Ricardo Lopes Cardoso

INSOLVENCY PREDICTION IN THE PRESENCE OF DATA INCONSISTENCIES

In this paper we use data inconsistencies as an indicator of financial distress. Traditional models for insolvency prediction normally ignore inconsistent data, either by removing or replacing it. Instead of removing that information, we propose a new variable to capture it; using it together with traditional accounting variables based on financial ratios for the purpose of insolvency prediction.

Reflexões para um framework da informação de custos do setor público brasileiro

This paper summarises the proposal for a framework for the cost information from the public sector. The proposal derives from contributions provided by the Brazilian central government, on two separate occasions and from two different working teams. The first dates back to 2005 and was presented in the final report of the Interministerial Committee. The second was coordinated by the Ministry of Finance in 2008-2009. These contributions were analysed in accordance with critical papers presented to the academic audience with regards to the framework for financial accounting issued by the International Accounting Standards Board and Financial Accounting Standards Board, and through the lens of the international literature related to the adoption of cost accounting systems in the public sector. Brazilian legislation requires the adoption of such information systems since 1964, although only now it is object of a work conducted by the Finance Ministry, which first results will become available this year. In 2004 the Brazilian Court of Audit issued a decision enforcing legislation - that may improve the number entities adopting a cost accounting system. But adoption is not enough, public managers shall use the information provided by the system - the use cannot efficiently enforced by law, it is a function of the relevance identified by potential users. It is suggested that the adoption of the cost information system and the use of its information in the Brazilian public sector should be a consequence of a gradual and flexibly implementation process, based on the accrual basis of accounting and on only one framework shared by all entities.This paper summarises the proposal for a framework for the cost information from the public sector. The proposal derives from contributions provided by the Brazilian central government, on two separate occasions and from two different working teams. The first dates back to 2005 and was presented in the final report of the Interministerial Committee. The second was coordinated by the Ministry of Finance in 2008-2009. These contributions were analysed in accordance with critical papers presented to the academic audience with regards to the framework for financial accounting issued by the International Accounting Standards Board and Financial Accounting Standards Board, and through the lens of the international literature related to the adoption of cost accounting systems in the public sector. Brazilian legislation requires the adoption of such information systems since 1964, although only now it is object of a work conducted by the Finance Ministry, which first results will become available this year. In 2004 the Brazilian Court of Audit issued a decision enforcing legislation - that may improve the number entities adopting a cost accounting system. But adoption is not enough, public managers shall use the information provided by the system - the use cannot efficiently enforced by law, it is a function of the relevance identified by potential users. It is suggested that the adoption of the cost information system and the use of its information in the Brazilian public sector should be a consequence of a gradual and flexibly implementation process, based on the accrual basis of accounting and on only one framework shared by all entities.

Causality in a Performance Measurement Model: A Case Study in a Brazilian Power Distribution Company

This study extends prior balanced scorecard (BSC) research by incorporating the effects of uncertainty, payment schemes and the strength of causal relations proposed in the performance measurement model (PMM) on the budgetary dynamics. Our analysis was restricted to two strategic business units (SBU), engineering projects and electricity distribution service, from a Brazilian electric power concessionaire. We postulate a mediated moderation association between uncertainty (treatment), bonus scheme (mediator), dispersion of payment scheme and the strength of causal relations proposed in the PMM (moderators) on budgetary slack (outcome). Additionally, we postulate that the use of accounting-based measures (ABM) also mediates the effect of uncertainty on budgetary slack. We gathered monthly observations from 102 indicators containing the target and achievement values throughout 2002–2006. Managers were later asked to answer questionnaires about the possible cause–effect relations between these indicators, then 215 causal maps of the department and corporate indicators were drawn up. Econometric analysis provided evidence that the budgetary slack observed is directly impacted by uncertainty, and this impact is moderated by the dispersion of payment scheme. However, we did not find any evidence that supported the mediation process proposed between uncertainty, ABM and budgetary slack. Incomplete implementation of BSC and the level of analysis adopted are possible explanations for that.

Brazilian Governmental Accounting Reforms: IPSAS and Accrual Accounting Adoption

Brazilian governmental accounting is affected by two reform processes: the implementation of accrual accounting and convergence with the International Public Sector Accounting Standards (IPSAS). This paper analyses the origins, the process and preliminary outcomes of such reforms. In order to characterize the Brazilian accounting system, we followed the questionnaire from Chan, Jones and Luder (1996) as a protocol, analysed financial reports and reviewed official literature that regulates Brazilian public sector accounting. The paper finds that the accounting reform has two origins: the need to prepare cost accounting information (year 2000) and the requirement to converge towards IPSAS (year 2009). Reform affects both central government and subnational governments, and is being coordinated by the Treasury’s central government. In the process, the Treasury has required the adoption of some sophisticated accounting policies that were beyond the capacity of IT platform installed on either central and local governments, and has had to postpone aspects of their implementation. Treasury has used this as a convenient opportunity to select which IPSAS requirements to implement, taking into account political agendas (e.g. avoiding the recognition of deficit). For these and other reasons, some states’ courts of accounts do not require compliance with some of the standards issued by the Treasury, which impairs the comparability of accounting information prepared by different Brazilian public sector entities.

DETERMINANTES DA REMUNERAÇÃO DOS EXECUTIVOS E SUA RELAÇÃO COM O DESEMPENHO FINANCEIRO DAS COMPANHIAS

Os incentivos financeiros sao mecanismos utilizados para se alinhar os objetivos do agente aos do principal. Este estudo objetiva verificar a relacao dos determinantes da remuneracao executiva com o desempenho financeiro e de mercado das companhias brasileiras de capital aberto listadas na BM&FBovespa. Os dados foram obtidos atraves de analise dos formularios de referencia disponibilizados pela Comissao de Valores Mobiliarios (CVM). O estudo classifica-se como exploratorio com abordagem quantitativa. Foram encontradas 228 empresas apos levantamento das companhias que disponibilizavam essas informacoes, sendo essa a amostra que compoe a pesquisa. Foi utilizado o teste de regressao linear multipla, com dados em painel, para testar a relacao entre remuneracao e desempenho das companhias entre os anos de 2011 a 2013. Foram encontrados fatores financeiros e fatores nao financeiros como determinantes da remuneracao nas companhias brasileiras de capital aberto. O teste de regressao identificou que ha relacao positiva e significativa do desempenho financeiro, com as remuneracoes baseadas em indicadores financeiros e nao financeiros, em conjunto, e remuneracoes baseadas apenas em indicadores nao financeiros. O desempenho de mercado nao obteve significância estatistica com a remuneracao dos executivos. Estes resultados evidenciam que planos de incentivos que se baseiam em indicadores financeiros, nao alinham os interesses dos agentes aos dos principais. A ausencia de resultado entre desempenho de mercado com os sistemas de remuneracao afirma que os planos de remuneracao nao alinham os interesses do principal e agente.

The Whole of Government Accounts in Brazil

This paper presents the origins, actual situation and future perspectives about the whole of public sector accounts (WPSA) in Brazil. We collected evidences from financial reports and regulation, and aiming to capture the implementation process path we interviewed technicians from the National Treasury Secretariat (NTS), other technicians and politicians that have participated in the design of relevant legislation and in the preparation of earlier and current versions of Brazil’s WPSA. The WPSA in Brazil was driven by a fiscal agenda in the year 2000 and preceded reforms towards IPSAS. Consolidation is required by law since 1964 for central and local governments, but the first public sector consolidated report, including assets and liabilities at large, was produced only in 2001. The paper describes the implementation and development process over 14 years of WPSA report. Notwithstanding, until date the Brazilian public sector does not prepare consolidations (properly said), but an aggregation of balances (not performing any consolidation adjustment).

Vagueness on the Left Side of Balance Sheet Classification

We explore the vagueness among property, plant, and equipment (PPE), intangible asset and inventory accounts that leads to liquidity level misrepresentation. Through the configurational approach, we identified five arrangements according to the intensity of property rights transference. Our purpose is to highlight the epistemic vagueness on liquidity order classification of assets items, in order to justify additional disclosure or other regulation strategies to reduce informational asymmetry. Even though IASBs accounting regulation accepts the presentation of balance sheet (BS) classified by items liquidity order, the traditional current/non-current classification of BS seems to have been used as a straitjacket, where inventories are current assets, and PPE and intangibles are non-current assets. While the gray zone is ignored, items that lay on that are swept under the rug, information asymmetry persists, and neglected by auditors and standard setters.

Comunicações uma contribuição ao aprimoramento da informação contábil, no tocante à mensuração do resultado contábil da produtora cinematográfica

This article presents a proposal to improve the criteria for measuring the accounting income of a movie producer active in the Brazilian market. Our interest in this subject is motivated by our admiration for cinema, and particularly for national productions. The need to improve information was observed as a result of the lack of standards for accounting procedures to be observed by the national producers. In this study, we develop a particular accounting model considering the production of a movie as a long-term contract, while income is determined in accordance with the actual creation of revenues.