Accounting Commons^™

Corruption In Contemporary Nigeria, Gabriel K. Afolabi

DLSU Business & Economics Review

Events in contemporary Nigeria point to the fact that corruption is a cankerworm that has eaten into the fabric of every facet of national life. Public officials demand payment of ransom before and/or after performing their legitimate functions. Businesspeople shortchange their customers through unfair dealings, while law-enforcement agents demand bribes and collaborate with fraudulent elements in the society. Employee theft is a common occurrence in many organizations. This study focuses on the nature of corruption, as well as causes, and strategies to adopt in curbing this disease in contemporary Nigeria. It concludes on the need to adopt a multidimensional approach, …

Conflict Of Interest?: Executive-Auditor Relationship And The Likelihood Of A Sec-Prompted Restatement, Henry Lyford

CMC Senior Theses

This study examines the relationship between executives and their independent auditor to see if there is a conflict of interest in their interaction. This study was motivated by the meltdowns, partially caused by fraudulent accounting, of many public companies in the late 1990s and early 2000s and the consequent passage of the Sarbanes-Oxley Act. This study examines the variables of audit fees, fees for other services, and auditor tenure to see if they are connected with the occurrence of an SEC-prompted restatement. The results show no significant correlation between amount of fees and the likelihood of an SEC-prompted restatement but …

Is The Special Purpose Vehicles Act Responsible For The Decline In Npl Ratios?, Stephanie L. Chan, Andrew Adrian Y. Pua

DLSU Business & Economics Review

This study aimed to determine if the SPV Act was actually responsible for the marked decline in NPL ratios this past four years. Using aggregated data for the entire Philippine Banking System, segregated according to type of bank, results suggest that the SPV Act was not responsible for the decline in the NPL ratios but may be attributed to a downward trend in the loan to asset ratio where values are getting closer to the interval for which NPL ratios are at a minimum, economic sluggishness as measured by deviations from the long run trend of macroeconomic variables, and seasonal …

A Comparative Analysis Of The Entrepreneurial Styles Of Second, Third, And Fourth Generation Overseas Chinese And Filipinos In The Philippines, Gerley Q. Po

DLSU Business & Economics Review

This study used the multiple case study research approach and presents a comparative analysis of the similarities and differences in entrepreneurship styles among second, third and fourth generation overseas Chinese and Filipinos in the Philippines. Specifically, it aimed to compare the entrepreneurs’ entrepreneurial characteristics, leadership styles, and value orientation. The results indicate that the two groups are heterogeneous even though they operate business in the same country. However, slowly, the influence of Filipino culture is seen in the fourth generation overseas Chinese. The study hopes to provide new generation of entrepreneurs insights on entrepreneurial styles that need to change to …

Human Resource Management Practices: Drivers For Stimulating Corporate Entrepreneurship In Large Companies In The Philippines, Divina M. Edralin

DLSU Business & Economics Review

Leading companies in the Philippines have realized that nurturing an entrepreneurial culture through the implementation of various strategic human resource management (HRM) practices will enhance their firm’s ability to gain competitive advantage and achieve superior performance. This study attempted to determine the degree to which various HRM practices stimulate corporate entrepreneurship and which HRM function is the most significant driver of corporate entrepreneurship (CE) in large companies in the Philippines. Findings reveal that the companies are extensively implementing different practices related to HRM functions that cultivate CE. Employee relations, training and development, and recruitment and selection HRM functions are found …

Nigeria’S Debt Overhang (1960-2005): A Critical Revisit, Solomon A. Adebola

DLSU Business & Economics Review

A general global trend up to the 1980’s has been for nations to rely substantially on external loans and aids for economic sustenance and technological development. This is particularly true for less developed countries (LDC). Unfortunately for these LDCs, their debts have gone beyond the countries’ capacity to repay. The debts have, for many such developing countries, been on a perpetual geometrical increase. Such countries have ended up with a debt overhang, with its detrimental impacts on the countries’ economic growth and social development. This research note gives a treatise on the theoretical framework of a debt overhang, and a …

Exploratory Market Survey Of Tuba In Tacloban City, Arturo Pacho

DLSU Business & Economics Review

This research note explores the market condition of tuba in Tacloban City in the Philippines. It examined the market viability of tuba as a source of income for small retailers as well as coconut farmers. To determine whether there is any commercial value to tuba, and to what extent, a survey was made on the type of tuba sold, the price it is sold for, the quantity sold, the age of tuba, and the source of tuba. This report provides basic information as to the commercial value of tuba to small store retailers in the city.

The Persistence Of Accounting Versus Economic Profit, Matthew J. Holian, Ali M. Reza

Faculty Publications

Drawing on Schumpeterian theory, this article presents estimates of a first-order autoregressive model of profit persistence for large US firms, using Economic Value Added (EVA), the popular measure of profits produced by Stern Stewart and Company, and simple (unadjusted) accounting measures from the Compustat database. We hypothesize about the differences we should expect to find between these two sets of estimates, and also provide a fresh normative assessment of the dynamic competitiveness of the US economy.

Tunneling Through Intercorporate Loans: The China Experience, Guohua Jiang, Charles M. C. Lee, Heng Yue

Research Collection School of Accountancy

This study investigates a particularly brazen form of corporate abuse, in which controlling shareholders use intercorporate loans to siphon billions of RMB from hundreds of Chinese listed companies during the 1996 to 2006 period. We document the nature and extent of these transactions, evaluate their economic consequences, examine factors that affect their cross-sectional severity, and report on the mitigating roles of auditors, institutional investors, and regulators. Collectively, our findings shed light on the severity of the minority shareholder expropriation problem in China, as well as the relative efficacy of various legal and extra-legal governance mechanisms in that country.

Private Fund Adviser Registration Act Hr-3818, Anita Krug

All Faculty Scholarship

This paper comments on the Obama administration's 2009 proposal for the regulation of hedge fund investment advisers.

Brokerage Industry Self-Regulation: The Case Of Analysts’ Background Disclosures, Lawrence Brown, Artur Hugon, Hai Lu

Research Collection School Of Accountancy

We evaluate an industry disclosure initiative designed to inform investors, the practice of providing information regarding investment professionals’ backgrounds. Implicit in the motivation for this initiative is the presumed relevance of background information to investors seeking investment professionals’ guidance. We find that analysts with disclosure incidents forecast less accurately than a matched sample of analysts without such disclosures, and that the market views disclosed analysts’ earnings forecasts as less credible than those of the matched sample. Our evidence is consistent with disclosures signaling a persistent analyst characteristic. We conclude that analyst backgrounds are informative regarding both the accuracy and credibility …

The Impact Of Selected Corporate Governance Variables In Mitigating Earnings Management In The Philippines, Mc Reynald S. Banderlipe Ii

DLSU Business & Economics Review

Given the increasing importance of corporate governance in the Philippines, this study attempts to explain the role of selected governance variables related to a company’s board of directors in mitigating earnings management in the country. Using the financial statements of publicly listed companies and a modified measurement model, the findings revealed that the holding of multiple directorial positions by the independent directors, and the managerial ownership of the board are significant enough to limit the incentives for earnings management. Moreover, firm size and return on assets were identified to have explanatory significance among the controlling factors.

Towards An Innovation Model In Teaching Management, Ernesto L. Bumatay

DLSU Business & Economics Review

This study discusses an innovation to management teaching called Learning-Activity-Based Experience Model (LAB-E Model). The perspective is that the entire learning process in a course will be experienced through sets of activities designed by the faculty. These sets or clusters of problems and activities are unique to the contents and objectives of the course as well as to the varying needs and capabilities of the students. Through management activities created and designed by the faculty, learning takes place. This innovative teaching model incorporates other common teaching methodologies which include small group presentation, facilitated discussion of cases, and lecture-discussion approach.

Input-Ouput Analysis Of The Key Sectors In Philippine Carbon Dioxide Emissions From A Production Perspective, Rachel C. Reyes

DLSU Business & Economics Review

The study computes the carbon dioxide emissions of the Philippines for the period of 2000 to 2006 and applies a production perspective input-output analysis to identify the key sectors whose value-added growth were responsible for the increase in emissions of the country and those that exhibited increased sectoral emissions from overall income growth. Power generation turned out to be the primary sector while cement manufacture, wholesale/retail trade, mining, road and water transport, and private services were revealed as the secondary sectors, jointly accounting for 0.66% increase in the country’s emissions from a 1% growth in their valueadded and experiencing 0.75% …

Perceived Organizational Effectiveness Of Labor Unions In The Banking, Hotel, And Manufacturing Industries, Divina M. Edralin

DLSU Business & Economics Review

To determine the extent of influence of the organization’s context and structure factors on the perceived effectiveness of labor unions in the banking, hotel, and manufacturing industries in the National Capital Region, 88 local unions consisting of 772 rank-and-file and supervisory union members from 82 firms were covered. It is evident from the results that the level of union effectiveness as perceived by the members is a function of two major organizational factors, namely, context and structure. Moreover, there are significant differences in the average level of effectiveness rating of unions per industry.

Law Making In The Guise Of Procedures: Placing Hurdles To The Right Of Appeal To The National Labor Relations Commission, Emmanuel O. Sales

DLSU Business & Economics Review

It is a legal given that the power to make laws or new norms lies with Congress and this power, granted by the Constitution, cannot be shared with or should not be encroached upon by another branch of government or an instrumentality of a branch. Rule making to implement the law or the promulgation of procedures to establish the process of enforcing rights is not always done subordinate to or in accordance with law. This study posits that the 2005 Rules of Procedure of the National Labor Relations Commission, specifically on the requirements for taking an appeal, is a case …

Innovation Process And Performance In Small- To Medium-Sized Firms: A Conceptual Framework, Edgardo S. Bolinao

DLSU Business & Economics Review

This study maps out the innovation process in Small and Medium Enterprises (SMEs) that can fundamentally affect business performance. The development of the conceptual framework can be used to encourage and enhance successful innovation management for SMEs. Overall, effective innovation is based on managing this process as a whole and on building up capacity and competency at each stage in the innovation. The framework put forth in this study is being proposed to be used as template for the development of a management development program for SMEs’ owner-managers and as a practical tool for diagnosing SMEs’ support systems.

What Is “The Learning Filipino Firm”?, Raymund B. Habaradas

DLSU Business & Economics Review

“The learning Filipino firm” can be classified into three types, namely the reactive firm, which is a reluctant learner; the adaptive firm, which is an eager learner; and the generative firm, which is a dynamic learner. This typology is based on the hypothesis that a firm’s learning style and its innovative capability is influenced by its organizational design. Among the key dimensions that must be considered are as follows: (a) organizational strategy, (b) organizational structure, and (c) organizational culture. These dimensions are closely intertwined, and, therefore, collectively influence a firm’s ability to constantly renew itself.

The Regulatory Response To Madoff, Anita Krug

All Faculty Scholarship

This white paper evaluates investor protection mechanisms in the securities regulatory regime at the time the Madoff fraud was exposed. It considers whether the post-Madoff call for additional regulation of hedge funds and/or their managers - and/or their respective activities - was warranted.

Family Structure Choice: Taxation As An Incentive To Change, Aman Khanna

The Corinthian

Traditionally defined as the union of one man and one woman charged with the responsibility of rearing children, the notion of family now includes a variety of living arrangements including non-marital cohabitation and single parents. The current study investigates individual incentives to change family structure from a person’s original status as single. This conceptual research, which is grounded in theories of marriage, proposes that federal, personal income tax is an input to change in family structure. A model of family structure change and propositions of the relationship between the federal tax and family structure are developed.

Exploring The Use Of Exchange Market Pressure And Rmu Deviation Indicator For Early Warning System (Ews) In The Asean+3 Region, Marvin Raymond F. Castell, Lawrence B. Dacuycuy

DLSU Business & Economics Review

Although macroeconomic and financial surveillance mechanisms have been in place both at the global level and at the Asia regional level, the results of the empirical analysis provide some evidence that a regional monetary unit (RMU) can be used to supplement existing surveillance tools for improved crisis detection and prevention. In particular, this study showed that the RMU may be useful as a tool for macroeconomic consultation.

The Functional Specification Of The Wageexperience Relationship And Male Wage Inequality In The Philippines: A Decomposition Analysis, Lawrence B. Dacuycuy

DLSU Business & Economics Review

This study analyzed the factors that have contributed to the increase in wage inequality among male workers in the Philippines. Using the Fields (2003) framework as a decomposition platform, the validity of the usual parametric specification of the wage-experience relationship to ascertain the effects of functional misspecification on wage decomposition estimates was investigated. The study found that the quadratic specification of the nonlinear relationship is inadequate, thereby favoring the use of the semiparametric partially linear model, which does not impose any functional assumption on the said relationship.

An Evaluation Of Financial And Non-Financial Environmental Disclosures Of Ten Publicly-Listed Mining Companies In The Philippines, Nimpha M. Aquino

DLSU Business & Economics Review

This study determined the environmental disclosure practices of 10 mining companies in the Philippines by examining the nature and extent of disclosures in the financial and non-financial sections of their 2006 corporate annual reports. It was found out that there was no uniformity in the environmental disclosures of the 10 mining companies. It was also discovered that there was no existing environmental reporting standards as far as environmental disclosure is concerned. The study provided recommendations to the standard-setting council to improve the firms’ environmental disclosure compliance with a discussion regarding the benefits these recommendations might offer.

An Excerpt From The Sec Commissioned Report: A Balance Sheet Disclosure Compliance Check Of Ten Publicly-Listed Companies, Ma. Gina T. Manaligod

DLSU Business & Economics Review

This study is an excerpt of a SEC-commissioned report. It investigated the extent of compliance of 10 publicly-listed finance companies with regard to the provisions of relevant PFRS/PAS on balance sheet disclosure requirements. This was accomplished by examining the balance sheet and the related note disclosures of the 10 companies. It was found the all 10 companies had deficiencies in their balance sheet disclosures. It can be implied from this study that deficiencies in disclosure requirements stem from the standards themselves. Recommendations for the improvement of disclosure compliance were provided.

Stock Diversification And Integer Programming, Emilina R. Sarreal

DLSU Business & Economics Review

This study shows how investors can maximize returns by preparing and monitoring their own stock portfolio by using an integer programming model with an algorithm that can be computed in spreadsheet and linear programming software. Further, the study emphasizes the importance of diversifying stockholdings to reap optimal returns and minimum volatility/risk. It also suggests employing behavioral portfolio theory where goals/aspirations of investors are combined with their reward-to-volatility profile.

Risk Management In The Indian Petrochemical Industry (With Special Reference To Haldia Petrochemicals Ltd.), Tamma K. Reddy, Subhayan Basu

DLSU Business & Economics Review

This study focuses on the identification and acceptance or offsetting of the risks threatening the profitability and existence of any petrochemical organization. It deals with the foreign exchange risk management policy of Haldia Petrochemicals Ltd. and how it could be implemented in the risk minimization or the profit maximization of the company. It applies theories about risks and offers insights and recommendations to the company regarding their management of risk exposures.

Exchange Rate Pass-Through For Selected Southeast Asian Countries, Stephanie L. Chan

DLSU Business & Economics Review

Long- and short-run exchange rate pass-through coefficients were estimated for Malaysia, Indonesia, Thailand, and the Philippines using a simple model based on absolute purchasing power parity. Results were lower than 0.30 for all four countries. Cointegration tests confirmed the existence of a long-run relationship between CPI, GDP, exchange rate, and the U.S. PPI for the countries studied. However, the post-estimation tests showed that a more comprehensive model may need to be developed. The low coefficients reflect the success of the countries in stabilizing their inflation levels, though implying that exchange rate interventions may be less effective in restoring trade balance.

An Empirical Investigation Of The Fairtax As An Alternative To The Federal Personal Income, Corporate Income, Estate And Gift, And Payroll Taxes, Yingxu Kuang

Doctoral Dissertations

Dissatisfaction with the current federal tax system is fostering serious interest in a national retail sales tax. Specifically, the FairTax Plan intends to replace most of the federal taxes with a national retail sales tax and is gaining momentum in Congress because of its purported progressive features. The FairTax is promoted as being progressive but there is considerable opposition to this claim.

Using the most recent 2005 Consumer Expenditure Survey (CES) data and estimating lifetime income from a Panel Study of Income Dynamics (PSID) panel tracked over 1968-2005, the distribution impacts of the FairTax Plan are examined, as well as …

Benchmarking The Home Pages Of The Top Multinational Manufacturing Corporations In The Philippines, Jeden O. Tolentino

DLSU Business & Economics Review

In the information age, having a presence on the World Wide Web is critical for firms to establish and maintain competitive advantage. This study evaluated the Web presence of the top multinational manufacturing corporations in the Philippines. A sample of 70 Web sites of companies in BusinessWorld’s list of the Top 1000 Corporations in the Philippines for 2006 was subjected to a framework of ten critical factors; and comparisons were made against existing benchmarks. Thereafter, the functionality of the Web sites of the three top-ranked companies was analyzed using a two-dimensional grid for Web site evaluation. Results indicate that there …

Lagged Effect Of Tv Advertising On Sales Lagged Effect Of Tv Advertising On Sales Of An Intermittently Advertised Product Of An Intermittently Advertised Product, Cesar C. Rufino

DLSU Business & Economics Review

This study is an empirical evaluation of the dynamic effect of intermittent television ad placements on the sales of a consumer product using three classes of distributed lag models. The study is also geared to analytically determine the duration of advertising effects and the dependability of the firm’s pulsing type of advertising strategy. Empirical results support the soundness of the company’s strategy. Maximum duration of advertising effect is estimated at six months, which is about the largest number of consecutive months the product was not seen on TV during the sample period.