Compliance with international financial reporting standards (IFRS) and the value relevance of accounting information in emerging stock markets : evidence from Kuwait

Since the 1960s, the value relevance of accounting information has been an important topic in accounting research. The value relevance research provides evidence as to whether accounting numbers relate to corporate value in a predicted manner (Beaver, 2002). Such research is not only important for investors but also provides useful insights into accounting reporting effectiveness for standard setters and other users. Both the quality of accounting standards used and the effectiveness associated with implementing these standards are fundamental prerequisites for high value relevance (Hellstrom, 2006). However, while the literature comprehensively documents the value relevance of accounting information in developed markets, little attention has been given to emerging markets where the quality of accounting standards and their enforcement are questionable. Moreover, there is currently no known research that explores the association between level of compliance with International Financial Reporting Standards (IFRS) and the value relevance of accounting information. Motivated by the lack of research on the value relevance of accounting information in emerging markets and the unique institutional setting in Kuwait, this study has three objectives. First, it investigates the extent of compliance with IFRS with respect to firms listed on the Kuwait Stock Exchange (KSE). Second, it examines the value relevance of accounting information produced by KSE-listed firms over the 1995 to 2006 period. The third objective links the first two and explores the association between the level of compliance with IFRS and the value relevance of accounting information to market participants. Since it is among the first countries to adopt IFRS, Kuwait provides an ideal setting in which to explore these objectives. In addition, the Kuwaiti accounting environment provides an interesting regulatory context in which each KSE-listed firm is required to appoint at least two external auditors from separate auditing firms. Based on the research objectives, five research questions (RQs) are addressed. RQ1 and RQ2 aim to determine the extent to which KSE-listed firms comply with IFRS and factors contributing to variations in compliance levels. These factors include firm attributes (firm age, leverage, size, profitability, liquidity), the number of brand name (Big-4) auditing firms auditing a firm’s financial statements, and industry categorization. RQ3 and RQ4 address the value relevance of IFRS-based financial statements to investors. RQ5 addresses whether the level of compliance with IFRS contributes to the value relevance of accounting information provided to investors. Based on the potential improvement in value relevance from adopting and complying with IFRS, it is predicted that the higher the level of compliance with IFRS, the greater the value relevance of book values and earnings. The research design of the study consists of two parts. First, in accordance with prior disclosure research, the level of compliance with mandatory IFRS is examined using a disclosure index. Second, the value relevance of financial statement information, specifically, earnings and book value, is examined empirically using two valuation models: price and returns models. The combined empirical evidence that results from the application of both models provides comprehensive insights into value relevance of accounting information in an emerging market setting. Consistent with expectations, the results show the average level of compliance with IFRS mandatory disclosures for all KSE-listed firms in 2006 was 72.6 percent; thus, indicating KSE-listed firms generally did not fully comply with all requirements. Significant variations in the extent of compliance are observed among firms and across accounting standards. As predicted, older, highly leveraged, larger, and profitable KSE-listed firms are more likely to comply with IFRS required disclosures. Interestingly, significant differences in the level of compliance are observed across the three possible auditor combinations of two Big-4, two non-Big 4, and mixed audit firm types. The results for the price and returns models provide evidence that earnings and book values are significant factors in the valuation of KSE-listed firms during the 1995 to 2006 period. However, the results show that the value relevance of earnings and book values decreased significantly during that period, suggesting that investors rely less on financial statements, possibly due to the increase in the available non-financial statement sources. Notwithstanding this decline, a significant association is observed between the level of compliance with IFRS and the value relevance of earnings and book value to KSE investors. The findings make several important contributions. First, they raise concerns about the effectiveness of the regulatory body that oversees compliance with IFRS in Kuwait. Second, they challenge the effectiveness of the two-auditor requirement in promoting compliance with regulations as well as the associated cost-benefit of this requirement for firms. Third, they provide the first known empirical evidence linking the level of IFRS compliance with the value relevance of financial statement information. Finally, the findings are relevant for standard setters and for their current review of KSE regulations. In particular, they highlight the importance of establishing and maintaining adequate monitoring and enforcement mechanisms to ensure compliance with accounting standards. In addition, the finding that stricter compliance with IFRS improves the value relevance of accounting information highlights the importance of full compliance with IFRS and not just mere adoption.

Developing a model of care to improve the health and well-being for Indigenous people receiving renal dialysis treatment

The high levels of end-stage renal disease among Indigenous Australians, particularly in remote areas of the country, are a serious public health concern. The magnitude of the problem is reflected in figures from the Australian and New Zealand Transplant and Dialysis Registry that show that Indigenous Australians experience end-stage renal disease at a rate almost 9–10 times higher than other non-Indigenous Australians. A majority of Indigenous Australians have to relocate to receive appropriate renal dialysis treatment. In some Australian states, renal treatment is based on self-care dialysis which allows those Indigenous Australians to be treated back in their community. Evidence clearly shows that reuniting renal patients with community and family improves overall health and well-being for those Indigenous Australians. With the appropriate resources, training, and support, self-care management of renal dialysis treatment is an effective way for Indigenous people with end-stage renal failure to be treated at home. In this context, the study was used to gain insight and further understanding of the impact that end-stage renal disease and renal dialysis treatment has had on the lives of Indigenous community members. The study findings are from 14 individually interviewed people from South East Queensland. Data from the interviews were analysed using a combination of thematic and content analysis. The study methodology was based on qualitative data principles where the Indigenous community members were able to share their experiences and journeys living with end-stage renal disease. Many of the experiences and understanding closely relate to the renal disease pattern and the treatment with other outside influences, such as social, cultural, and environmental influences, all having an equal impact. Each community member’s experience with end-stage renal disease is unique; some manage with family and medical support, while others try to manage independently. From the study, community members who managed their renal dialysis treatment independently were much more aware of their renal health status. The study provides recommendations towards a model of care to improve the health and well-being is based on self-care and self-determination principles.

Nitrogen fertilizer rate management as a nitrous oxide mitigation strategy: Development of a nitrous oxide emission reduction protocol (NERP)

Nitrous oxide (N2O) is a potent agricultural greenhouse gas (GHG). More than 50% of the global anthropogenic N2O flux is attributable to emissions from soil, primarily due to large fertilizer nitrogen (N) applications to corn and other non-leguminous crops. Quantification of the trade–offs between N2O emissions, fertilizer N rate, and crop yield is an essential requirement for informing management strategies aiming to reduce the agricultural sector GHG burden, without compromising productivity and producer livelihood. There is currently great interest in developing and implementing agricultural GHG reduction offset projects for inclusion within carbon offset markets. Nitrous oxide, with a global warming potential (GWP) of 298, is a major target for these endeavours due to the high payback associated with its emission prevention. In this paper we use robust quantitative relationships between fertilizer N rate and N2O emissions, along with a recently developed approach for determining economically profitable N rates for optimized crop yield, to propose a simple, transparent, and robust N2O emission reduction protocol (NERP) for generating agricultural GHG emission reduction credits. This NERP has the advantage of providing an economic and environmental incentive for producers and other stakeholders, necessary requirements in the implementation of agricultural offset projects.

Developing speaking assessment tasks to reflect the 'social turn' in language testing

Interactional competence has emerged as a focal point for language testing researchers in recent years. In spoken communication involving two or more interlocutors, the co-construction of discourse is central to successful interaction. The acknowledgement of co-construction has led to concern over the impact of the interlocutor and the separability of performances in speaking tests involving interaction. The purpose of this article is to review recent studies of direct relevance to the construct of interactional competence and its operationalisation by raters in the context of second language speaking tests. The review begins by tracing the emergence of interaction as a criterion in speaking tests from a theoretical perspective, and then focuses on research salient to interactional effectiveness that has been carried out in the context of language testing interviews and group and paired speaking tests.

Geekdom for Grrrls health : Australian undergraduate experiences developing and promoting women’s health in cyberspace

There is an increasing global reliance on the Internet for retrieving information on health, illness, and recovery (Sillence et al, 2007; Laurent et al, 2009; Adams, 2010). People suffering from a vast array of illnesses, conditions, and complaints, as well as healthy travelers seeking advice about safe practices abroad, and teens seeking information about safe sexual practices are all now more likely to go to the internet for information than they are to rely solely on a general practitioner or physician (Santor et al, 2007; Moreno et al, 2009; Bartlett et al, 2010). Women in particular seek advice and support online for a number of health-related concerns regarding issues such as puberty, conception, pregnancy, postnatal depression, mothering, breast-cancer recovery, and ageing healthily (van Zutphen, 2008; Raymond et al, 2005). In keeping with this increasing socio-technological trend, the Women’s Health Unit at the Queensland University of Technology (Q.U.T), Brisbane, Australia, introduced the research, design, and development of online information resources for issues affecting the health of Australian women as an assessment item for students in the undergraduate Public Health curriculum. Students were required to research a particular health issue affecting Australian women, including pregnancy, pregnancy terminations, postnatal depression, returning to the work force after having a baby, breast cancer recovery, chronic disease prevention, health and safety for sex-workers, and ageing healthily. Students were required to design and develop websites that supported people living with these conditions, or who were in these situations. The websites were designed for communicating effectively with both women seeking information about their health, and their health practitioners. The pedagogical challenge inherent in this exercise was twofold: firstly, to encourage students to develop the skills to design and maintain software for online health forums; and secondly, to challenge public health students to go beyond generating ‘awareness’ and imparting health information to developing a nuanced understanding of the worlds and perspectives of their audiences, who require supportive networks and options that resonate with their restrictions, capabilities, and dispositions. This latter challenge spanned the realms of research, communication, and aesthetic design. This paper firstly, discusses an increasing reliance on the Internet by women seeking health-related information and the potential health risks and benefits of this trend. Secondly, it applies a post-structural analysis of the de-centred and mobile female self, as online social ‘spaces’ and networks supersede geographical ‘places’ and hierarchies, with implications for democracy, equality, power, and ultimately women’s health. Thirdly, it depicts the processes (learning reflections) and products (developed websites) created within this Women’s Health Unit by the students. Finally, we review this development in the undergraduate curriculum in terms of the importance of providing students with skills in research, communication, and technology in order to share and implement improved health care and social marketing for women as both recipients and providers of health care in the Internet Age.

Elements of public asset management framework for local governments in developing countries

There is a widespread recognition to the need of better manage municipal property in most cities in the world. Structural problems across regional, state, and territorial governments that have legal powers to own and maintain real property are similar, regardless of the level of development of each country. Start from a very basic level of property inventory records. The need for better manage to the local government owned property is the result of widespread decentralisation initiatives that often have devolved huge property portfolios from central to local governments almost “overnight”. At the same time municipal or regional governments were and continue to be unprepared to deal with multiple issues related to the role of property owners and managers. The lack of discussion of public asset management especially the elements that should be incorporated in the framework creates an important challenge to study the discipline of public asset management further. The aim of this paper is to study the practices of public asset management in developed countries, especially the elements of public asset management framework, and its transferability to developing countries. A case study was selected and conducted to achieve this aim. They involved interviews and a focus group. The study found that in public asset management framework, proper asset identification, public asset needs analysis, asset life cycle and performance measurements are an important element that should be incorporated in the framework. Those elements are transferable and applicable to developing countries’ local governments. Finally, findings from this study provide useful input for the local government policy makers, scholars and asset management practitioners to establish a public asset management framework toward more efficient and effective local governments in managing their assets as well as increasing public services quality.

Developing risk assessment tools for fleet settings : where to from here?

The costs of work-related crashes In Australia and overseas, fleet safety or work-related road safety is an issue gaining increased attention from researchers, organisations, road safety practitioners and the general community. This attention is primarily in response to the substantial physical, emotional and economic costs associated with work-related road crashes. The increased risk factors and subsequent costs of work-related driving are also now well documented in the literature. For example, it is noteworthy that research has demonstrated that work-related drivers on average report a higher level of crash involvement compared to personal car drivers (Downs et al., 1999; Kweon and Kockelman, 2003) and in particular within Australia, road crashes are the most common form of work-related fatalities (Haworth et al., 2000).

Feasibility of open markets for mainline railways in China

For decades, the development, construction, track ownership and operation of mainline railways in China have been overseen by the state-owned authorities. From mid-90’s, the mainline railway management has undergone revamps to revitalize the intra-modal competitiveness of railway transportation and to steer it toward the direction of modern business management. With the rapid economic growth; the large-scale expansion of the mainline network; and the increasing expectation on service, the mainline railways in China require further restructuring. Inevitably, a sustainable approach to ensure business viability and service quality in the next few decades is an imminent challenge. This paper reviews the operations and management of mainline railway in China and discusses the possibility of introducing open access market. Drawing the experiences on railway open markets outside China, the discussions include the need and feasibility of railway open market in China; and the suitability and limitations of different models. Particular considerations will be given to the unique characteristics of the mainline railways in China, where the developments across neighbouring regions are unbalanced; freight and passenger services are of similar demands; and the high-speed train operations are operated with low-speed ones in mixed traffic.