bluuebunny/crossref_metadata_2025 huggingface dataset:
ACCOUNTING REGULATION: AN ALTERNATIVE PERSPECTIVE
Authors: Laughlin Richard C. , Puxty Anthony G.
Published: December 2006

This paper analyses the debate over accounting regulation. Accepting the need for regulation, it first rejects the view of accounts as maps before going on question the conventional wisdom that the incompatibility of “interests” means that lack of agreement on standards is inevitable. It argues that conflicts over accounting standards are the result of clashes of worldview rather than interest, and provides evidence of this by analysing the debate over three contentious standards. The conclusion is that an agreed conceptual framework is feasible, although not on the basis currently envisaged.
FINANCIAL ACCOUNTING REPORTS: A MARKET MODEL OF DISCLOSURE: A COMMENT
Authors: Walker M.
Published: December 2006

In a recent paper Bird and Locke concluded “that a freely operating market for accounting information, unencumbered with disclosure requirements, can work efficiently”. The purpose of this Comment is to explain why this conclusion is unjustified. In particular it argues that our present understanding of the socalled ‘Market’ for information is so limited that no presumption, either for or against the efficiency of this market, can be given unequivocal theoretical support.
THE CONSEQUENCES OF GROWTH MAXIMISATION AND EXPENSE PREFERENCE POLICIES OF MANAGERS: EVIDENCE FROM UK BUILDING SOCIETIES. A STUDY OF THE CAUSES OF PROFIT INSUFFICIENCY DURING A PERIOD OF INCREASED COMPETITION USING DISCRIMINANT ANALYSIS
Authors: Barnes Paul
Published: December 2006

It has often been argued that the monopolistic position of building societies and the lack of constraints on policies of their managers has brought inefficiencies and managerial utility maximising results. This may be seen in society growth policies and their expense preference behaviour. When there is increased competition affecting margins some building societies may earn insufficient profits so as to threaten their financial stability. The present study uses multiple discriminant analysis to study the period 1978–1980 and verifies the hypothesis that both growth and expense preferences caused profit insufficiency which could lead to financial distress.
THE ENTERPRISE THEORY: AN EXTENSION
Authors: Purdy Derek E.
Published: December 2006

In America in the 1950s it was observed that large public corporations were portraying their sense of social responsibility through an analysis of gross income in various forms of supplementary accountings. Suojanen (1954) considered these accountings and their setting and then proposed the production value added statement as an appropriate accounting for the situation. The recent use of value added statements in the United Kingdom has prompted this examination of the enterprise theory and resulted in strengthening some of its assump tions and extending its accounting. The main extension is the separation of the rewards of management from those of other employees.
A RATIONAL RECONSTRUCTION OF THE DECISION‐USEFULNESS CRITERION
Authors: Puxty Anthony G. , Laughlin Richard C.
Published: December 2006

Most prescriptive external accounting is based upon the notion of increased welfare, and all existing accounting theory is predicated upon the decision‐usefulness criterion. This paper challenges the application of this criterion by demonstrating that it need not (as such theory implies) lead to enhanced welfare, and evidence is presented to support this. It presents instead a model for external accounting which is founded on an enriched model of welfare and is contingent on varying levels of societal environmental complexity.
UNDERSTANDING AND CONDUCTING EVENT STUDIES
Authors: Bowman Robert G.
Published: December 2006

Event studies have become one of the most important methodological approaches to empirical research in frnance and accounting. This paper discusses the nature of event studies, differentiating the four basic types: information content, market efficiency, model evaluation and metric explanation. A structure is identified for the conduct of event studies and the steps discussed. Specific studies in the literature are cited as illustrations of various points. Finally, a number of issues of interpretation, evaluation and design are discussed which are crucial to the effective conduct and understanding of an event study.
BUDGET AUDITING IN GOVERNMENTAL ORGANISATIONS FINANCED BY TAXATION
Authors: Pendlebury Maurice , Jones Rowan
Published: December 2006

There is some a priori support in the literature for using budgets as external financial reports, both before the financial year and afterwards. There is also some support for having these budgets audited. A questionnaire was sent to six hypothesised user groups in two local authority areas to determine whether there was empirical support for the a priori positions. The responses revealed wide support for making budget figures publicly available, both before and after the fmancial year. Support for auditing these budgets came only from external user groups (excluding members of parliament).
MULTIPLE OBJECTIVES IN ACCOUNTING AND FINANCE
Authors: Bhaskar Krish , McNamee Patrick
Published: December 2006

This paper fnst discusses the results of previous empirical and theoretical work relating to multiple objectives. It then reports on a survey carried out in 1978 by means of a questionnaire circulated to the top 500 companies. The paper finds that despite strong evidence of multiple objectives, the profit motive is dominant, although there is evidence of growth as a significant objective.

Proxy goals for a single primary objective function are found to be present, particularly in relation to risk. Finally, the implications of these results for accounting and finance are discussed.
A NOTE ON THE MARGINAL COST OF DEBT CAPITAL
Authors: Vickers Douglas
Published: December 2006

The firms marginal cost of debt capital was interpreted in this author's previous publications as the “full marginal cost of relaxing the money capital availability constraint'’ when the incremental money capital employed takes the form of debt capital. Account is thereby taken of the effects on financing costs of the increased risk exposure that debt financing implies for both debt and equity holders. The present paper clarifies a misconception in a recently published paper by Draper and Findlay, and exhibits the linkage between concepts relevant to the firm's fmancing decision and the general marginal analysis.
AN ALGORITHM FOR DETERMINING UNIQUE NONNEGATIVE INTERNAL RATES OF RETURN
Authors: Russell Allen M. , Rickard John A.
Published: December 2006

The problem of determining an internal rate of return of a given sequence of cash flows is equivalent to solving a polynomial equation. Although Sturm's theorem determines the exact number of roots of a polynomial in a given interval, its application can be long and tedious. For this reason it has not been particularly popular with non‐mathematical practitioners. Recently, considerable effort has been devoted to finding tests or algorithms which are easier to apply. This paper introduces an old but useful theorem on the location of roots of a polynomial, elucidates recent results due to Clarke and others, and also offers some improvements.
AN EXPANDED COMMERCIAL PAPER RATING SCALE: CLASSIFICATION OF INDUSTRIAL ISSUERS
Authors: Peavy John W. , Edgar S. Michael
Published: December 2006

The finance literature contains many examples of attempts to classify bond issuers into rating categories and to identify the key variables which contribute to bond rating differences. This study extends the classification literature to include industrial commercial paper issuers. Standard and Poor's has expanded its A‐ 1 commercial paper category, and hypothesized division characteristics are proposed, followed by the classification test. The relative comparability of key variables in this study to those in bond studies is striking.
ON LINEAR DISCRIMINATION WITH ACCOUNTING RATIOS
Authors: Richardson Frederick M. , Davidson Lewis F.
Published: December 2006

Much research in Accounting and Finance is concerned with using the linear discriminant function (LDF) to model accounting‐based ratios to predict financial events and other variables. Little attention has been given to the conditions under which the model is optimal, and to any resultant biases in model output associated with accounting ratios that do not meet optimality. This study lists conditions for LDF optimality, and discusses the potential problems when accounting numbers do not meet such conditions. This knowledge is extended by reported results of an empirical study which show that the cross‐sectional properties of some ratios arr not temporally stable. Finally, suggestions are offered to improve modeling efforts.
DEBT AND TAXES: EMPIRICAL EVIDENCE
Authors: Patterson Cleveland S.
Published: December 2006

The literature currently proposes several capital structure theories whose predictions are generally mutually exclusive. Empirical testing to date has been subject to serious conceptual and econometric problems. The present study, which is carried out on a cross‐section of industrial firms, attempts to overcome several deficiencies in earlier studies. Although the results are more consistent with Miller's 1977 hypothesis that the value of the firm is independent of leverage in the absence of leverage‐related costs than they are with those theories which predict a value‐maximizing optimum debt level, there is significant evidence that the value of the firm may be negatively related to leverage over a broad range of debt usage.
THE REPORTING OF INVESTMENTS IN ASSOCIATED COMPANIES AND CREDIT EVALUATIONS: AN EXPERIMENTAL STUDY
Authors: Wilkins Trevor , Zimmer Ian
Published: December 2006

Policymakers have been concerned with the problem of accounting for investments in associated companies. A field experiment was conducted to investigate the effects of alternative methods of recognising revenue from investments in associated companies on creditors' evaluations and decisions. Results indicate that most creditors do not adjust financial statements based on alternative methods of accounting and that different methods of accounting affect credit assessments and decisions. The implications of these findings for policymakers and creditors are discussed.
SOME ESTIMATES OF THE IMPACT OF CORPORATE DIVERSIFICATION ON THE VALUATION AND LEVERAGE OF USA FIRMS: ESTIMATES FROM 1972 DATA
Authors: Rosenthal Leonard , Sullivan Timothy G.
Published: December 2006

This paper estimates the effect of corporate diversification on market valuation and leverage. Using a data base which allows one to determine the product lines of companies on the 3‐digit S.I.C. code level, a set of multi‐industry firms was chosen. For each of these diversified firms, a portfolio of single industry firms was constructed which matched the component parts of the multi‐ industry firm. Tests showed that although diversified firms employ significantly greater financial leverage, their relative market value is significantly less than that of the matching portfolios of single industry firms with which they com‐ pete. This study does not support the view that corporate diversification creates synergistic benefits which can be translated into increased market value of the firm's securities.
EFFECT OF MERGERS ON THE SHARE PRICE MOVEMENT OF THE ACQUIRING FIRMS: A UK STUDY
Authors: Dodds J.C. , Quek J.P.
Published: December 2006

The profitability of mergers in Britain has not received the same attention as in the USA. This study examines mergers for the UK industrial sector as a whole for a period (1974–76) when merger activity was relatively slack. A standard methodology is used, but the size effects and the activeness of acquirors as well as the financing of the acquisition are examined. The conclusions contradict to some extent those found by other researchers in that the evidence was inconsis‐ tent with the Efficient Markets Hypothesis. The effect of taking firm size into account was found to reduce the standard deviations of the sample and it would appear that the cash mergers were viewed as less desirable by the market com‐ pared to equity exchange. For the separation of merger activehon active firms it was found that there was less dispersion of the residuals for non‐merger active firms.
DIVIDEND POLICY AND ITS RELATIONSHIP TO INVESTMENT AND FINANCING POLICIES: EMPIRICAL EVIDENCE
Authors: Partington Graham H.
Published: December 2006

In this paper it is argued that dividend policy is not determined as a residual, but rather that firms adopt independent dividend and investment policies. Empirical evidence, based on a questionnaire survey, supports this view. Independent dividend and investment policies are possible because debt finance is usually raised in sufficient quantities to accommodate the financial demands created by dividend and investment decisions.
FINANCIAL CHARACTERISTICS RELATED TO MANAGEMENTS'STOCK SPLIT AND STOCK DIVIDEND DECISIONS
Authors: Elgers Pieter T. , Murray Dennis
Published: December 2006

Several studies have made inquiries of corporate managers concerning their motivations for undertaking stock splits and stock dividends. This paper investigates whether the factors identified by these studies are in fact associated with the actual stock distribution decisions of managers. The results are consistent with the view that managements issue large stock distributions (25 per cent or greater) in order to keep the per share price in an optimal range and to signal optimistic expectations to the market. Firms with relatively low per share prices were inclined to issue small stock distributions (less than 25 per cent); the signaling motivation also played a role here.
Adjustments For ‘Extraordinary Items’In Smoothing Reported Profits of Listed Australian Companies: Some Empirical Evidence
Authors: Craig Russell , Walsh Paul
Published: December 2006

Nothing is more likely to undermine the credibility of financial reporting than the suspicion that the results reported were predetermined and that the accounting methods used were selected to produce the results desired by the preparers of the report', Solomons (1983).
CAPITAL INVESTMENT APPRAISAL TECHNIQUES: A SURVEY OF CURRENT USAGE
Authors: Sangster Alan
Published: December 2006

This paper seeks to show that organisational change, fuelled by the expansion of information technology, may have contributed to the erosion of the previously established relationship between company size and the quantitative investment appraisal criteria selected. It finds that companies are using more methods together, that usage of the more sophisticated discounted cash flow techniques is higher, and that usage of the less theoretically sound accounting rate of return technique is lower, than previous studies would have suggested for companies of the size involved. It suggests that the size/method selection relationship may only be identifiable when the companies involved are all part of one study, or the studies compared are contemporaneous.
AUDITOR CHOICE AND AUDIT FEE DETERMINANTS
Authors: Thornton Daniel B. , Moore Giora
Published: December 2006

An analytical model predicts that cross‐sectionally (1) the marginal cost of auditor quality is inversely related to the strength of client companies' internal control. (2) In the short run, clients with stronger control, lower business risk, or less complex audits choose higher quality auditors; but whether they pay higher audit fees is indeterminate. (3) In the long run, client companies have both lower quality auditors and weaker controls as risk or complexity increase, so less precise financial reporting is expected from them. (4) The effects of risk and complexity on fees are indeterminate, because the price and quantity components of fees tend to vary inversely as risk or complexity change. The predictions are consistent with findings that have been viewed as empirical anomalies.
DEREGULATION AND THE VOLATILITY OF UK STOCK PRICES
Authors: Peel David A. , Pope Peter F. , Yadav Pradeep K.
Published: December 2006

This paper examines the behaviour of the UK stock market for significant changes in volatility over the four years surrounding Big Bang i.e. 27 October, 1986 when the market was substantially deregulated. The main findings are that after Big Bang but prior to Black Monday, the UK stock market was no more volatile than prior to Big Bang, but that after Black Monday, the UK market was more volatile than prior to Big Bang even after adjusting for increases in global volatility.
SIMPLE RESOURCE ALLOCATION RULES: A NOTE ON A GENERALISATION
Authors: Stark Andrew W.
Published: December 2006

A stream of literature exists on the ability to pick payback hurdles such that use of the payback method replicates decisions based on net present value (NPV) analysis under circumstances where the basic shape of the cash inflow pattern associated with the investment opportunity facing the firm is assumed known. The literature has derived such payback hurdles for specific cash inflow pattern shapes (e.g., level, exponentially increasing/decreasing, arithmetic growth, etc.) The main concern of this note is to identify an expression for a general class of cash inflow pattern shapes (of which the specific shapes in the previous literature are examples) from which can be derived the payback hurdle corresponding to any specific shape belonging to the general class.
ORGANIZATIONAL STRUCTURE AND INTRAFIRM TRANSFER PRICES FOR INTERDEPENDENT PRODUCTS
Authors: Schroeder Douglas A.
Published: December 2006

This paper applies a modified, truth‐revealing Ronen‐McKinney (1970)/Groves‐Loeb (1976) intrafirm transfer pricing mechanism for interdependent products to evaluate the relative economies of alternative organizational structures. In particular, the mechanism's communication efficiency is compared for two common organizational structures: (i) product‐line divisionalization and (ii) functional divisionalization. While there are no differences in communication efficiency for the two organizational forms when independent products are involved, the analysis suggests that product‐line divisionalization provides for more efficient communication than functional divisionalization when interdependent products are involved.
REINTERPRETATION OF THE SHAREHOLDER GAINS IN SELLOFF TRANSACTIONS
Authors: Cheng Louis T.W. , Davidson Wallace N.
Published: December 2006

This paper examines the overall wealth effects of selloffs. When sellers and buyers are examined separately, abnormal returns are found around the announcement days. However, a combination of matched‐pair buyers and sellers in value‐weighted portfolios wipes out these gains. In a sample of 182 selloff portfolios, 93 of them experience positive returns while the remaining 89 cases face negative price reactions. These results cast doubt on the conclusion that selloff activity is generally synergistic. In addition, a large size difference is found between buyers and sellers. Large buyers win more often than small buyers. Small sellers win more often than large sellers. Our results show that when examining selloffs for synergy equally‐weighted results can be biased.
AN EMPIRICAL INVESTIGATION INTO THE IMPACT OF PROFIT SHARING SCHEMES OF EXECUTIVIES ON THE CONTENT OF CORPORATE SUBMISSIONS ON PROPOSED ACCOUNTING STANDARDS
Authors: Macarthur John B. , Groves Roger E. V.
Published: December 2006

This paper examines the comments submitted by UK companies on 20 proposed accounting standards to test the hypotheses that executives favor standards that increase, or dampen the variance of, accounting profit numbers on which their incentive remuneration is based. Test results were generally as hypothesised but only the profit variance outcomes were statistically significant. Allowing for political environment changes affected only the profit variance results. There was no evidence that the relative monetary size of bonus payments was a significant lobbying factor. No significant differences were found between the lobbying preferences of companies with or without executive incentive schemes.
THE EFFECTS OF THE ANNOUNCEMENTS OF DIVIDEND INCREASES ON STOCK RETURN VOLATILITY: THE EVIDENCE FROM THE OPTIONS MARKET
Authors: Jayaraman Narayanan , Shastri Kuldeep
Published: December 2006

This paper examines the impact of the announcements of dividend increases on the volatility of underlying stock returns implied by option prices, and analyses whether the impact is related to the label associated with the dividend increase. The results suggest that the announcements of labelled dividend increases are accompanied by a decrease in implied volatility, while the announcements of unlabelled increases in dividends are associated with no change in implied volatility. These results are consistent with the hypothesis that signal implicit in the announcements of dividend increases provides noisy information about the firm's volatility.
DETERMINANTS OF AUDIT FEES FOR QUOTED UK COMPANIES
Authors: Chan Philip , Ezzamel Mahmoud , Gwilliam David
Published: December 2006

This study reports further evidence as to the determinants of the audit fees paid by quoted companies in the UK. It outlines a framework based on the findings from semi‐structured interviews with partners in four large audit firms and the results of previous research, and tests this framework by means of multivariate analysis using 1987 data for a large sample of quoted UK companies. A model explaining 87 per cent of the variation in audit fees is constructed. The principal explanatory variables are found to be auditee size, return on shareholders equity, the number of subsidiaries, the lag between the year end and the date of the audit report, the size of the auditor, a measure of auditee diversification, the ownership structure of the auditee, and whether the auditor was based in London, with the last three being new variables introduced in this study.
DAY OF THE WEEK EFFECTS: A TEST OF THE INFORMATION TIMING HYPOTHESIS
Authors: Defusco Richard A. , McCabe George M. , Yook Ken C.
Published: December 2006

Many explanations have been offered for the negative Monday effect. An obvious conjecture is that the negative return might be due to firms timing the release of information after the market closes on Friday. We test this conjecture on a sample of 233 firms for 1986. Using a firm's board meeting date as a proxy for high information days we find that a firm's Monday return near a board meeting date is more likely to be negative than other Monday returns. Also the remaining days of the week tend to be more positive than similar days further away from the board meeting. Our results appear to explain part of the negative Monday effect.
ASSET PRICING WITH IN‐ AND OUTFLOW CONSTRAINTS: THEORY AND EMPIRICAL EVIDENCE FROM SWEDEN
Authors: Bergström Clas , Rydqvist Kristian , Sellin Peter
Published: December 2006

The paper analyzes asset pricing and portfolio choice when domestic investors collectively cannot hold foreign assets beyond a maximum value. We add the constraint that foreign investors cannot hold more than a fraction of the shares of domestic assets. Consistent with Swedish stock market data, both domestic and foreign investors pay premiums for investing in the other country's assets. Some empirical observations are inconsistent with the CAPM framework.
GOOD NEWS, BAD NEWS, VOLUME, AND THE MONDAY EFFECT
Authors: Fishe Raymond P.H. , Gosnell Thomas F. , Lasser Dennis J.
Published: December 2006

New evidence is presented on the nature of the Monday effect in stock market returns. Using stock returns for the years 1962‐1986, the Monday effect is found to be confined to periods of negative market returns. Monday's returns are no different from other weekday returns in periods of positive returns. In addition, trading volume and the Monday effect are related. Monday's volume is lower than the other weekdays. When returns are compared controlling for trading volume, we find that the Monday effect is confined to negative return periods with above normal volume, which represent only two per cent of the sample period.
DUAL CLASS SHARES: ARE THERE RETURNS DIFFERENCES?
Authors: Foerster Stephen R. , Porter David C.
Published: December 2006

We examine dual classes of shares with identical dividends and liquidation treatment, but with different voting rights. We extend previous dud class studies by examining bid‐ask adjusted prices and by examining returns after controlling for bid‐ask spread and market value differences between voting classes. We establish that voting right differences, although related to price differences between superior and restricted voting shares, do not impact on average returns behavior. These findings are consistent with previously forwarded voting premium hypotheses.
TAX UNCERTAINTIES AND THE INVESTMENT DECISION
Authors: Cheung Joseph K. , Heaney John
Published: December 2006

This paper investigates how the firm's investment decision is affected by uncertainties in the tax laws under an asymmetric structure of income taxation. Tax liability is modelled as a call option, and tax uncertainties are modelled as randomness in the exercise price of the call option. The effects on the investment decision are derived by evaluating the comparative statics of the optimal investment level with respect to the volatility of the exercise price. The central result is that the disincentive effects of the tax uncertainties are generally exacerbated under the tax asymmetry.
EXPECTATIONS, SECURITY YIELDS, AND INFLATION: EX‐ANTE RISK PREMIA ON UK SHARES, CORPORATE BONDS AND GILTS, 1969–1987
Authors: Yaansah R.A. , Peasnell K.V.
Published: December 2006

This paper provides estimates of monthly risk premia required by investors on shares, corporate bonds and government gilts during the period 1969–1987, based on the CAPM and using deviations between past actual returns and the model's forecast returns as inputs. Ex‐ante risk premia increased dramatically during the 1970s and again on equities in the period around the October 1987 Crash. The risk premia moved closely in line with inflation in the 1970s, casting considerable doubt on the Modigliani and Cohn thesis that the fall in share prices in the middle of that decade was due to the market suffering from money illusion. When account is taken of trends in the premia and inflation timeseries, the correlation between the two disappears. This result is consistent with the findings of others that the widely observed negative correlation between share returns and inflation is a spurious one, traceable to monetary accommodation of supply‐side shocks to the real economy — something which is hard to reconcile with the money illusion argument.
STATISTICAL PROPERTIES OF DAILY RETURNS: EVIDENCE FROM EUROPEAN STOCK MARKETS
Authors: Corhay A. , Rad A. Tourani
Published: December 2006

This paper attempts to model the distributional properties of daily stock returns on several European Stock Exchanges. The empirical findings reveal the presence of non‐linear dependencies that cannot be captured by the random walk model. A model of return‐generating process that fit the data empirically is the Generalized Autoregressive Conditional Heteroskedastic GARCH (1,1) process with a conditional student‐t distribution.
SECURITY ANALYST FORECASTS AND THE EARNINGS YIELD ANOMALY
Authors: Bauman W. Scott , Dowen Richard J.
Published: December 2006

This paper tests for existence of a positive relationship between the earnings yield anomaly and the earnings forecast error (EFE) effect. The earnings yield anomaly recognizes that stocks with low price‐earnings ratios produce positive risk‐adjusted returns. The EFE effect refers to the positively related stock price response to differences in reported earnings per share (EPS) and the EPS previously forecast by security research analysts. The within group method is used in order to remove the effect of the EFE. Empirical research findings based on 1979‐1988 data, indicate that the EFE effect does not account for the earnings yield anomaly.
BANK LENDING RELATIONSHIPS AND THE COMPLEX NATURE OF BANK‐CORPORATE RELATIONS
Authors: Holland John
Published: December 2006

Recent developments in the banking and bank lending literature have highlighted the significance of bank‐corporate relations. This paper expands the concept of relations, and places the credit relationship within the broader context both of comprehensive financial service supply relationships and multiple bank‐corporate relationships. The expanded concepts of relations are based on extensive case study research and are explored through the use of theoretical constructs. These concepts of relations are then used to investigate bank rationales for relationship banking and to identify enhanced research opportunities for the related bank lending research programmes.
RATIONAL INVESTORS' REACTION TO UNCERTAINTY: EVIDENCE FROM THE WORLD'S MAJOR MARKETS
Authors: Ajayi Richard A. , Mehdian Seyed
Published: December 2006

This paper examines the reaction of rational investors to unexpected information across the world's major markets. The empirical results provide considerable support for the Uncertain Information Hypothesis and limited support for the Overreaction Hypothesis. In addition, it is found that investors are compensated for post‐event increased volatility across these major markets.
CORPORATE TAKEOVER BARRIERS: VALUATION AND FIRM PERFORMANCE
Authors: Bojanic Sharon Lee , Officer Dennis T.
Published: December 2006

This study provides additional evidence on the share price effect of takeover barriers such as antitakeover charter amendments, dual classes of common stock, and poison pill plans. The share price reaction to the construction of takeover barriers is found to be negative but insignificant. However, when disaggregated by type, significant negative share price reactions are found on construction of poison pill plans. New evidence on the possible relationship between firm performance and takeover barrier construction is also presented. The results of this study suggest that management of ‘efficiently‐run’ firms may construct takeover barriers to deter value‐diminishing takeovers.
EVIDENCE ON ADJUSTMENTS IN MAJOR NATIONAL STOCK MARKET LINKAGES OVER THE 1980S
Authors: Brocato Joe
Published: December 2006

This paper measures the alterations that have occurred in equity market correlations for six major internationally active stock exchanges between 1980 and 1987. The markets are chosen so as to allow for geographical diversity while still accounting for almost ninety percent of total worldwide equity market capitalization. The VAR variance decomposition technique is used to measure intermarket linkage patterns. We find substantial alterations in intermarket linkage patterns occurring over the 1980s. While the US market (the New York Stock Exchange) is still the dominant financial force in world equities trading, other markets (particularly those in the Pacific Basin region) now account for an increasing impact on observed index correlations in the system. This paper suggests that world financial integration is, in part, responsible for the altered linkage patterns observed over the 1980s.
INTERESTS AND THE PROFESSION‐STATE DYNAMIC: EXPLAINING THE EMERGENCE OF THE AUSTRALIAN PUBLIC SECTOR ACCOUNTING STANDARDS BOARD
Authors: Chua Wai Fong , Sinclair Andrew
Published: December 2006

This paper seeks to understand the professionalisation project of accountants by historically ‘following’ the organised, contingent interests of state agencies, professional elites, business and community organisations. Drawing upon recent research on the accounting profession that is grounded in the work of Weber, Marx and Foucault, professions are seen as self‐interested transnational collec‐tives whose internal modes of membership control and external relationships with other organised interests are both structured and subject to continual renegotiation and change. This particular framing of professional associations is illustrated by documenting the emergence of the Australian Public Sector Accounting Standards Board in 1983.
ESTIMATING RETURNS ON FINANCIAL INSTRUMENTS: TIME VERSUS MONEY‐WEIGHTED RETURNS
Authors: Tippett Mark
Published: December 2006

The present paper addresses the problem of estimating returns on financial instruments when there is incomplete information about the instrument's cash flows. Two return metrics are analysed; namely, the money‐weighted return and the time‐weighted return. Returns are usually reported in the financial media on a money‐weighted basis. However, there is increasing evidence that returns measured on a time‐weighted basis are more appropriate for the evaluation of financial performance. The present note outlines the relationship between the two return metrics and examines some estimation procedures which may be used.
INFORMATION ASYMMETRY AND THE UNDERPRICING OF INITIAL PUBLIC OFFERINGS: FURTHER EMPIRICAL EVIDENCE
Authors: Cheung C. Sherman , Krinsky Itzhak
Published: December 2006

Information Asymmetry is usually assumed in most explanations of the underpricing of initial public offerings (IPOs). In Baron's (1982) model, the underwriter is better informed than the issuing firm concerning the demand for the IPO. The greater uncertainty associated with the demand will lead to a greater underpricing due to the enhanced value of the underwriter's expertise. In the case that the issuer is also an informed investment banker, Baron's hypothesis predicts no underpricing. Our results based on Canadian investment bankers do not support Baron's hypothesis.
LEASING AND THE US 1986 TAX REFORM ACT
Authors: Gutman Eyal , Yagil Joseph
Published: December 2006

The US 1986 Tax Reform Act (TRA) contains several tax provisions affecting many areas of corporate finance including lease financing. One of the more important provisions is the Alternative Minimum Tax (AMT) which determines an alternative in addition to the usual tax computation, and consequently results in a new lessee‐lessor tax‐asymmetry. To investigate the overall impact on the net advantage of leasing (NAL) of both the AMT and the other relevant provisions of the TRA, a leasing model is developed which incorporates these tax provisions. In the context of this leasing model, the following results are derived. When the AMT provision does not apply, the Tax Reform Act (TRA) reduces substantially the net advantage of leasing (NAL) over buying. In contrast, the effect of the AMT symmetry is positive. As a result, the combined effect of the AMT and the other changes in the TRA on the NAL is negligible for property class of assets of the more common length of time (about ten years), but becomes negative for real‐property type of assets.
PRICING CURRENCY FUTURES OPTIONS WITH LOGNORMALLY DISTRIBUTED JUMPS
Authors: Tucker Alan L. , Madura Jeff , Marshall John F.
Published: December 2006

We find that a mixed diffusion‐jump process fits most daily currency futures price series better than a mixture of normal densities and, especially, an asymmetric stable Paretian model. We also find that Merton's (1976) mixed diffusion‐jump option pricing model outperforms Black's (1 976) model for valuing currency futures options. Our results suggest that researchers should begin to consider the possibility of jump processes as time‐independent models of other futures price series.
AN EMPIRICAL INVESTIGATION OF BETA STABILITY: PORTFOLIOS VS. INDIVIDUAL SECURITIES
Authors: Gregory‐Allen Russell , Impson C. Michael , Karafiath Imre
Published: December 2006

The concept that portfolio betas are more stable than betas for individual securities has become the ‘conventional wisdom’ in finance; statements to this effect may be found in many popular finance textbooks. The objective of this paper is to challenge the conventional wisdom. A random sample of individual stock returns and portfolio returns is used to compare the empirical distribution of beta shifts for individual firms and portfolios. The number of statistically significant changes in beta are no greater for individual securities than for portfolios.
THE EUROPEAN PERSPECTIVE ON THE COMPOSITION AND VARIABILITY OF THE ECU
Authors: Johnson Robert R. , Soenen Luc A.
Published: December 2006

In 1979 the Ecu was established as a currency basket including the currencies of the nine EC‐member countries at that time. Its composition was modified in 1984 and again in 1989 by increasing the number of currencies in the basket to 10 and 12 respectively. The results of our analysis show that the Ecu has become consistently less variable with each change in its composition, when expressed in terms of the Greek drachma, Italian lira, Portuguese escudo, Spanish peseta, and to a lesser extent the British pound. However, the Ecu has become consistently less stable with respect to the German mark and the Dutch guilder. The results were mixed for the Belgian/Luxembourg franc, French franc, Irish punt and Danish krone.
THE UNDERPRICING OF IPOS OF FINANCIAL INSTITUTIONS
Authors: Alli Kasim , Yau Jot , Yung Kenneth
Published: December 2006

This paper examines the underpricing of IPOs of financial institutions over the period 1983 to 1987. Based on a sample of 185 banks and savings and loan associations (including S&L conversions) and a control sample of 1,361 industrial firms, results indicate that in general IPOs of financial institutions are significantly less underpriced than those of the non‐financial institutions. In particular, the IPOs of non‐S&L conversion financial institutions are less underpriced than the IPOs of non‐financial institutions.
THE DETERMINANTS OF AUDIT FEES: SOME EMPIRICAL MODELS
Authors: Pong C.M. , Whittington G.
Published: December 2006

This paper proposes a model of audit fee determination based upon size and other characteristics of the auditee and the auditor, and upon whether there has been a recent change of auditor (which might lead to a low‐balling effect). A novel feature of the model is that auditee size is measured in two dimensions, sales and assets, and is allowed to have a quadratic relationship with audit fee. The model was estimated for a sample of large listed UK companies for the years 1981 to 1988. The results support the low‐balling hypothesis and also provide insights into the distinctive role of the Big 8 firms in the audit market.
GAME THEORY AND THE AUDITOR'S PENALTY REGIME
Authors: Hatherly David , Nadeau Luc , Thomas Lyn
Published: December 2006

This paper models the audit as a cooperative game played by the auditor and auditee within a penalty regime imposed by a regulatory authority. The paper investigates the relationship between the penalties set by the regulator and the jointly agreed strategy of the auditor and auditee, and discusses how the penalty regime might be employed so as to induce a particular strategic outcome such as high effort levels on the part of the auditee and/or auditor.
A LONGITUDINAL SURVEY ON CAPITAL BUDGETING PRACTICES
Authors: Pike Richard
Published: December 2006

This paper reports the findings of a longitudinal study of capital budgeting practices within 100 large UK companies between 1975 and 1992. Such an approach enables a more meaningful comparison of changes in investment practices over time and helps to clarify the confusing picture built up from comparison of prior surveys with different research designs and often low response rates.
ARE LONG‐HORIZON STOCK RETURNS PREDICTABLE? A BOOTSTRAP ANALYSIS
Authors: Malliaropulos Dimitrios
Published: December 2006

This paper examines empirical evidence of predictability of long‐horizon real and excess stock returns in the UK using univariate as well as multivariate Variance Ratio tests. In order to estimate the sampling distribution of the test statistics, artificial histories ofstock returns are generated from their empirical distribution using the bootstrap method. This allows the construction of significance levels of the test statistic which are free from distributional assumptions. The empirical results indicate that there is no evidence of mean reversion in stock prices even if a wider information set to forecast stock returns is used and that the significance of historical Variance Ratio statistics has been overstated by previous studies.
FORECASTING VOLATILITY FOR PORTFOLIO SELECTION
Authors: Vasilellis George A. , Meade Nigel
Published: December 2006

The volatility of an asset is a primary input to the portfolio selection problem. Information about volatility is available from two sources, namely the share market and the option market. This paper examines the forecasting performance, over a three month investment horizon, of time series forecasts (from the share market) and option based implied volatilities. Three time series models, including GARCH, are used and twenty four implied volatility estimation models are employed. Using a data set of twelve UK companies, it is demonstrated that implied volatilities produce better individual forecasts than time series. However, more remarkably, forecasts combining implied volatilies and time series estimates significantly outperform both component forecasts.
RISK, SEASONALITY AND THE ASYMMETRIC BEHAVIOUR OF STOCK RETURNS
Authors: Chelley‐Steeley Patricia L.
Published: December 2006

For some time there has been a puzzle surrounding the seasonal behaviour of stock returns. This paper demonstrates that there is an asymmetric relationship between systematic risk and return across the different months of the year for both large and small firms. In the case of both large and small firms systematic risk appears to be priced in only two months of the year, January and April. During the other months no persistent relationship between systematic risk and return appears to exist. The paper also shows that when systematic risk is priced, the size of the systematic risk premium is higher for large firms than for small firms and varies significantly across the months of the year.
FAMILY INTERACTION AND SOCIAL ADJUSTMENT IN A SAMPLE OF NORMAL SCHOOL CHILDREN
Authors: Aston P. Jean , Dobson Gillian
Published: December 2006

Twenty‐five children aged 10–11, none of whom had been psychiatrically assessed as “disturbed”, were rated for their social behaviour at school. Nine with no signs of disturbance were termed the “Adjusted” group, 8 with one or two signs the “Middle” group, and & with four or more signs the “Disturbed” group. Significant differences were found between the “Adjusted” and “Disturbed” groups for parental verbal behaviour during a family discussion task, “Disturbed” mothers being comparatively over‐prominent and over‐attentive to their children, “Disturbed” fathers being withdrawn. Overt behaviour appeared to reflect mild underlying emotional disturbances within the “Disturbed” and “Middle” groups.
MATERNAL REJECTION AND CONSERVATION: AN ANALYSIS OF SUB‐OPTIMAL COGNITION
Authors: Hamilton Vernon
Published: December 2006

Attempts were made to derive a plausible relationship between socialization experiences and conservation. It was postulated that children of accepting and rejecting mothers would differ from an early age in patterns of arousal and activation levels, in experiences of stress, and in their willingness to obtain social feedback in problem solving. Therefore, it was proposed, children exposed to rejection might find it more difficult to apply logical strategies in information processing, and to filter out irrelevant from relevant stimuli in conservation tests. As predicted, conservation assessed by new pictorial tests of increasing difficulty was shown to be less well developed in children of rejecting mothers.
REMOVING INFANT RHESUS FROM MOTHER FOR 13 DAYS COMPARED WITH REMOVING MOTHER FROM INFANT
Authors: Hinde Robert A. , Davies Lynda
Published: December 2006

In a previous experiment, 6 rhesus monkey mothers were removed from their infants for 13 days, the infants being left in their familiar environment. Here the procedure was reversed–5 infants were removed to an isolation cage in a strange room, the mothers staying in their familiar environment. Contrary to expectation these infant‐removed infants were less disturbed than the mother‐removed infants. This difference was associated with, and was probably due to, a more positive role by the mothers of the infant‐removed group in mother‐infant interaction after reunion. It is suggested that the effects of a separation experience may be mediated in part by the disturbance to the mother‐infant relationship which results.
THE LEARNING OF GRAMMATICAL INFLEXIONS IN NORMAL AND SUBNORMAL CHILDREN
Authors: Bradbury B. , Lunzkr E. A.
Published: December 2006

Two groups of 18 children, one of average ability, the other drawn from E.S.N. schools were selected as of approximately MA6. Each subject was given a learning task requiring the induction of grammatical rules (to supply the appropriate nonsense‐syllable ending to a nonsense syllable stem) for past, plural and possessive. The three rules varied in generality and were allocated to grammatical form classes in a perfectly crossed design. Both groups of children learned the more general rule more effectively, and no other differences were consistent. E.S.N. children were less able to apply the rule to a single presentation of a transfer example. The findings are examined for the light that they throw on the nature of specific retardation in E.S.N. children.
BEHAVIOURAL CHARACTERISTICS OF CHILDREN IN RESIDENTIAL CARE IN RELATION TO INDICES OF SEPARATION
Authors: Yule William , Raynes Norma V.
Published: December 2006

Children in two large Group Cottage Homes were rated on standard behaviour ratings scales by both their house parents and their teachers. They were found to be significantly more maladjusted than their peers living at home. Attempts were made to relate the behavioural ratings to a variety of indices of the childrens' separation experiences.
A CASE STUDY OF AN “AUTISTIC‐SAVANT”: MENTAL FUNCTION IN THE PSYCHOTIC CHILD WITH MARKEDLY DISCREPANT ABILITIES
Authors: Goodman Joan
Published: December 2006

This paper describes discrepant mental function in an. autistic‐savant boy, so labelled because he has the behavior of an autistic child and the cognitive profile of the idiot savant. Major findings are that: perception is adequate for visual discrimination, but not for spatial orientation; superior memory‐ exists for specialized data of limited scope and is explained, not by unusual rates of initial learning, but by a failure to forget; abstract associations are formed while developmentally easier tasks are failed. It is suggested that these contradictions—frequently found in psychotic children—are a natural developmental outcome of deficiencies in somatic awareness.
CHILDHOOD HALLUCINATIONS
Authors: Egdell H. G. , Kolvin I.
Published: December 2006

The definition and problems in diagnosis of childhood hallucinations is the background of a critical review of reported figure of incidence. Hallucinations, occurring in clear consciousness in a child psychiatric in‐patient population are presented. There was a frequency of 5 per cent in the general in‐patient group. Eighty‐one per cent of these with psychosis of late onset (5–15 years) were hallucinated in contrast to the infantile psychosis group (onset before 3 years) where none were found. Descriptions of children with hallucinations arising in great stress, late onset psychosis and Mandrax Intoxication are given.
A NOTE ON “ALIENATED” YOUTH THE FUNCTIONS OF THE DISTRICT OF SOHO, LONDON
Authors: Holden H. M.
Published: December 2006

In this essay the plight of “unattached” adolescents in the West End of London is considered in the light of Erikson's concept of an adolescent “moratorium”. The suggestion is made that the district of Soho fulfils many of the necessary conditions for such a “moratorium” and the fate of adolescents who select this particular environment for this purpose is explored. Some consideration is also given to the caretaking resources provided by the community within the district.