International Standard Setting Research Articles

International Financial Standards and the Explanatory Force of Lex Mercatoria

The global financial crisis has cast a strong light on some hitherto obscure corners of the financial world, provoking an outpouring of calls for concerted international action. “Hard law” having disappointed, can “soft law”, in the form of international financial standards, substitute for traditional national legislation. This article examines some of the difficulties associated with the “international standards as soft law” discourse. First of all, conceptual problems in the “soft law” discourse itself reveal profoundly different patterns of legal thought cutting across national boundaries, resulting in different understandings of international financial standards. Secondly, recent experience, over the past decade, with some “soft law” international financial standards as both diagnostic and prophylactic tools, has been decidedly mixed, in fact, largely unsatisfactory. Thirdly, the “soft law” discourse in international finance appears strangely remote from the daily grind of international commercial practice, where the discourse is largely unknown. But perhaps in this disconnect between theory and practice lies clues to important normative forces at work in international finance, and in particular the international capital markets. The more one considers the world of international finance, the more obvious become the outlines of centuries old transnational merchant law, the contentious lex mercatoria. The proposition put forward here is that the formal regulation of financial markets is supported by a body of strong and persistent customary law, a lex mercatoria, a rarely acknowledged but powerful undercurrent in finance, especially in its international iteration. The continued prevalence of oral contracting and the stubborn persistence of self-regulatory principles are examples. There are several intriguing implications to this proposition. Is it possible that the global financial crisis represented not only a failure of formal, state-led regulation, as it surely did, but also a breakdown of a lex mercatoria of finance? If that is the case, international standard setters and national regulators, both, ignore this lex mercatoria (the customs and practices of international finance) at their peril. To do so, would be to miss a true, powerful, source of normativity operating in international financial markets.

Estudio de los gastos de I+D :un análisis empírico en el sector del automóvil

The difference between the financial information that companies disclose and the information needs of users, have been of growing concern and interest in the academic research. Most argüe that this difference is explained largely by the assets internally developed intangibles, including r&d. Currently, this still of great interest as the international standard-setters are in the process of harmonization, in order to take profit of the current accounting systems. The present research aims to examine the value relevance of r&d expenditures, using the Ohlson's model (1995). The results reject the relevance of current r&d expenditure used to valué listed companies.

JPSearch: New international standard providing interoperable framework for image search and sharing

For the last 15 years, there have been various research and great advances in the field of content-based search and retrieval of images. In this paper, we present an overview of the JPSearch Standard, which is a recently published set of international standards providing interoperable framework for image search and sharing. The JPSearch standard is composed of six parts, which are Part 1: System framework and components, Part 2: Registration, identification and management of schema and ontology, Part 3: Query format, Part 4: File format for metadata embedded in image data (JPEG and JPEG 2000), Part 5: Data interchange format between image repositories, Part 6: Reference software. The Part 1 provides motivation and overview of the JPSearch framework. The Part 2 supports interoperability among various metadata specifications and social tagging using the specification of core metadata and translation rule description language. The Part 3 provides powerful image query language for interoperability among multiple image databases. The Part 4 specifies a file format based on JPEG and JPEG 2000 file format in which arbitrary number of metadata description of a image can be embedded. The Part 5 supports interoperability in interchanging images with metadata between image repositories. Finally, the Part 6 provides reference and utility softwares based on which the JPSearch compliant systems can be easily developed. In this paper, summaries and usage examples for each part of the JPSearch standard are presented.

The Role of Fashion in the Characters of Online Games

Abstract This research study aims to discover the relationships among the fashion of characters, storytelling, and game satisfaction in Massive Multiplayer Online Role Playing Games(MMORPG) in order to examine the influence of the fashion of characters in games on storytelling and game satisfaction, and to identify the following constructs: fashion of characters, storytelling, and game satisfaction. The global game market has grown rapidly every year since the introduction of computer games. The size of the global game market in 2010 was 6 billion dollars, and the online game market captured 64.2% of the total market. The competition in the online game market has become increasingly fierce in South Korea. Millions of people now spend several hours per week on MMORPGs, which have several features that attract a large number of users. First, the world of MMORPGs is open and user-oriented. Many game users interact with each other in the same space and play games in their own way. MMORPGs also have continuous...

Guidelines International Network: Toward International Standards for Clinical Practice Guidelines

Guideline development processes vary substantially, and many guidelines do not meet basic quality criteria. Standards for guideline development can help organizations ensure that recommendations are evidence-based and can help users identify high-quality guidelines. Such organizations as the U.S. Institute of Medicine and the United Kingdom's National Institute for Health and Clinical Excellence have developed recommendations to define trustworthy guidelines within their locales. Many groups charged with guideline development find the lengthy list of standards developed by such organizations to be aspirational but infeasible to follow in entirety. Founded in 2002, the Guidelines International Network (G-I-N) is a network of guideline developers that includes 93 organizations and 89 individual members representing 46 countries. The G-I-N board of trustees recognized the importance of guideline development processes that are both rigorous and feasible even for modestly funded groups to implement and initiated an effort toward consensus about minimum standards for high-quality guidelines. In contrast to other existing standards for guideline development at national or local levels, the key components proposed by G-I-N will represent the consensus of an international, multidisciplinary group of active guideline developers. This article presents G-I-N's proposed set of key components for guideline development. These key components address panel composition, decision-making process, conflicts of interest, guideline objective, development methods, evidence review, basis of recommendations, ratings of evidence and recommendations, guideline review, updating processes, and funding. It is hoped that this article promotes discussion and eventual agreement on a set of international standards for guideline development.

The World Trade Organization and organic food trade: potential for restricting protectionism?

This paper outlines the global food regulation regime and its institutions, focussing upon the way in which these address organic food trade. While the WTO agreements have rules for scientifically based policy measures adopted to protect human, animal or plant health or life, there is some disagreement on whether the WTO's Agreement on Technical Barriers to Trade (addresses food labelling) covers production standards based on ethical values such as those defining organic food standards. Another problem is that two sets of international standards for organic food exist—the Codex Alimentarius guidelines and the standards of the International Federation of Organic Agriculture Movements. Finally, many certification bodies are private organisations certifying on the basis of government standards. This blurs the distinction between private and public and questions whether WTO rules apply to these private organisations. It is concluded that this current state of affairs entails that organic food standards can potentially be used by governments as technical barriers to trade to protect their domestic organic producers from international competition. In the concluding section, the potential for improving the global organic food trade regime is discussed.

The International Accounting Education Standards Board: Influencing Global Accounting Education

ABSTRACTThe purpose of this paper is to make readers aware of Accounting Education Standards (IESs), which are developed by the International Accounting Education Standards Board (IAESB). These standards are influencing accounting education and training worldwide. Less than a decade old, the IESs are enforced through the member bodies of the International Federation of Accountants (IFAC) and professional accountancy organizations throughout the world. The goal of the IESs is to ensure that economic decision makers can rely on the competence of professional accountants regardless of the country where the accountants received their education and training.Differing cultures, languages, and social, educational, and legal systems pose a challenge for developing a globally applicable set of international accounting education standards. Accounting educators can help the IAESB meet this challenge by responding to IAESB exposure drafts, undertaking research relevant to issues being addressed by the IAESB, becoming directly involved in the standard-setting process, and using IAESB standards, practice statements, information papers, and other information on the education and training of professional accountants in developing, assessing, and evolving accounting education programs.

Religious Minorities and Human Rights: Bridging International and Domestic Perspectives on the Rights of Persons Belonging to Religious Minorities under English Law

This paper considers minorities in English law through the prism of international standards related to both freedom of religion or belief, and minority rights. These two sets of international normative standards are brought together in order to emphasize the fact that persons belonging to religious minorities have access not only to general human rights standards including freedom of religion or belief, but also to minority rights. Combining the implications of these applicable rights, the paper will suggest that religious minorities‘ should be (A) taken to include persons belonging to minorities on grounds of both religion or belief; (B) that their religious practice should not only be considered manifestation‘ of religion or belief but also the practice of a minority culture; and that (C) states have a duty to protect the survival and continued development of the identity of religious minorities and allow such persons to enjoy their culture. The paper will then move to considering a few recent cases in English law, in order to examine the extent to which these three implications are realized within them.

Corporate Lobbying in Private Accounting Standard Setting: Does the IASB have to Reckon with National Differences?

This paper explores whether the attitude of preparers towards lobbying to a private accounting standard setter is different depending on the regulatory background of the preparers' home country. Prior literature examined the preparers' incentives and characteristics as drivers to participate in the due process of international accounting standard setting, but it did not investigate the impact of the preparers' national regulatory background on participation. As a result of the acceptance of the International Financial Reporting Standards promulgated by the International Accounting Standards Board (IASB) in different countries, preparers who are traditionally accustomed with an accounting standard setting process initiated by governments with few opportunities for formal participation, are now able to participate in a private accounting standard setting process characterised by several possibilities for participation. Comparing survey evidence of Belgian preparers with existing survey evidence of UK preparers, we notice that the participation methods used, the perception on the effectiveness of the participation methods and the reasons for non-participation differ across both groups of preparers. This finding suggests that the national regulatory background of the preparers may affect the behaviour of preparers in their decision to participate in private accounting standard setting.

The Rule of Law as a Guiding Principle of European Union’s External Action

This paper aims to offer a comprehensive overview of how the EU promotes the rule of law abroad and to discuss the EU’s normative effectiveness as an ‘exporter’ of values and principles. A brief expose of the EU’s constitutional framework is first offered to show that the rule of law must be viewed as a constitutional principle of a foundational nature that the EU is committed to promote in its relations with the wider world. The instruments by which the EU promotes the rule of law abroad will then be reviewed. It is argued that the EU, when acting as an exporter of values, tends to pay little attention to conceptual issues and largely equates the rule of law with a soft ideal whose content is largely delineated on a case-by-case basis. It is contended, however, that the EU is not exporting a vague or incoherent ideal. On the contrary, the EU clearly promotes a broad and substantive understanding of the rule of law and its legislative and policy instruments all defend the view that the rule of law alongside democracy and respect for human rights must be understood as a set of intertwined and mutually reinforcing principles. It logically follows that while EU instruments may offer different definitions and pursue too many distinct objectives, they nevertheless demonstrate that the EU’s understanding of the rule of law goes beyond the so-called formal or thin approach. In the final part of this paper, the EU’s role as an exporter of values and principles will be examined from two angles: the normative impact of EU rule of law policies and actions at the international level and their effectiveness. Two main points will be made. Firstly, as an international standard-setter, the EU cannot claim great successes but this can be directly linked to an apparent lack of interest in conceptualisation issues and the fact that the EU promotes a conception that is largely consensual amongst the foremost international organisations. Secondly, the EU should consider taking into account the multiple indexes, checklists and other indicators which have been developed to measure and monitor countries’ adherence to the rule of law in order to better identify shortcomings, suggest appropriate reforms and track progress (or lack thereof) in a less impressionistic and uncoordinated manner than is currently the case

The value relevance of non-financial performance indicators: new cues from the European fashion industry

Intangible assets and related performance measures assume increasing importance in valuation processes. Value relevance studies testify to their importance through an analysis of market stock prices. We aim to examine the value relevance of non-financial indicators in European fashion companies. The indicator selected is the "change in mono-brand stores". Applying the models proposed by current literature, we have refuted the value relevance hypothesis. However, refining both the "operationalization" of the concepts and the related result analysis procedure, the value relevance is confirmed. In this way, we contribute to increasing the generalizability of this research trend and to fuel the debate concerning the standardization process of this information. In particular, following in the footsteps of the Gartner/EBRC project, supported by AICPA (Gartner-EBRC, 2010), our results can help the national and international standard setters to pinpoint the indicators that really matter for the fashion industry and standardize their communication.

Vibrant fault diagnosis for hydroelectric generator units with a new combination of rough sets and support vector machine

The fault diagnosis for hydroelectric generator unit (HGU) is significant to prevent dangerous accidents from occurring and to improve economic efficiency. The faults of HGU involve overlapping fault patterns which may denote a kind of faults in the early stage or a subset of samples that caused by multi-fault. But until now it has not been considered in the traditional classifier of fault diagnosis for HGU. In this paper, a novel classifier combined rough sets and support vector machine is proposed and applied in the fault diagnosis for HGU. Instead of classifying the patterns directly, the fault patterns lying in the overlapped region are extracted firstly. Then, upper and lower approximations of each class are defined on the basis of rough set technique. Next, for the fault patterns lying in the overlapped region, the reliability they belong to a certain class is calculated. At last, the proposed method is successfully applied in analyzing an international standard data set, as well as diagnosing the vibrant faults of a HGU. The results show that the proposed classifier can more properly describe the complex map between the faults and their symptoms, and is suitable to fault diagnosis for HGU.

Treatment outcome of children with severe acute malnutrition admitted to therapeutic feeding centers in Southern Region of Ethiopia

Background: Inadequate intake of carbohydrates, proteins, vitamins and minerals is one of the causes for malnutrition. It often affects young children and contributes to more than 60% of deaths in children in developing countries. One in four of malnourished children receiving traditional treatment die during or soon after treatment. The study aimed to assess the treatment outcome of children treated in therapeutic feeding centers (TFC) in southern Ethiopia.Methods: A retrospective review of reports submitted by the TFCs was done during 2003-2004. Data was collected from the monthly reports using standardized formats. The variables included age, treatment centers, type of malnutrition and treatment outcome which were analyzed using descriptive statistics.Results: Of 11,335 cases of malnutrition, 47% (5447) had severe wasting and 53% (6103) had edematous malnutrition. Of the total, 87% (11,191) were cured while 3.6% (468) had died. The average length of stay was 25 and 21 days with an average weight gain of 14 and 13.4 g/kg/d for children with severe wasting and edematous malnutrition, respectively. With increasing age, the death rate decrease and cure rate increased (p < 0.05 for both).Discussion: Our results show that the new management approach implemented in the TFC improved the treatment outcome of malnourished children compared to the minimum international standard set for management of severe acute malnutrition which is cure rate of at least 75% and death rate less than 10%, average length of stay of less than30 days and average weight gain of 8g/kg/day.

Financial Stability, New Macro Prudential Arrangements and Shadow Banking: Regulatory Arbitrage and Stringent Basel III Regulations

Despite Basel III’s efforts to address capital and liquidity requirements, will the risks linked to regulatory arbitrage increase as a result of Basel III’s more stringent capital and liquidity rules? As well as Basel III reforms which are geared towards greater facilitation of financial stability on a macro prudential basis, further efforts and initiatives aimed at mitigating systemic risks – hence fostering financial stability, have been promulgated through the establishment of the De Larosiere Group, the European Systemic Risk Board, and a working group comprising of “international standard setters and authorities responsible for the translation of G20 commitments into standards.” This paper aims to investigate the impact of Basel III on shadow banking and its facilitation of regulatory arbitrage as well as consider the response of various jurisdictions and standard setting bodies to aims and initiatives aimed at improving their macro prudential frameworks. Furthermore, it will also aim to illustrate why immense work is still required at European level – as regards efforts to address systemic risks on a macro prudential basis. This being the case even though significant efforts and steps have been taken to address the macro prudential framework. In so doing, the paper will also attempt to address how coordination within the macro prudential framework – as well as between micro and macro prudential supervision could be enhanced.

International Accounting Standardisation: Is Politics Back?

In the absence of political legitimacy, international accounting standardisation is founded on procedural and substantial legitimacies, which have been challenged by the current financial crisis. This paper represents a critique of this built up legitimacy. It demonstrates in particular that whilst due process is admittedly a transparent procedure, it is one in which only those players with major financial and intellectual resources can participate. It also highlights the weakness of the theoretical foundation, in particular agency theory and the theory of efficient markets, on which the conceptual framework of the IASB rests. This critical study of the foundations of the legitimacy of the IASC/IASB enables us to understand the extent of recent political intervention in a field that had previously been abandoned. Whilst international accounting standards did not trigger the crisis, some observers have said that they accelerated and even amplified it, mainly as a result of their pro-cyclical nature. This explains why, in October 2008, the international standard-setter was suddenly called to order by the European Union who requested it to urgently amend its Standards IAS 39 ‘Financial Instruments’ and IFRS 7 ‘Financial Instruments: Disclosures’. This intervention by a political organisation is all the more remarkable since international accounting standardisation seemed to have been definitively handed over to specialists from the IASC/IASB, a body which had declared itself to be the international standardiser. The crisis therefore strongly undermined the legitimacy of the international standardiser. This raises the question of whether we are about to witness the return of politics in a field, which is, in reality, highly political. This possible return is indicated not only by the pressures successfully exerted on the international standardisation body by the EU and the G8 but also the recommendations made to the IASC/IASB by the new G20 and the publication in France of reports of a political, highly critical nature, devoted to the recent evolution of accounting standardisation. In this paper, using a reflexive, critical approach, we question the legitimacy of the IASC/IASB with the aim of evaluating the extent of the political recommendations made to it. It is clear that the legitimacy of an accounting standardisation body is fundamental since it conditions the legitimacy of the standards it issues, accounting practice itself and in the end, the confidence of users in the financial statements of companies. But this legitimacy is not innate. It is not natural or pre-existing. As we shall see, it is constructed and managed. In the first section, we will examine, and try to specify, the foundations of the IASB. In the second section, we will demonstrate the fragility of these foundations, a fragility that existed before the crisis but which the latter exposed more clearly. Lastly, in the third section, we will attempt to see if recent interventions of political organisations in the international accounting standardisation process have challenged the international standardiser and if they herald the return of politics.

ASSESSMENT OF TURKEY’S ANTI-MONEY LAUNDERING AND COMBATING TERRORIST FINANCING SYSTEM

International financial system evolves rapidly and is global in nature. It provides opportunities to carry out transactions across borders quickly with a relative degree of anonymity. It is therefore imperative to highlight and share current information about potential vulnerabilities of jurisdictions’ financial system for robust antimoney laundering and combating the financing of terrorism (AML/CFT) system. Furthermore, it is crucial to review and consider issues related to international cooperation in identifying and examining vulnerable jurisdictions that are falling in implementing vigorous AML/CFT system so that others can take actions against those jurisdictions which are reluctant in reforming its system adequately. The objectives of this study are a) to give information about the money laundering and Financial Action Task Force (FATF) as an international standard setter for combating money laundering and terrorist financing b) to explain steps taken by FATF for the sake of international cooperation for combating money laundering and terrorist financing and c) to show how Turkey’s current situation are in the scope of international cooperation for combating money laundering and terrorist financing as a result of FATF assessment.

Repoliticalization of accounting standard setting—The IASB, the EU and the global financial crisis

Abstract Since its inception, the IASB has been able to set standards with relatively little political influence in its governance or standard setting process. But this changed with the outbreak of the global financial crisis. Political bodies began to view accounting standards as a contributing factor that amplified the consequences of the crisis on banks, financial markets and the overall economy. Regaining control over accounting standard setting was seen as imperative. In this article, we investigate how the EU sought to gain control over the IASB and how the global standard setter responded to limit political influence. Our findings show that a re-balancing of power in favor of political interests has occurred between the stakeholders of international accounting standard setting. Further research in this area looks promising. We suspect that the heightened influence of political actors may lead to further power struggles and efforts to cope with on-going changes in the institutional environment.

Exploring the role of country and client type on the auditor's client risk assessments and audit planning decisions

PurposeThe purpose of this paper is to examine whether country (Australia or Japan) and client type (public sector or private sector) impact the auditor's client risk assessments, subsequent audit planning decisions (planned audit hours) and audit planning responsiveness to client risk assessments.Design/methodology/approachThe study is based on previously developed audit planning models and uses working paper‐sourced data of planned auditor effort and nine client risk assessments. The study samples are taken from public and private sector audit engagements of two major audit firms in Australia and Japan, respectively.FindingsEvidence is found that country and client type do have an impact on the auditor's client risk assessments and planned total audit hours, but they do not moderate audit planning responsiveness to client risk assessments.Research limitations/implicationsThe test variable is confounded by the country and client type characteristics inherent in the study's samples. If the differences are caused by country, this suggests that audit planning decisions vary across countries, even when the same auditing standards are adopted. However, if they are caused by client type, this suggests that the same audit approach (i.e. the audit risk model) is applied differently depending on client characteristics.Practical implicationsThese findings are useful to international standard setters, audit practice quality control and training, and audit research.Originality/valueNo prior study has examined the role of country and client type on the auditor's client risk assessments and audit planning decisions. Further, no prior study has examined whether the relationship between the auditor's client risk assessments and audit planning decisions is moderated by country and client type.

A Content Based Analysis of Comment Letters on the IASB Discussion Paper 'Financial Instruments with Characteristics of Equity'

The distinction between equity and liabilities is a challenging question for international standard setters. On this topic, the IASB and the FASB are developing a long-term project with the aim of addressing unresolved issues around classifying financial instruments as either equity or liabilities. With this regard, many approaches, which involve various effects on the gearing and on the reported earnings, have been proposed.In its discussion paper “Financial Instruments with Characteristics of Equity” the IASB exposed the alternative methods previously presented by the FASB in former Preliminary Views. Among the three different approaches, the Basic Ownership Approach was recommended in consideration of its simplicity with the hope of reducing structuring opportunities.Also the EFRAG gave its contribution to this debate by issuing its own discussion paper; it suggested a new classification method, the Loss Absorption Approach.As any controversial case, it is thus interesting to have a deeper understanding of the process that will lead to the final accounting standard which should be, in future, adopted by both the IASB and the FASB.In this research a content based analysis on comment letters sent in response to the discussion paper of the IASB will be developed. Two aspects will be studied, primarily the relation between the geographical provenance of respondents and their positions expressed in the comment letters, secondly the relation between the enterprise’s form (cooperative/versus non cooperative) of respondents and their own preference.

Implementation of Article 41 of the 8th EU Directive in the EU member states &amp;ndash; impact on internal governance mechanisms

In reaction to accounting scandals, national and international standard-setters have introduced and enforced additional corporate governance mechanisms in recent years. These regulatory changes have had an especially large effect on external governance mechanisms like disclosure requirements, the accountability of management and board members and statutory audits. For the first time, in Article 41 of the 8th EU Directive, European legislation addressed the relationship between audit committees (which are now mandatory for public-interest entities) and other internal governance mechanisms such as internal controls, the internal audit function, and the risk management system. This study investigates the current level of implementation of the items addressed in the 8th EU Directive within the EU member states. Implementation varies considerably from one jurisdiction to another, and there is no consensus regarding the internal audit function and other internal governance mechanisms within Europe.