Seeking Incentives for a Successful Second and third Business Opportunity after Bankruptcy in Times of Recession

In the years of the financial and sovereign debt crisis in Greece, many viable businesses that are facing financial difficulties are led to liquidation rather than timely restructuring, with very few entrepreneurs having a second chance. This corporate failure faced by Greek companies in recent years may have been caused by either endogenous or exogenous factors or a combination of these two. In this paper we investigate the factors (economic, social and political) that will help to facilitate entrepreneurs' access to a second and third opportunity, taking also into account socially vulnerable groups such as disabled people and women entrepreneurs. Moreover, we try to find the characteristics that would encourage honest bankrupt entrepreneurs to a second business venture and the sectors where a second chance may have increased chances of sustainability in Greece. The aim of our research is to lead Greece to higher levels of self-employment, reduction in unemployment, and exit from the crisis.

IMPACTS OF EARNINGS MANAGEMENT ON CORPORATE FAILURE: A CASE STUDY OF WIRECARD

The purpose of this study is to find out whether earnings management has impacts on bankruptcy risk based on the data of Wirecard Company. The M-score of Beneish's (1999) model has been used to detect the probability of earnings management. On the other hand, the Z"-Score of Altman's (1968) model has been applied to detect Corporate Failure. Both the models are widely used models in their respective fields. The data from 2002 to 2019 were collected from the annual reports of the Wirecard Company. The result of M-Score indicates that earnings management has a significant impact on the corporate failure (Z-Score) of the company. This finding specifies that a financially distressed firm adopts earnings manipulations. The finding also implies that earnings manipulations harm the financial health of a firm. According to the findings, it can be suggested that to know the financial aspects of a company, both the (Beneish M-model and Altman Z-score model) models could be used concurrently. Beneish M-model is for detecting earnings management and the Altman Z-score model is for determining corporate failure. The novelty of the study is that no study was done on Wirecard Company focusing on the association between earnings management & bankruptcy risk.

The audit reform in the United Kingdom: Challenges and the future

Subject. Intended to counter fraud and unreasonably high bonuses for top executives, the U.K. corporate governance and audit reform implies some changes so as to improve the financial transparency of companies, primarily, large and public interest entities. The reform is called to maintain the lucrativeness and competitiveness of the U.K. financial markets, creating a sustainable and manageable environment, which major long-term investors seek. Objectives. I review and summarize proposals set out in the reform as best-in-class practices, which may work in auditing and assurance in Russia and underlie respective changes. The reform may contribute to the auditing profession, help avoid accounting scandals and corporate failure. Methods. Studying the audit reform, I applied methods of analysis, generalization, and analogy. Results. Having analyzed the reform plan, I found valuable ideas concerning directors’ responsibilities, corporate reporting and auditing. The reform suggests that the Audit, Reporting and Governance Authority should be established. The definition of public interest entities became broader. Audit boards are now to meet additional requirements. The audit market will be overhauled by segregating auditing and consultancy units of the Big Four companies and introducing statutory audit, which should be jointly performed by major and smaller entities, and tightening audit transparency rules. Hence, top executives will be more responsible and liable for financial reporting and increased transparency of internal control and trade account settlement principles. Such proposals should be adapted to the audit regulation practice in Russia and be applied with reference to the recent legislative novels. Conclusions. The quality of audit is critical for the economy and the public, since it ensures the national credibility as a capital market. Any sustainable economy needs a comprehensive approach, which combines the audit reform and corporate governance and accounting standards reform.

Labor Contracts, Wages and SME Failure

Although employment protection and employee remuneration has been shown to affect many aspects of a firm’s performance, evidence of their ability to explain firm failure is very limited. This paper examines the effect of different types of labor contracts and wages on the probability of corporate failure between 2012 and 2019 using a sample of 29,596 Belgian SMEs. Using discrete time hazard regression models, we find that the use of contract types with lower employment protection and paying lower wages are significant predictors of failure.

A Study on impact of Forensic Audit towards Investigation and Prevention of Frauds

This study is on impact of forensic audit towards investigation and prevention frauds in any financial performances or corporate companies. The incessant financial Fraud resulting to corporate collapse and the failure of the statutory audit to detect and prevent fraudulent activities which had led to the impoverishment of investors had given rise to need for forensic auditor. In view of the above this paper considers the impacts of forensic auditor on corporate governance. The study was a theoretical research which considered the roles of forensic auditors in combating fraudulent activities, distinction of forensic auditor and statutory auditor, characteristic of forensic auditor and impact of forensic auditor on corporate governance. Data generated were analyzed using charts, graphs, tables and regression. Our findings revealed that forensic audit has a significant negative impact on number of fraud cases, number of staff involved in fraudulent activities and data collected with the sample size of 125 respondents through the well-structured questionnaires from the Auditors, Accountants, Managers, Professional Accountants and Accounting Knowledgeable persons with this data we have used SPSS Methodology to find the Regression, Correlation Coefficient, Descriptive statistics, Reliability test, Anova, Factor analysis. From studies carried out this paper is forensic auditors having improved management accountability, strengthened external auditor’s independence and assisting audit committee members in carrying out their oversight function by providing them assurance on internal audit report have impacted positively to corporate governance, thereby reducing corporate failure and impoverishment of investors.