Economic Challenges in the Context of Pandemic and War Circumstances. Monetary and Economic Research Center 8th Annual Conference
Economic Challenges in the Context of Pandemic and War Circumstances. Monetary and Economic Research Center 8th Annual Conference
Contributor(s): Nikolay Nenovsky (Editor), Petar Chobanov (Editor), Yanko Hristozov (Editor), Diyana Miteva (Editor), Giovani Pavanelli (Editor), Bruno Théret (Editor), Jean Paul Pollin (Editor), Yannick Lucotte (Editor), Mihai Mutascu (Editor), Elena Ponomorenko (Editor)
Subject(s): Politics / Political Sciences, Politics, Economy, National Economy, Supranational / Global Economy, Business Economy / Management, Economic policy, International relations/trade, EU-Accession / EU-DEvelopment, Financial Markets, Public Finances, Fiscal Politics / Budgeting
ISSN: 2534-9600
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: monetary policy; fiscal policy; central banks; Covid-19; pandemic crisis; economic growth; risks; economic stability; monetary regime; Euro zone; international trade; economic integration; Green finance; banks; trade credit; economic recovery
Summary/Abstract: The eighth annual scientific conference of the Monetary and Economic Research Center (MRC) was held from 20th to 21st of September 2022 at the University of National and World Economy (UNWE) in Sofia, Bulgaria. All papers of this book have been gone through a blind review and corrected where necessary. The book with papers is financed through university project НИД НП 10/2022 at the University of National and World Economy. The Union of Bulgarian Economists as well as Institute of Economics and Politics at UNWE, Sofia University and LEFMI France and are co organizers of the conference. Founded in 2014, MRC diffuses knowledge in monetary theory, history, policy and institutions, associating empirical researches, developing new statistical measurements, estimating quantitative models of economic behavior, assessing the economic effects of monetary policies, and projecting the effects from the work of alternative monetary organisations. The MRC is а nonprofit economic research unit within the department of Finance at UNWE. Main accent on the 8th Annual Conference was the economic challenges in the context of pandemic and war circumstances. Researchers and professionalsfrom more than 10 countries took part. The present book consists papers in English language.
- E-ISBN-13: 978-619-90797-7-5
- Page Count: 264
- Publication Year: 2023
- Language: English
Georgia's Convergence with the European Union: Export Challenges
Georgia's Convergence with the European Union: Export Challenges
(Georgia's Convergence with the European Union: Export Challenges)
- Author(s):Nino Papachashvili, Tamta Mikaberidze, Marine Tavartkiladze
- Language:English
- Subject(s):Politics / Political Sciences, Politics, Economy, Supranational / Global Economy, International relations/trade, EU-Accession / EU-DEvelopment
- Page Range:7-14
- No. of Pages:8
- Keywords:trade policy; institutional distance; regional integration; EU-Georgia trade; DCFTA
- Summary/Abstract:The paper aims to identify Georgia's export challenges in the context of Deep and Comprehensive Free Trade Area (DCFTA) and to present the theoretical findings for the assessment the results of the Georgia’s convergence to the EU under the free trade conditions. In order to assess its impact on export, the paper provides a comparative analysis of the results of the sociological survey of Georgian exporters conducted in 2016 and 2022 and also, an experimental study on the impact of institutional distance on export. Among the important findings are: exporters with more than 5 years of experience (mostly considering sanitary and phytosanitary standards) were positively affected by institutional proximity and export flows are in positive correlation with the state effectiveness (according to the WGI) in partner countries.
Monetary Policies in Response to Covid-19 Crisis in the Balkans. Challenges to Central Banks
Monetary Policies in Response to Covid-19 Crisis in the Balkans. Challenges to Central Banks
(Monetary Policies in Response to Covid-19 Crisis in the Balkans. Challenges to Central Banks)
- Author(s):Tsvetelina Marinova, Nikolay Nenovsky
- Language:English
- Subject(s):Politics / Political Sciences, Politics, Economy, National Economy, Economic policy, Public Finances
- Page Range:15-35
- No. of Pages:21
- Keywords:monetary policy; fiscal policy; central banks; Covid-19; Balkans; monetary regimes; crisis
- Summary/Abstract:In the Balkan countries (Bulgaria, Romania and Serbia) the coronavirus pandemic has had serious economic and social repercussions. While in Bulgaria there are a number of formal, legal constraints to pursuing expansionary fiscal and monetary policies, as well as those stemming from the participation of the Bulgarian lev in the exchange rate mechanism 2 and the EU Banking Union, in Romania and Serbia the government and the central bank dispose of more policy tools and opportunities to react to crises. This is evidenced by the applied monetary easing strategies, including quantitative easing as well as other unconventional monetary policy and liquidity measures during the pandemic. In this regard the aim of the paperis to demonstrate to what extent the type of monetary regime determines the scope and nature of reactions in the event of a shock and crisis associated with systemic uncertainty and the possibilities for economic recovery in the three Balkan states.
Post COVID-19 Recovery and New Challenges for Central And Eastern European Countries
Post COVID-19 Recovery and New Challenges for Central And Eastern European Countries
(Post COVID-19 Recovery and New Challenges for Central And Eastern European Countries)
- Author(s):Gergana Mihaylova-Borisova
- Language:English
- Subject(s):Economy, Business Economy / Management, Public Finances
- Page Range:36-49
- No. of Pages:14
- Keywords:economic growth; monetary policy; pandemic crisis; CEE countries
- Summary/Abstract:Following the severe pandemic crisis related to the spread of a new virus to humanity, the coronavirus COVID-19, economies are beginning to recover at different rates depending on the extent to which they have been affected by thecrisis. The aim of the study is to analyse to what extent the Central and Eastern European (CEE) countries have been able to recover from the pandemic crisis and reach pre-crisis levels of their main economic indicators. Despite the successful recovery of most of them, the countries face new challenges posed by a number of internal and external factors such as accelerating inflation, expansionary monetary policies of central banks, declining bank profits as a result of increased costs, and the outbreak of war between Russia and Ukraine.
The Distribution Phase and the Short-Term Risks for the Universal Pension Funds in Bulgaria
The Distribution Phase and the Short-Term Risks for the Universal Pension Funds in Bulgaria
(The Distribution Phase and the Short-Term Risks for the Universal Pension Funds in Bulgaria)
- Author(s):Jeko Milev
- Language:English
- Subject(s):Economy, Public Finances
- Page Range:50-61
- No. of Pages:12
- Keywords:pension funds; distribution phase; investment results; risks
- Summary/Abstract:The newly adopted legislation that regulates the pay-out phase for the universal pension funds in Bulgaria and the continuously rising minimum amount of the pension benefit due by the first pillar of the system started to distort the incentives for the insured individuals in a surprising way. Those with small amount of savings are more interested to stay within their pension fund than those who were able to accumulate bigger amount during the accumulation period. The current research is trying to put some light on this strange situation. The first part of the paper describes some specific moments from the new regulation that concern the distribution phase and the second part provides some estimates about individuals from different income groups and the probability of choosing to stay in their pension fund and not to transfer their savings into the first pillar of the system. The paper concludes with some recommendations about future reforms that could strengthen the pension system in the country.
Impact of Pandemics – An Economic Perspective
Impact of Pandemics – An Economic Perspective
(Impact of Pandemics – An Economic Perspective)
- Author(s):Diyana Miteva
- Language:English
- Subject(s):Economy, National Economy, Supranational / Global Economy
- Page Range:62-70
- No. of Pages:9
- Keywords:pandemic; impact; crisis; covid-19; economic stability
- Summary/Abstract:Recent COVID-19 pandemic surprised society and state leaders with its sudden appearance finding countries unprepared for common lockdown, travel restriction and high infection rates. It affected heavily society, business and state governance around the world causing unprecedent drop and changes in economic indicators. Therefore, the paper aims to outline the main impact pandemics have on economies. An analysis of the overall economic indicators affected by the Covid-19 pandemic is given where results show that sharp increase of government debt, inflation, financial sector leverage and other indicators are reported following 2020. Data proves the serious crisis that countries are facing because of Covid-19 pandemic and also how vulnerable the world economy is towards pandemic.
The Evil Payments Trilogy: Push Payment Fraud; Abolition of Cash and Deductions from Face Value When Payment is Made by Cards
The Evil Payments Trilogy: Push Payment Fraud; Abolition of Cash and Deductions from Face Value When Payment is Made by Cards
(The Evil Payments Trilogy: Push Payment Fraud; Abolition of Cash and Deductions from Face Value When Payment is Made by Cards)
- Author(s):Gordon Kerr
- Language:English
- Subject(s):Economy, Micro-Economics, Public Finances
- Page Range:71-78
- No. of Pages:8
- Keywords:cash; payments; cards; payment fraud; CBDC; central banks; Bank of England; Payment Services Regulator; Visa Mastercard; stress tests; IFRS accounting rules; zombie banks
- Summary/Abstract:Initiatives in accounting, central banking supervision of banks, bank stability and payments which incept in the UK are generally copied throughout the EU. The Bank of England are, it is believed, determined to abolish cash and replace it with a CBDC (central bank digital currency) already trendily named “Britcoin”. Riding the general wave of enthusiasm for tech and “digitisation”, rapid changes are planned late 2022 early 2023 to the UK payments system. All of these changes, proposed by regulators as ‘modernisation’ to be embraced and worshipped on the altar of tech, tech and more tech, should be paused. The real agenda of the Bank of England (and ECB) is to abolish cash to enable deeply negative interest rates despite rising inflation. This will be retrograde for UK and European societies; will lead to mass poverty and will reduce democratic accountability of governments. Moreover, the desire to abolish cash has incentivised the Bank of England via its subsidiary regulator, the Payment Services Regulator, to do nothing to address rising frauds and charges for card use, since they will claim that this Britcoin replacement of cash will be easier to use and cheaper than cards and less exposed to fraud. The present payments landscape in the UK is dystopian, marred by three easily fixable problems causing massive consumer harm. They are each presented here and collectively termed the ‘evil payments trilogy’.
Monetary Stability and Regional Currency Board: Towards a Two-Tier System to Accelerate Regional Integration in the Horn of Africa. (A Policy Proposal)
Monetary Stability and Regional Currency Board: Towards a Two-Tier System to Accelerate Regional Integration in the Horn of Africa. (A Policy Proposal)
(Monetary Stability and Regional Currency Board: Towards a Two-Tier System to Accelerate Regional Integration in the Horn of Africa. (A Policy Proposal))
- Author(s):Moustapha Aman, Nikolay Nenovsky
- Language:English
- Subject(s):Economy, National Economy, Public Finances
- Page Range:79-96
- No. of Pages:18
- Keywords:monetary regime; Currency board; Central Bank; Horn of Africa
- Summary/Abstract:The last few decades have been marked by a proliferation of currency union projects in Africa. In a context of exchange rate instability and poorly convertible currencies, the authorities in most of the countries of the Horn of Africa are looking for an exchange rate regime that can stabilise and develop their economies. To achieve monetary stability in this sub-region, which is at the crossroads of some of the busiest sea and land routes, this paper reflects on the potential benefits of a monetary system that is characterised by a two-tiered architecture: national currencies and a common currency governed by a regional Currency Board.
What Happened to Bulgaria and the Eurozone
What Happened to Bulgaria and the Eurozone
(What Happened to Bulgaria and the Eurozone)
- Author(s):Yanko Hristozov
- Language:English
- Subject(s):Politics / Political Sciences, Politics, Economy, National Economy, Supranational / Global Economy, International relations/trade, EU-Accession / EU-DEvelopment
- Page Range:97-104
- No. of Pages:8
- Keywords:euro; euro zone; inflation Bulgaria; Croatia; Romania
- Summary/Abstract:The topic of the adoption of the euro in Bulgaria is as well-worn as it is relevant with each subsequent year because the country is on the threshold of the euro zone, but something is still missing. Expectations for admission at the beginning of 2024 turned out to be impossible because Bulgaria did not meet the requirements for inflation levels, although it was exemplary in this indicator in recent years. It turned out that all efforts were in vain, but there is still hope that within one to two years the economic indicators will stabilize and the country will become a full member of the Eurozone. The purpose of this report is to examine the state of convergence indicators in Bulgaria, Croatia and Romania for the period 2020-2022 and to try to trace the reasons for our not being admitted to this monetary union, which is so important to us.
Transition to Payments for Russian Gas in Rubles: One Step Beyond
Transition to Payments for Russian Gas in Rubles: One Step Beyond
(Transition to Payments for Russian Gas in Rubles: One Step Beyond)
- Author(s):Vasily Tkachev
- Language:English
- Subject(s):Politics / Political Sciences, Politics, Economy, National Economy, Supranational / Global Economy, International relations/trade
- Page Range:105-114
- No. of Pages:10
- Keywords:gas; international trade; payments
- Summary/Abstract:Russia has long dominated in the supply of gas to many European countries, at the same time being heavily dependent on the foreign currency revenues from gas exports to cover its foreign currency demand. Therefore the Russia-Europe gas trade was considered mutually beneficial. Geopolitical tensions of spring 2022 changed this status quo. Russia required gas to be paid in rubles. The paper lays out an analytical framework for understanding the reasons and consequences of this drastic move based on the combination of macro- and micro-level challenges. We argue that the new mechanism of the Russian gas payments introduced in 2022 should be considered transitional to a potential future radical overhaul of the payments for Russian exports.
Convergence of the GDP Structures of CEE Countries to the Euro Area
Convergence of the GDP Structures of CEE Countries to the Euro Area
(Convergence of the GDP Structures of CEE Countries to the Euro Area)
- Author(s):Nikolay Velichkov, Dimitar Damyanov D.
- Language:English
- Subject(s):Politics / Political Sciences, Politics, Economy, National Economy, Supranational / Global Economy, International relations/trade, EU-Accession / EU-DEvelopment
- Page Range:115-126
- No. of Pages:12
- Keywords:economic integration; euro area; structural convergence
- Summary/Abstract:This paper attempts to find out to what extent CEE countries are converging towards the euro area in terms of their GDP structures. To achieve our objectives, we use a beta-convergence econometric approach that relies on fixed effects panel data estimation. We estimate a simple equation for all GDP structures and compare the results between two groups of countries. The results obtained from the empirical analysis indicate that there is a process of beta convergence in the GDP structures of the CEE countries towards the euro area. The intensity of this process shows certain specifics both in relation to the countries in and outside the euro area, and in relation to individual structural components. The increasing structural similarity does not exclude the manifestation of certain negative influences on macroeconomic dynamics, which could reduce the intensity of the real convergence process.
Challenges of Management of Green Finance after the Pandemic
Challenges of Management of Green Finance after the Pandemic
(Challenges of Management of Green Finance after the Pandemic)
- Author(s):Nadya Velinova-Sokolova
- Language:English
- Subject(s):Economy, National Economy, Supranational / Global Economy, Business Economy / Management
- Page Range:127-144
- No. of Pages:18
- Keywords:green finance; challenges; management; after COVID-19; Bulgaria
- Summary/Abstract:Transitioning to a sustainable future with inclusive, green economies and resilient ecosystems requires huge investments. The rescue packages imposed by the COVID-19 crisis make the pursuit of global sustainability goals even more dependent on urgent investment decisions to be taken by the public and private sector. In response, this study is an attempt to understand the role of green financing in economic growth after the pandemic. The article also examines the impact of COVID-19 on the financial industry, the participation of green finance in the economic recovery after the pandemic. The author put forward the provision on the existence of causal relationships between the "green" financial and "green" economy and analyzed the challenges of management of green finance in Bulgaria.
The Foreign Exchange Policy of China – Is the Country a “Currency Manipulator”?
The Foreign Exchange Policy of China – Is the Country a “Currency Manipulator”?
(The Foreign Exchange Policy of China – Is the Country a “Currency Manipulator”?)
- Author(s):Paskal Zhelev
- Language:English
- Subject(s):Politics / Political Sciences, Politics, Economy, Supranational / Global Economy, International relations/trade
- Page Range:145-157
- No. of Pages:13
- Keywords:renminbi (RMB); undervalued exchange rate; currency manipulation; foreign exchange reform
- Summary/Abstract:China’s exchange rate policy has been one of the most contentious economic issues in present times. The large open economy with a state-led development model has been often accused of deliberately keeping its currency undervalued, thereby conferring unfair competitive advantagesto its exporters, and fuelling global imbalances. The experts’ opinions on that however are greatly divided. The paper’s main goal is to evaluate whether China has been manipulatingthe exchange rate of the RMB through its exchange rate policy over the last decade. Based on various indicators, the results show that there is no evidence of China engaging in currency manipulation to the detriment of its trading partners.
Ordoliberalism and Liberalism in the Post-War Czechoslovakia (1945–1948)
Ordoliberalism and Liberalism in the Post-War Czechoslovakia (1945–1948)
(Ordoliberalism and Liberalism in the Post-War Czechoslovakia (1945–1948))
- Author(s):Tomáš Nikodym, Josef Šíma
- Language:English
- Subject(s):History, Economic history
- Page Range:158-169
- No. of Pages:12
- Keywords:ordoliberalism; liberalism; Czechoslovakia; Christianity
- Summary/Abstract:The paper deals with economic thought of almost forgotten Christian conservatives after the World War Two. Despite the all-embracing socialist ideas, these people were proposing non-socialistic post-war order based on private property, free enterprise and competition. Their proposals were in the sharp contrast to the leading idea of “socializing” or “economic” democracy and comprehensive economic planning. Their economic thought had elements of both classical liberalism and ordoliberalism. Despite their relatively good public recognition, political development of post-war Czechoslovakia did not allow them to change public opinion. One way or another, the proper interpretation of their work is still missing in the history of economic thought textbooks so we attempt to provide at least the overview of their ideas and thus also provide the basis for future research agenda.
The Ownership in Different Schools of Economic Thought. Comparisons and an Alternative Approach
The Ownership in Different Schools of Economic Thought. Comparisons and an Alternative Approach
(The Ownership in Different Schools of Economic Thought. Comparisons and an Alternative Approach)
- Author(s):Plamen D. Tchipev
- Language:English
- Subject(s):History, Economic history
- Page Range:170-181
- No. of Pages:12
- Keywords:ownership; property rights; classical political economy; neoclassical economic paradigm; neo-institutional economics; general theory of systems
- Summary/Abstract:The paper aims to identify several major approaches used by various important schools toward the concept of ownership. And to find how they differ from each other and what benefits (and shortcomings) offer those differences to the analysis of the ownership/property. These comparisons are in order to launch an alternative approach toward the concept. The point is not to “improve” or to criticize, but to attempt to look on the category from an “outside” viewpoint.
Financing from Suppliers during Covid-19 Pandemic: Evidence from Bulgarian Listed Firms
Financing from Suppliers during Covid-19 Pandemic: Evidence from Bulgarian Listed Firms
(Financing from Suppliers during Covid-19 Pandemic: Evidence from Bulgarian Listed Firms)
- Author(s):Galya Taseva
- Language:English
- Subject(s):Economy, Business Economy / Management
- Page Range:182-196
- No. of Pages:15
- Keywords:trade credit; supplier financing; financial performance; Covid-19; Bulgaria
- Summary/Abstract:The article examines which firms rely more heavily on supplier financing and how the crisis caused by the Covid-19 pandemic has affected supplier financing for these firms. The research is based on information about manufacturing companies listed on the stock exchange in Bulgaria for the period 2018 - 2021. The results of the research show that companies that are net debtors on trade credit have worse financial indicators. Accounts payable of companies net debtors to suppliers have shrunk in absolute terms in both years since the start of the pandemic. But for companies that are net debtors on trade credit, the reduction in payables to suppliers is much smaller than the reduction in loans to banks and other financial institutions in the first year of the pandemic. In the first year of the pandemic, when the initial shock to the economy was the strongest, the relative importance of trade credit as a source of financing for firms with poorer financial performance and lower creditworthiness grew.
Some Speculations on Measurability with WERY (War Economic Recovery Index)
Some Speculations on Measurability with WERY (War Economic Recovery Index)
(Some Speculations on Measurability with WERY (War Economic Recovery Index))
- Author(s):Elena Simeonova
- Language:English
- Subject(s):Politics / Political Sciences, Politics, Economy, National Economy, Supranational / Global Economy, Security and defense, Peace and Conflict Studies
- Page Range:197-203
- No. of Pages:7
- Keywords:war; economic recovery; compose indicators; index; political risk; geopolitical risk; Covid-19
- Summary/Abstract:The paper proposes and conceptually outlines an author’s composite indicator for measuring from political risk perspective the economic recovery after the current Russian-Ukrainian war. The core assumption is that the economic recovery is inevitable according to the general law of systems and the cyclicality. The aim is by combining and amending available measuring tools to propose new derivative which gives a different prospective economic recovery measurement. As a measurement tool, WERI is not yet complete and will be subject to future refinement and development. It should be perceived as a kind of manifestation of the author's passion for measurement and the construction of measuring tools.
The Impact of Covid 19 on Activities of Banks
The Impact of Covid 19 on Activities of Banks
(The Impact of Covid 19 on Activities of Banks)
- Author(s):Kamelia Assenova
- Language:English
- Subject(s):Economy, Business Economy / Management
- Page Range:204-213
- No. of Pages:10
- Keywords:COVID 19; economic cycle; banks; credit
- Summary/Abstract:The COVID-19 pandemic is causing unpredictable disruption in the global economy. The pandemic affects every sector of economy. As a result of this virus, the world economy is weakening, and this is also happening in Bulgaria.The banking sector is an important component of every economy. The banks have a fundamental role as provider of payment services, liquidity and funding to the business and individuals in the time of COVID-19 crisis. This paper aims to examine the impact of COVID-19 on bank liabilities and assets during the crisis and their role for the recovery of the economy. During the COVID19 crises the business reduces its deposits, because it does not have enough purchases and receivables. The firms need the usage of lending to cover inequality between in- and outflows, decide their liquidity problems and ensure the working capital for restarting of business. The risk during the COVID-19 crisis rises and the quality of credit portfolio will deteriorate, by increasing non-performing loans.
The Effectiveness of Monetary Policy in the Context of Central Bank Independence in Developing Countries: Case of Morocco
The Effectiveness of Monetary Policy in the Context of Central Bank Independence in Developing Countries: Case of Morocco
(The Effectiveness of Monetary Policy in the Context of Central Bank Independence in Developing Countries: Case of Morocco)
- Author(s):Moulay-driss Saikak, Radouane Raouf
- Language:English
- Subject(s):Economy, National Economy, Supranational / Global Economy
- Page Range:214-235
- No. of Pages:22
- Keywords:monetary policy efficiency; central bank independence; central bank transparency; SVAR
- Summary/Abstract:The objective of independent central banks is to ensure price stability to achieve macroeconomic stability, because controlling inflation depends on the effect of monetary policy on activity. So central banks have two mandates. They act on the interest rate based on the economic situation. To ensure price stability, most developed and developing countries have made their central banks independent and transparent. Independence strengthens the credibility of monetary authorities and makes monetary policy in this context more effective. To verify the effectiveness of monetary policy within the framework of the independence of the central bank, we mobilized a SVAR model for the Moroccan case. The study covers two separate periods on a quarterly basis (1994 to 2005 and 2006 to 2020) to take account of the effective implementation of independence. The results imply an efficient transmission of monetary policy, and we conclude that the framework of independence is a good solution to conduct monetary policy for BAM.
EU Global Leadership in Trustworthy AI: High Risk Applications – Implementation and Gabs
EU Global Leadership in Trustworthy AI: High Risk Applications – Implementation and Gabs
(EU Global Leadership in Trustworthy AI: High Risk Applications – Implementation and Gabs)
- Author(s):Galya Mancheva
- Language:English
- Subject(s):Politics / Political Sciences, Politics, Economy, EU-Accession / EU-DEvelopment, ICT Information and Communications Technologies
- Page Range:236-249
- No. of Pages:14
- Keywords:artificial intelligence; European union; regulations; symbolic approach; statistical approach; machine learning
- Summary/Abstract:The paper is devoted to the European Union regulatory framework on Artificial Intelligence related to SME and the EU global position in this aspect. The objective is to follow up the readiness of the EU to have a global leadership in trustworthy AI. The thesis of the study is that the EU is not ready to have a global leadership in trustworthy AI. For the purposes of the analysis firstly the position of the EU globally is observed within the global trends in Artificial intelligence. Secondly, content analysis and cross-check of current the EU regulatory framework and legislation is performed in order to investigate the main raised issues and their stage of completion. It was found that the main unsolved and unregulated issues are related to adaptation of current legislation of national AI strategies and new and adapted liability rules to be established. As of the national AI strategies a total of 19 Member States, including Norway have adopted national AI strategies. Some Member States (e.g. Finland, Cyprus and Germany), have already updated and reviewed their initial strategies. Forthcoming national action have to be taken by Austria, Belgium, Croatia, Greece, Ireland, Italy, Romania, and Slovenia. As of the new and adapted liability rules, it is postponed to the end of 2022 the EU to measure adapting the liability framework to the challenges of new technologies, including AI. As per global trends, the inconsistency of the EU members will prolong the process of implementation the legislation and achieving the main EU goal to have a global leadership in trustworthy AI.
Detection of Financial Statements Manipulation Using the Beneish M-Score: The Case of Companies Recently Charged by SEC.
Detection of Financial Statements Manipulation Using the Beneish M-Score: The Case of Companies Recently Charged by SEC.
(Detection of Financial Statements Manipulation Using the Beneish M-Score: The Case of Companies Recently Charged by SEC.)
- Author(s):Desislava Petkova
- Language:English
- Subject(s):Economy, Accounting - Business Administration
- Page Range:250-264
- No. of Pages:15
- Keywords:earnings manipulation; Beneish M-score model; financial ratios; fraudulent reporting
- Summary/Abstract:The Beneish M-score model is a useful tool for identifying the potentially fraudulent behaviour of a company that could lead to misstated financial data. This paper uses the detective model to determine if and when warning signs of manipulation were identifiable before the companies were officially charged with fraud by U.S. SEC. Data used in the analysis are the 10-K reports from the U.S. SEC Edgar database. The study analyses two companies involved in financial scandals in 2021 and showsthat the model can be used to catch manipulative actions in advance under the condition that other factors should be considered. To further deepen the analysis of the model’s mechanisms, the paper recommends concentrating on fewer fraudulent cases and entering into details for each business.