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Stock Exchanges

4GG “Tools and Techniques for Implementing Tar- Institute of Management Accountants. (1991, June). [Editorial].
get Costing” (1998) Management Accounting, p. 1.
Management Accounting Practices Committee. (1981). Defini-
4HH “Theory of Constraints (TOC) Management
tion of management accounting. Management Accounting
System Fundamentals” (1999)
Statements. Montvale, NJ: Institute of Management Accoun-
4II “Implementing Integrated Supply Chain Man- tants.
agement for Competitive Advantage” (1999) Schiff, Jonathan B., and Penino, Charles J. (1990, Winter). The
emerging authority of statements on management account-
4JJ “Tools and Techniques for Implementing Inte- ing. The Journal of Applied Business Research, pp. 87–91.
grated Supply Chain Management” (1999)
Vangermeersch, Richard, and Jordan, Robert (1996). In M.
4KK “Implementing Lean Production Fundamen- Chatfield and Richard Vangermeersch (Eds.), The history of
tals” (2000) accounting. New York: Garland.
4LL “Implementing Capacity Cost Management
Systems” (2000) B. Douglas Clinton
4MM “Designing an Integrated Cost Management
System for Driving Profit and Organizational
Performance” (2000)
STOCK EXCHANGES
4NN “Implementing Process Management for
Improving Products and Services” (2000) A stock exchange is a forum provided by any organization,
association, or group of persons for trading in securities
4-OO “Understanding and Implementing Internet
E-Commerce” (2000) representing shares of firms. By providing a trading sys-
tem, a stock exchange performs two essential services.
4PP “Implementing Automated Workflow Manage- First, it provides a market for the buying and selling of
ment” (2000) stock. Second, it provides a way of monitoring the value
5A “Evaluating Controllership Effectiveness” (1990) of a stock investment portfolio.
5B “Fundamentals of Reporting Information to The statutory definition of exchange as specified by
Managers” (1992) the U.S. Securities and Exchange Commission (SEC) is a
“market place or facilities for bringing together purchasers
5C “Managing Cross-Functional Teams” (1994)
and sellers of securities or for otherwise performing with
5D “Developing Comprehensive Competitive Intel- respect to securities the functions commonly performed
ligence” (1996) by a stock exchange.” The SEC carefully revised Rule 3b-
5E “Redesigning the Finance Function” (1997) 16 to define these terms to mean any organization, associ-
ation, or group of persons that: (1) brings together the
5F “Tools and Techniques for Redesigning the orders of multiple buyers and sellers; and (2) uses estab-
Finance Function” (1999)
lished, nondiscretionary methods (whether by providing a
5G “Implementing Shared Service Centers” (2000) trading facility or by setting rules) under which such
orders interact with each other, and the buyers and sellers
Those charged with the responsibility of developing
entering such orders agree to the terms of a trade.
new statements monitor developments in the field, includ-
ing the IMA’s initiatives in providing a conceptual frame- A particular trading system may not be recognized as
work for management accounting, as well as in business an exchange, depending on the securities laws of the
generally. Such monitoring assures the practitioners that country. Given that differences across countries may exist
timely guidance will be available. The results of the moni- with respect to legal definitions, a more detailed discus-
toring will lead to changes and extension of guidance. sion of what constitutes a trading system is appropriate.

SEE ALSO Accounting; Institute of Management Accoun-
TRADING SYSTEMS
tants
Trading markets may be defined as systems consisting of
an order-routing system, an information network, and a
BIBLIOGRAPHY
Aldridge, C., and Colbert, J. (1997, July). We need better finan- trade-execution mechanism. A trading system is a com-
cial reporting. Management Accounting, pp. 32–36. munications technology for passing allowable messages
between traders, together with a set of rules that transform
American Institute of Certified Public Accountants. (2005).
Statement on auditing standards No. 69. AICPA Professional traders’ messages into transaction prices and allocations of
Standards. Vol. 1. New York: Author. quantities of stock among market participants.

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 699