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Kosmos
Astronomia Astrofizyka
Inne

Kultura
Sztuka dawna i współczesna, muzea i kolekcje

Metoda
Metodologia nauk, Matematyka, Filozofia, Miary i wagi, Pomiary

Materia
Substancje, reakcje, energia
Fizyka, chemia i inżynieria materiałowa

Człowiek
Antropologia kulturowa Socjologia Psychologia Zdrowie i medycyna

Wizje
Przewidywania Kosmologia Religie Ideologia Polityka

Ziemia
Geologia, geofizyka, geochemia, środowisko przyrodnicze

Życie
Biologia, biologia molekularna i genetyka

Cyberprzestrzeń
Technologia cyberprzestrzeni, cyberkultura, media i komunikacja

Działalność
Wiadomości | Gospodarka, biznes, zarządzanie, ekonomia

Technologie
Budownictwo, energetyka, transport, wytwarzanie, technologie informacyjne

Australasian Accounting, Business and Finance Journal

  • The purpose of this note is to offer a broad historical setting in which to review Yamey’s criticisms of Sombart and other historians regarding the significance they attributed to the introduction of double-entry bookkeeping for economic development. In a series of articles Yamey (1947, 1949, 1959, and1964, for example) challenged their views of the importance of double-entry bookkeeping to economic development. The note is organised as follows. The views of Sombart, Spengler, Nussbaum and Mattessich are quoted, and an overview of Yamey’s position is provided. The historical setting is then extended to include a broader context facilitating comparison of different approaches that may be classified as microeconomic or macroeconomic.

    http://ro.uow.edu.au/aabfj/vol8/iss3/8 2014/09/09 - 12:44
  • This paper develops and tests a new valuation model. Callen and Morel (2000) apply the Lintner (1956) dividend model to the famous Ohlson (1995) valuation model and develop the Lintnerian linear accounting valuation model (henceforth, the CM model). However, Bauer and Bhattacharyya (2007) suggest that the Lintner dividend model does not fit firm dividend policy behaviour appropriately and decide to construct another dividend policy process. This study applies their dividend model to construct a new valuation model, which performs better than the original Ohlson and CM models empirically.
    Applying the Engle and Granger (1987) cointegration concepts, we examine the performance of the three models for the 1,564 firm-year panel data of US companies from 1973 to 2006. Our findings indicate that all tested variables are stationary after the first order difference process and that all three models exhibit long-run equilibrium relations among equity price and explanatory variables. However, our model has the highest cointegration ratio, which is almost 100 percent of sample firms. Hence, our model is more suitable to evaluate the equity value and provides improvement for the previous accounting valuation models.

    http://ro.uow.edu.au/aabfj/vol8/iss3/7 2014/09/09 - 12:44
  • The objective of this study is to examine the trends of director remuneration in Malaysia’s publicly listed companies. The proxies for executive pay are based on cash remuneration consisting of fees, salary, bonuses, and benefits to kin. Based on the data collected from 486 publicly listed companies in Bursa Malaysia from 2007 to 2009, we empirically tested findings that the trends for remuneration increased during and after the financial crisis. The study also reveals that the structure of remuneration, such as salary and bonuses for executives, showed an increasing trend during and after the financial crisis; however, it shows that the trend of director remuneration in family firms after the financial crisis was decreasing. Further analysis indicates that family members were willing to accept lower fees, bonuses, and benefits to kin in order to maintain cash flow. Our study suggests that no expropriation existed in family firms during and after the financial crisis. However, executives in non-family firms are less interested in accepting lower remuneration as part of a contract.

    http://ro.uow.edu.au/aabfj/vol8/iss3/6 2014/09/09 - 12:44
  • After the introduction of the nonlinear unit root test in 2003, research has provided evidence of nonlinear real exchange rate dynamics in Asian countries. However, few studies have conducted nonlinear unit root tests for South Asian real exchange rates. Some of these studies argued in favour of stationary real exchange rates, whereas others concluded the nonstationarity of real exchange rates. A major problem with these nonlinear unit root tests is their failure to consider structural changes for long periods of time. To confirm the mixed test results for the stationarity of South Asian real exchange rates, this study employs unit root test by allowing both single and multiple endogenous structural breaks for Bangladesh, India, Pakistan and Sri Lanka for the period of 1957 to 2011, except that data for Bangladesh covers a shorter sample period. Results show nonstationary real exchange rates for the sample countries. Overall empirical evidence indicates that long-run purchasing power parity does not hold for major South Asian countries.

    http://ro.uow.edu.au/aabfj/vol8/iss3/4 2014/09/09 - 12:44
  • Agency theory suggests that independent outside board members may have an important monitoring function of the financial reporting process. As a result, boards with more independent directors have a tendency for increased monitoring and are therefore expected to insist on better earnings quality. This study examines whether board independence improves earnings quality by reducing earnings management in Portugal, a country with significantly different institutional and legal characteristics from the Anglo-Saxon countries. Using ordinary least square (OLS) and two stage least squares (2SLS) techniques to control potential simultaneity problems between board independence and earnings quality, we find evidence that independent board members improve earnings quality by reducing earnings management for a sample of Portuguese listed firms. This result suggests that strengthening the independence of boards by appointing more independent board members is a positive step toward improving earnings quality.

    http://ro.uow.edu.au/aabfj/vol8/iss3/3 2014/09/09 - 12:44
  • The purpose of this study is to investigate the extent of impression management in corporate annual reports in an Australian context. To contribute to this topic, a research question is investigated: do the most profitable Australian companies, assessed by percentage change in profit before tax, organise the chairmen’s statements of their corporate annual reports and disclose information in a way that is significantly different from those least profitable companies?
    In terms of the methodology, this research has selected the top 50 most and least profitable companies in ASX 500 as at 30th June 2009 respectively. For reference and comparison purposes, another 50 companies were selected randomly from the rest of the population. Content analysis was applied.
    The results of this study were indicative that chairmen’s letters from profitable and non-profitable Australian companies do demonstrate significantly different presentational preferences.

    http://ro.uow.edu.au/aabfj/vol8/iss3/2 2014/09/09 - 12:44
  • This issue of AABFJ brings together papers from accounting, finance and economic disciplines.

    http://ro.uow.edu.au/aabfj/vol8/iss3/1 2014/09/09 - 12:44
  • Purpose Contemporary management accounting techniques (such as TQM, BSC, JIT) are widely lauded by academia but the proposed relevance to business has not necessarily the view held by industry (e.g. Burns & Vaivio, 2001; Chenhall & Langfield-Smith, 1998; Innes et al., 2000. The purpose of this article is to investigate the acquisition by a modern multi-national firm of a major IT-based management accounting program to assess the relevance and usefulness of its functionality by identifying the type(s) of systems that are utilised and the rationale for upgrading or modifying its system(s).
    Design/methodology/approach – This study relies on a single case based on two in-depth semi structured interviews with accounting and finance professionals in a multi-national manufacturing company that recently implemented a modern management accounting system.
    Findings – The findings indicate that despite demonstrating some relevance of the management accounting information, the manufacturer deactivated components of the system that were deemed irrelevant at particular levels of the organisation. Relevance was not demonstrated absolute.
    Originality/value – This paper provides evidence about the non-reliance on management accounting information in a multinational company operating in Australia. The findings in the study imply that relevance is linked to implementation, planning and training will help managers to better prepare themselves in setting up contemporary management accounting systems.

    http://ro.uow.edu.au/aabfj/vol8/iss2/9 2014/07/01 - 18:21
  • We explore influences on unlisted companies when Portugal moved from a code law, rules-based accounting system, to a principles-based accounting system of adapted International Financial Reporting Standards (IFRS). Institutionalisation of the new principles-based system was generally facilitated by a socio-economic and political context that increasingly supported IFRS logic. This helped central actors gain political opportunity, mobilise important allies, and accommodate major protagonists. The preparedness of unlisted companies to adopt the new IFRS-based accounting system voluntarily was explained by their desire to maintain social legitimacy. However, it was affected negatively by the embeddedness of rule-based practices in the ‘old’ prevailing institutional logic.

    http://ro.uow.edu.au/aabfj/vol8/iss2/8 2014/07/01 - 18:21
  • This study examines the outcome of decentralisation reforms in Indonesia, focusing on the association between demographic characteristics and differences in the financial condition of local governments units. It investigates cross-sectional data pertaining to demographic characteristics and financial statements audited by the Supreme Audit Body of 419 Indonesian local government units for the fiscal year 2007. It utilises demographic attributes including scope of entity, location, tenure (date of entry), gender, human development index (HDI) and size of local governments to explain differences in the financial condition of Indonesia’s local government. Local government financial condition is proxied by quick ratio, debt ratio, services ratio, and ratio of local to total revenues. The results suggest that scope and location of local government units help explain all of the financial condition variables. The findings further infer that local government units domiciled in Java tend to report better financial conditions relative to those domiciled in other islands. Our results also show that local government units with greater female populations and higher HDI are more likely to have a local authority that (1) has better ability to finance their general services from their unrestricted net assets, and (2) has greater ability to earn more revenues from local sources. Finally, this study documents that the larger the population of a local government unit, the higher its liquidity position, the stronger its ability to funding general services, and the greater its possibility earning revenues from its local sources.

    http://ro.uow.edu.au/aabfj/vol8/iss2/7 2014/07/01 - 18:21
  • This study explores how monetary policy changes flow through the banking sector in Australia. Drawing on data between 2004 and 2010, we divide banks into three groups according to their size, and examine the impact of that cash rate change on lending of different types of loans. We find the response of bank lending after a monetary policy change varies with the size of the bank as well as the types of loan. Smaller banks are more sensitive to policy rate changes, and household loans, government loans and intra-group loans are less responsive to monetary policy compared with financial and non-financial loans.

    http://ro.uow.edu.au/aabfj/vol8/iss2/6 2014/07/01 - 18:21
  • A substantial body of accounting and finance literature has been devoted to the study of Mergers and Acquisitions (M&As) dominated by discussions relating to the gains and losses that accrue from transactions involving large public companies. This paper makes a unique contribution to the literature by investigating the M&A experience of microcap businesses. Transactions involving microcap M&A are substantially different to those involving large companies on a number of dimensions. This paper explores the determinants of microcap M&A success and pitfalls and problems from an integration perspective. Due to the paucity of research in the area an exploratory research design is employed, conducting interviews with five CEOs of companies that had each managed multiple transactions. We find microcap M&As are successful when measured against identified goals but generally take longer and cost more than expected. Further, culture and communication are key issues in determining success/failure. We also find the in-house management of integration aspects is problematic for these businesses and suggest this warrants further study.

    http://ro.uow.edu.au/aabfj/vol8/iss2/5 2014/07/01 - 18:21
  • This paper uses a panel cointegration method to test the Ohlson (1995) model. Sample firms are selected from US listed companies during the period from 1986 to 2004. The analysis is focussed on whether the fundamental value of corporations cointegrates with market value. The results support the hypothesis of cointegration that a long-run equilibrium relationship exists between a corporation’s fundamental value and market value. Subsequently, this paper evaluates the predictive power of the Ohlson model for future market value assessment. Since the Ohlson model is built upon the dividend discount model, this paper also examines the validity and the predictive power of the dividend discount model as a basis for comparison. The results show that the Ohlson model can forecast future stock price movements much more accurately in any predicted horizon.

    http://ro.uow.edu.au/aabfj/vol8/iss2/4 2014/07/01 - 18:21
  • The purpose of this paper is to illustrate the use of a Sustainability Balanced Scorecard (SBSC) as a contributing factor in the process of organisational legitimacy assessment. The methodological approach in this study is supported by the application of content analysis to identify and examine the disclosed sustainability indicators of a major Australian financial institution (Westpac). The theoretical lens of legitimacy theory and the Balanced Scorecard (BSC) are used as points of reference to inform and structure the overall theoretical framework of this study. The results indicate that the four perspectives of a traditional BSC correlate with the main sources of influential inputs to Westpac’s sustainability reporting. In addition, the SBSC presented in this article successfully illustrates focal areas of reporting practice, providing a succinct overview of an organisation’s reporting activities. The primary contributions of this research are to the literature on social and environmental disclosures, including the research of Do, Tilt and Tilling (2007), and Baxter, Chua and Strong (2010) and the provision of a practical technique to illustrate the focal activity of an organisation’s social and environmental reporting as part of the legitimisation process.

    http://ro.uow.edu.au/aabfj/vol8/iss2/3 2014/07/01 - 18:21
  • This paper examines the efficiency of the Treasury Bond futures market in Australia. We provide a comprehensive explanation of the method used to price, and evaluate efficiency of the 3 and 10 Year Australian Treasury Bond Futures contracts, against underlying bond baskets. Results indicate that the futures contracts exhibit minimal variation from their theoretical value. The average mispricing equates to 1.96 basis points for 3 Year and 1.19 basis points for 10 Year government bond futures contracts. However, during some periods (including the financial crisis of 2008), the bond futures contracts exhibit greater mispricing. Consistent with prior literature, we find a decreasing pattern of mispricing towards expiry, with the futures contract yields and average forward yields of the underlying bonds converging towards expiry. Further analysis reveals that volatility and time to expiry exhibit a significant positive relationship with the absolute level of mispricing.

    http://ro.uow.edu.au/aabfj/vol8/iss2/2 2014/07/01 - 18:21
  • Editorial AABFJ Volume 8, Issue 2

    http://ro.uow.edu.au/aabfj/vol8/iss2/1 2014/07/01 - 18:21
  • This paper models the price and income elasticity of retail finance in Australia using aggregate quarterly data and an autoregressive distributed lag (ARDL) approach. We particularly focus on the impact of the global financial crisis (GFC) from 2007 onwards on retail finance demand and analyse four submarkets (period analysed in brackets): owneroccupied housing loans (Sep 1985–June 2010), term loans (for motor vehicles, household goods and debt consolidation, etc.) (Dec 1988–Jun 2010), credit card loans (Mar 1990–Jun 2010), and margin loans (Sep 2000–Jun 2010). Other than the indicator lending rates and annual full-time earnings respectively used as proxies for the price and income effects, we specify a large number of other variables as demand factors, particularly reflecting the value of the asset for which retail finance demand is derived. These variously include the yield on indexed bonds as a proxy for inflation expectations, median housing prices, consumer sentiment indices as measures of consumer confidence, motor vehicle and retail trade sales, housing debt-to-housing assets as a measure of leverage, the proportion of protected margin lending, the available credit limit on credit cards, and the All Ordinaries Index. In the long run, we find significant price elasticities only for term loans and margin loans, and significant income elasticities of demand for housing loans, term loans and margin loans. We also find that the GFC only significantly affected the long-run demand for term loans and margin loans. In the short run, we find that the GFC has had a significant effect on the price elasticity of demand for term loans and margin loans. Expected inflation is also a key factor affecting retail finance demand. Overall, most of the submarkets in the analysis indicate that retail finance demand is certainly price inelastic but more income elastic than conventionally thought.

    http://ro.uow.edu.au/aabfj/vol8/iss1/7 2014/04/03 - 17:49
  • This paper examines the use of fair value accounting for investment properties by 96 randomly selected Chinese listed companies’ year-ending 2008 annual reports. Half the sampled companies use fair value while half use historical cost, both methods being allowable under International Financial Reporting Standards (IFRS) and Chinese Accounting Standards (CAS). This represents the lowest possible level of comparability (or harmony) when there are only two choices of method. A combination of T indices to summarise the level of comparability and logistic regression reveals that companies with an international influence (listed on international stock exchanges and/or with international operations) are more likely to use fair value. Furthermore, there is evidence that companies with above average volatility in earnings are more likely to use fair value than historical cost. The consequences for domestic and international harmony for regulators and investors is discussed in the context of the opening of Chinese markets to international investment.

    http://ro.uow.edu.au/aabfj/vol8/iss1/6 2014/04/03 - 17:49
  • This paper examines changes in returns and trading volumes around earnings announcements for firms which have both A-shares (traditionally for local investors only) and B-shares (traditionally for foreign investors only) in China. It considers the impact of regulatory changes which reduced the segmentation of local and foreign investors across the two classes of shares. We find that both the A- and B-markets experience significant price changes around earning announcements. When the two markets are fully segmented, the magnitude of price changes in the A-share market are significantly smaller than the B-market which lends empirical support to the previous claim that the B-market is less informed. The changes in trading volume indicate that the B-market investors have less divergent expectations and interpretations of the pre-disclosure information compared to the A-market investors.However, when regulatory changes reduced the level of segmentation, the price and volume reactions in the two markets became more consistent. The results suggest that the A- and Bmarkets are more integrated as a result of the regulatory changes.

    http://ro.uow.edu.au/aabfj/vol8/iss1/5 2014/04/03 - 17:49
  • This paper examines the perceptions of practitioners of the new directions taken by NZICA with respect to its academic and professional programme requirements to obtain CA Institute membership. The “future viability of any professional body is dependent on continuously attracting new members, ideally the best and the brightest new tertiary graduates”, and this is “undoubtedly the case for New Zealand’s professional accounting body, the New Zealand Institute of Chartered Accountants (NZICA)” (Malthus & Fowler 2009, p. 26). In this study, the concurrent triangulation approach to mixed methods described by Creswell (2009) was used to collect data. This approach enabled the results of the two quantitative and qualitative databases to be integrated and compared.
    It was found that accounting practitioners felt the changes made by NZICA may devalue the brand, while the reduction in liberal papers would result in a narrower degree. Overall, accounting practitioners agreed that three to four years of tertiary accounting education was adequate, a broader four-year course would result in a better-rounded graduates. The reduction in the length of the tertiary programme caused concern that future graduates would be less mature. Accounting practitioners also felt that the changes would harm the credibility of NZICA internationally. However, some accounting practitioners did welcome the fact that the NZICA membership requirements will be more aligned with Institute of Chartered Accountants Australia. Accounting practitioners felt that the new technical modules would offer more flexibility. They believed that the four technical modules should repeat the material taught at university, as long as a balance was maintained between technical and practical skills. They also believed that the changes would result in an increased onus on the employer. Additionally, accounting practitioners agreed that on-the-job training should not replace a tertiary qualification in accounting. Accounting practitioners noted that on-the-job training replacing tertiary education meant that individuals who learn better through practical experience would be advantaged. However, if there was no tertiary education, then graduates would face a steep learning curve.

    http://ro.uow.edu.au/aabfj/vol8/iss1/4 2014/04/03 - 17:49
  • Purpose: The objective of this study is twofold. Firstly, to examine the extent of social and environmental reporting in Australia, selected Global Reporting Initiative (GRI, 2002) social and environmental reporting guidelines were used to determine the extent; secondly, to analyse the association between firm characteristics and Levels of Social and Environmental reporting (SER), regression analysis was used to test the hypotheses.
    Design/methodology/approach: This study investigated SER practices of 47 small and large Australian companies drawn from five industries. Using seventeen social and eighteen environmental disclosure indicators, the study evaluates disclosure information presented in annual reports. Regression analysis was used to empirically examine the determinants of SER.
    Findings: The results indicated that the extent of SER by Australian Companies was fairly low and the extent of total disclosure was significantly higher for large organisations in the Industrial Transport industry. Companies with negative return on total assets reported significantly higher social information. The extent of total disclosure was unrelated to an organisation’s age and external auditor size.
    Originality/value: The study provided a detailed analysis of the SER from the developing economy perspective using GRI social and environmental performance indicators.
    Research limitations/implications: The study was limited by the use of selected GRI social and environmental indicators.
    Practical and Social implications: The paper argues for greater social and environmental accounting researcher engagement with SEA practice. The study showed the gap and challenge still lies ahead in improving the quantity and quality of SEA from a developed economy perspective.

    http://ro.uow.edu.au/aabfj/vol8/iss1/3 2014/04/03 - 17:49
  • An initial public offering (IPO) represents one of the final stages in the life of a small firm as it transitions from private to public. In this paper the experience of directors is examined to determine the extent of the role they play in ensuring a successful listing. Unique data from 122 IPOs on the Swedish Stock Exchange have been examined in a search for the effect of director experience on aftermarket performance. Specific aspects of director experience within a board, such as interlocking directorships and average tenure, are connected to the underpricing of Swedish IPOs. Contrary to expectations, no statistically significant relationship was found between long-run aftermarket performance and director experience at the time of an IPO. This suggests that the previous experience of directors, as measured in earlier studies, is less relevant to long-term aftermarket performance in Sweden compared to other countries studied in the literature review. This emphasises the importance of examining different institutional contexts.

    http://ro.uow.edu.au/aabfj/vol8/iss1/2 2014/04/03 - 17:49
  • The articles published in this issue of AABFJ are drawn from accounting, economics and finance discipline areas.

    http://ro.uow.edu.au/aabfj/vol8/iss1/1 2014/04/03 - 17:49
  • This paper describes a critical analysis of three recently published theoretical frameworks developed to explain management control design within inter-organisational collaborations. The particular concern is that, despite a plethora of theoretical frameworks attempting to explain management control design choices, these frameworks have yet to be utilised in practice. The focus is on their respective ability to explain control change in response to coordination problems, recognising the interactive nature of inter-organisational relationships. It adopts an approach previously used in the accounting literature for the purpose of promoting discussion and critical reflection. The resulting case study analysis provides critical insight on how each of the frameworks can influence discipline-specific understanding of control evolution. Improved understanding is expected to indicate potential usefulness to accounting practice. Hence, within inherent limitations, the paper reflects on opportunities to consolidate extant management accounting theory.

    http://ro.uow.edu.au/aabfj/vol7/iss4/6 2013/12/19 - 13:22
  • The aim of the paper is to investigate the relationship between audit committee characteristics and earnings management. Samples in the study included 50 industrial companies listed on the Amman Stock Exchange ASE. Two models were used to measure earnings quality: one which depends on earnings continuity as an indication of quality, and one which depends on the decrease of discretionary accruals of quality, using pooled data regression for the two tests (Ordinary Least Squares OLS and Binary Logit). The study found that there was an influence of some standard characteristics of the audit committee on earnings quality.

    http://ro.uow.edu.au/aabfj/vol7/iss4/5 2013/12/19 - 13:22
  • State-owned enterprises (SOEs) are legally private entities used in many jurisdictions to satisfy public needs, mostly through extensive consumption of public funds. While the nature of purposes pursued and of resources employed affects their accountability in a public sense, their financial reporting requirements are set on the basis of their legal form and this may end up generating a misalignment between accountability and reporting. Such a misalignment significantly impairs the effectiveness of financial reporting and limits the relevant public authorities’ ability to control. The case of Italian SOEs is a fine example. These were created as incorporated entities fully or partially owned by local governments willing to dislocate the production of public services, especially utilities. Such companies have benefitted, thanks to the chosen legal form, from a private style financial reporting model that has significantly eased the controls normally existing on public administrations, and which has favoured massive misuse of public funds and largely illegal management conducts. This paper advocates for significant amendments to the financial reporting model they inherit from the legal form, in order to realign their private-style accounting obligations with their public-style accountability.

    http://ro.uow.edu.au/aabfj/vol7/iss4/4 2013/12/19 - 13:22
  • Our study addresses the research gap regarding the absence of an empirical cross-country study on the determinants of the strength of auditing and reporting standards (SARS). Using data on 133 countries at various stages of development, we examine the role of environmental factors that influence a country’s strength of auditing and reporting standards. Our empirical results confirm that institutional infrastructure, financial market development and higher education and training jointly influence a country’s strength of auditing and reporting standards. We obtain qualitatively similar subsample results when we partition countries on the basis of economic development.

    http://ro.uow.edu.au/aabfj/vol7/iss4/3 2013/12/19 - 13:22
  • Auditing standards require an auditor to make various enquiries about liabilities in general this may entail consideration of potential litigations and claims that the audited entity may be facing. To perform this part of audit, the auditors will generally seek representation letters from lawyers of the company detailing an estimate prepared by management, confirmed by their lawyers through a representation letter, and then sent directly to the auditors.
    This paper reviews the implications for the auditing profession of a case that involved auditors seeking such representation letters. The case involves litigation between the Westpac Banking Corporation and 789TEN Pty Ltd. While the Westpac case confirmed the legal position of the auditor in their task of collecting evidence in order to form an opinion in Australia, it highlights a significant anomaly under the law and should place the issue of solicitor’s representation letters as audit evidence firmly on the agenda of policymakers.
    This issue of the compromise of legal privilege during the conduct of an audit is also not confined to Australia: other common law jurisdictions, such as the UK and the US, have also sought to clarify the position of auditors when issues of the integrity of legal privacy privilege arise.

    http://ro.uow.edu.au/aabfj/vol7/iss4/2 2013/12/19 - 13:22
  • Indonesia has taken initiatives to reform its public sector financial management. One of the reform agendas was to introduce ‘cash to accrual’ accounting for improved financial reporting. It is expected that improved financial reporting will enhance financial accountabilities of the governmental agencies and will assist both internal and external decision makers whose decisions will be based on the financial reports. However, it has been observed that there is a significant increase in the number of qualified audit reports when these financial reports were audited. This also means that these financial reports are lacking in providing true and fair views on the financial activities of the governmental agencies, thereby not assisting in discharging their accountabilities. This study seeks to answer the question as to why the numbers of qualified audit reports have increased despite the existence of various governmental accounting reform agendas. Based on the in-depth case studies of three Indonesian local governments, it is found that the demand, the supply and the quality assurance of the accounting information outputs in these local governments are not in parity, and this lacking in parties actually has impacted in producing unqualified and usable accounting reports.

    http://ro.uow.edu.au/aabfj/vol7/iss4/7 2013/12/19 - 13:22
  • http://ro.uow.edu.au/aabfj/vol7/iss4/1 2013/12/18 - 01:51
  • We explore two approaches (cohort versus hazard) to measure the probability of investment rate migrations of pension funds in Australia. We also develop validation procedures pertinent to each approach and find that the cohort method is more stable in its forecasts and reports a lesser migration probability to lower investment grades with minimal statistical significance. Conversely, the hazard approach reports a higher migration probability to lower investment grades with statistical significance. This finding has considerable consequences for fund managers as they seek to mitigate any downward trends in their investment appraisals, especially as the cohort approach is the industry’s preferred approach in calculating rating migrations. The fund manager has a choice to make regarding measuring probability investment rate migrations, one between: stability (cohort) or accuracy (hazard).

    http://ro.uow.edu.au/aabfj/vol7/iss3/9 2013/10/30 - 08:41
  • Voluntary superannuation contributions provide a means for individuals to top-up their savings in a tax advantaged environment. In order to encourage voluntary contributions the government instituted the co-contribution scheme in 2003. Under the existing scheme, within a given financial year the government contributes up to a maximum of $500 when an individual on a low income makes a voluntary contribution of up to $1,000. Despite the apparent financial attractiveness of the scheme, participation among eligible persons is low. Reasons may include competing expenditure needs leading to a lack of sufficient funds for contribution, lack of trust in the system given regular changes to superannuation policy, and behavioural reasons including a short-term rather than long-term focus, procrastination from uncertainty and fear of regret, and loss aversion. In this paper we investigate another possible reason for low participation, namely poor financial opportunity cost. While an immediate 50% investment return may appear to be a ‘no-brainer’, for eligible individuals or families with mortgages, scheme participation may in fact not be optimal. We investigate the relative benefit of scheme participation versus reducing a mortgage, and conclude that while participation is sensible for those with short remaining mortgage terms, for those with longer mortgage terms the decision to participate may not be preferred unless one assumes generous long-term superannuation investment returns, or unless scheme participation is intended year on year for long durations.

    http://ro.uow.edu.au/aabfj/vol7/iss3/8 2013/10/30 - 08:41
  • Australians’ high use of personal debt is, in part, attributable to the relaxation of the financial services regulation. There is concern that while debt has the potential to increase a person’s wealth, if used ineffectively it can have the opposite effect. This paper details a study of 680 Australians to ascertain whether their financial capability is related to the effective use of personal debt. The findings suggest that it appears people with greater financial capability are more likely to use debt effectively.

    http://ro.uow.edu.au/aabfj/vol7/iss3/7 2013/10/30 - 08:41
  • Financial planning requires students to display tacit learning. However, the traditional teaching approach concentrates on theory development independent of any applied connection with the profession. This paper uses an adaptation of the Goetz et al. (2005) model to demonstrate how curricula can provide a smoother progression into the financial planning profession. Further, a number of teaching strategies are described to provide a closer connection with the profession.

    http://ro.uow.edu.au/aabfj/vol7/iss3/6 2013/10/30 - 08:41
  • Over the last two decades the need for a financially literate population has grown in importance. Hence in Australia, it is imperative that individuals possess both the financial knowledge and capability to make sound financial decisions. In contrast, the results of the Australian & New Zealand Bank (ANZ) surveys from 2003 to 2010 have demonstrated that there is a substantial deficiency in the level of financial literacy amongst many of the Australian population.
    Both the government and the private sector have encouraged the development of financial education programs as an important tool in remedying the detected low levels of financial literacy as reported in the ANZ research. The Australian Security and Investment Commission (ASIC), the government regulator, has strongly promoted the need to develop confident and informed consumers and investors through the provision of quality financial education. ASIC’s focus was reiterated in its Report 229, the National Financial Literacy Strategy. This report which was announced in March 2011 set out the strategy for the development and delivery of initiatives to improve financial literacy levels in Australia (ASIC 2011).
    In particular, the National Strategy has been developed to improve the level of financial literacy among Australian students. The focus is on incorporating financial education through the existing school curriculum, beginning in kindergarten through to year 12 students.
    The aim of this research paper is to challenge and ask questions relating to the Australian Government’s financial literacy strategy directed at schools. This direction would appear to have limited support of success, given the evidence published in the USA, and to a limited extent in the United Kingdom and Europe. This study reviews the current evidence available in both Australia and the USA in relation to financial literacy projects in schools. In respect of the international experience this paper explores the possible reasons for their limited success, and in some cases failure, to deliver the desired outcomes.
    In Australia there has been no academic research as to the possible effectiveness of teaching financial literacy at a school level. Given the USA research into such initiatives, this paper seeks to question the policy direction of the government in Australia. This paper also challenges the validity of the current Australian approach. The emphasis placed upon school financial literacy programs defies the wealth of evidence overseas which has failed to identify any measurable improvement in financial knowledge, attitudes and behaviour as a result of imbedding financial literacy in school education curriculum.

    http://ro.uow.edu.au/aabfj/vol7/iss3/5 2013/10/30 - 08:41
  • Fund disclosure is an important communication tool between trustees and fund members for product comparison and credibility verification. We examine what drives Australian not-forprofit superannuation funds to disclose their fund product information to the market. Our research derives a model that shows how the proprietary costs of disclosure and fund governance drive the disclosure of information about trustee, investment agents, fees, and overall practices. The research findings indicate that disclosure costs have a significant negative influence on voluntary disclosure, while board size has a weak positive relation with disclosure. Board independence is an unreliable and insignificant explanatory variable for voluntary disclosure. We discuss how the multi-layer agency relationship and institutional factors in the superannuation funds industry influence the power of these factors and their effects on voluntary disclosure.

    http://ro.uow.edu.au/aabfj/vol7/iss3/4 2013/10/30 - 08:41
  • Poor financial literacy may lead to poor life choices. These life choices can create or contribute to financial stress with adverse consequences - not the least of which may be homelessness. These issues are relatively well understood, but there is limited research on the link between financial stress, financial literacy and counselling, and homelessness. Specifically, there has been little research on how improved financial literacy and appropriate financial counselling might help to prevent homelessness.
    This paper synthesises existing literature on this topic and considers these issues using the ABCX family stress model of Hill (1958) using data from an Australian program aimed at alleviating family homelessness, the Home Advice Program. We provide evidence that suggests that case management and support which incorporates financial counselling and financial literacy can assist in moderating the impact of financial stress and help those at risk of homelessness. The findings have implications for public policy in the areas of financial education, consumer finance, and social services provision.

    http://ro.uow.edu.au/aabfj/vol7/iss3/3 2013/10/30 - 08:41
  • The use of lifetime annuities is one obvious candidate to deliver guaranteed income in retirement. This paper quantifies the marginal increase in income to a single male when compelled to purchase a lifetime annuity from superannuation savings, compared to the current position of voluntary annuitisation in the Australian market. It is found that significant increases in average income are possible under compulsion, with an associated decrease in the cost of the age pension. Future mortality is shown to be the key area of sensitivity. The critical importance of future age pension eligibility rules being adaptable in line with mortality changes is demonstrated.

    http://ro.uow.edu.au/aabfj/vol7/iss3/2 2013/10/30 - 08:41
  • The Global Financial Crisis (GFC); changes in regulation; issues in public perception and trust have contributed to a troubled 2013 for financial planners. As financial planning and wealth management providers seek to bolster their professional status, the Financial Planning Education Council’s National Curriculum and Accreditation Framework and ASIC’s minimum training requirements are also a space to watch.
    In prospect, 2014 will offer opportunities and challenges in the form of a changed government; regulatory changes; accreditation challenges and the hope of the recruitment of strong financial planning and wealth management professionals for the future.

    http://ro.uow.edu.au/aabfj/vol7/iss3/1 2013/10/30 - 08:41
  • The purpose of this paper is to investigate the effect of better compliance with corporate governance regulation on managerial accruals (discretionary accruals) in New Zealand listed companies. Unlike previous research of earnings management, Jones model (Jones 1991), Modified Jones model (Dechow, Sloan, & Sweeney, 1995) and Performance Matched Accruals Model (Kothari, Leone, & Wasley, 2005) this research focuses on free cash flow as a measure of discretionary accruals instead of cash flow from operating activities. Univariate and multivariate regression analysis was done on 70 New Zealand listed firms over the period of 2000 - 2007 (inclusive). Results found that better compliance with corporate governance reduces discretionary accruals implying lower managerial opportunistic behaviour. Consistent with existing theories and models of discretionary accruals, this research documents that free cash flow increase managerial discretion by comparing with commonly used accruals model such as Jones Model, Modified Jones Model and Performance Matched Accruals Model. This study provides insights to regulators in developing corporate governance and financial reporting guidelines. It suggests that ‘Comply or Explain’ form of soft regulation reduces managerial discretion with stock exchange listing. This research uses a comparative analysis of traditional discretionary accrual measure with free cash flow approach of discretionary accruals. Moreover, an integration approach of discretionary accrual measure was never done in New Zealand.

    http://ro.uow.edu.au/aabfj/vol7/iss2/7 2013/06/18 - 18:44