Financial Accounting:
Issue: Imperfect Financial Accounting Standard (FAS): Off-books accounting activities- should authorities be aware of evaluating fair-value accounting levels?
It was noted that Enron misused fair-value measurements for core business activities, further proceeded to general trading contracts (Benston, 2006). Therefore, external stock holders, investors believed a brilliant blueprint drew by Mr. Fastow, former CFO of Enron, received darkling ROIs. Should FASB be more strict on evaluating firms’ fair value accounting levels of 3?
Financial Accounting (2):
Issue: Derivatives: Really a good way for SMEs?
Investors carefully analyze corporations’ financial reports and further decide which one is trustworthy and should be rewarded with their investments. “Outcomes from firms’ use of derivatives are a prominent part of financial reports”, thus, adoption of derivatives may be a way for capturing investors’ eyes, and towards more careful decision choices and better managerial and firm-level performance (Koonce, Lipe and McAnally, 2008). However, is it a necessity for all firms, including SMEs, even though they don’t have enough energy and cash flow to manage large variety and levels of derivatives?
Managerial Accounting
Issue: Do goal difficulty levels affect goal commitments in an SPMS?
“SPMS features have a positive effect on goal commitment” (Webb, 2004). Two issues come out then, when confronting rapid organizational changes, e.g, mergers and acquisitions, how to help mangers understand and commit financial goals they have been assigned to, through SPMS settings? Alternatively, how to define difficulty levels of goals and assign them to our managers?
Auditing
Issue: Are there any other factors affecting external auditing fees?
Plenty of researches have been published regarding external auditing fee determinants, like company’s size, industry etc, however, surprisingly few articles revealed internal auditors’ contribution to external auditing fee. Felix and his team collected data from “Big 6” accounting firms and noted internal audit contribution would like to form less external auditing fees (Felix, Gramling and Maletta, 2001). But auditing standards have been more regulated since Enron’s collapse. Does it still fit current situation?
Taxation
Issue: Could firms really make constant and consistent money drills from low corporate tax rates?
A penny saved is a penny earned, for-profit organizations always like to have lower effective tax rate, Dyreng, Hanlon and Maydew’s study reveals one forth companies maintaining cash effective tax rates below 20 percent, compared with an overall average of 30 percent, out of 2,077 firms in their sample pool (Dyreng, Hanlon and Maydew, 2008). However, one stressful issue could not be neglected, could those firms stick on low effective tax rates when external taxation environment changes, are there any dynamics which can describe the correlations?
Reference List:
Benston, J.G. Fair-value accounting: A cautionary tale from Enron. Journal of Accounting and Public Policy, 25 (Jul/Aug 2006): 465-484
Dyreng, D.S., M. Hanlon and E.L. Maydew. Long-run Corporate Tax Avoidance. The Accounting Review, 83(Jan 2008): 61-82
Felix, L.W. Jr., A.A. Gramling and M.J. Maletta. The contribution of internal audit as a determinant of external audit fees and factors influencing this contribution. Journal of Accounting Research, 39(December 2001):513-534
Koonce, L., G.M Lipe and L.M. McAnally. Investor reactions to derivate use and outcomes. Review of Accounting Studies. 13(December 2008): 571-597
Webb. A.R. Managers' Commitment to the Goals Contained in a Strategic Performance Measurement System. Contemporary Accounting Research, 21(Winter 2004): 959-964
上研究课程的时候随手做的一个article analysis,拿去用吧... |
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