Client Portfolio Research Articles

Propuesta metodológica para calcular pérdidas crediticias esperadas, utilizando el método simple de la NIIF 9

La presente investigación tiene como objetivo proponer una herramienta metodología que permita el cálculo crediticio de perdidas esperadas, a través del uso del método simple, dotando a las microempresas un instrumento de análisis de información que permita a la Dirección realizar una eficiente planificación financiera. El estudio es de corte transversal tomando información de fuentes secundarias internas, dentro del periodo de tiempo del año 2019. El método instaurado en el caso se compone de un enfoque cualitativo, en primera instancia, se analiza los datos de naturaleza primaria y secundaria para generar una construcción acorde del marco teórico; con este razonamiento se seleccionó una ficha de entrevista aplicada a los encargados del área contable. Los hallazgos investigativos demuestran que el sector automotriz está conformado por micronegocios que en su mayoría no cuentan con una correcta planificación; el grado de aplicación y conocimiento de la NIIF 9 es carente, debido a que no existe una medición y evaluación precisa de las pérdidas crediticias, que son otorgadas mediante una línea de créditos a la cartera de clientes. La propuesta metodológica se adaptó a la industria de venta de repuestos automotrices, además pretende ser un soporte para la mejora sistemática en el rendimiento contable y financiero del departamento de cobranzas.

Outdoor sports and active tourism company management in Cordoba (southern Spain): An empirical study on the perception and behavior of supply

This paper analyzes the perception and behavior of active tourism companies that provide outdoor physical sports activities in emerging tourist destinations in Cordoba, an inland province of southern Spain. The active tourism supply of registered businesses was analyzed using fieldwork data and more than 30 variables including training and qualification of human resources, business vision of demand, marketing and promotion strategies, and perceptions of supply trends. To this end, a quantitative-qualitative empirical study was performed together with in-depth interviews of key stakeholders. Official registry sources were also used to complement the data. The results show a fragmented network of micro-SMEs that are functionally isolated from the rest of the tourism supply and display an intuitive and poor market-oriented behavior due to the inadequate management of their client portfolio. Such management models make it difficult for these businesses to take advantage of key strategic assets to increase profitability and achieve a competitive and sustainable advantage.

Social Media and E-mail Marketing Campaigns: Symmetry versus Convergence

Companies use social business intelligence (SBI) to identify and collect strategically significant information from a wide range of publicly available data sources, such as social media (SM). This study is an SBI-driven analysis of a company operating in the insurance sector. It underlines the contribution of SBI technology to sustainable profitability of a company by using an optimized marketing campaign on Facebook, in symmetry with a traditional e-mail campaign. Starting from a campaign on SM, the study identified a client portfolio, processed data, and applied a set of statistical methods, such as the index and the statistical significance (T-test), which later enabled the authors to validate research hypotheses (RH), and led to relevant business decisions. The study outlines the preferences of the selected group of companies for the manner in which they run a marketing campaign on SM in symmetry with an e-mail-run campaign. Although the study focused on the practical field of insurance, the suggested model can be used by any company of any industry proving that BI technologies is the nexus of collecting and interpreting results that are essential, globally applicable, and lead to sustainable development of companies operating in the age of globalization. The results of the study prove that symmetrical unfolding (time and opportunity symmetry) of SM marketing campaigns, and using email, could lead to better results compared to two separate marketing campaigns. Moreover, the outcomes of both campaigns showed convergence on SBI platforms, which led to higher efficiency of management of preferences of campaign beneficiaries in the insurance sector.

Audit Office Industry Diversity and Audit Quality

This study examines the association between the industry diversity of an audit office and audit quality, where industry diversity is the extent to which clients differ by industry classification. We find a negative association between industry diversity and audit quality that is robust to controlling for other audit office and client characteristics. We observe this association while holding the level of audit office specialization or expertise in a particular industry constant. The association is most apparent at the low end of the distribution of industry diversity, where audit offices with the least diverse client portfolios have the highest audit quality. We also find that the association exists for both small and large audit offices as well as both industry specialists and non-industry specialists. However, we do not observe the association when the office audits clusters of clients, where clusters are three or more clients in the same industry.

Audit Market Competition and Client Portfolio Risk

This study investigates whether audit market competition influences the risk profile of audit offices’ client portfolios and whether an audit office’s client risk profile affects the association between audit market competition and audit quality. Economic theory suggests that market competition can affect a company’s risk-taking, but there is limited evidence on how audit market competition affects audit offices’ client portfolio composition. Two streams of prior research have documented that auditors make portfolio management decisions based on risk avoidance, and that audit market competition affects audit quality, although the results are mixed. We suggest that audit market competition influences audit offices’ acceptance of risky clients by reducing the set of available acceptable clients. The increased riskiness of audit offices’ client portfolio, in turn, affects audit quality provided by the audit office. We find that audit market competition at both the MSA and MSA-industry levels increases the riskiness of audit offices’ client portfolios. Furthermore, results suggest that audit market competition through increases in the audit office’s client portfolio risk explains a significant amount of the total effect of audit market competition on audit quality. This study contributes to the prior literature examining how audit offices manage their client portfolio risk and how audit market competition affects that ability and ultimately affects audit quality.

The Costs and Benefits of Retirement Policies at U.S. Audit Firms

The mandatory retirement age within U.S. Big 4 audit firms ranges from 55 to 62, which has attracted controversy and legal scrutiny. The potential costs of an earlier retirement age include the loss of established networks, experience, and expertise. However, studies in non-U.S. jurisdictions conclude that partners nearing retirement disengage from their work, which manifests in lower audit quality. Using intensive hand-collected data on the age of 3,148 U.S. audit partners, we provide the first evidence of the costs and benefits of mandatory retirement policies at U.S. audit firms. We find that audit quality does not vary, but that fees are significantly higher for U.S. partners approaching retirement. These findings suggest that U.S. mandatory retirement policies are forcing out experienced revenue earners that are producing audit quality equivalent to younger partners. Additional analysis reveal that partner retirements are mechanisms to promote and grow the client portfolios of younger and female audit partners, and therefore increase partner diversity. Our additional analysis of non-U.S. audit partners leading audits of U.S. listed companies shows that partners approaching retirement are associated with lower audit quality across certain measures. This suggests that the audit quality of older U.S. partners is superior to their non-U.S. counterparts.

Tendencia de las cuentas por cobrar y ratios de actividad en ana empresa privada de Lima, en los periodos 2011 -2015

El objetivo de la presente investigación es determinar en qué medida la tendencia de las cuentas por cobrar explica los ratio de actividad en una la empresa comercial y servicios generales en el periodo 2011 a junio del 2015 y establecer una estimación para el periodo 2016 y 2017. El nivel de estudio es explicativo, longitudinal y retrospectivo. La población de estudio estuvo conformada por la cartera de clientes de la empresa. Según el análisis descriptivo se determinó la frecuencia de recuperación de cuentas por cobrar y la rotación trimestral. Mediante el modelo de regresión lineal (Anova) se explicó la variación de la rotación trimestral a partir de la rotación de cuentas por cobrar, obteniéndose un r = ,986 y r2 = ,973, permitiendo realizar una estimación para los años 2016 y 2017. Se demuestra que la empresa convierte en efectivo sus cuentas por cobrar en la medida que los días aumentan y las veces de cobro (6 a 12 veces al año a periodo de 60 a 30 días), disminuyendo en cada trimestre (1.5 a 3 veces por trimestre a periodo de 60 a 30 días). Esto indica que la cobranza vencida de la cartera atrasada, así como la cobranza con problemas potenciales y de alto riesgo han disminuido significativamente. Por ende, la capacidad gerencial de la empresa es eficiente para generar fondos de manera efectiva, administrando de forma adecuada los créditos como estrategia, así como los servicios prestados proyectados.

La antroponimia en tiempos de la protección de los datos personales

Anthroponomy is a discipline with a long tradition in the study of names that has anthropological, historical, sociological and, of course, linguistic explanatory dimensions that contribute enormously to the knowledge and understanding of past and present man. Recently, from 1970 to the present, the emergence and development of information technology and the Internet implied a great step for humanity in terms of technology and the democratization of knowledge. However, three sectors of society have used this technology to inappropriately and maliciously access the information of the people: the politician, for electoral purposes, the commercial one, for the client's portfolio and publicity, and that of the thieves, for the fraud and impersonation. As a response in Mexico two laws were created: the “Ley de Protección de Datos Personales en Posesión de Particulares”, 2010, and the “Ley General de Protección de Datos Personales en Posesión de Sujetos Obligados”, 2017. Cause this, a paradox for anthroponomy scholars arises, that what is their object of study is now an object that is legally forbidden to them. This paper reviews this problem and proposes some urgent actions to address it. Key-words: Anthroponomy; Protection of personal data; Research (legal framework).

Is the End of History Passive?

A powerful investor trend towards passive over active management seems to have become the new normal in the investment industry. The passive “end of history” thesis has a kernel of empirical truth. Passivation, however, is an imperfect match to wealth management clients’ individual demand for capital preservation (stability), let-alone performance enhancement. Active management needs a more precise specification to deserve a role in client portfolios. A possible justification could be tackling the distinction between fuzzy assets (subjective and exposed to instability) vs. eigen assets (objective and stable).

Too much, too young: improving the client clearing mandate

The policy of clearing standardized over-the-counter (OTC) derivatives contracts through central counterparties (CCPs) was introduced after the 2008 crisis, and it has had a major impact. It has been implemented in major jurisdictions via “clearing mandates” that apply to the clearing members of CCPs and their clients. Since the policy was implemented, OTC derivatives markets have changed in ways that reduce the benefit of central clearing for clients. As policy makers are currently reviewing clearing mandates, considering how to improve them is apposite. Against this background, we present new evidence of the distribution of risk in client portfolios and use this to motivate clearing policy improvements. We recommend that the mandate to clear should be phrased in terms of initial margin. We present evidence of the concentration in client clearing service provision and suggest that regulatory barriers to increased competition should be lifted. Finally, we discuss two innovations that would increase the likelihood of clients moving between clearing members. This process, known as porting, is an important potential benefit of clearing. These innovations are the creation of a special-purpose clearing member for porting, and the development of access models for larger clients that will reduce their dependence on clearing members.

Jumping to Conclusions: A Theory of Decision-Making at Technology Incubators

The technology incubation process is used for taking nascent ideas through to market-based commercialisation. The client selection decision is arguably the most important stage in this process. The predominant view in the literature is that client selection ought to be carried out using robust selection criteria linked to critical success factors. The results of this research question the value of such approaches. Assessors at incubators do not follow a wholly rational process linking client attributes to critical success factors. Instead, a combination of both rational and non-rational or intuitive processes help assessors chose clients which 'appear' most promising on a range of both written and un-written criteria. Due to limitations inherent in traditional information collection mechanisms, assessors consistently use 'stereotyping' and 'attribute substitution' to make selection decisions. A new 'entrepreneurial readiness' heuristic was discovered and the reasons behind the strategic misalignment between client selection outcomes and incubator service portfolios is explained.

Modeling of optimal portfolio of clients of centralized pharmaceutical network

The research object identifies the risk management of a centralized pharmacy network related to marketing relationships between the network and different customer groups. The development of a competitive market leads to the need for pharmacy networks to engage the customer into a dialogue, giving him/her certain benefits, thereby reducing their own risks. The subject of the research is the modelling the optimal client portfolio of a centralized pharmacy network as one of the risk management tools.Based on the fundamentals of Markowitz portfolio theory and multicriteria optimization, this paper builds a basic model of an optimal portfolio of clients of centralized pharmacy network, which takes into account three groups of customers – loyal, casual and online orders. In contrast to the classic two-criteria model (risk minimization while maximizing income), the model has been introduced to maximize entropy, which enhances the diversification effect. Four modifications of the basic model are also considered. The first of these deepens on the analysis of the portfolio of clients of the network to the individual pharmacies belonging to this network. The following three model different marketing strategies in which one customer group is preferred.Matlab software has been developed to solve many of the Pareto-optimal client portfolios for solving multicriteria-based problem-solving models. Model verification was performed on real data provided by one of the pharmacy chains.Modelling the optimal customer portfolios of a centralized pharmacy network eliminates the deficiencies in network management and selects the optimal combination of loyal, casual, and online client group distribution. This provides the opportunity to influence these consumer groups by implementing appropriate loyalty programs, which ultimately leads to higher profits. The simulation results will be useful for automating the business processes of any trading network, managing risk, analyzing loyalty programs to improve the effectiveness of their operations.Keywords: pharmacy network, loyal customers, internet clients, optimal portfolio model, multicriteria task.

Voluntary employee attrition. Descriptive and predictive analysis

Abstract Voluntary attrition represents the percent of employees voluntarily leaving a company. Counteracting this phenomenon with hiring new employees has a great negative impact on the company for several reasons. Firstly, it hinders timely delivery of current projects and, consequently, damages reputation and diminishes client portfolio. Secondly, it increases costs by generating the need for many recruitment specialists. Thus, adapting the HR strategy is essential, especially as increasingly more Millennials enter the labor market. The present paper aims at presenting options for studying voluntary attrition and the situations when they can be used. We indicate both descriptive methods (turnover and retention rates, cohort analysis), in order to present tools that any HR manager can easily employ, and predictive methods (logistic regression, survival analysis), which are more accurate and provide more actionable insight towards minimizing attrition, but require data and skills. The results are presented comparatively, highlighting the advantages and disadvantages of each category. Most literature focuses on a single method, thus the main contribution of this article is that it compares several methods, allowing for an informed decision of the HR specialist, depending on the company’s resources, personnel qualification and specific context.

Auditors and Relationship Banking

This study examines whether a bank’s relationship with a borrowing firm’s external auditor through a shared client portfolio affects loan pricing. I find that when lenders’ portfolios are more concentrated in firms engaging a particular auditor, borrowers who engage that auditor enjoy lower spreads. This relation is only evident when the lender is the lead arranger who is primarily responsible for information gathering about the borrower. Tests suggest the reduction in information asymmetry facilitating these lower borrowing costs occurs via banks’ enhanced ability to interpret the audited financial statements when they have greater familiarity with the external auditor. My results are relevant to debt-seeking firms who should be mindful of their auditor’s relationship with prospective lenders, as well as regulators seeking to better understand how auditors can affect corporate financing outcomes.

A hidden risk of auditor industry specialization: evidence from the financial crisis

We identify situations in which auditor industry specialization could be detrimental for audit outcomes. We predict that during periods of heightened industry-specific risk, specialist auditors from the affected industry could struggle to secure and allocate sufficient resources to mitigate the heightened risk because they have client portfolios concentrated in the affected industry. Using a measure of office-level industry concentration/specialization (as opposed to a market-based measure), we find that banking auditor industry specialization is associated with higher audit quality and more timely audits during the period before the financial crisis. However, during the financial crisis, banking industry specialization is associated with lower audit quality and less timely audits. Collectively, our results suggest that auditor industry specialization can be detrimental in certain circumstances and that audit firms and audit regulators should consider whether the audit markets have become too specialized to handle the resource allocation problems that crisis situations present.

The Spillover Effects of Mandatory Audit Partner Rotation: Evidence from Audit Adjustments

We analyze whether and how mandatory audit partner rotation affects the audit adjustments for the rotated partner’s remaining clients. We argue mandatory audit partner rotation can affect audit production of remaining clients through two channels. First, it can cause audit partners to acquire unfamiliar new clients and thus shift their attention and effort away from existing ones. Second, it can destroy positive audit synergies by disrupting cross-audit information spillovers. Consistent with these conjectures, we find smaller income-decreasing audit adjustments for the rotated partner’s remaining clients after a mandatory rotation. The decrease in audit adjustments is more pronounced when new client acquisition driven by the rotation causes a large increase in the partner’s capacity demand and when the remaining client is in the same industry as the mandatorily dropped client. The evidence furthers understanding of audit production and underscores the interdependence among audits in an auditor’s client portfolio.

Sharpe–Risk Tradeoffs in Portfolios of Corporate Bonds

A portfolio replication approach is used to determine the implied cost of risk for a client's portfolio. This allows us to quantify with a single number, the extent a long-only investment manager is delivering on the twin goals of (1)~Sharpe ratios as high as possible, and (2) having actual risk as close as possible to target risk. A CAPM-like world for credit portfolios is assumed: idiosyncratic risk may be diversified away and only the remaining systematic risk is priced. The broad idea is however more widely applicable.

Do Audit Partners with Greater Self-Control Perform Higher-Quality Audits and Achieve Greater Career Success?

Trait self-control – the ability to regulate behavior, thoughts, and emotions, especially in pursuit of goals – is important in achieving success in a variety of situations. However, little is known about whether or how individual audit partners’ traits and characteristics can influence audit quality or other outcomes. We combine survey and archival data to examine whether and how Big 4 audit partners’ trait self-control relates to audit quality, client portfolio size, and compensation. We find that trait self-control is predictive of higher audit quality (decreased discretionary accruals and increased probability of issuing a modified audit opinion) and of partners having larger client portfolios and higher compensation. In additional analyses we rule out that this is a selection effect whereby partners with higher self-control audit better clients. Instead, our findings suggest that audit partners’ level of trait self-control is an important determinant of audit quality and audit partners’ career success.

Auditor sanctions and the management of riskiness of audit client portfolios

This study examines the effect of auditor sanctions imposed on the riskiness of auditors' client portfolios. We identify auditors/audit firms that were subject to disciplinary actions by the China Securities Regulatory Commission (CSRC) and empirically examine the change in the riskiness of their client portfolios after the sanctions were imposed. The empirical results suggest a decrease in the overall clientele financial risk, measured by both aggregate bankruptcy measures and individual financial risk measures, after enforcement releases were issued. Moreover, we find that the decrease in client portfolios' risk is greater when a disciplinary action is imposed in the period of higher legal liability than when it is imposed in the period of lower legal liability. This study contributes to prior studies on the effects of audit failure on auditors' behaviour by examining the association between auditor sanctions and the management of audit client portfolios risk.

Generating Revenue Growth Ideas at Evergreen Executive Education, Llc (a)

The new business development manager for Evergreen Executive Education has been asked by the firm's CEO to develop a list of as many revenue growth ideas as he could over the next week. The COE saw this task as critical for the new services initiative that he had been hired to lead. The list would be an inventory of possibilities for ongoing consideration as well as a catalyst for other professionals in the firm to generate additional ideas. The CEO had described the task for him was to keep his primary business-development mission in mind, and to think big and out of the box. Excerpt UVA-G-0644 Rev. Feb 15, 2019 Generating Revenue Growth Ideas at Evergreen Executive Education, LLC (A) As the newly hired business development manager for Evergreen Executive Education, LLC (EEEL), Curtis Koch had just finished his second week with the firm. As he settled behind his office desk after a meeting with Martha Hires, the firm's CEO, he took in the park-like view outside his office window and a smile spread across his face. Over the course of his first two weeks, he felt he had achieved a pretty good grasp of the firm's personnel, programs, and client portfolio. Indeed, the point of the meeting with Hires had been mostly for him to give her a sense of what he had learned about the firm. She had asked a few pertinent questions, listened intently to his answers, and, in the end, she had expressed her pleasure and affirmation that he had done his homework well and had learned so quickly. The genesis of the smile-inducing moment he was experiencing had come near the end of his meeting with Hires. She had asked him to develop a list of as many revenue growth ideas as he could over the next week. They had to be potentially viable, although not specifically proven. They had to be briefly described, although not fully fleshed out. She wanted him to imagine, to brainstorm, and to bring to bear all his experience, prior reading, and creativity to craft the ideas. She had expressed no illusion that all his ideas would be doable, but she had also expressed optimism that many of them would be actionable when studied further. She saw this task as critical for the new services initiative that Koch had been hired to lead. The list would be an inventory of possibilities for ongoing consideration as well as a catalyst for other professionals in the firm to spark their own creativity for generating additional ideas. The way Hires had framed the task for him as he was leaving was, with his primary business-development mission in mind, to think big and out of the box, think what if and why not? . . .