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GAME THEORY: MINIMISING THE COST OF CAPITAL VS. MAXIMISING THE RETURN OF INVESTORS
Get PDFThe application of game theory to financial transactions focuses on two categories of stakeholders: users of financing (firms) and providers of financing (investors). The core of game theory consists in the strategy that a partner is able to build starting from the possible decisions of the other partner (each party having opposing interests). In fact, we deal here with a cooperative game in which both opponents seek to maximise their own chances of winning. The article aims to highlight the manner in which mathematical game theory is transposed in the field of corporate finance by balancing the firm’s objectives (maximising market value by minimising the cost of raising capital) and the investors’ objectives (maximising returns on investments). The intended novelty of this paper lies in developing a model for optimising a firm’s financial structure and assessing it in terms of investors’ interests
NEW REQUIREMENTS FOR STATUTORY AUDITORS IN EUROPEAN UNION
Get PDFStatutory audit missions are completed through the drawing up of audit reports. The elements of an audit report are standardized by International Standard on Audit ISA 700 “Forming an opinion and reporting on financial statements”. In April 2014, Directive 2006/43/EC on statutory audits of annual accounts and consolidated financial statements has been amended by Directive 2014/56/EU of the European Parliament and of the Council of April 2014. All in the month of April 2014, the European Parliament and the Council adopted Regulation No 136/66/EEC. 537/2014 Regarding specific requirements relating to statutory audits of public interest entities. These documents provide for expanded content for the report of the Audit Board and some additional requirements. In this way the Directive 2014/56/EC lays down mandatory items in the report of the Audit Board additional to those laid down by international reference. Regulation lays down the duty of auditor’s entities of public interest to include in the report of the Audit Board items additional to those laid down by the Directive. Furthermore, lays down an obligation for them to send, in addition to the report of the Audit Board, Other reports content well specified: a supplementary report addressed to the audit committee of the entity audited; a report to the supervisory authority of the entity of public interest; a report of transparency, which will be published on their web site; and, A report by the authority to the monitoring by reporting list of entities of public interest audited and of revenue. Such reports together with some comments, is the subject of article
ELEMENTS OF THE NEOCLASSICAL GROWTH THEORY
Get PDFOne of the relevant components of the contemporary economic science is the economic growth theory, the economic background of the time leading to new guidelines of the research. The neoclassical growth theory - the core of modern analysis - explains how the capital accumulation and technological changes affect the economy, significant for the analysis of the economic growth process being the Solow’s neoclassical growth model. The paper brief describes the elements of the economic growth model developed by Solow, both for the situation when it allows the explanation of extensive growth and that wherein the growth is of intensive nature, as a result of the intervention of exogenous technical progress – a determinant of factors productivity growth. It is highlighted the importance of the exogenous neoclassical model, proposed by Solow, who showed the determinant role of the technical progress in the economic growth phenomenon
VALUE OF THE NET TREASURY AND ITS IMPLICATIONS ON THE FINANCIAL STABILITY OF THE COMPANY
Get PDFPractice proved that the management process cannot be based on routine and intuition, but on scientific analysis, on deep knowledge of the actual situation, as well as on identifying the vulnerabilities and the development opportunities. The economic and financial analysis performed by means the net treasury has the role of using the information supplied by accounting, based on which conclusions will be drawn on the efficiency of the activity performed within an entity. The importance of the net treasury arises from the fact that it shows the amount of liquid assets of an entity at a certain moment in time, being connected to the short-term financial operations, the purpose of which is to ensure the resources necessary to finance the company’s economic activity. The net treasury synthetically reflects the method of achieving financial stability within the company on long and short term. Our endeavour ends by determining the strengths and the weaknesses in the activity of a trading company, as well as the measures that are to be applied on short and on long term in order to achieve the present objectives
THE INSTITUTION OF ACCOUNTING NORMALISATION IN ROMANIA – HISTORY AND PRESENT
Get PDFThe institution of accounting normalization at a national level can essentially be as public, private and mixed. On its nature depend the way of accepting/imposing the accounting norms and also the character of these norms, character which can be more or less restrictive. The present article is a study regarding the institution of normalization of accounting in Romania from the beginning (when the process of normalizing the Romanian accounting began) to present, following its changes through two stages which have marked the evolution of our country in the second half of the 20th century and beginning of the 21st century: the stage of socialism, having a centralized economy, and the stage of transition to a market economy, which started right after the 1989 Revolution. Within post-revolutionary stage, under the Ministry of Finances, the institution of accounting normalization in Romania, a mixed organism was created, which sums up a large series of “actors” interested in the accounting information and has the role of allowing those actors to involve into the process of normalization, which would let the Romanian accounting normalization pass from an exclusively public approach to a mixed one
REGULATION AND ENFORCEMENT OF COMPETITION POLICY
Get PDFCompetition policy starts by shaping a legislative framework. This is aimed to establish boundaries for conducting competition and also sets limits of licit and illicit demarcation, for competitive and anticompetitive practices. The Romanian Competition Law has a divalent approach and it aims to provide specific behavioral conditions in order to stimulate and protect free-market competition, with the ultimate goal of developing a balanced, efficient and competitive economy. Our country’s Competition policy is based on punishing the behavior. There are three such types of anti-competitive behavior, namely: agreements between undertakings, abuse of dominant position and mergers and other concentrations between undertakings. Recent Practice proved that this “enforcement-conduct-punishment” structure is not necessary the best way to address competition and it is high time for authorities to switch both regulation and enforcement of competition from the “classical perspective” towards concepts like “competition advocacy” and “soft power” and give competition policy a new, reshaped face
GLOBAL ADVERTISING MARKET – THE DYNAMICS OF THE LAST DECADE
Get PDFAdvertising as a form of impersonal communication aimed at a wide and diffuse audience, is the ideal tool to promote products targeting large markets in which consumers are not strong differentiated in terms motivations, preferences, attitudes, etc. Currently, in the global advertising market we can find extremely powerful organizations whose work often exceeds local and even regional economic sphere. From simple expertise in advertising, these organizations have expanded their services to a growing number of communication tools, organizing their activity to better respond to client’s requirements. These kind of advertising organizations alongside global advertisers are the key factors in the dynamics of this market. This article focuses on presenting some data regarding global expenditure in advertising, establishing as reference points the years 2002 and 2012. Moreover, we concentrated on expenditures by regions and advertisers, and on revenues obtained by advertising organizations and advertising networks, starting from official data provided by Advertising Age and Euromonitor
WHY DON’T YOU COME OVER? – A DIFFERENT WAY TO PROMOTE ROMANIA
Get PDFInvesting in the country brand represents a strategic priority as it consolidates the image and international reputation of the respective members. Although Romania started to invest in this long-term process in 1996, the promotional actions have lacked coordination and efficiency. The Romania’s country image is insufficiently shaped and the Country Brand Index study conducted in 2012 confirms it by placing our country on the last positions. We shall show in this study that by exploiting the collective intelligence principle and the involvement of the Net Generation’s representatives, many echoing campaigns can be created in the virtual environment. The country brand is being built rather by means of every individual’s involvement, by what we do and what we say every day. “Why Don’t You Come Over?” campaign, which has contributed in an unexpected way to improve Romania’s image by spreading humor in the virtual space, should show all actors responsible that there may be successful promotion patterns
SUBSEQUENT EVENTS AND THEIR IMPORTANCE IN DRAWING UP ANNUAL FINANCIAL STATEMENTS
Get PDFSubsequent events, called so because they are recorded after the closing date of financial year, must be recorded and taken into account in drawing up the financial statements. Some of them can fundamentally changing financial position of the entity or provide information to users absolutely necessary for their decisions. Accounting treatment in this situation is provided for by International Standard of Accounting ISA 10 “Events after the Reporting Period”, whose provisions are taken to a large extent in national accounting standards. For financial auditor, investigating how the subsequent events are presented in the financial statements shall constitute a procedural obligation. Auditor`s procedure is based on the provisions of an specific International Standard on Auditing, ISA 560 “Subsequent events”. He shall be required to satisfy itself that in the financial statements shall be presented all treatment and appropriate information concerning subsequent events
AN OVERVIEW ON RETAIL REVERSE LOGISTICS
Get PDFThis article is a theoretical approach on retail reverse logistics. Environmental concern and the current marketing strategy have spurred retailers to implement strategies to facilitate product returns from end customers. Reverse logistics, indicating the process of this return flow, encompasses such activities as the movement of returned products, facilities to accommodate returned items, and overall remedy process for returned items. The retail industry, under great competitive pressure, has used return policies as a competitive weapon. Grocery retailers were the first to begin to focus serious attention on the problem of returns and to develop reverse logistics innovations. Grocery retailers first developed innovations such as reclamation centers. Reclamation centers, in turn, led to the establishment of centralized return centers. Centralizing returns has led to significant benefits for most firms that have implemented them. Over the last several years, retailers have consolidated. Now, more than ever, reverse logistics is seen as being important. This reverse distribution activity can be crucial to the survival of companies, because the permanent goodwill of the company is at stake. Businesses succeed because they respond to both external and internal changes and adjust in an effective manner to remain competitive