Societies and political orders in transition, Aug 24, 2018
This chapter deals with the issue of the public and private debt in Bosnia and Herzegovina. All t... more This chapter deals with the issue of the public and private debt in Bosnia and Herzegovina. All the indicators of public debt in Bosnia and Herzegovina have been on a sharp upward trend since 2008. Denial and comparison with developed countries where these indicators maybe even higher are only excuses for not solving the problem. In conditions of stagnant or slow-growing public revenues, while debts are growing rapidly, an excessively large public administration that threatens private sector production and investment, an uncompetitive economy with low levels of foreign and domestic investments and a poor business environment, debts all threaten further progress. The stagnation of lending activity and high credit risks has also affected the corporate sector in recent years. Due to the lack of quality projects and the poor economic situation, the rate of credit growth has been depressed. The profitability of companies is very low, while losses of capital have increased and a high share of loans is used to repay existing loans. Loans for private housing purposes have also decreased, while general consumption loans been on a growing trend due to the low level of personal disposable income, causing households to borrow increased amounts to meet their basic needs.
ABSTRACT This paper analyses local government practitioners’ perceptions of the usefulness of acc... more ABSTRACT This paper analyses local government practitioners’ perceptions of the usefulness of accounting information for decision-making in jurisdictions with dual reporting (cash and accruals). The authors show that, in general, neither educational background (in economics or in other disciplines) nor the experience (length of time in the job) of public sector managers in Croatia and in the Republic of Srpska (Bosnia and Herzegovina) affected their perceptions of the usefulness of accounting information. The research provides new insights into the usefulness of mandatory reports and the availability of information for decision-making in dual reporting systems.
The paper deals with the empirical verification of the effectiveness and usefulness of risk diver... more The paper deals with the empirical verification of the effectiveness and usefulness of risk diversification using the main stock exchange indices in the Eurozone (euro area) countries. A recognized methodology for examining the scope and limitations of international diversification for institutional investors is used in the paper. The goal of the research is to determine the effects of portfolio optimization i.e. the benefits of applying modern portfolio theory for institutional investors. The additional goal is to determine the effects of investing in Bitcoin on portfolio optimization. The research was conducted using the method of modern portfolio theory on a sample of Eurozone and Bitcoin countries. The movement of the values of stock exchange indices during 2019 was observed. Markowitz’s theory was applied to the observed values so that the change in the value of each index in the model was treated as a change in the value of one security. After that, the movement of Bitcoin values was introduced into the same data. The obtained portfolios were tested with data from 2020. The research will offer an answer to the question: “What are the advantages and disadvantages of using Bitcoin in portfolio optimization?” The contribution of the paper is reflected in the presentation of the scope and limitations of modern portfolio theory for institutional investments. The conclusion is that the rational behavior of institutional investors requires consideration of portfolio optimization using the Markowitz model because it is possible to create portfolios that, on the basis of historical returns, give the desired returns with certain risks. However, the application results deviate significantly from the expected return. The results show that the use of Markowitz’s method of portfolio selection, with all limitations, is desirable, possible, and applicable, but that it has serious limitations in terms of neglecting transaction costs, exchange rate differences, and actual trading on the stock exchange. The research also provides certain recommendations. Further research can be directed towards testing and improving the model.
Purpose: One of the ways to enhance transparency and usefulness of audit reports is to include in... more Purpose: One of the ways to enhance transparency and usefulness of audit reports is to include information on key audit matters (KAMs). In this paper, based on the presented KAMs, we investigate transparency of audit reports of listed companies in Bosnia and Herzegovina and in Croatia. Methodology: For the purposes of this research, we collected and systematised data from published audit reports and then analysed them by means of descriptive statistical methods. Results: The research results show that in Croatia only a few audit reports lack a section on KAMs and there is no difference between the audit reports issued by the Big Four and the reports of other audit firms. In Bosnia and Herzegovina, most audit reports do not include a section on KAMs, but, unlike the Big Four, who disclose at least one KAM, other audit firms generally do not present any. Additionally, the research results show differences in the number of communicated KAMs between the audit reports prepared by the Big...
Journal of Public Budgeting, Accounting & Financial Management, 2020
PurposeThe purpose of this research is to show the impact of the pandemic on the budget of Bosnia... more PurposeThe purpose of this research is to show the impact of the pandemic on the budget of Bosnia and Herzegovina (BiH) as a developing country. It also aims to give an answer as to how BiH politicians used budgetary measures to respond to the pandemic and what key economic factors influenced the design of those measures.Design/methodology/approachThe study conducted detailed analyses of budgets at level of central government, as well as other publicly available documents of relevant governments bodies, international statistics and media reports up to the end of June 2020.FindingsDecline of economic activity and a number of budgetary measures adopted by central BiH authorities under the influence of characteristics of BiH economy, characteristics of public finance and available source of funding, resulted in less government revenues and sizable government expenditures to assist the economy and public health system. The fiscal stability achieved over the past years and low level of d...
Governance Research and Development Centre, Croatia & University of Malta, Faculty of Economics, Management and Accountancy, Department of Insurance, 2016
ЗБОРНИК РАДОВА ЕКОНОМСКОГ ФАКУЛТЕТА У ИСТОЧНОМ САРАЈЕВУ
The paper investigates how financially insecure public companies in the Republic of Srpska are us... more The paper investigates how financially insecure public companies in the Republic of Srpska are using the Altman EM score model and the RAPO model developed on business entities in the Republic of Srpska. Public companies are classified as low, medium and high risk companies in terms of the probability of going bankrupt. The results show that in the observed period from 2013 to 2018, half of public companies are constantly in the problem zone, while about 40% are in the safe zone. That is, companies that have been identified as problematic have been in that group for many years, while those with low business risk have been consistently successful. The paper also presents the state's participation in the capital of public companies, as well as expenditures in the form of subsidies and recapitalizations that are allocated from the budget every year.
Proceedings of the Faculty of Economics in East Sarajevo , 2020
The paper investigates how financially insecure public companies in the Republic of Srpska are us... more The paper investigates how financially insecure public companies in the Republic of Srpska are using the Altman EM score model and the RAPO model developed on business entities in the Republic of Srpska. Public companies are classified as low, medium and high-risk companies in terms of the probability of going bankrupt. The results show that in the observed period from 2013 to 2018, half of the public companies are constantly in the problem zone, while about 40% are in the safe zone. That is, companies that have been identified as problematic have been in that group for many years, while those with low business risk have been consistently successful. The paper also presents the state's participation in the capital of public companies, as well as expenditures in the form of subsidies and recapitalizations that are allocated from the budget every year.
Societies and political orders in transition, Aug 24, 2018
This chapter deals with the issue of the public and private debt in Bosnia and Herzegovina. All t... more This chapter deals with the issue of the public and private debt in Bosnia and Herzegovina. All the indicators of public debt in Bosnia and Herzegovina have been on a sharp upward trend since 2008. Denial and comparison with developed countries where these indicators maybe even higher are only excuses for not solving the problem. In conditions of stagnant or slow-growing public revenues, while debts are growing rapidly, an excessively large public administration that threatens private sector production and investment, an uncompetitive economy with low levels of foreign and domestic investments and a poor business environment, debts all threaten further progress. The stagnation of lending activity and high credit risks has also affected the corporate sector in recent years. Due to the lack of quality projects and the poor economic situation, the rate of credit growth has been depressed. The profitability of companies is very low, while losses of capital have increased and a high share of loans is used to repay existing loans. Loans for private housing purposes have also decreased, while general consumption loans been on a growing trend due to the low level of personal disposable income, causing households to borrow increased amounts to meet their basic needs.
ABSTRACT This paper analyses local government practitioners’ perceptions of the usefulness of acc... more ABSTRACT This paper analyses local government practitioners’ perceptions of the usefulness of accounting information for decision-making in jurisdictions with dual reporting (cash and accruals). The authors show that, in general, neither educational background (in economics or in other disciplines) nor the experience (length of time in the job) of public sector managers in Croatia and in the Republic of Srpska (Bosnia and Herzegovina) affected their perceptions of the usefulness of accounting information. The research provides new insights into the usefulness of mandatory reports and the availability of information for decision-making in dual reporting systems.
The paper deals with the empirical verification of the effectiveness and usefulness of risk diver... more The paper deals with the empirical verification of the effectiveness and usefulness of risk diversification using the main stock exchange indices in the Eurozone (euro area) countries. A recognized methodology for examining the scope and limitations of international diversification for institutional investors is used in the paper. The goal of the research is to determine the effects of portfolio optimization i.e. the benefits of applying modern portfolio theory for institutional investors. The additional goal is to determine the effects of investing in Bitcoin on portfolio optimization. The research was conducted using the method of modern portfolio theory on a sample of Eurozone and Bitcoin countries. The movement of the values of stock exchange indices during 2019 was observed. Markowitz’s theory was applied to the observed values so that the change in the value of each index in the model was treated as a change in the value of one security. After that, the movement of Bitcoin values was introduced into the same data. The obtained portfolios were tested with data from 2020. The research will offer an answer to the question: “What are the advantages and disadvantages of using Bitcoin in portfolio optimization?” The contribution of the paper is reflected in the presentation of the scope and limitations of modern portfolio theory for institutional investments. The conclusion is that the rational behavior of institutional investors requires consideration of portfolio optimization using the Markowitz model because it is possible to create portfolios that, on the basis of historical returns, give the desired returns with certain risks. However, the application results deviate significantly from the expected return. The results show that the use of Markowitz’s method of portfolio selection, with all limitations, is desirable, possible, and applicable, but that it has serious limitations in terms of neglecting transaction costs, exchange rate differences, and actual trading on the stock exchange. The research also provides certain recommendations. Further research can be directed towards testing and improving the model.
Purpose: One of the ways to enhance transparency and usefulness of audit reports is to include in... more Purpose: One of the ways to enhance transparency and usefulness of audit reports is to include information on key audit matters (KAMs). In this paper, based on the presented KAMs, we investigate transparency of audit reports of listed companies in Bosnia and Herzegovina and in Croatia. Methodology: For the purposes of this research, we collected and systematised data from published audit reports and then analysed them by means of descriptive statistical methods. Results: The research results show that in Croatia only a few audit reports lack a section on KAMs and there is no difference between the audit reports issued by the Big Four and the reports of other audit firms. In Bosnia and Herzegovina, most audit reports do not include a section on KAMs, but, unlike the Big Four, who disclose at least one KAM, other audit firms generally do not present any. Additionally, the research results show differences in the number of communicated KAMs between the audit reports prepared by the Big...
Journal of Public Budgeting, Accounting & Financial Management, 2020
PurposeThe purpose of this research is to show the impact of the pandemic on the budget of Bosnia... more PurposeThe purpose of this research is to show the impact of the pandemic on the budget of Bosnia and Herzegovina (BiH) as a developing country. It also aims to give an answer as to how BiH politicians used budgetary measures to respond to the pandemic and what key economic factors influenced the design of those measures.Design/methodology/approachThe study conducted detailed analyses of budgets at level of central government, as well as other publicly available documents of relevant governments bodies, international statistics and media reports up to the end of June 2020.FindingsDecline of economic activity and a number of budgetary measures adopted by central BiH authorities under the influence of characteristics of BiH economy, characteristics of public finance and available source of funding, resulted in less government revenues and sizable government expenditures to assist the economy and public health system. The fiscal stability achieved over the past years and low level of d...
Governance Research and Development Centre, Croatia & University of Malta, Faculty of Economics, Management and Accountancy, Department of Insurance, 2016
ЗБОРНИК РАДОВА ЕКОНОМСКОГ ФАКУЛТЕТА У ИСТОЧНОМ САРАЈЕВУ
The paper investigates how financially insecure public companies in the Republic of Srpska are us... more The paper investigates how financially insecure public companies in the Republic of Srpska are using the Altman EM score model and the RAPO model developed on business entities in the Republic of Srpska. Public companies are classified as low, medium and high risk companies in terms of the probability of going bankrupt. The results show that in the observed period from 2013 to 2018, half of public companies are constantly in the problem zone, while about 40% are in the safe zone. That is, companies that have been identified as problematic have been in that group for many years, while those with low business risk have been consistently successful. The paper also presents the state's participation in the capital of public companies, as well as expenditures in the form of subsidies and recapitalizations that are allocated from the budget every year.
Proceedings of the Faculty of Economics in East Sarajevo , 2020
The paper investigates how financially insecure public companies in the Republic of Srpska are us... more The paper investigates how financially insecure public companies in the Republic of Srpska are using the Altman EM score model and the RAPO model developed on business entities in the Republic of Srpska. Public companies are classified as low, medium and high-risk companies in terms of the probability of going bankrupt. The results show that in the observed period from 2013 to 2018, half of the public companies are constantly in the problem zone, while about 40% are in the safe zone. That is, companies that have been identified as problematic have been in that group for many years, while those with low business risk have been consistently successful. The paper also presents the state's participation in the capital of public companies, as well as expenditures in the form of subsidies and recapitalizations that are allocated from the budget every year.
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Papers by Jelena Poljasevic