candidate and assistant within the Babeş-Bolyai University, the Faculty of economics and Business Administration and is teaching Basic Accounting, Financial Accounting, Advanced Accounting and Controlling. E-mail: [email protected] Dumitru Matiş earned his Ph.D. at the Babeş-Bolyai University, Cluj-Napoca, Romania. Currently he is a professor of different accounting disciplines, among which Basic Accounting, Financial Accounting, Advanced Accounting and International Accounting within the Babeş-Bolyai University, and Dean of the Faculty of Economics and Business Administration within the same University. He is member of the Chamber of Financial Auditors from Romania and of the Superior Council of the Accounting and Financial Reporting Council of Romania. E-mail: [email protected] The authors' research activities for this paper have been funded by the research projects CNCSIS 2571/2009 "Developing a conceptual integrated and self sustainable model regarding financial reporting within Romanian private sector entities" and CNMP 92-085/2008 "Developing a functional model for optimizing the national strategy regarding financial reporting within Romanian private sector entities"

Motivating Accounting Professionals in Romania. Analysis after Five Decades of Communist Ideology and Two Decades of Accounting Harmonization

Our paper focuses on accounting professionals in Romania as being a significant element when considering a national accounting system that went through complex accounting reforms of more than two decades. Since accounting policy represents an area of social and economic policy we must also consider the five decades of communist regime leaving their fingerprint on the Romanian society. It is our objective to capture the perception of the Romanian accounting profession that actually witnessed all these processes of transformation. More precisely we focus on exploring the motivational pattern of Romanian accounting professionals, arguing that our results could offer useful insights when it comes to accountants’ drivers to participate in the international accounting arena and therefore in the international accounting harmonization process. Our theoretical framework is based on Herzberg’s motivation-hygiene theory. Since Herzberg in his studies used the interview method, for more consistency, we found an interview-based qualitative approach to be the most appropriate to our research. One of our conclusions is that Herzberg’s theory can identify and explain reasonably well the motivational factors of today’s Romanian accounting professionals. However, the theory must be adjusted for higher relevance: (1) salary is not seen hygiene but a motivator, (2) advancement is not a motivator but hygiene, and (3) team/staff with strong motivational effect must be added to the model. Motivators and Hygiene factors were directly related to the level of hierarchy and redrafted a different pattern within the structure of an entity. By analyzing the information being obtained through the interview process, our paper offers an overview on the particular work environment that characterizes the accounting professional of late Romanian modernity, after five decades of an ideology based system. The results of the performed analysis document the fact that alienation and dependence have not become characteristics of the modern accounting professional. Furthermore, dehumanization and exploitation prove to be, in the case of the Romanian accounting system, inevitable consequences of the division of labor and the development of private property.Drivers, Motivators, Hygiene Factors, Job Satisfaction, Labor Behavior, Organizational Culture, Human Resource Accounting

Trade union strategy in Sydney's construction union: a Roman Catholic perspective

Rudd Government ministers have talked tough towards the more militant Australian trade unions since coming to office in November 2007. However, despite this, it is still fair to say that the removal of the Howard-Costello Government reduced neo-liberal hegemony by altering the invisible balance of power between capital and labour in the construction industry. Using a set of case studies, based on data obtained from fieldwork at the New South Wales, Australia branch of the Construction Forestry Mining and Energy Union (CFMEU), we document key elements of union strategy at the branch level in the year immediately after the removal of the Howard-Costello Government. A key aspect of branch level strategy was building site visits by a team of organisers, led by the divisional state secretary, designed to rebuild influence on site and reconnect with workers. Furthermore, the CFMEU’s hiring of foreign language speaking organisers and production of foreign language publications is a praiseworthy attempt to reach out to ethnic minority workers and bring them under the ‘mainstream’ union umbrella. We use a theory framework of Roman Catholic social teaching to frame our discussions

SEARCHING FOR THE FAIR STORY BEHIND FAIR VALUE FOR FINANCIAL INSTRUMENTS

Our paper aims at telling the whole story where fair value accounting is concerned. Harsh criticism has been brought to this concept under current circumstances that motivated out research. Without arguing for fair value as something it is not, we briefl

FAIR VALUE EMPIRICAL STUDIES: AN OVERVIEW ON ACCONTING RESEARCH LITERATURE

Our paper develops a literature review on fair value studies. The purpose of thestudy is to synthesize the main results of accounting research literature empiricallyapproaching fair value measurement. Therefore, our analysis imposes the use of literaturereview methodology. After briefly introducing the concept of fair value, the first part of thepaper follows the shift taking place in accounting paradigms when it comes to accountingmodels. The main part of the paper discusses empirical studies on fair value by closelyanalyzing their research design, the employed research methodology and the obtained results.The originality of the paper as well as its contribution consist in offering a comprehensiveoverview on studies in accounting research literature that analyze fair value accountingthrough an empirical approach. Discussing the relevance and reliability of such studies furtherimpacts upon the relevance of their results and how they can be used.Fair value, accounting model, empirical studies, research literature

THE ACCOUNTING REGULATION PROCESS IN THE FIELD OF FINANCIAL INSTRUMENTS

Our paper develops an analysis on the accounting regulation process by considering the field of financial instruments as one of the most controversial areas of financial reporting. After a brief introduction, comprising aspects related to the accounting regulation process, we first stop upon the historical evolution of the two main accounting referential that currently collaborate through the convergence process. Our analysis focuses both on standards first issuance and on their amendment process. A special emphasize is given to the international accounting referential. The obtained results enhance the complexity of the approached field and indicate significant steps still needed to be taken