Editorial

ID: 9051

Authors: Fábio Frezatti.

Source: Revista Contabilidade & Finanças, v. 23, n. 60, p. 159-159, September-December, 2012. 1 page(s).

Document type: Editorial (Portuguese)

A case of management accounting change: the political and social dynamics

ID: 9052

Authors: Cláudio de Araújo Wanderley, John Cullen.

Source: Revista Contabilidade & Finanças, v. 23, n. 60, p. 161-172, September-December, 2012. 12 page(s).

Keyword: Brazilian electricity sector , Management accounting change , Organizational change , Privatization , Structuration Theory

Document type: Article (Portuguese) Show Abstract

The main objective of this study is to explain the political and social dynamics of the process of management accounting change in a privatized Brazilian electricity distribution company by articulating and studying the interconnections between the inter- and intra-organizational environments (i.e., the political and economic level, organizational-field level and intra-organizational level). This study adopts an interpretive case study as its research method to analyze the changes in management accounting that occurred in the case company within a period of 8 years, from 2000 (the privatization year) to 2007. This paper argues that to understand these changes in management accounting, it is important to consider and discuss the social and political dynamics of inter- and intra-organizational environments, because the practices and criteria at the economic and political level, as well as the practices and criteria at the  organizational-field level in conjunction with the intra-organizational rationale, shape a company’s management accounting system. To explain the changes in the case organization, this work draws upon the constructs proposed by Dillard, Rigsby et al. (2004) to articulate and understand the three levels of the social and political system. These constructs are based on Weber’s axes of tension (Weber, 1958, 1961; Weber & Roth, 1968) and Giddens’ structuration theory. The analysis of this case indicates that there were profound changes in the case company’s management systems after the process of privatization, particularly with regards to the budgetary system, the performance measurement system and the ways in which managers use management accounting information.

Determinants of disclosure timing for financial statements of Brazilian public companies

ID: 9053

Authors: Guilherme Kirch, Paulo Renato Soares Terra, João Batista Nast de Lima.

Source: Revista Contabilidade & Finanças, v. 23, n. 60, p. 173-186, September-December, 2012. 14 page(s).

Keyword: Corporate governance , Disclosures , Financial statements , Panel data methods , Timing

Document type: Article (Portuguese) Show Abstract

This work examines the determining factors affecting the timing of disclosures in quarterly and annual financial statements of Brazilian companies with shares that are listed on the Sao Paulo Stock Exchange with shares that composed the São Paulo Stock Exchange Index (IBOVESPA) during the period 1/1997 – 2/2009. The determining factors were grouped into the following four dimensions: the complexity of operations, the characteristics of corporate governance, the level of information asymmetry, and the proprietary costs and statement content. With a final sample of 83 companies (1585  observations), the effects of 13 explanatory variables on the timing of disclosures in financial statements were examined using panel data methods; the variables examined included leverage control, company size, level of corporate governance, institutional ownership, financial statement consolidation, volatility, and losses. The main findings suggest that disclosing consolidated statements and/or statements that include losses has a positive effect on the timing of the disclosure,  corroborating the hypothesis that disclosure timing is positively affected by greater complexity in operations and by the content of the statements (in this case, “bad news”). Control of the leverage variable, in turn, was shown to be negatively related to disclosure timing, suggesting that there may be a substitution relationship between these variables. Contrary to theoretical expectations, volatility displayed positive and statistically significant coefficients. However, upon the application of the instrumental variables method to obtain consistent estimates when there is simultaneity between volatility and disclosure timing, the volatility variable exhibited a negative coefficient and was statistically non-significant.

An analysis of federal entities’ compliance with public spending: applying the newcomb-benford law to the 1st and 2nd digits of spending in two Brazilian states

ID: 9054

Authors: José Isidio de Freitas Costa, Josenildo dos Santos, Silvana Karina de Melo Travassos.

Source: Revista Contabilidade & Finanças, v. 23, n. 60, p. 187-198, September-December, 2012. 12 page(s).

Keyword: Continuous auditing , Newcomb-Benford Law , Public Spending , Second digit

Document type: Article (Portuguese) Show Abstract

The following question is investigated in this study: Are there significant deviations in the distribution of the 1st and 2nd digits of state public spending from the behavior predicted by the Newcomb-Benford Law (NB-Law)? The goal of this study is to detect the occurrence of significant deviations in the distribution of the 1st and 2nd digits of state public spending compared to the standard distribution defined in the NB-Law. This study develops an interdisciplinary and exploratory methodology to analyze 134,281 contracts issued by 20 management units in two states. An accounting model based on hypothesis testing was applied to analyze the data, thereby evaluating the conformity between the observed distribution and that predicated by NB-Law. This study showed that there were significant differences in the distribution of digits; the numbers 7 and 8 had excess occurrences, and 9 and 6 were rare occurrences compared to the proportions expected by the NB-Law for the 1st figure. This behavior denoted a tendency to avoid conducting the bidding process. The analysis of the 2nd digit, unprecedented for the Brazilian case, showed a significant excess of occurrences for the numbers 0 and 5, which indicated the use of rounding in determining the value of contracts. We show the feasibility, usefulness, and practicality of applying the NB-Law to the action of oversight bodies, particularly when planning an audit and determining the audited sample.

Analysis of the relationship between accounting information and systematic risk in the Brazilian market

ID: 9055

Authors: Ana Luísa Gambi Cavallari Amorim, Iran Siqueira Lima, Fernando Dal-Ri Murcia.

Source: Revista Contabilidade & Finanças, v. 23, n. 60, p. 199-211, September-December, 2012. 13 page(s).

Keyword: Accounting information , Beta , CAPM , Systematic risk

Document type: Article (Portuguese) Show Abstract

According to the existing literature, accounting information represents an important predictor of a company’s future cash flow and serves to assess the risk of stock investments. Because such information reflects the economic and financial reality of a company during a given period, this information relates to the systematic risk of an investment, which justifies the use of the information for decisions related to the composition of a stock portfolio. Within this context, the present study seeks to present empirical evidence on the relationship between accounting information and systematic risk in the Brazilian market. More specifically, the objective is to analyze the relationship between the accounting betas and the market betas of companies in Brazil. For this analysis, 97  companies from 15 economic sectors were selected from the Securities, Commodities, and Futures Exchange of São Paulo (Bolsa de Valores, Mercadorias e Futuros de São Paulo – BM&FBOVESPA) from the first quarter of 1995 to the third quarter of 2009. A total of 468 accounting variables were used. To operationalize the relationship between the variables, a regression model with panel data was used. One the one hand, the results show that some  accounting betas may explain the market beta and do so in an anticipated manner and that these accounting betas are able to improve the prediction of the market beta when used alongside the historical market betas. On the other hand, the majority of accounting beta versions displayed a rather insignificant or even nonexistent relationship.

Auditor and auditee perceptions of internal auditing practices in a company in the energy sector

ID: 9056

Authors: Débora Lage Martins Lélis, Laura Edith Taboada Pinheiro.

Source: Revista Contabilidade & Finanças, v. 23, n. 60, p. 212-222, September-December, 2012. 11 page(s).

Keyword: Auditee , Auditing practices , Internal auditing , Risk-based auditing

Document type: Article (Portuguese) Show Abstract

Internal auditing activities have experienced a great deal of expansion and appreciation in recent years. The objective of this study was to evaluate the   perceptions of internal auditors and auditees regarding the internal auditing practices of a Brazilian company in the energy sector. The study, conducted as a case study with the use of primary sources, analyzed different aspects of internal auditing activities, including auditor training and the characteristics  associated with good auditing work. Internal auditors and auditees indicated the level of preparation of the auditor, the quality of the auditing  recommendations, and risk  orientation as the factors with the greatest influence on the quality of internal auditing services, supporting findings in the literature. The studied groups also had positive perceptions regarding the contribution of internal auditing to improvements in process performance, internal control structures, and the company’s management of risk, which are relevant indicators in the evaluation of the quality of internal auditing services. The study revealed that auditors and auditees had different perceptions of the evaluation of auditee behavior. The perceptions of auditors and auditees regarding the use of good internal auditing practices are, in most cases, coherent with the quality attributes cited in the literature, indicating the presence of these attributes in the evaluation of internal auditing service quality.

Determinants of audit and non-audit fees provided by independent auditors in Brazil

ID: 9057

Authors: Rodrigo Telles Pires Hallak, Andre Luiz Carvalhal da Silva.

Source: Revista Contabilidade & Finanças, v. 23, n. 60, p. 223-231, September-December, 2012. 9 page(s).

Keyword: Audit fees , Consulting fees , Corporate governance

Document type: Article (Portuguese) Show Abstract

The aim of the present study is to identify the factors affecting the auditing and consulting expenditures in Brazilian public companies. The current study was motivated by the lack of studies on auditing and consulting expenses in Brazil, whereas this matter has been researched for years in other countries. Data on Brazil are scarce because the disclosure of spending on auditing and consulting services provided by independent auditors only became mandatory in 2009. The disclosure of these data enables the analysis of the drivers of the fees paid by companies for these services. In this study, we only analyzed the expenditures for consultancy services provided by the same auditing firm; that is, we ignored all spending on other consultants. The results indicate that audit fees are positively related to company size, corporate governance quality, and the Big Four status of the auditor. In terms of consulting expenses, there is a positive relationship between company size and Big Four status, but there is no significant relationship with corporate governance.

Corporate Financial Performance and Corporate Social Performance: methodological development and the theoretical contribution of empirical studies

ID: 9058

Authors: João Maurício Gama Boaventura, Ralph Santos da Silva, Rodrigo Bandeira de Mello.

Source: Revista Contabilidade & Finanças, v. 23, n. 60, p. 232-245, September-December, 2012. 14 page(s).

Keyword: Corporate Financial Performance , Corporate Social Performance , Stakeholder Theory

Document type: Article (Portuguese) Show Abstract

One of the roles of accounting is to provide information on business performance, either through financial accounting indicators or otherwise. Theoretical-empirical studies on the relationship between Corporate Financial Performance (CFP) and Corporate Social Performance (CSP) have increased in recent years, indicating the development of this research field. However, the contribution to the theory by empirical studies is made in an incremental manner, given that each study normally focuses on a particular aspect of the theory. Therefore, it is periodically necessary to conduct an analysis to evaluate how the  aggregation of empirical studies has contributed to the evolution of the theory. Designing such an analysis was the objective of the present study. The theoretical framework covered the following: stakeholder theory, the relationship between CSP and CFP, good management theory, and slack resource theory. This research covered a 15-year period (1996 to 2010), and the data collection employed a search tool for the following databases: Ebsco, Proquest, and ISI. The sampling process obtained a set of 58 exclusively theoretical-empirical and quantitative articles that test the CSP-CFP relationship. The main  results in the theoretical field reinforce the proposed positive relationship between CSP and CFP and good management theory and demonstrate a deficiency in the explanation of the temporal lag in the causal relationship between CSP and CFP as well as deficiencies in the description of the CSP construct. These results suggest future studies to research the temporal lag in the causal relationship between CSP and CFP and the possible reasons that the positive association between CSP and CFP has not been assumed in some empirical studies.

The relationship between idiosyncratic risk and returns in the Brazilian stock market

ID: 9059

Authors: Fernanda Primo de Mendonça, Marcelo Cabus Klotzle, Antonio Carlos Figueiredo Pinto, Roberto Marcos da Silva Montezano.

Source: Revista Contabilidade & Finanças, v. 23, n. 60, p. 246-257, September-December, 2012. 12 page(s).

Keyword: EGARCH model , Idiosyncratic risk , Stock market , Stock returns , Three-Factor model

Document type: Article (Portuguese) Show Abstract

The relationship between idiosyncratic risk and stock returns has been widely studied in various international publications with controversial results. In the Brazilian context, studies on this subject are scarce. This study seeks to verify the relationship between idiosyncratic risk and stock returns in the Brazilian stock market. To achieve this goal, two methods were used to estimate idiosyncratic volatility: first, the residuals of regressions based on the Fama and French Three-Factor Model and second, the EGARCH model, which provided the conditional volatility. These variables were added to cross-section regression models, along with the following stock-specific variables: beta, market value, book-to-market ratio, momentum effect and liquidity. The results show that idiosyncratic volatility has a positive and significant influence on stock returns and that the most appropriate model is the one that includes all the mentioned variables. The analysis of the other variables also produced important results. Contrary to expectations, the market value of stocks and liquidity had an important influence on returns. These variables’ coefficients were positive in all the analyzed models. This result may reflect the particularities of the Brazilian market, which is smaller, more recent and less consolidated than the USA stock market. On the other hand, the results relating to the book-to-market ratio and the momentum effect were consistent with the literature. Value stocks and those with a good past performance tended to produce higher returns.