nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2007‒10‒06
four papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Accounting: A General Commentary on an Empirical Science By Salvary, Stanley C. W.
  2. Liquidity and Manipulation of Executive Compensation Schemes By Axelson, Ulf; Baliga, Sandeep
  3. Who or What Really Counts in a Firm’s Stakeholder Environment: An Investigation of Stakeholder Prioritization and Reporting By Giacomo Boesso; Kamalesh Kumar
  4. Auswirkungen der IFRS-Umstellung auf die Risikoprämie von Unternehmensanleihen - Eine empirische Studie für Deutschland, Österreich und die Schweiz By Kerstin Kiefer; Philipp Schorn

  1. By: Salvary, Stanley C. W.
    Abstract: Many researchers have questioned the view of accounting as a science. Some maintain that it is a service activity rather than a science, yet others entertain the view that it is an art or merely a technology. While it is true that accounting provides a service and is a technology (a methodology for recording and reporting), that fact does not prevent accounting from being a science. Based upon the structure and knowledge base of the discipline, this paper presents the case for accounting as an empirical science.
    Keywords: national accounting and organizational accounting; risk-sharing arrangements; management of time and other resources; monetization of the economy; command over goods and services; extrinsic value and intrinsic value; commodity money and paper/nominal money; money in relation to credit; the firm and long range planning; market value versus committed finance; explanation and prediction; expectations and uncertainty.
    JEL: M4 M41
    Date: 2007–06–28
  2. By: Axelson, Ulf (Swedish Institute for Financial Research); Baliga, Sandeep (Northwestern University)
    Abstract: Several standard components of managerial compensation contracts have been criticized for encouraging managers to manipulate short-term information about the firm, thereby reducing transparency. This includes bonus schemes that encourage earnings smoothing, and option packages that allow managers to cash out early when the firm is overvalued. We show in an optimal contracting framework that these components are critical for giving long-term incentives to managers. The lack of transparency induced by the features of the contract makes it harder for the principal to engage in ex post optimal but ex ante inefficient liquidity provision to the manager.
    Keywords: Executive compensation; earnings management; transparency
    JEL: G34 J33
    Date: 2007–07–15
  3. By: Giacomo Boesso (Università di Padova); Kamalesh Kumar (University of Michigan-Dearborn)
    Abstract: Following the line of thinking that a firm is a nexus of contracts between stakeholders, with managers as “the central node” (Hills and Jones, 1992), this study examined how managers prioritize stakeholder relationships and to what extent firms engage in voluntary disclosure with the stakeholder group they deem to be important. Data was simultaneously collected from two different national business contexts, Italy and the US. Results of the study show that the power, legitimacy, and urgency that managers associate with various stakeholder groups cumulatively determine how they go about prioritizing competing stakeholder claims. The results also provide evidence to the effect that the more importance a firm attaches to a stakeholder group, the greater the level of interaction between the firm and the stakeholder group, as evidenced in the information reported by the firm in its disclosures.
    Keywords: Stakeholder management, voluntary disclosures, cross-cultural differences, stakeholder engagement, prioritizing stakeholder claims, stakeholder dialogue
    JEL: M14 M41
    Date: 2007–09
  4. By: Kerstin Kiefer; Philipp Schorn
    Abstract: Reduziert eine IFRS-Umstellung die Informationsdefizite der Fremdkapitalgeber und somit auch die Risikoprämie von Unternehmensanleihen? Entgegen bisherigen empirischen Untersuchungen betrachten wir den Zusammenhang zwischen Offenlegung und Kapitalkosten für Fremdfinanzierung. Folglich analysieren wir den Einfluss einer IFRS-Umstellung auf die Risikoprämie von Anleihen deutscher, österreichischer und schweizer Unternehmen im Zeitraum von 1997 bis 2005. Unsere Ergebnisse zeigen, dass sich die Veränderung der Risikoprämie nach einer Umstellung auf IFRS um ca. 39% verringert. Allerdings tritt dieser Effekt mit einer zeitlichen Verzögerung auf, da die Verringerung im zweiten Jahr nach der Umstellung stärker ist als im ersten Jahr.
    Keywords: IFRS-Umstellung, Fremdkapitalkosten.
    JEL: M41 G32
    Date: 2007–09

This nep-acc issue is ©2007 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.