Juvenile Justice Paradox

#2. Alliance Great
Juvenile Justice Paradox

In the proposed article, the authors state inconsistency between the juvenile justice system in contemporary Russia and the population needs. To explain this phenomenon, the authors make a brief historical digression and trace the transformation of traditional family into the nuclear one, alongside with changes in the structure of individual’s needs, conditioned by technological progress. The authors analyze the role of the state in the said process, which, according to the authors, contributes to erosion and destruction of the traditional family values, stimulates decrease in the birth rate among the indigenous population and, at the same time, its increase among migrants, where the values of traditional family continue to dominate due to historical conditions. According to the authors, erosion and transformation of the values of a traditional family and its death as such is just as inevitable as scientific and technological progress. Solution of the problem seems to be in humanizing juvenile justice system and bringing its practice in conformity with the population mentality.

Mechanism of Corporate Fraud Influence on Financial Policy of Russian Companies

#1. Long-Lasting Choice
Mechanism of Corporate Fraud Influence on Financial Policy of Russian Companies

The present article discusses the features of the corporate fraud and shocks influence on the capital structure of the company. Actions of Russian companies related to distortion of the accounting reports, implementation of deals with some interest (exceeding authority by the board of directors), sham transactions aimed at withdrawal of assets from the company (damage to the company and its shareholders), as well as obtaining unjustified tax benefit, contribute to financial restrictions and increase the lack of companies’ transparency. On the other hand, the impact of adverse market shocks makes Russian companies to focus on saving large amounts of money inside the company. In addition, the paper examines the effect of adverse shocks on changes in the debt policy of the company. Attention is drawn to the link between corporate fraud and financial policies of the company in view of adverse shocks impact on the sources of funding. Fraud causes the situation when Russian companies tend to save more money because of additional restrictions related to involving debt finance. Analysis results suggest that companies choose the internal source of financing as less expensive, following the hierarchical theory of optimal funding. The accumulated monetary reserves allow them to overcome at lower costs the effects of adverse shocks that determine financial instability. Corporate fraud and adverse shocks affect the company’s financial policy, forcing it to rely more on internal financing and to constantly increase its cash reserves, solving the problem associated with financial constraints.