The Influence of Auditor State-Level Legal Liability on Conservative Financial Reporting in the Property-Casualty Insurance Industry

2012 ◽  
Vol 31 (3) ◽  
pp. 95-124 ◽  
Author(s):  
Jennifer J. Gaver ◽  
Jeffrey S. Paterson ◽  
Carl J. Pacini
Keyword(s):  
Financial Reporting ◽  
Insurance Industry ◽  
State Level ◽  
Third Party ◽  
Forum Shopping ◽  
Legal Concept ◽  
Auditor Liability ◽  
Loss Reserve ◽  
Legal Costs ◽  
Liability Standards

SUMMARY This paper provides the first evidence that state-level liability standards affect auditor behavior. We hypothesize that auditors demand more conservative reporting when their insurance clients are domiciled in states with more stringent standards for third-party claims against the auditor for negligence. To test this hypothesis, we analyze a sample of 3,107 loss reserve observations from 1993 through 2004. Our sample is restricted to private insurers that operate in a single state to control for auditor liability under statutory law and to reduce the possibility of forum shopping by plaintiffs. Consistent with Petroni (1992), we find that financially struggling insurers tend to under-reserve. This behavior is attenuated when the insurer is domiciled in a state that uses either the Restatement of Torts or the reasonable foreseeability standard to determine the auditor's liability to third parties. Compared to the case where the auditor's liability is defined by the legal concept of privity, these standards impose greater legal costs on auditors for ordinary negligence. JEL Classifications: M41; M42; G22; K13.

Balancing Tax and Financial Reporting Objectives: Effective Tax Planning within the Property and Casualty Insurance Industry

2007 ◽  
Vol 22 (2) ◽  
pp. 285-318
Author(s):  
David W. Randolph ◽  
Jim A. Seida
Keyword(s):  
Financial Reporting ◽  
Firm Value ◽  
Insurance Industry ◽  
Tax Planning ◽  
Ethical Considerations ◽  
Loss Reserve ◽  
Reporting Decisions ◽  
Tax Benefits ◽  
Alternative Sources ◽  
Joint Consideration

Tax-planning strategies will not enhance firm value if the tax benefit is less than the (nontax) costs incurred to achieve such benefit. Effective tax planning therefore requires the joint consideration of tax benefits and the costs of obtaining those benefits, rather than a myopic focus on only tax minimization. This case presents the opportunity for you to evaluate alternative sources of tax law and balance tax and nontax concerns (including ethical considerations) as you make the same loss reserve reporting decisions that property-casualty (P&C) insurers faced following the Tax Reform Act of 1986 (TRA86).

scholarly journals CioSy: A Collaborative Blockchain-Based Insurance System

Electronics ◽  
2021 ◽  
Vol 10 (11) ◽  
pp. 1343
Author(s):  
Faiza Loukil ◽  
Khouloud Boukadi ◽  
Rasheed Hussain ◽  
Mourad Abed
Keyword(s):  
Data Storage ◽  
Insurance Industry ◽  
Emerging Technology ◽  
Third Party ◽  
Insurance Companies ◽  
Smart Contracts ◽  
Insurance Policy ◽  
Insurance System ◽  
Advanced Technologies ◽  
Multiple Challenges

The insurance industry is heavily dependent on several processes executed among multiple entities, such as insurer, insured, and third-party services. The increasingly competitive environment is pushing insurance companies to use advanced technologies to address multiple challenges, namely lack of trust, lack of transparency, and economic instability. To this end, blockchain is used as an emerging technology that enables transparent and secure data storage and transmission. In this paper, we propose CioSy, a collaborative blockchain-based insurance system for monitoring and processing the insurance transactions. To the best of our knowledge, the existing approaches do not consider collaborative insurance to achieve an automated, transparent, and tamper-proof solution. CioSy aims at automating the insurance policy processing, claim handling, and payment using smart contracts. For validation purposes, an experimental prototype is developed on Ethereum blockchain. Our experimental results show that the proposed approach is both feasible and economical in terms of time and cost.

Application of Fuzzy Logic to Fraud Detection

2005 ◽  
pp. 135-139
Author(s):  
Mary Jane Lenard ◽  
Pervaiz Alam
Keyword(s):  
Financial Reporting ◽  
Average Cost ◽  
Medical Insurance ◽  
Financial Statements ◽  
Third Party ◽  
Insurance Fraud ◽  
Fraudulent Financial Reporting ◽  
The Cost ◽  
The U.S ◽  
Financial Reporting Fraud

In light of recent reporting of the failures of some of the major publicly-held companies in the U.S. (e.g., Enron & WorldCom), it has become increasingly important that management, auditors, analysts, and regulators be able to assess and identify fraudulent financial reporting. The Enron and WorldCom failures illustrate that financial reporting fraud could have disastrous consequences both for stockholders and employees. These recent failures have not only adversely affected the U.S. accounting profession but have also raised serious questions about the credibility of financial statements. KPMG (2003) reports seven broad categories of fraud experienced by U.S. businesses and governments: employee fraud (60%), consumer fraud (32%), third-party fraud (25%), computer crime (18%), misconduct (15%), medical/insurance fraud (12%), and financial reporting fraud (7%). Even though it occurred with least frequency, the average cost of financial reporting fraud was the highest, at $257 million, followed by the cost of medical/insurance fraud (average cost of $33.7 million).

The Price of Justice: New National and State-Level Estimates of the Judicial and Legal Costs of Crime to Taxpayers

2016 ◽  
Vol 42 (2) ◽  
pp. 231-254 ◽  
Author(s):  
Priscillia Hunt ◽  
James Anderson ◽  
Jessica Saunders
Keyword(s):  
State Level ◽  
Costs Of Crime ◽  
Legal Costs

Financial reporting for commercial service charges in the retail sector

2015 ◽  
Vol 33 (2) ◽  
pp. 152-172 ◽  
Author(s):  
Andrew Holt ◽  
Timothy Eccles
Keyword(s):  
Financial Reporting ◽  
Third Party ◽  
Retail Sector ◽  
Content Type ◽  
Reporting Practices ◽  
Code Of Practice ◽  
Reporting Requirements ◽  
Service Charge ◽  
Shopping Centres ◽  
Retail Shopping

Purpose – The purpose of this paper is to assess whether financial reporting practices for commercial service charges in the UK retail sector match the best practice requirements of the Royal Institution of Chartered Surveyors (RICS) Code of practice for commercial service charges. This assessment was performed by benchmarking commercial service charge documents provided to retail occupiers at UK shopping centres against the RICS Code’s financial reporting requirements. Design/methodology/approach – Data were generated from direct analysis of actual service charge documents supplied to commercial retail occupiers. This ensures authenticity by removing reliance upon third party reporting of said data. The paper uses a sample size that is representative of the financial reporting practices for commercial service charges at UK shopping centres. Findings – Levels of compliance with the financial reporting requirements of the RICS Code of Practice for commercial service charges are found to be poor, especially in terms of the disclosure of the accounting policies used during the preparation of the service charge accounts. These results contrast with claims by the professional body. Research limitations/implications – The work analyses service charge documents prepared during 2010-2012 by 44 managing agents and 87 landlords at 126 UK retail shopping centres located in Great Britain. Content analysis was utilised to interpret the data and required some subjective judgement by the researchers. Originality/value – Data are original and the paper provides a unique benchmarking test for assessing Code compliance. This contrasts markedly with the anecdotal evidence offered by the profession in defending current standards of practice and whilst the paper has limitations, it is the largest and most in-depth study of commercial service charge practices at UK retail shopping centres.

scholarly journals INTEGRASI LEMBAGA PENYELESAIAN SENGKETA ALTERNATIF DALAM PROSES ACARA PERADILAN PERDATA: STUDI TENTANG PUTUSAN PENGADILAN YANG DI MEDIASI BERDASARKAN PERMA NOMOR 1 TAHUN 2008

2014 ◽  
Vol 3 (3) ◽  
Author(s):  
AAN Roy Sumardika
Keyword(s):  
Supreme Court ◽  
Dispute Resolution ◽  
Negotiation Process ◽  
Third Party ◽  
Mediation Process ◽  
Peace Agreement ◽  
Legal Concept ◽  
Legal Remedy ◽  
The Law ◽  
Court Proceedings

Mediation process means dispute resolution through negotiation process for obtaining a peace agreement between the parties by using a third party in settling the dispute. Article 130 HIR/154 RBg determines peace efforts may use since the trial began before a judge hands down the dispute. Mediation as part of the Alternative Dispute Resolution is a process outside the court, but Indonesian Supreme Court Rules No. 1/2008 integrates it in the court proceedings and allows the mediation process at the level of legal remedy. So the problem investigated is the court decision re-mediated and the peace agreement mediation results. The method used normative legal research by Legislation Approach and to deepen the research study also use a Legal Concept Analysis Approach which is intended to establish a view and legal arguments in solving the problem at hand. Case that has been decided by the courts is not possible to re-mediated. The mediation process at the level of legal remedy is contrary to the law, especially the provisions of Article 130 HIR / 154 RBg. Indonesian Supreme Court Rules as rules are hierarchically under the law (HIR/RBg) not justified material being regulated substance exceeding material are governed by higher laws. So Indonesian Supreme Court Rules No. 1/2008 can not be a legal basis to regulate the integration of mediation into the docket particularly about mediation at the level of legal remedy because the principle of lex superiori derogat legi inferiori and the principle of lex specialis derogat legi generali not met.

Third-Party Damage Factors Analysis and Control Measures of Daqing-Harbin Oil Pipeline

2013 ◽  
Vol 411-414 ◽  
pp. 2527-2532 ◽  
Author(s):  
Li Xin Wei ◽  
Li Yan Han
Keyword(s):  
Fault Tree ◽  
Control Measures ◽  
Third Party ◽  
Tree Model ◽  
Legal Concept ◽  
Oil Pipeline ◽  
The Third ◽  
Pipeline Failure ◽  
Main Factors ◽  
The Third Party

The third-party damage is the main factor of Daqing-Harbin oil pipeline failure. This paper analyzes a variety of factors causing the third-party damage, and establishes the fault tree model. By analyzing the minimal cut set and structures importance degree of fault tree, the main factors of the third-party damage that caused pipeline failure are determined. The main factors are as follows: Lack of pipeline conditions, human vandalism, the frequency of line patrol and management systems, lack of public education and the legal concept, and construction operation injury. On the basis of analyzing the factors, the precautions of the third-party interference are proposed.

Consequences of XBRL Standardization on Financial Statement Data

2012 ◽  
Vol 26 (1) ◽  
pp. 155-167 ◽  
Author(s):  
Miklos A. Vasarhelyi ◽  
David Y. Chan ◽  
J. P. Krahel
Keyword(s):  
Technology Acceptance ◽  
Financial Reporting ◽  
Current Data ◽  
Third Party ◽  
Financial Statement ◽  
Business Reporting ◽  
Data Fidelity ◽  
Acceptance Model ◽  
New Research ◽  
Five Axes

ABSTRACT XBRL (eXtensible Business Reporting Language) has become an important element of the financial reporting landscape. This paper provides a discussion of the effects of XBRL on the usefulness of financial data. Using the theoretical framework of the technology acceptance model (TAM), we examine XBRL's potential to improve the usefulness of reported financial information. As XBRL gains wider acceptance, we examine five axes along which XBRL standardization will propagate: current data, disclosure format, historical data, data fidelity and assurance, and third-party data. We also call attention to new research opportunities that may arise as XBRL and related technologies mature.

scholarly journals 2.2. THE FORMATION OF INDICATORS OF NON-FINANCIAL REPORTS ACCORDING TO ACCOUNTING AND MANAGEMENT ACCOUNTING

2020 ◽  
Author(s):  
Т.В. Лесина ◽  
Е.А. Филимонова
Keyword(s):  
Financial Reporting ◽  
Management Accounting ◽  
State Level ◽  
The State ◽  
Financial Reports

Актуальность исследуемых вопросов определена тем, что показатели нефинансовой отчетности приобретают все большее значение для стейкхолдеров. В формировании нефинансовой отчетности в Российской Федерации заинтересованность проявляется и на государственном уровне. Цель статьи заключается в демонстрации возможностей использования показателей бухгалтерского и управленческого учета для формирования отдельных показателей нефинансовой отчетности в разрезе экономической, экологической и социальной категории. Ведущим методом к исследованию данной проблемы является наблюдение, классификация, обобщение, систематизация. В статье представлены примерные показатели нефинансовой отчетности по стандартам GRI и раскрытие их в бухгалтерском учете организации. Материалы статьи могут быть полезными при подготовке информации для формирования нефинансовой отчетности руководителями и работниками экономических служб. The Relevance of the studied issues is determined by the fact that the indicators of non-financial reporting are becoming increasingly important for stakeholders. In the formation of non-financial reporting in Russia, interest is manifested at the state level. The purpose of the article is to demonstrate the possibility of using indicators of accounting and management accounting for the formation of individual indicators of non-financial reporting. The leading method to study this problem is observation, classification, generalization, systematization. The article presents approximate indicators of non-financial reporting on GRI standards and their disclosure in the accounting of the organization. The materials of the article can be useful in the preparation of information for the formation of non-financial reporting to managers and employees of economic services.

scholarly journals The Partisan Mask: Political Orientation, Collectivism, and Religiosity Predict Mask Use During COVID-19

2021 ◽  
Author(s):  
Hohjin Im ◽  
Peiyi Wang ◽  
Chuansheng Chen
Keyword(s):  
State Level ◽  
The United States ◽  
Political Orientation ◽  
Third Party ◽  
The Us ◽  
Political Conservatism ◽  
Strong Correlate ◽  
Using Data ◽  
The Individual ◽  
Socioeconomic And Demographic Factors

In the United States, the COVID-19 pandemic became an unconventional vehicle to advance partisan rhetoric and antagonism. Using data available at the individual- (Study 1; N = 4,220), county- (Study 2; n = 3,046), and state-level (n = 49), we found that partisanship and political orientation was a robust and strong correlate of mask use. Political conservatism and Republican partisanship were related to downplaying the severity of COVID-19 and perceiving masks as being ineffective that, in turn, were related to lower mask use. In contrast, we found that counties with majority Democrat partisanship reported greater mask use, controlling for various socioeconomic and demographic factors. Lastly, states with strong cultural collectivism reported greater mask use while those with strong religiosity reported the opposite. States with greater Democrat partisanship and strong cultural collectivism subsequently reported lower COVID-19 deaths, mediated by greater mask use and lower COVID-19 cases, in the five months following the second wave of COVID-19 in the US during the Summer of 2020. Nonetheless, more than the majority for Democrats (91.58%), Republicans (77.52%), and third-party members (82.48%) reported using masks. Implications for findings are discussed.

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