The Business Review Journal

Vol. 3* Number 2 * Summer 2015

The Library of Congress, Washington, DC   *   ISSN 1553 - 5827

The Library of Congress, Washington, DC   *   ISSN 2167-0803

Online Computer Library Center, OH   *   OCLC: 940146916

National Library of Australia   *   NLA: 49026139

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Halliburton and Efficient Market Theory

Dr. Donald G. Margotta, Northeastern University, Boston MA

 

ABSTRACT

On March 5, 2014 The United States Supreme Court reviewed the case of Halliburton Corp. v. Erica P. John Fund, a securities fraud case that had been in litigation for more than ten years. The case has important implications for the acceptance of efficient market theory in securities fraud litigation, and perhaps other types of litigation, especially litigation involving valuations issues.  This paper reviews the history of the case, the legal issues motivating it, and the implications the case has for the future use of efficient market theory in litigation. Although the case before the Supreme Court in Halliburton Corp. v. Erica P. John Fund (“Halliburton”),1  involved securities fraud allegations against Halliburton, key issues in the case issues relate to the Supreme Court’s 1988 landmark decision in Basic v. Levinson (“Basic”).2 In particular, that case validated use of the “fraud on the market” theory in securities fraud litigation, a legal theory premised on the finance theory of efficient markets and the validity of both theories were challenged in Halliburton. The significance of  Basic’s fraud on the market theory was underscored by in a 2013 Forbes article (Fischel) which referred to it as “the most powerful engine of civil liability ever established in American law,” while plaintiffs in Halliburton described Basic (Kendall) as "the cornerstone for modern private securities litigation." The economic importance of the case can be seen from the fact that “more than 3,000 private class-action securities-fraud lawsuits were filed between 1997 and 2012, generating more than $73 billion in legal settlements” (Kendall) and companies involved in class action lawsuits experienced approximately $600 billion in lost shareholder value (Steinberg). “Halliburton” also attracted the attention of leading finance scholars, twenty nine of whom signed amicus curiae briefs in the case, including 2013 Nobel Prize recipient Eugene Fama. The background of the case and the key legal principles involved are described first. 

 

Systems Theory and Unintended Consequences of Government- Motivated Currency Wars: A Multiple Case Study

Dr. Craig Martin, University of Phoenix, Northcentral University, and Walden University

 

ABSTRACT

Although the actions initiated by governments and central banks are intended to produce positive outcomes for the host country, financial implications for markets and the macro economy often produce uncertainty and detrimental consequences for consumers and investors alike. Using a foundation of Systems Theory and Complexity Theory, the multiple case studies sought to further understand why these unintended factors arise and to explore how financial risk for investors emanating from the uncertain future of a currency war may be mitigated. The research suggests that market volatility during and post the currency war is expected, that inflation and/or deflation will arise and that upheaval of the system of global currencies occurs as a result of the currency wars. By furthering understanding the derivation of these economic consequences, long-term, retirement-planning investors can manage portfolio asset diversity to mitigate risk for expected returns on investment. Although international currency wars have produced one of the most destructive sets of outcomes, government actions leading to a currency war do not occur for the purpose of initiating economic conflicts (Rickards, 2011). Central governments seek full employment for national constituents; economic theory has posited that employment growth follows from growth in production of goods and services (GNP). Growth in exports contributes positively to GNP growth, and governments employ fiscal and monetary policy to achieve growth in exports (Hill, 2013). Unintended consequences from government actions to foster growth in trade have ranged from the theft of market share in exports from trading partners and the resultant retaliation by those partners to sequential bouts of inflation and deflation and recession to collapse of currency systems. Such are the outcomes from the currency wars of the twentieth- and twenty-first centuries (Rickards, 2011). While the research suggests that unintended consequences in aggregate are predictable as outcomes from a currency war, the specifics of these occurrences are not predictive. The resultant uncertainty promises an environment that does not suit the long-term, retirement-planning investor whose proclivity is to seek a return certain on one’s investments (Dent, 2014). However, if the investor understands the likely boundaries of outcomes for values of paper currencies operating in context of economic currency wars, said investor should be able to rationally plan a diversified portfolio that mitigates risk to the potential return on investment (Taleb, 2012).

 

Electronic Medical Records, Patient Privacy and Deployment of Healthcare Systems on Cloud Resources: Analysis of the Legal, Business and Technological Aspects

Rupesh Mishra, POC Supervisor, Golden Valley Hospital, Clinton, Missouri

Brian Palmer, Systems Engineer, Saint Luke's Health System, Kansas City, Missouri

Dr. Sam Ramanujan, Professor of CIS, University of Central Missouri, Warrensburg, Missouri

 

ABSTRACT

This paper explores the legal and security aspects of onsite medical records in paper and electronic formats as well as the business, legal and technological aspects of healthcare systems deployed on cloud resources. We will take a look at the current healthcare trend for entities deploying systems that uses a standardized form of electronic medical records as a standard of care and how these entities maintain privacy of confidential medical data. Furthermore, we also take a look at how the presence of many disparate systems of various capacities and capabilities within these entities makes it difficult to integrate them to provide quality patient care at a larger scale in terms of efficiency, timeliness, cost-effectiveness, geographical distribution and security. To eliminate issues that arise from system integration problems, we will discuss how the deployment of healthcare system over cloud resources could become a solution and innovation for the healthcare field in the future. In the medical technology world, we are truly entering a new era.  Because of government initiatives concerning patient privacy, providers are moving towards a common format for patient medical records.  The EMR, or Electronic Medical Record, is quickly becoming a key focus.  Gone are the days of folder upon folder of paper records and now a small practice can hold all of its patient data on a portable hard drive. The change is massive and while we are moving quickly, there are still improvements to be made.  At the core of this movement is the concern for patient privacy and the integrity and protection of data.  We should be concerned not only with protecting data for the sake of the patients, but new technology developed should also be focused on protecting the integrity of the data as well.  What good is data privacy, if we can’t rely on the integrity and/or accuracy of the data itself?  We must also look to access control when discussing privacy of data; like any good security protocol, having preventative measures for unauthorized access in play is a necessity. 

 

Consumer’s Achieving Styles (ASI) Similar to the Brand’s Achieving Styles (OASI) in a High Involvement, Relational Exchange within an Academic Setting

Dr. Stephen M. Rapier, Pepperdine University, CA

Dr. David L. Ralph, Pepperdine University, CA

Dr. Stacy M. P. Schmidt, California State University, Bakersfield, CA

 

ABSTRACT

This is a quantitative research study of the correlation of the consumer’s Individual Achieving Styles (ASI) with the consumer’s perception of the Achieving Styles (OASI) rewarded by the brand.  The hypothesis proposed by the researcher is that the consumer’s Individual Achieving Styles (ASI) will be similar to the consumer’s perception of the Achieving Styles (OASI) rewarded by the brand.  The full research design for the hypothesis utilized a partially mixed methods approach employing both quantitative and qualitative methodologies.  Using a sequential design that contained a two-stage approach, the dominant quantitative phase was conducted first and the qualitative phase second before mixing the data at the interpretation stage (Leech & Onwuegbuzie, 2009).  The final findings will reflect an integrative mixed methods approach, whereby the data from each methodology contribute to the results (Castro, Kellison, Boyd, & Kopak, 2010). These findings reflect only the first stage of the research which consisted of only the quantitative phase of the study.  The findings of the quantitative study supported the hypothesis, that the consumer’s behavior will correspond with the behavior favored by his/her brand choice.  For the purpose of this study, the hypothesis was predicated on the assertion in the leadership literature that similarities between the follower and leader fuel the follower’s feeling of “reassurance and familiarity” (Gardner, Avolio, Luthans, May, & Walumbwa, 2005).  The follower is motivated by the perceptions to bond with the leader (Ilies, Morgeson, & Nahrgang, 2005).  As a result of the study, it is conjectured that a consumer similarly connects with a brand because of the brand’s perceived similarity to him/herself.  In addition, the study indicates that using the Connective Leadership Model, this affinity would be reflected in the alignment between the consumer’s Achieving Styles (ASI) and those rewarded by the brand (OASI).  The hypothesis proposed by the researcher is that the consumer’s Individual Achieving Styles (ASI) will be similar to the consumer’s perception of the Achieving Styles (OASI) rewarded by the brand. 

 

Self-Leadership: Guiding Principles for Adaptive Leaders and Organizations

Dr. Richard Pircher, University of Applied Sciences bfi Vienna

Christiane Seuhs-Schoeller, Center for Integral Leadership, Vienna, Austria

 

ABSTRACT

To adapt to a changing environment requires appropriate perception of the current status. Therefore we have scrutinized theoretical and empirical findings on individual human perception as a basis for decision-making and appropriate behavior. Special focus is placed on the role of the unconscious and dual-system approaches. From this foundation we derive guiding principles for more sustainable internal balancing and more comprehensive integration of external stimuli. These principles allow leaders and organizations to identify blind spots more easily and to improve perception of the inside and the environment. Self-leadership is suggested to be the key factor for applying these principles both individually and in organizations. We will give examples for organizations with improved internal homeostasis and adaptability to changing environments. The ability of an organization to survive and to be successful relates to its potential to adapt to a changing environment. The competence to perceive relevant stimuli from the outside and the inside of the organization constitutes a prerequisite for organizational adaptability. Consequently appropriate perception is a crucial factor for individuals and teams to decide and behave in a productive way. Therefore in this paper we apply a multi-disciplinary analysis of human perception. From this basis we derive guiding principles for adaptable self-leadership. They are expected to provide the foundation for the increased adaptability of individuals, teams and organizations.  Self-leadership may be defined as “a comprehensive self-influence perspective that concerns leading oneself toward performance of naturally motivating tasks as well as managing oneself to do work that must be done but is not naturally motivating” (Manz, 1986: p. 589). In addition to self-management, the concept of self-leadership not only addresses the “how” of self-influence. Additionally, also the “what” and “why” are covered. Through the focus on the “why” and “what” of self-influence, individual self-leaders address the underlying reasons for effort and behavior (Manz, 2014). Increased self-leadership corresponds with better affective responses and improved work performance (Stewart, Courtright & Manz, 2011). Perception is the main basis for learning and behavior. For us as human beings our abilities to perceive the environment and our own bodies with our senses are very limited in quantity and quality.

 

Are Women Treated Fairly in the U.S. and European Markets?

Jennifer Mitchell, Sam Houston State University, TX

Dr. Balasundram Maniam, Sam Houston State University, TX

Dr. Hadley Leavell, Sam Houston State University, TX

 

ABSTRACT

The number of women in the labor market increased across the globe in the last century.  Although the United States have legislatively determined that gender-neutrality is the law for this country, that lofty goal does not appear to be reality.  Determining whether women are treated in a gender-neutral way is the first issue to address. This paper does a comparative analysis of the treatment in the work place of women, both in the United States and in several European countries.  Research focused on women’s employment in the last forty years indicates differing trends between the United States and Europe regarding participation, wages and salary, career advancement, and job specializations for women. These differing trends may be explained by a number of factors. Technological changes have opened many fields and allowed job specialization leaps for women. Legal changes have forced the hand of employers.  Globalization has opened the eyes of people long-accustomed to a status quo. Education opportunities have become more affordable thus permitting women to seek higher-level positions.  Finally, cultural preferences within the family structure have continued to evolve with a strong shift toward two-parent families sharing the child-rearing responsibilities. The United States and the European countries are experiences these factors to varying degrees. This paper explores these differences in treatment along with their causes.  Gender equality is an emotional subject for many. In order to facilitate change, the subject must be studied with objective quantifiable methods. As an increasingly large number of women shifted into the workforce, an intense amount of research, debate and legislation has occurred regarding the difference in treatment of women in the workforce.  One might assume that the European workforce conditions would be comparable to the United States. Instead, a number of inconsistencies occur in the statistics and customs of women’s employment when comparing the United States and Europe.  Variances occur in the number of working women and the wage differences between genders.  Statistical results on the “glass ceiling”, or the inability to advance, differ between the United States and Europe.  The largest dissimilarities occur concerning the benefits that women receive as part of job opportunities.  The cultures have a dissimilar focus on the specialization, or desired schedule and family leave provisions offered to women, and this may be a large factor in the differences in wages and advancement.  After analyzing these differences, discovering the motivation for these differences is needed.  

 

Internal Audit Excellence Orientation and Firm Survival

Pennapa Kueket, Mahasarakham University, Thailand

Dr. Karun Pratoom, Mahasarakham University, Thailand

Dr. Saranya Raksong, Mahasarakham University, Thailand

 

ABSTRACT

The current, internal audit department has developed a function of operations audit, by focusing on excellence. The all organizations have believed that the internal audit that focused on excellence will be able to create value for the internal audit function and to survive to the organization. This research aims to study the impact of internal audit excellence orientation and firm survival by having mediating variable composite; internal audit practice quality, risk management effectiveness, fraud error detection success, operational efficiency outstanding, business excellence, goal achievement. The 94 food export firms are the samples. The statistics used is the OLS regression. The study found that the internal audit excellence orientation has a positive impact on internal audit practice quality, risk management effectiveness, fraud error detection success, operational efficiency outstanding, business excellence, goal achievement, and firm survival. The result shows that operation of internal audit that focused on excellence can create value for the internal audit and operation of organization. In addition, that internal audit practice quality has a significant positive effect on goal achievement, that risk management effectiveness has a significant positive effect on the business excellence, fraud error detection success has a significant positive effect on the business excellence, operational efficiency outstanding is not significantly related to the business excellence, business excellence and goal achievement has a significant positive effect on the firm survival. The future research, we suggest to study antecedent variables that affect on the internal audit excellence orientation, the benefits for internal audit departments and organizations into adaptation for improving the operation to have efficiency and effectiveness. The internal audits are being developed for the management of both public and private (Cohen et. al., 2002), which the concept internal audit is the foundation of discipline in important internal audit. It is the main business philosophy that can reflect activity and behavior of organizational. The process of managing operational of internal audit to ensure in the effective which must be consistent with the standard make the operational internal audit has quality. In addition, the internal audit that is effective will help operations of the organization to achieve and survive.

 

The Impact of Board Financial Expertise and Education on Corporate Derivatives Using

Dr. Po-Kai Huang, Shih Hsin University, Taiwan

Dr. Li-Yu Chan, JinWen University of Science and Technology, Taiwan

 

ABSTRACT

This study investigates the impact of board financial expertise and education on corporate use of derivatives. Specifically, the study investigates whether a higher level of financial expertise among board members is more likely to result in the company using derivatives for hedging, but not for speculation. Results show that directors on the board with financial expertise (and a master’s degree or above) hold positive views on hedging. In addition, regarding the speculation ratio, they have a negative influence. However, directors on the board with accounting expertise (and a master’s degree or above) cause higher amounts of speculation and have a negative influence on the hedging ratio.  When the board of a company is making the decision to use derivatives, the people who are making the decision are equally important. In addition, when the company wants to engage in derivatives trading, it is also required by the government to take full responsibility of the supervision and management of the trading. However, because of the complex structure and high degree of professionalism related to derivatives, for the Board to be able to take the onus of supervision and management, it needs to have financial expertise. If the board has financial expertise and takes responsibility of supervision and management, it would prohibit the use of derivatives to conduct speculation and for hedging purposes. In addition to hedging functions, derivatives also provide the means to allow the company to engage in speculation. Speculation is not good for a company. It can increase a company’s earnings or cash flow volatility, as well as corporate exposure to risk. If financial experts join the board, they will help the board to perform supervisory functions and lower the probability of accountancy fraud, violation of regulations, and alteration of reporting forms (Abbott, Parker, and Peters, 2004; Agrawal and Chadha, 2005). Therefore, this study inferred that the financial expertise of the board will also affect the decision making regarding use of derivatives by the company. The study’s purpose is to investigate the relationship between financial expertise of the board and a corporation’s use of derivatives for hedging.

 

Cost Allocation Effectiveness and Organizational Survival: An Empirical Assessment of Textile Manufacturing Businesses in Thailand

Pittaya Ponklang, Mahasarakham University, Thailand

Dr. Karun Pratoom, Mahasarakham University, Thailand

Dr. Saranya Raksong, Mahasarakham University, Thailand

 

ABSTRACT

Cost allocation effectiveness is important for cost management as it supports decision making, enhances competitive advantage and enables organizations to survive. The objective of this study is to investigate the effects of cost allocation effectiveness on organizational survival. In this study, 179 textile manufacturing businesses in Thailand are the sample of the study. The results of the study reveal that cost allocation effectiveness has a significant positive effect on cost management efficiency, decision making success, and resource usefulness quality. Cost allocation effectiveness consequences have a significant positive effect on superior operational excellence, outstanding firm performance, and organizational survival. In addition, business vision, managerial accounting knowledge, and competitive intensity have an important positive impact on cost allocation effectiveness. The future study needs to develop other methods which may be applied in the future such as in-depth interview, case studies in order to fully understand of this construct measurement and confirm all relationships of this model. It is the same needs to collect data from covering a wider industrial manufacturing in order to increase the external reliability. The importance of cost information has increased judgment and decision maker’s use for planning, directing, and controlling of the firms (O’Donnell and David, 2000) which are useful to support strategic management. In addition, the appropriate strategy is determined for the organization to focus on the cost information. Under competitive intensity, the cost management that executives need to know about the cost information as accurately as possible so they can support decision making success about  resource allocation, customer profitability, product profitability, pricing, and product mix. Cost allocation is one of the major obligations of executives who need to make decisions about allocating of joint cost and support cost management system. This will enable the cost of accuracy and completeness be used indecision making and management to be effective in the organization. Thus, managers need to focus on understanding the objectives f cost allocation. However, in the practice of cost allocation has posed a key problem for management accountants for years (Terzioglu, 2012), because it is complicated in practice. Therefore, cost information from allocating effective is important to firm's success as it will help managers understand of utility costs and  support cost management and competitive advantage (Ilic, Milicevic and Cvetkovic, 2010).

 

The Impact of Information Asymmetry and Dispersion of Opinion on Stealth Trading Around Earning Announcements

Dr. Han-Ching Huang, Chung Yuan Christian University, Taiwan R.O.C.

Dr. Pei-Shan Tung, Chung Yuan Christian University, Taiwan R.O.C.

 

ABSTRACT

This paper examines stealth trading in stock markets around earning announcements. During preannouncement period, most of the cumulative stock price change occurring in the small-size category is larger than that in other size categories under earning announcement. Moreover, the extent of stock stealth trading before earning announcements is positively correlated with the level of ex ante information asymmetry and negatively correlated with the dispersion of opinion. After earning announcements, the stealth trading is negatively correlated with the information asymmetry and negatively correlated with the dispersion of opinion.  This paper examines stealth trading in stock markets around earning announcements. The stealth trading hypothesis proposed by Barclay and Warner (1993) indicate that if stock price movements are mainly caused by private information being revealed through the trades of investors and if privately informed traders concentrate their trades in certain sizes – not too small (which is too expensive in terms of trading costs) and not too large (which could give them away) – then most of a stock’s cumulative price change will take place on medium-sized trades. That is, informed traders attempt to camouflage their information to earn more profit by spreading their trades over time. Traditionally, informed traders engage in medium-sized trades since the trading costs of small trades are too expensive and large trades may reveal their information. Since transaction costs have decreased due to the decimalization, Hansch and Choe (2007), Hvidkjaer (2008), Blau et al. (2009), and Jain and McInish (2010) found that the lower bound of the size of stealth trades has declined. Thus, small-sized trades contribute more to the price change than medium-sized trades during the decimalization period. In this paper, the stealth trading is defined as trading in a size at which most of a stock’s cumulative price change would take place. Based on information-based stealth trading hypothesis proposed by Blau et al.  (2009), when trading volume is lower, informed traders are more inclined to break up their trades to disguise their information.

 

Performance Evaluation System Competency and Firm Survival: Empirical Evidence from Cosmetic Businesses in Thailand

Suwit Waitip, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Suparak Janjarasjit, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Saranya Raksong, Mahasarakham Business School, Mahasarakham University, Thailand

 

ABSTRACT

The main objective of this study is to examine relationships between performance evaluation system competency and firm survival of empirical evidence from cosmetic businesses in Thailand. Data were collected by survey questionnaires distributed to the heads of accounting departments of firms, 130 completed questionnaires are used in the analysis. The results indicate that performance evaluation system competency has significant positive impacts on firm survival by using organizational commitment awareness, organizational citizenship behavior, organizational loyalty concern, business excellence, and corporate competitiveness as the mediators. Similarly, organizational commitment awareness has positive effects on organizational citizenship behavior, organizational loyalty concern, and business excellence. Likewise, organizational loyalty concern has significant relationship to business excellence, and corporate competitiveness. However, organizational citizenship behavior does not relate to business excellence, and corporate competitiveness due to two variables may be affected by other important factors such as organizational learning rather than such variable and it also was conducted under the rules and regulations. The implications, further research, and limitations are also highlighted.  Nowadays, the environment has become more complex and changing, especially business environments issues regarding advance technology for production and administration, the quality of products and services, diversity of productions, and change of customer behaviors. Also, it has increase competition locally and globally and changes laws and engagement environment conditions to economic benefit sharing and response customer demand such as Association of Southeast Asian Nations (ASEAN) Trade in goods agreement (Association of Southeast Asian Nations, 2014). This has effect on organizational operation and performance toward survival of the firm. Organizational operation efficiency is based on many factors that are components of management in organization, especially management tools or techniques which are important factors that support the administration and development of the firm to create competitiveness and organizational operation excellence and toward the survival of the organization.

 

Foreign Exchange Volatility and Yields Movements in Eurozone

Dr. Ana Rimac Smiljanic, University of Split, Croatia

Dr. Ivan Karin, University of Split, Croatia

 

ABSTRACT

This paper studies the impact of yields movements on the long-term sovereign bonds on foreign exchange volatility in the Eurozone from the beginning of 2003 to the end of 2013. Using such a period of time allowed us to carry out separate analysis before and after the global financial crisis. Namely, today in the world of free financial flows the exchange rate is one of the most important indicators of the country’s stability. After the emergence of the global financial crisis, state stability is again in the main focus of investors. The Eurozone countries rocked the debt crisis after the global financial crisis. One of the specificities of the Eurozone compared to the rest of the world is that a common currency exists, while all member states are issuing government bonds individually and have a separate fiscal policy. With the arrival of turbulence in  financial markets, investors have different perceptions of the quality of government bonds of member countries. A change of government bond yields indicates, also, a change in the perception of risk of investing in the financial assets of countries from the Eurozone. This changed perception of risk is causing the movement of capital among countries and consequently is resulting in a change in the Euro and US dollar exchange rate. The results of our empirical study proved that three member states have the greatest impacts on the movement of capital between Euro and Dollar assets: namely Luxembourg, the Netherlands and Germany. After the financial crash in 2008, the yields on the sovereign debt of Eurozone countries started to move in different directions. Namely, after the introduction of the Euro, the yields on bonds of these countries were moved in a similar pattern, and differences among them became smaller in time. On the other hand, these economies reacted differently to the global financial crisis and some of them found themselves in serious fiscal difficulties. Consequently, the credit rating agency started to downgrade the sovereign debt ratings on some of them which gained a great deal of attention from investors. This resulted in great movements of capital among Eurozone counties but also in great inflows and outflows of capital from the Eurozone to other countries. Namely, the member states of the Eurozone share a common currency, but each country still has full fiscal sovereignty. Therefore, this creates a unique economical environment that allow us to search for the answer to how the yield change on the sovereign debt in one member country of the Eurozone  affects the movements of the Euro on the foreign exchange market.

 

Modern Computerized Accounting Knowledge and Job Performance of Accounting in the Thai-Listed Firms

 

Mukdawan Poldet, Mahasarakham University, Thailand

Dr. Suparak Janjarasjit, Mahasarakham University, Thailand

Dr. Phaprukbaramee Ussahawanitichakit, Mahasarakham University, Thailand

 

ABSTRACT

This study attempts to provide understanding the relationships among modern computerized accounting knowledge, its consequents and job performance by investigating the reality phenomena. The objective is to investigate the effects of modern computerized accounting knowledge on job performance of accountants in the Thai-listed firms. The knowledge-based view of the firm is used to explain the relationship of the variables in conceptual model. Data were collected from a sample of 95 accountants in the Thai-listed firms by questionnaire mailings. The Ordinary Least Squares (OLS) regression is used for testing the proposed hypotheses. The results show that modern computerized accounting knowledge has a significant positive effect on computer-based AIS creativity and best accounting practice. Moreover, computer-based AIS creativity and best accounting practice have a significant positive effect on decision-making efficiency support. Finally, decision-making efficiency support has a strong positive effect on job performance. This empirical finding is a useful guideline for accountants, organizations, and regulators to increase modern computerized accounting knowledge for enhancing the accounting job outcome and job performance. In short, conclusion and directions for future research are suggested at the end. Advanced accounting technologies are namely as accounting software, online-based accounting applications, real-time systems, database management systems, computer networks, and database design. They are used to prepare and to produce financial reporting and accounting information for users to make better economic decision (Bovee et al., 2002; Ghasemi et al., 2011; Jones and Willis, 2003; Sürmen and Daştan, 2007). Nevertheless, it is an undeniable circumstance that information technology plays a major role of accountants to provide the momentum of driving accounting activities (Vaassen and Hunton, 2009). For instance, the enterprise resource planning (ERP) systems adoption has developed the quality, ease of access and accounting information timing for managers, and can improve transaction processes to more flexibility (Granlund and Malmi, 2002). Moreover, the using computers in accounting part of business, it is agreed that reasonable and more efficient methods of data collection and recording, processing and storage accounting data.

 

The Process of European Direct Tax Harmonization

Dr. Maria Luisa Fernandez de Soto Blass, Universidad Catolica San Antonio de Murcia, Spain

 

ABSTRACT

Tax harmonization implies a process of progressive approximation and coordination of legislation in tax matters of the member states of the European Union. It is a series of steps which tries to reduce the financial and tax distortions and discriminations in the jurisdictional conditions which exist within the member states in order to achieve the full realization of freedom of movement of goods, people, services and capital in the Single Market. It is one  step off the unification of tax systems through the creation of identical taxes but with different rates in a first stage, or taxes and tax rates which are the same in a second stage.  The present paper contains a study of  the concept of tax harmonisation, the principles, techniques, instruments and procedures in European Union Tax harmonisation, the development of European Union harmonisation of direct taxation and finally some conclusions. The researches discuss about the legal nature (direct or indirect ) of the Spanish Estate Environmental Taxes. This paper is the result of the researches that the author is carrying out about “Taxation and Climate Change”, that is a National Investigation and Development Research (DER2010-14799) and the other research about “Study on the desirability and the possibility of extending the freedom of choice in education at the Community of Madrid through the implementation of private funding sources (EDUCACEU) REF USPBS-PI02/2011-UNESCO 5309-5802-5909 and group of researches: Law: Past, present and future legal issues of Universidad Católica San Antonio de Murcia.  Tax harmonization implies a process of progressive approximation and coordination of legislation in tax matters of the member states of the European Union  (Fernández de Soto Blass (2004). It is a series of steps which tries to reduce financial and tax distortions and discrimination in the jurisdictional conditions which exist within the member states in order to achieve the full realization of freedom of movement of goods, people, services and capital in the Single Market. It is one step off the unification of tax systems through the creation of identical taxes but with different rates in a first stage, or taxes and tax rates which are the same in a second stage ( new articles, 90 - 102 TCE) The Neumark Report states that tax harmonisation consists of the necessary measures to establish taxation and public spending conditions similar to those which would exist in a unified Economy (Pelecha 1994, pp. 62) .

 

Accounting Well-Roundedness Competency and Professional Success: Evidence from Bookkeepers in Thailand

Phathairat Pongpratead, Mahasarakham University, Thailand

Dr. Saranya Raksong, Mahasarakham University, Thailand

Dr. Suparak Janjarasjit, Mahasarakham University, Thailand

 

ABSTRACT

As changing environment of business, the bookkeepers, therefore, need to adapt themselves according to environmental change such as new technologies, new regulations, and laws. The bookkeepers need to have an accounting well-roundedness competency (AWRC) to succeed and sustain their profession. However, this research also proposes the definition of the AWRC leading to the professional success (PS) by using regression analysis methods. The results show that the AWRC needs to have accounting knowledge excellence, accounting applied, and knowledge integration that can be a part of the PS. In addition, the AWRC can generate the job quality (JQ) and job effectiveness (JEN) resulting in the stakeholder acceptance that leads to the PS as well. To understand the role of moderating variable, this research also proposes the experience usefulness (EU) as to moderate the relationship AWRC with its dimensions and JQ and JEN. The results show that the EU can only support to moderate the relationship between the AWRC and the JQ as well as the AKE. As changing environment of business, the bookkeepers, therefore, need to adapt themselves according to environmental change such as new technologies, new regulations, and laws. The bookkeepers need to have a well-roundedness competency to succeed and sustain their profession. Davie (2008) found that the bookkeepers cannot provide an efficient work with only the accounting knowledge because they need to have a variety of knowledge for accounting occupation. This corresponds with the research of Oakes (2012) that professional success needs to have a variety of knowledge. Ahmed (2013) found that it is time to develop ability of bookkeepers to respond to the requirement of accounting users in order to progress of the bookkeepers. As above mentioned, accounting well-roundedness competency is important to sustain and succeed for the bookkeepers. In addition, the lack of well-roundedness competency is a reason that the bookkeepers cannot succeed in accounting profession (Gomez and Guerrero, 2013). In addition, there are a lot of competitions among bookkeepers to have more customers due to economic competition.

 

The Investigation of the Influence of Service Quality Toward Customer Engagement in Service Dominant Industries in Thailand

Dr. Wilert Puriwat, Chulalongkorn University, Thailand

Dr. Suchart Tripopsakul, Bangkok University, Thailand

 

ABSTRACT

The concept of customer engagement gained the attention of marketing scholars and practitionersever since there was research evidence to confirm that positive customer engagement lead to increasing a firms’ performance. In today’s interactive dynamic business environment, customer engagement represents a strategic imperative for generating enhanced corporate performance such as sales growth, superior competitive advantage, and profitability. Engaged customers enhance a firm’s performance by providing positive word-of-mouth, being involved in new product development processes, and co-creating experience and value.  Although there has been an increased recognition in the concept of customer engagement, empirical research concerning both antecedents and consequents of customer engagement are still very limited, especially in marketing literature.  This study endeavors to add value to the customer engagement conceptualization in response to emerging importance of the theory as emphasized by the Marketing Science Institute. The concept of customer engagement has become more popular in marketing theory and needs more concrete empirical research to support it. However, only a few extant empirical studies have examined the relationship between service quality and customer engagement. The purpose of this study is to investigate the influence of service quality toward customer engagement. The results found that service quality has a positive relationship with customer engagement as the antecedent factor. According to the Structural Equation Modeling analysis of proposed hypotheses, sub dimensions of service quality significantly influence customer engagement in three dimensions; namely, cognitive, emotional, and behavioral engagement. Reliability is the highest positive effect to customer engagement with 0.854 factor loading. The second highest positive effect is responsiveness with 0.841 factor loading.

 

Internal Audit Knowledge Management Proficiency and Internal Audit Success: An Empirical Investigation of Corporate Governance Awarded Firms in Thailand

Napaporn Shupkulmongkol, Mahasarakham University, Thailand

Dr. Phaprukebaramee Ussahawanitchakit, Mahasarakham University, Thailand

Dr. Suparak Janjarasjit, Mahasarakham University, Thailand

 

ABSTRACT

This paper aims to examine the relationship among the effects of internal audit knowledge management proficiency and internal audit success. The components, the consequences of internal audit knowledge management proficiency are included best internal audit practice, internal audit report efficiency, internal audit quality, internal audit professionalism, and internal audit success. For the relationships among internal audit knowledge management proficiency and its consequences can explain by the knowledge-based view theory (KBV). Future research is suggestion to seek other consequence variables of internal audit knowledge management proficiency for literature review. Theoretical and managerial contributions are explicitly provided. Conclusion and suggestions and directions of the future research are included. Currently the world has entered the era of Knowledge-based Economy (KBE). Knowledge has been considered as one of the most important assets for businesses and the strategic resources needed for the organization to maintain a sustainable competitive advantage (Chen, Yeh, and Huang, 2012; Nonaka, Toyama, and Konno, 2000). Moreover, the knowledge is more important than physical assets (land, capital, and labor, etc.) (Chen, Yeh, and Huang, 2012).Knowledge management is the process that allows organizations to create and acquire knowledge and to select, organize, use, disseminate, and transfer important information and expertise which is essential for the management of the organization (Decision making, problem solving, learning, and strategic planning, etc. (Gupta, Lyer, and Aronson, 2000). The implementation and use of knowledge management has increased rapidly since 1990, the figure was 80 percent. Lord of the largest global organizations that knowledge management were used (KPMG, 2000; Lawton, 2001).

 

Empirical Investigation of the Market Reactions to the SEO in Korean Stock Market

Dr. Doug S. Choi, Metropolitan State University of Denver, Denver, CO

 

ABSTRACT

The purpose of this study is to examine stock market reactions to the seasoned equity offering (SEO) among the firms in the Korean stock market. An SEO is a new equity issue by an already publicly traded company. Major effort is devoted to ascertain the extent to which Myers’ (1984) pecking order theory of corporate financing appears to explain financial structure among fifty of the largest firms listed in the Korean Stock Exchange for five financial years from 2008 to 2012. The results of this study will reveal if the experiences of the U.S. firms hold true in the Korean financial community. The capital structure studies incorporating recent developments in the Korean market are beneficial to U.S. as well as Korean firms, since many U.S. firms have become heavily involved with many Asian firms through direct and indirect investment. Although the capital structure theory is not a new area of research, it remains one of the most interesting and puzzling topics of research. Following the work of Modigliani and Miller (1958) and Miller (1977), the general view of capital structure has been the static trade-off theory. According to this theory, firms’ optimal capital structure mix is generally viewed as a trade-off between the various costs of bankruptcy and financial distress. Recent empirical studies, however, suggest that some important financing behaviors are not explained by the static trade-off theory since there are wide variations in actual financing behaviors, even in firms with similar financial characteristics. These discrepancies have propagated several attempts to reconcile theory with perceived practices. Several empirical studies attempt to explain dispersion of actual debt policies in many firms in the U.S. Despite these attempts, recent studies on the capital structure among the U.S. firms provide little evidence of empirical consensus in this area of the capital structure theories. Furthermore, the majority of the studies that addressed capital structure mixture have been focused in the context of developed countries; in particular, the U.S. and U.K. There are relatively few studies that have tested the capital structure theories and their explanations using data from developing countries.

 

Regional Economic Development Models of Automotive Centers in the Southern German states: Neckarsulm and Sindelfingen

David Fekete, Szechenyi Istvan University, Gyor, Hungary

 

ABSTRACT

This article observes two German automotive industry centers (Sindelfingen and Neckarsulm) in the framework of the research programme titled “Development of Economic and Social Role of Automotive Regional Innovation and Technological Knowledge Centre at Széchenyi István University”. In the study I analyze the cooperations between the relevant actors of the automotive industry centers in order to reveal the functional models and their institutionalized or informal cooperation systems in Sindelfingen and Neckarsulm. There are many similarities between the two centers: cities with relatively small population, the presence of a significant automotive industry company, there aren’t any universities and R&D activity takes place in the framework of the automotive industry companies. Both cities are interested in the diversification of the economic system and their economic development policy focuses on the development of infrastructure. Nowadays, one of the flagships of the European economic growth is the continuous development of the automotive industry. Keeping and increasing the capacity of this sector is a key element for both the state and the local participants, therefore the ones, who are involved, do their best. Collaboration and co-operation amongst the city, the automotive company, the local institution of higher education and K+F (research and development) institutions, can be considered as an important key element of local development. In Győr –  that gives home to the most important automotive factory of Audi AG and at the same time to the biggest engine factory of the world – a widespread cooperation has started among the participants of the automotive industry (big, small and middle sized automotive companies, educational institutions, career guidance centres, local authority, higher education, cluster etc.) in order to let all the participants know each other’s opinions, the directions of development through regular consultations, meetings and besides building out a network, in order to form a cooperation that has a strong lobbying force. Several alternatives have arisen concerning the practical frames of cooperation, even solutions that do not need to be institutionalized and have an organizational form.

 

Proactive Internal Control System and Firm Success: An Empirical Investigation of Electrical Appliances and Electronic Parts Businesses in Thailand

Pattareya Henklang, Mahasarakham University, Thailand

Dr. Sutana Boonlua, Mahasarakham University, Thailand

Dr. Phaprukbaramee Ussahawanitchakit, Mahasarakham University, Thailand

 

ABSTRACT

This study aims to investigate the effects of proactive internal control system on firm success via the proactive internal control system consequences; organizational risk reduction, corporate practice efficiency, financial reporting quality, internal audit quality, goal achievement, and stakeholder. Data were collected by survey questionnaires administrated to the internal audit directors or internal audit managers of electrical appliances and electronic parts businesses in Thailand, 214 completed questionnaires are used in the analysis. The results of the study indicated that the proactive internal control system had an influence on organizational risk reduction, corporate practice efficiency, financial reporting quality, internal audit quality, goal achievement, and firm success. Moreover, organizational risk reduction, corporate practice efficiency, financial reporting quality, and internal audit quality had an influence on goal achievement, and stakeholder satisfaction. Furthermore, goal achievement had a positive effect on stakeholder satisfaction; similarly, goal achievement and stakeholder satisfaction showed a positive effect on firm success as well. Future research is then needed to collect data from the different sample and/or comparative populations in order to verify the generalizability of the study and increase the level of reliability. At present, internal control systems have become very important for the operation and achievement of organizational objectives in businesses worldwide. Internal control system represents all the approved policies and procedures used by management in order to achieve an effective business management (Mihaela and Lulian, 2012). Moreover, internal control systems are the basic instrument for the enterprise control to assist the administration as important mechanism of governance processes for the organization’s activities. It also plays important roles in detecting and eliminating the threats and risks in due time, preventing fraud and irregularities in its operation (Lakis and Giriūnas, 2012; Wardiwiyono, 2012). Certainly, lack of internal controls and their deficient operations make companies vulnerable to a number of risks, such as improper recording of accounting transactions, making unauthorized transactions, and fraud. All these matters have a significant impact on financial performance and competitiveness.

 

Research and Development Effects on Company Dynamic Capabilities

Dr. Lovorka Galetic, Professor, Faculty of Economics & Business, University of Zagreb, Croatia

Dr. Zeljko Vukelic, Marius Consulting, Zagreb, Croatia

 

ABSTRACT

In the current conditions of wide-reaching changes, research and development is faced with new challenges and is increasingly tasked with creating business solutions in a markedly different way than in the past. Great progress in the area of new technologies, the resulting rapid increase in the speed of doing business, global business networking, and the increasing appearance of new business models are but a few of the examples that illustrate the very enhanced dynamics in business today. The dynamic capabilities framework, as a concept recognised at the end of the 20th century, is gradually becoming an increasingly important factor of business success. This paper examines the main characteristics of research and development and presents a new model of company dynamic capabilities in line with contemporary trends and the current conditions of the 21st century. Connections between these two concepts have been developed in theory. This link has created a basis for investigating the influence of a company’s research and development on its dynamic capabilities, with the aim of development and strengthening capabilities, as this can ultimately result in a competitive advantage and achieving the desired business result. Research and development was considered on the basis of its fundamental determinants, which are also a framework for their measurement pursuant to the most recent Frascati Manual of the Organisation for Economic Co-Operation and Development. These determinants pertain to expenditures on research and development, and on personnel involved in research and development, which are divided into research and technical staff based on their profession and role in the accompanying processes. Dynamic capabilities are examined on the basis of the fundamental factors for their identification and measurement, which includes the capability of sensing and seizing business opportunities, the possibility of reconfiguring existing and acquiring new resources, internal and external transformation of a company, the integration of internal and external knowledge, and business coordination and activities of the company, which is also a key complement of the new multi-dimensional construct based on business agility presented here.

 

Regional Economic Development Models of Automotive Centers in the France: Rennes and Poissy

Andras Horvath, International Relations Expert, Budapest, Hungary

 

ABSTRACT

The PSA Rennes Plant is one of the most important car plants in France. The plant was acquired by the PSA Group in 1976. The plant is one of the biggest employer of Rennes. In the 60s Citroen decided to build a new plant on a greenfield site in Rennes which area was an agricultural center. During the next fourty years the plant produced 10 million cars. The plant has good relation with the institutions of education system. They launched a partnership which works well. Both parties benefit the advantages. The PSA provides internships and entry-level jobs for the students. The Academy can also develop their education program because PSA supports the learning of the new technologies. PSA also gives advices to students for the guidance. They permit to visit the plant where student can ask from PSA experts and also can meet several job opportunities. Both parties are interested in an education program often updated. The Science center in Rennes called L’Espace des Science is an intermediary between science and people. It has an important role, it wants to show the science for people of all ages. PSA’s Poissy plant is an important car plant in the suburbs of Paris. The history of the plant is linked to the city’s history. In the 20th century the production of vehicle provided job for citizens. Nowadays 80% of job is directly or indirectly connected to PSA Group. The city leaders always have a good relationship with the plant. Because of the economical crisis the plant decreased the production, so the operation of the plant changed. As PSA invested a large amount before the crisis, the plant can not be closed. In our days the PSA operate only 2 production line, besides of this they forms their new leaders. The plant has good relation with the institutions of education system.

 

The Moderating Role of Corporate Image on the Impact of Service Guarantee on Service Recovery Effect

Dr. Shao-Cheng Cheng, Chinese Culture University, Taipei, Taiwan

Yu-Huan Kao, Chinese Culture University, Taipei, Taiwan

 

ABSTRACT

Many scholars explored the impaction of service guarantee type towards consciousness of quality, probability of service failure, purchase intention and consumer's psychology and behavior, but little research about consumers’ responding after recovery when enterprise violated service guarantee. Therefore, this study uses experiment framework with totally 6 groups to investigate three different kinds of service guarantee against two different levels of corporate image to test whether service guarantee and corporate image impact service recovery differently in the restaurant industry. The results indicate that whether enterprise has provided service guarantee, the recovery effect are quite depressed even after recovery or compensation. But the recovery effect of enterprise with good corporate image is better than the normal one’s. In other words, even the enterprises provide service guarantee, they should make sure it can be execute correctly, otherwise the consumers will still not be satisfied after recovery. Increasing new customer and maintaining the relationships with regular customers are both significant for business managers (Johnston and Hewa, 1997), and an organization’s success is depending on whether it can provide highly stable service quality and satisfactory experience to maintain the customer relationships (Webster and Sundaram, 1998). Increasing the number of new customer and maintain the relationships with regular customers are both significant for the operator (Johnston and Hewa, 1997), and an organization’s success is depending on whether it can provide highly stable service quality and satisfactory service experience to maintain the customer relationships (Webster and Sundaram, 1998). However, because of attributes as invisibility, inseparability, variability, and easy to decay (Fisk, Brown, and Bitner, 1993), it may be impossible for service delivery to be hundred percent zero defection (Berry and Parasuraman, 1991; Bitner, Booms, and Mohr, 1994; Reichheld and Sasser, 1990).

 

Banking Sector in Poland: Stability over the Crisis

Dr. Michał Kruszka, Vistula University, Warsaw, Poland

 

ABSTRACT

The paper introduces performance of banking system in Poland during the period of European economic crisis. It also contains presentation of influence of financial supervisor on financial market and the real sector of the economy and possible threats to the institutional framework of financial supervision in Poland. Article presents how microeconomic changes of parameters of mortgage granted in foreign currency can be transformed into bank’s capital needs. Some details about resolutions and recommendations issued by the Polish Financial Supervision Authority (KNF) are also magnified in the paper. The practice of last years indicates that activity of the supervisory authority is an important determinant of financial stability.  This paper introduces performance of banking system in Poland during the period of European economic slowdown, ie. years 2007-2013. Main aim of author is to present a stability of Polish financial market and to show influence of financial supervisor on financial market and the real sector of the economy. Moreover an attempt has been made to find out what are possible threats to the institutional framework of financial supervision in Poland. Author presents also how microeconomic changes of parameters of mortgage loans granted in foreign currency can influence bank’s capital needs. Such an attitude is very important when one consider that in Poland some problems with mortgage lending (less serious than in the other EU countries) stemmed from changes of exchange rates rather than burst of housing bubble. The paper is divided into four parts. The first contains short presentation of key macroeconomic figures, the second is aimed at performance of banking sector, the third presents an example of FX loans problem while the last presents some details about resolutions and recommendations issued by the Polish Financial Supervision Authority (KNF).  Poland macroeconomic performance over the period 2007-2013  can be considered to be favourable, especially if country is compared with the European Union and Euro zone. Polish economy avoided recession and output growth was resilient remaining above EU average (see graph 1).  However,  despite output growth, labor market remained relatively weak: economic activity did not rise substantially, suggesting so called  jobless growth (1).

 

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