Editorial

ID: 7206

Authors: Fábio Frezatti.

Source: Revista Contabilidade & Finanças, v. 23, n. 58, p. 5-5, January-April, 2012. 1 page(s).

Document type: Editorial (Portuguese)

Evidence of institutionalizing elements in the Balanced Scorecard in the book strategy in action: a view based on institutional theory

ID: 7207

Authors: Paschoal Tadeu Russo, Cláudio Parisi, Evandir Megliorini, Claudiane Barbosa de Almeida.

Source: Revista Contabilidade & Finanças, v. 23, n. 58, p. 7-18, January-April, 2012. 12 page(s).

Keyword: BSC , Institutional theory , Management , Strategy

Document type: Article (Portuguese) Show Abstract

The Balanced Scorecard (BSC) is a methodology that allows managers to define and implement a set of financial or nonfinancial indicators in a balanced way to assess an organization’s performance from four viewpoints. Many companies are unsuccessful in their implementation of the BSC. This lack of success may be attributed to different factors, such as strategic problems, planning failures, and poorly defined targets and goals. However, the failed implementation may be attributed in part to the failure to institutionalize habits and routines. In this regard, this objective of this paper is to use institutional theory to determine whether the book Strategy in Action: Balanced Scorecard contains evidence that the BSC model proposed by the authors (Kaplan & Norton) includes elements that favor the model’s institutionalization. For this purpose, a qualitative bibliographic survey was prepared. The survey revealed 404 clues that were rated according to Tolbert and Zucker’s description of the processes inherent to institutionalization and to Scott’s proposed framework of legitimation/legitimizing. These findings suggest that the book primarily legitimizes the BSC by examining organizations and describes it as an acknowledged management instrument. The aspects supporting the semi-institutional stage (26% of the findings) and the total institutionalization stage (10% of findings) suggest that the authors intended to propose a tool without focusing on the institutionalization process, which may partly explain the great difficulty faced by companies attempting to implement this methodology.

Financial frictions and substitution between internal and external funds in publicly traded brazilian companies

ID: 7208

Authors: Márcio Telles Portal, João Zani, Carlos Eduardo Schönerwald da Silva.

Source: Revista Contabilidade & Finanças, v. 23, n. 58, p. 19-32, January-April, 2012. 14 page(s).

Keyword: Capital structure , Cash policy , Debt policy , Financial constraint , Pecking order

Document type: Article (Portuguese) Show Abstract

The present study aimed to document the effects of financial constraints on the negative relationship between cash flow and external funds, a phenomenon associated with the Pecking Order Theory. This theory suggests that companies subject to more expensive external funds (financially constrained firms) should demonstrate a stronger negative relationship with cash flow than companies subject to minor financial frictions (financially unconstrained firms). The results indicate that the external funds of constrained firms consistently present less negative sensitivity to cash flow compared with those of unconstrained companies. Additionally, the internal funds of constrained companies demonstrate a positive sensitivity to cash flow, whereas those of unconstrained companies do not show any such significant behavior. These results are in accordance with the findings of Almeida and Campello (2010), who suggest the following: first, because of the endogenous nature of investment decisions in constrained companies, the complementary relationship between internal and external funds prevails over the substitutive effects suggested by the Pecking Order Theory; and second, the negative relationship between cash flow and external funds cannot be interpreted as evidence of costly external funds and therefore does not corroborate the Pecking Order Theory.

An analysis of the deinstitutionalization of inflation-adjusted accounting practices in Brazilian companies

ID: 7209

Authors: Amaury José Rezende, Reinaldo Guerreiro, Flávia Zóboli Dalmácio.

Source: Revista Contabilidade & Finanças, v. 23, n. 58, p. 33-51, January-April, 2012. 19 page(s).

Keyword: Decoupling of accounting information , Deinstitutionalization , Inflation adjustment , Institutional theory

Document type: Article (Portuguese) Show Abstract

This article aims to analyze the deinstitutionalization of the inflation-adjustment accounting practices used by large Brazilian companies. The theoretical assumptions used were based on institutional theory, which provides a sociological interpretation of human behavior that recognizes the phenomenon of limited rationality and the political character of social action. Analyses were based on the empirical approach that was proposed by Oliver (1992). The research strategy consisted of questionnaires and interviews conducted in a population of 118 large Brazilian companies from Exame Magazine’s list of the 500 largest companies. The primary respondents were accountants and controllers. Factor analysis, one-way ANOVA and the Kruskal-Wallis test were conducted using the approach proposed by Oliver (1992), and the research included 22 variables comprising 12 constructs and 6 qualitative hypotheses regarding the pressures that motivate the deinstitutionalization of inflationadjusted accounting practices. Therefore, with regard to the constructs assessed, emphasis was placed on identifying the political pressures (the environment) and the functional pressures in both the organizational and environmental dimensions. However, the social pressures did not prove to be significant. We conclude that the process of deinstitutionalization results from a distinct combination of institutional factors, and these results are consistent with the findings from research conducted in the US market and in the UK.

Accounting choices in Brazil: identifying the characteristics of publicly traded companies that opted to maintain versus derecognise deferred assets

ID: 7210

Authors: Fernando Drago Lorencini, Fábio Moraes da Costa.

Source: Revista Contabilidade & Finanças, v. 23, n. 58, p. 52-64, January-April, 2012. 13 page(s).

Keyword: Accounting choices , Brazilian Law 11.638/2007 , Brazilian Law 11.941/2009 , Deferred assets

Document type: Article (Portuguese) Show Abstract

The issuance of Brazilian Law 11.638/2007 is a critical step in the convergence of the Brazilian Generally Accepted Accounting Principles (GAAPs) towards International Financial Reporting Standards. After the law was implemented and later modified by Provisional Executive Order 449/2008 (converted into Law 11.941/2009), certain accounting choices were allowed during the transition period. The Brazilian GAAPs allowed for restructuring costs and costs related to opening a new facility to be recognised as assets. As a transitional provision, companies were allowed to choose between maintaining or eliminating these values. In this paper, we attempted to identify which company characteristics were associated with this accounting choice. The final sample consisted of Brazilian companies listed on the BM&FBOVESPA, and a logistic regression identified two characteristics. Participation in one of the three different corporate governance levels of the BM&FBOVESPA was associated with the choice to derecognise the deferred assets, while companies decided to maintain the deferred asset if it was relatively large. The empirical evidence reported here contributes to the literature by explaining the manner in which a set of firm characteristics is related to a firm’s accounting choices.

Effects of income smoothing practices on the conservatism of public companies listed on the BM&FBOVESPA

ID: 7211

Authors: José Elias Feres de Almeida, Alfredo Sarlo Neto, Ricardo Furieri Bastianello, Eduardo Zandomenigue Moneque.

Source: Revista Contabilidade & Finanças, v. 23, n. 58, p. 65-75, January-April, 2012. 11 page(s).

Keyword: Accounting informatio , Capital markets , Conditional conservatism , Income smoothing

Document type: Article (Portuguese) Show Abstract

The aim of this study was to investigate two aspects of accounting information that may be inherently related: income smoothing practices and conditional conservatism. Theoretically, the more a firm employs income smoothing, i.e., uses accruals to reduce the variability of profits, the less possibility there is for the timely acknowledgement of future economic losses (i.e., bad economic news) in profits. Eckel’s model (1981) was used in this study to classify listed companies as smoothing or non-smoothing, and Basu’s model (1997) was used to quantify the degree of conditional conservatism present in each firm. To make the results more robust, samples were created with annual stock return data from both March and December. The results indicated that non-smoothing firms had a higher degree of conditional conservatism, i.e., more opportunity to recognize future economic losses because the market could use the stock return data to anticipate future losses contained in the information regarding profits. This research made it possible to observe theoretical relationships between properties of accounting information: i) there is a relationship between income smoothing and conditional conservatism (i.e., accounting choices); ii) the informational environment of the Brazilian capital market contributes to the market distinction between smoothing and non-smoothing firms; and iii) the improvement of the capital market provides economic operators with greater insight into economic losses that are contained in accounting results.