Aldy Fernandes da Silva

EARNINGS MANAGEMENT AND ECONOMIC CRISES IN THE BRAZILIAN CAPITAL MARKET

The 2008 economic crisis challenged accounting, either demanding recognition and measurement criteria well adjusted to this scenario or even questioning its ability to inform appropriately entities’ financial situation before the crisis occurred. So, our purpose was to verify if during economic crises listed companies in the Brazilian capital market tended to adopt earnings management (EM) practices. Our sample consisted in 3,772 firm-years observations, in 13 years – 1997 to 2009. We developed regression models considering discretionary accruals as EM proxy (dependent variable), crisis as a macroeconomic factor (dummy variable of interest), ROA, market-to-book, size, leverage, foreign direct investment (FDI) and sector as control variables. Different for previous EM studies two approaches were used in data panel regression models and multiple crises were observed simultaneously. Statistics tests revealed a significant relation between economic crisis and EM practices concerning listed companies in Brazil in both approaches used.La crisis economica de 2008 ha desafiado a la contabilidad, exigiendo criterios de reconocimiento y evaluacion apropiadamente ajustados a ese escenario, o incluso cuestionando su capacidad de informar adecuadamente sobre la situacion economico-financiera de las entidades antes del comienzo de la crisis. Nuestro objetivo ha sido comprobar si durante las crisis economicas las empresas que cotizan en el mercado de capitales brasileno se inclinan a adoptar practicas de gestion de resultados (GR). La muestra esta formada por 3.772 observaciones por empresa/ano, durante 13 anos (de 1997 a 2009). Desarrollamos modelos de regresion, considerando los ajustes discrecionales (discretionary accruals) como proxy de GR (variable dependiente), la crisis como un factor macroeconomico (variable de interes), ROA, market-to-book, tamano, impulso, inversion extranjera directa y sector como variables de control. Al contrario de los estudios anteriores sobre gestion de resultados, se han utilizado dos enfoques en los modelos de regresion de datos en panel y se observaron distintos escenarios de crisis simultaneamente. Las pruebas estadisticas revelaron, en ambos enfoques utilizados, una relacion significativa entre la crisis y las practicas de GR en las companias presentes en Brasil.

Earnings management and macroeconomic crises

Purpose – The purpose of this paper is to investigate whether macroeconomic crises are a motivational factor for earnings management practices by the companies listed in the capital markets of Brazil and the USA. Design/methodology/approach – The sample consisted of 7,932 firm-quarter observations from listed Brazilian companies and 99,931 from listed US companies, covering a 13-year period (1998-2010). The authors developed regression models for the panel data, taking into account discretionary accruals as an earnings management proxy (dependent variable), while crises were regarded as a macroeconomic factor (dummy variable of interest). Also considered were return on assets, market-to-book ratio, size, leverage, foreign direct investment, income taxes, quarters, and sectors, which were treated as control variables. Findings – The results corroborate the conceptual issues involved in undertaking this study, and they demonstrate that in periods of macroeconomic crises, companies are more motivated to empl...

Enterprise Risk Management and Firm Value: Evidence from Brazil

ABSTRACT International studies have shown that the evolution of traditional risk management (TRM) toward a holistic perspective and the simple adoption of enterprise risk management (ERM) have increased firm value from a strategic perspective. This study empirically investigates the association between ERM and firm value (measured by Tobin’s q ratio) in 649 firm-year observations that were listed in the IBrX100 index on the Brazilian stock exchange (BM&FBovespa) during 2004–2013. After the introduction of controls with exogenous effects, the results indicate a positive association between firm value and the use of an ERM approach, which aligns with most international studies.

A Estrutura a Termo da Taxa de Juros e seu Impacto no Teste de Adequação de Passivo para Seguradoras no Brasil

The Brazilian regulation for applying the Liability Adequacy Test (LAT) to technical provisions in insurance companies requires that the current estimate is discounted by a term structure of interest rates (hereafter TSIR). This article aims to analyze the LAT results, derived from the use of various models to build the TSIR: the cubic spline interpolation technique, Svensson’s model (adopted by the regulator) and Vasicek’s model. In order to achieve the objective proposed, the exchange rates of BM&FBOVESPA trading days were used to model the ETTJ and, consequently, to discount the cash flow of the insurance company. The results indicate that: (i) LAT is sensitive to the choice of the model used to build the TSIR; (ii) this sensitivity increases with cash flow longevity; (iii) the adoption of an ultimate forward rate (UFR) for the Brazilian insurance market should be evaluated by the regulator, in order to stabilize the trajectory of the yield curve at longer maturities. The technical provision is among the main solvency items of insurance companies and the LAT result is a significant indicator of the quality of this provision, as this evaluates its sufficiency or insufficiency. Thus, this article bridges a gap in the Brazilian actuarial literature, introducing the main methodologies available for modeling the yield curve and a practical application to analyze the impact of its choice on LAT.

Gestión de resultados y crisis económica en lo mercado de capitales brasileño

The 2008 economic crisis challenged accounting, either demanding recognition and measurement criteria well adjusted to this scenario or even questioning its ability to inform appropriately entities’ financial situation before the crisis occurred. So, our purpose was to verify if during economic crises listed companies in the Brazilian capital market tended to adopt earnings management (EM) practices. Our sample consisted in 3,772 firm-years observations, in 13 years – 1997 to 2009. We developed regression models considering discretionary accruals as EM proxy (dependent variable), crisis as a macroeconomic factor (dummy variable of interest), ROA, market-to-book, size, leverage, foreign direct investment (FDI) and sector as control variables. Different for previous EM studies two approaches were used in data panel regression models and multiple crises were observed simultaneously. Statistics tests revealed a significant relation between economic crisis and EM practices concerning listed companies in Brazil in both approaches used.La crisis economica de 2008 ha desafiado a la contabilidad, exigiendo criterios de reconocimiento y evaluacion apropiadamente ajustados a ese escenario, o incluso cuestionando su capacidad de informar adecuadamente sobre la situacion economico-financiera de las entidades antes del comienzo de la crisis. Nuestro objetivo ha sido comprobar si durante las crisis economicas las empresas que cotizan en el mercado de capitales brasileno se inclinan a adoptar practicas de gestion de resultados (GR). La muestra esta formada por 3.772 observaciones por empresa/ano, durante 13 anos (de 1997 a 2009). Desarrollamos modelos de regresion, considerando los ajustes discrecionales (discretionary accruals) como proxy de GR (variable dependiente), la crisis como un factor macroeconomico (variable de interes), ROA, market-to-book, tamano, impulso, inversion extranjera directa y sector como variables de control. Al contrario de los estudios anteriores sobre gestion de resultados, se han utilizado dos enfoques en los modelos de regresion de datos en panel y se observaron distintos escenarios de crisis simultaneamente. Las pruebas estadisticas revelaron, en ambos enfoques utilizados, una relacion significativa entre la crisis y las practicas de GR en las companias presentes en Brasil.

Gerenciamento de resultados e crises econômicas no mercado de capitais brasileiro

The 2008 economic crisis challenged accounting, either demanding recognition and measurement criteria well adjusted to this scenario or even questioning its ability to inform appropriately entities’ financial situation before the crisis occurred. So, our purpose was to verify if during economic crises listed companies in the Brazilian capital market tended to adopt earnings management (EM) practices. Our sample consisted in 3,772 firm-years observations, in 13 years – 1997 to 2009. We developed regression models considering discretionary accruals as EM proxy (dependent variable), crisis as a macroeconomic factor (dummy variable of interest), ROA, market-to-book, size, leverage, foreign direct investment (FDI) and sector as control variables. Different for previous EM studies two approaches were used in data panel regression models and multiple crises were observed simultaneously. Statistics tests revealed a significant relation between economic crisis and EM practices concerning listed companies in Brazil in both approaches used.La crisis economica de 2008 ha desafiado a la contabilidad, exigiendo criterios de reconocimiento y evaluacion apropiadamente ajustados a ese escenario, o incluso cuestionando su capacidad de informar adecuadamente sobre la situacion economico-financiera de las entidades antes del comienzo de la crisis. Nuestro objetivo ha sido comprobar si durante las crisis economicas las empresas que cotizan en el mercado de capitales brasileno se inclinan a adoptar practicas de gestion de resultados (GR). La muestra esta formada por 3.772 observaciones por empresa/ano, durante 13 anos (de 1997 a 2009). Desarrollamos modelos de regresion, considerando los ajustes discrecionales (discretionary accruals) como proxy de GR (variable dependiente), la crisis como un factor macroeconomico (variable de interes), ROA, market-to-book, tamano, impulso, inversion extranjera directa y sector como variables de control. Al contrario de los estudios anteriores sobre gestion de resultados, se han utilizado dos enfoques en los modelos de regresion de datos en panel y se observaron distintos escenarios de crisis simultaneamente. Las pruebas estadisticas revelaron, en ambos enfoques utilizados, una relacion significativa entre la crisis y las practicas de GR en las companias presentes en Brasil.

Percepção dos gestores sobre o processo de institucionalização do Balanced Scorecard de uma empresa de saneamento

Abstract The Balanced Scorecard (BSC) methodology is one of the management artifacts most widely used by large companies, but many organizations have difficulty with its implementation and use. This research sought to identify the factors that contributed to the institutionalization and/or the deinstitutionalization of BSC in a large basic sanitation company. The research was conducted by means of questionnaires with managers through which it was possible to identify, in the light of institutional theory, and more precisely from new institutional sociology, sociological motivations that contributed to the institutionalization and/or deinstitutionalization of BSC in the organization. The conclusion was that the combined effects of different agents that acted for their own interests, the lack of an institutionalized technical environment and, at a certain moment in time, the lack of conditions that supported and maintained the technical environment (the main leadership left) were the main causes that contributed to the deinstitutionalization process of BSC.

Influence of auditors' report on variation of stock returns of preference shares of the companies listed on Brazilian Stock Market

The objective of this paper was to verify how returns on preference share of companies listed in the Brazilian stock market react to the announcement of auditors’ opinion. The listed companies’ data was obtained from the database of Economatica and the auditor’s reports from CVM, for an 11-year period. Additionally, we calculated the average rate of the stock returns for 30 days before and after the publication of financial statements. The Wilcoxon test was computed for comparing the average stock returns before and after publication of auditors’ report. Based on our analysis, we concluded that there is an indication that the publication of auditors’ report had effects on the average return of traded shares in the month after the publication of auditors’ reports. The paper drew attention to the pattern of the financial statements of the year in which auditors’ report had impact on the stock returns.

Presence of Potential Contingency of the Government in the Attitudes Adopted by UG’s Managers

The objective of this research was to assess of the contingency reflexes of Brazilian Central Government on the management of the Management Units – MU. The representation model assumed that the reflexes take place under the form of shortcuts adopted by managers in order to make budget execution feasible. This is a descriptive research of a qualitative nature, which was performed by gathering, handling, and interpreting data from court proceedings in the Federal Audit Court – TCU on the annual account audits of the UGs in Direct Government Bodies, Autonomous Institutions, and Foundations located in the State of Sao Paulo. Data analysis was based on a content analyzing procedure that involved selecting documents, listing assumptions and measuring indicators, as well as employing the Chi-square test for a statistical assessment of the research assumptions. The results have shown that there is a variety of creative actions and that it is possible to identify them according to the management area, there is also a diversified incidence of such creative actions among management areas, affecting indiscriminately the following areas: budgeting, finance, assets and property, personnel, provision of goods and services, and operations. Key words: Public finance. Action of rendering of accounts. Fiscal responsibility. Budget. Executions (Law). Tribunal de Contas da Uniao.

Nível de evidênciação obtido na divulgação das notas explicativas de instrumentos financeiros derivativos segundo a deliberação CVM n° 550/08 DOI:10.5007/2175-8069.2010v7n13p175

The derivatives market has grown and re.ned in recent years, with the need to regulate this practice throuxadgh the institutionalization of specific notes. Thus, this study aims to analyze the explanatory notes relating to derivative financial instruments of a public company in the food sector of the city of trying to check whether they are appropriate to the quality standards recommended by the CVM. 550 of 17 October 2008. To this end, we carried out a qualitative study of documentary character, the data were analyzed using the technique of content analysis. It was found that the company discloses studied qualitative and quantitative information about its financial instruments and the notes thereto are in accordance with the new guidelines of the CVM, thus improving visibility, but without clear disclosure of all risks inherent in the operations of protection company’s activity. It is believed that with the emanation of clearer rules for using these instruments there had been a change in the quality of information disclosed is also moving towards greater clarity on the degree of risk exposure of the company at which to invest. We conclude that the effectiveness and implications based on the quality of information that will be brought in view of the institutionalization of norms, are still to come, and thus opens a way to improve education and further studies on the subject, increasingly aligning practices with the Brazilian quantitative and qualitative requirements of international accounting standards (IFRS).