The non-binding vote on executive pay : a review of the CLERP 9 reform

Directors’ and executives’ remuneration, including levels of pay, accountability and transparency, is controversial. Section 250R of the CLERP (Audit Reform & Disclosure) Act 2004 that was not greatly anticipated, requires the holding of a non-binding resolution on board remuneration at companies’ annual general meetings. The reform has been criticised on the basis that, inter alia, it blurs the respective roles of shareholders and directors. This article identifies possible motivations for the imposition of the non-binding resolution in Australia. These are evaluated with reference to sources of corporate governance policy and the current state of Australia’s relevant corporate governance structures. We speculate that the non-binding vote will not amount to a substantive addition to the corporate governance regime.

A risk simulation framework for information infrastructure protection

Information communication and technology (ICT) systems are almost ubiquitous in the modern world. It is hard to identify any industry, or for that matter any part of society, that is not in some way dependent on these systems and their continued secure operation. Therefore the security of information infrastructures, both on an organisational and societal level, is of critical importance. Information security risk assessment is an essential part of ensuring that these systems are appropriately protected and positioned to deal with a rapidly changing threat environment. The complexity of these systems and their inter-dependencies however, introduces a similar complexity to the information security risk assessment task. This complexity suggests that information security risk assessment cannot, optimally, be undertaken manually. Information security risk assessment for individual components of the information infrastructure can be aided by the use of a software tool, a type of simulation, which concentrates on modelling failure rather than normal operational simulation. Avoiding the modelling of the operational system will once again reduce the level of complexity of the assessment task. The use of such a tool provides the opportunity to reuse information in many different ways by developing a repository of relevant information to aid in both risk assessment and management and governance and compliance activities. Widespread use of such a tool allows the opportunity for the risk models developed for individual information infrastructure components to be connected in order to develop a model of information security exposures across the entire information infrastructure. In this thesis conceptual and practical aspects of risk and its underlying epistemology are analysed to produce a model suitable for application to information security risk assessment. Based on this work prototype software has been developed to explore these concepts for information security risk assessment. Initial work has been carried out to investigate the use of this software for information security compliance and governance activities. Finally, an initial concept for extending the use of this approach across an information infrastructure is presented.

Not-for-profit ratios for financial resilience and internal accountability : a study of Australian international aid organisations

Not-for-profit (NFP) financial ratio research has focused primarily on organisational efficiency measurements for external stakeholders. Ratios that also capture information about stability, capacity (liquidity), gearing and sustainability, enable an assessment of financial resilience. They are thus valuable tools that can provide a framework of internal accountability between boards and management. The establishment of an Australian NFP regulator highlights the importance of NFP sustainability, and affirms the timeliness of this paper. We propose a suite of key financial ratios for use by NFP boards and management, and demonstrate its practical usefulness by applying the ratios to financial data from the 2009 reports of ACFID (Australian Council for International Development)-affiliated international aid organisations.

Putting the Repository First: Implementing a Repository to RIS Workflow for QUT ePrints

As one of the first institutional repositories in Australia and the first in the world to have an institution-wide deposit mandate, QUT ePrints has great ‘brand recognition’ within the University (Queensland University of Technology) and beyond. The repository is managed by the library but, over the years, the Library’s repository team has worked closely with other departments (especially the Office of Research and IT Services) to ensure that QUT ePrints was embedded into the business processes and systems our academics use regularly. For example, the repository is the source of the publication information which displays on each academic’s Staff Profile page. The repository pulls in citation data from Scopus and Web of Science and displays the data in the publications records. Researchers can monitor their citations at a glance via the repository ‘View’ which displays all their publications. A trend in recent years has been to populate institutional repositories with publication details imported from the University’s research information system (RIS). The main advantage of the RIS to Repository workflow is that it requires little input from the academics as the publication details are often imported into the RIS from publisher databases. Sadly, this is also its main disadvantage. Generally, only the metadata is imported from the RIS and the lack of engagement by the academics results in very low proportions of records with open access full-texts. Consequently, while we could see the value of integrating the two systems, we were determined to make the repository the entry point for publication data. In 2011, the University funded a project to convert a number of paper-based processes into web-based workflows. This included a workflow to replace the paper forms academics used to complete to report new publications (which were later used by the data entry staff to input the details into the RIS). Publication details and full-text files are uploaded to the repository (by the academics or their nominees). Each night, the repository (QUT ePrints) pushes the metadata for new publications into a holding table. The data is checked by Office of Research staff the next day and then ‘imported’ into the RIS. Publication details (including the repository URLs) are pushed from the RIS to the Staff Profiles system. Previously, academics were required to supply the Office of research with photocopies of their publication (for verification/auditing purposes). The repository is now the source of verification information. Library staff verify the accuracy of the publication details and, where applicable, the peer review status of the work. The verification metadata is included in the information passed to the Office of Research. The RIS at QUT comprises two separate systems built on an Oracle database; a proprietary product (ResearchMaster) plus a locally produced system known as RAD (Research Activity Database). The repository platform is EPrints which is built on a MySQL database. This partly explains why the data is passed from one system to the other via a holding table. The new workflow went live in early April 2012. Tests of the technical integration have all been successful. At the end of the first 12 months, the impact of the new workflow on the proportion of full-texts deposited will be evaluated.

Comments on the Australian Accounting Research Foundation's Legislation Policy Discussion Paper NO.4 (A framework for financial reporting by incorporated associations)

The Australian Accounting Research Foundation (AARF) recently issued Legislative Policy Discussion Paper No.4 which proposes a framework for financial reporting by Australian incorporated associations.This paper comments on both the merits and deficiencies of the proposal. In particular it notes that the proposal simply advocates that the application of differential reporting, accounting standards, and the conceptual framework be imposed on incorporated associations by amended statutes. It is noted that in light of long experience in the corporate sector, he espoused benefits of such a move may not eventuate. Further, concern is expressed that the proposal is a blank cheque one because of the inadequacy of existing relevant accounting standards and the proposal to introduce new relevant standards. Another major defect in the proposal is that it emanates from accountants who acknowledge in their conceptual framework, the need for external reports to report on performance through both financial and non-financial reporting methods. Despite that acknowledgment, the standard set of external reports prepared by accountants do not measure performance as defined in their own conceptual framework (SAC 2) and in their auditing pronouncements (AUP 33), and they have restricted their domain to financial reporting (SAC 2). Accordingly the proposal appears to be seriously deficient and it is suggested that it be rejected and a new proposal be prepared by a multi-party group free from vested interests.

Small business entity tax concessions : through the eyes of the practitioner

The often competing imperatives of equity, simplicity and efficiency in the income tax regime, particularly the notion of simplicity, has been most evident within Australia’s small business sector over the last decade. In an attempt to provide tax simplification and reduce the tax compliance burden faced by Australian small businesses, provisions collectively referred to as the ‘simplified tax system’ or STS were introduced. The STS was designed to provide eligible small businesses with the option of adopting a range of ‘simplified’ tax measures designed to simplify their tax affairs whilst at the same time, reducing their tax compliance costs. Ultimately, a low take-up rate and accompanying criticisms led to a remodelled and rebadged concessionary regime known as the ‘Small Business Entity’ (SBE) regime which came into effect from 1 July 2007. This paper, through a pilot study, investigates the SBE regime though the eyes of the practitioner. In line the Australian Federal Government’s objective of simplification and reduced compliance costs, the purpose of the study was to (1) determine the extent to which the SBE concessions are being adopted by tax practitioners on behalf of their clients, (2) gain an understanding as to which individual SBE tax concessions are most favoured by practitioners, (3) determine the primary motivation as to why tax practitioners recommend particular SBE concessions to their clients, and (4) canvass the opinions of practitioners as to whether they believed that the introduction of the SBE concessions had met their stated objective of reducing tax compliance costs for small businesses. The findings of this research indicate that, while there is a perception that the SBE concessions are worth embracing, contrary to the policy intent, the reasons behind adopting the concessions was the opportunity to minimise a clients’ tax liability. It was revealed that adopting particular concessions had nothing to do with compliance costs savings and, in fact, the SBE concessions merely added another layer of complexity to an already cumbersome and complex tax code, which resulted in increased compliance costs for their small businesses clients. Further, the SBE concessions allowed tax practitioners the opportunity to engage in effective tax minimisation, thereby fulfilling the client advocacy role of the tax practitioner in maximising their clients’ tax preferences.

An exploratory study into audit challenges in IT governance : a Delphi approach

Information technology (IT) has been playing a powerful role in creating a competitive advantage for organisations over the past decades. This role has become proportionally greater over time as expectations for IT investments to drive business opportunities keep on rising. However, this reliance on IT has also raised concerns about regulatory compliance, governance and security. IT governance (ITG) audit leverages the skills of IS/IT auditors to ensure that IT initiatives are in line with the business strategies. ITG audit emerged as part of performance audit to provide an assessment of the effective implementation of ITG. This research attempts to empirically examine the ITG audit challenges in the Australian public sector. Based on literature research and Delphi research, this paper provides insights regarding the impact of, and required effort to address these challenges. The authors also present the ten major ITG audit challenges facing Australian public sector organisations today.

Accounting Research Journal Editorial : "ARJ – The First 25 Years"

In this 25th year of publication of the Accounting Research Journal we pay tribute to the efforts of the dedicated Editors who have successfully guided and developed the journal since its inception in 1988. After the rapid growth in accounting and finance research in the 1970s and 1980s the absence of outlets in Asia-Pacific region to publish novel, timely and applied research became increasingly apparent. In response to this gap, ARJ’s first volume was published in 1988 by the School of Accountancy at the Queensland Institute of Technology (QIT), which became the Queensland University of Technology (QUT) in the following year. The founding Editor was Myles McGregor-Lowndes and his editorship continued for three years until Scott Holmes took over as Editor in 1991. In 1992, Robert Faff joined Scott Holmes as Joint Editor, and their joint editorship continued for six years until Robert Faff took the reins as Editor in 1998. At that time Scott remained as Associate Editor and the editorial team was joined by Roger Willett as Consulting Editor and Chris Lambert as Associate Editor. This arrangement continued until 2002 when Tim Brailsford was newly appointed as Managing Editor. The editorship returned to QUT in 2008 and was taken on by Chris Ryan with our support as Co-editors. Since 2011 we have been the Joint Editors. Table 1 lists the individuals who have been involved in editing ARJ over the 25-year period and their roles...

An analysis of the differences in audit processes used in the audit of nonprofit and profit organisations

Nonprofits constitute a large part of collective behaviour in society. Presently there is little formal research addressing the role of audits in nonprofit organisations. Before models can be developed for the production of nonprofit auditing information, it is necessary to examine the present conduct of nonprofit audits. The Australian Accounting Research Foundation - Legislation Review Board has released a position paper on the Association Incorporation Acts in Australia - the most frequently used legal form for nonprofit organisations. The Board is addressing the issue of financial statement reporting including audit. This is coinciding with the investigations resulting from the collapse of the National Safety Council (Victorian Division), (NSC). The NSC, a nonprofit organisation formed as a company limited by guarantee, is in liquidation and the auditors are being sued for damages resulting from their alleged failure to perform their duties adequately.

Taxing charities : reform without reason?

The proposal to tax the unrelated business income of charitable organisations was announced in the 2011 budget, but the course of events has overtaken the stated policy rationale. We identify and discuss the policy for the imposition of the new tax and demonstrate that the measure is unnecessary given a recent judgement by the High Court, establishment of a new charity regulator and a better understanding of the applicable tax theory.

On governing collaborative Information Technology (IT) : a relational perspective

Organizations today invest in collaborative IT to engage in collaborative alliances to sustain or improve their competitive positions. Effective use of this collaborative IT in an alliance requires a deeper understanding of their governance structures. This effort is to ensure the sustainability of these alliances. Through the relational view of the firm, we suggest relational lateral IT-steering committees, relational IT operational committees, and relational IT performance management systems as IT governance structures for collaborative alliances. We then incorporate these structures, develop a model for approaches to governing collaborative IT, and evaluate the effectiveness for such governance structures in the IT-dependent alliances. We suggest that IT governance efforts of an alliance should contribute to their collaborative rent. We also suggest that the collaborative rent of an alliance would relate to the business value of its alliance partners. Field survey data containing 192 responses indicates a positive influence of the suggested IT governance efforts of the alliance on the collaborative rent of the alliance. The results also suggest a positive impact of the collaborative rent of the alliance on the business value of the alliance partners.