Fair value accounting for non-current assets and audit fees: Evidence from Australian companies

We investigate the association between asset revaluations of non-current assets and audit fees, using a sample of ASX 300 companies from the years 2003–2007.We report that there is a significant increase in the audit fees paid when non-financial assets (PPEs, investment properties and intangible assets) are measured at fair values. Moreover, we provide evidence that an independent valuer or appraiser significantly weakens the positive association between asset revaluations and audit fees. Furthermore, companies whose noncurrent assets are revalued upwards and those that revalue their non-current assets upwards every year have significantly higher audit fees. Additional tests provide empirical evidence that the strength of corporate governance has a moderating effect on the level of audit fees. This study contributes to the ongoing debate on the role of fair value accounting. The findings suggest agency costs associated with fair value estimates may offset the benefits from the use of fair value accounting.

The social consequences of control: Accounting for indentured labour in Fiji 1879 - 1920

Purpose: This is a study of the social consequences of accounting controls over labour. It examines the system of tasking used to control Indian indentured workers using a governmentality approach in the historical context of Fijian sugar plantations during the British colonial period, from 1879 to 1920. Method/ Methodology: Archival data consisting of documents from the Colonial Secretary’s Office, reports and related literature on Indian indentured labour was accessed from the National Archives of Fiji. In addition, documented accounts of the experiences of indentured labourers over the period of the study give voice to the social costs of the indenture system, highlighting the social impact of accounting control systems. Findings: Accounting and management controls were developed to extract surplus value from Indian labour. The practice of tasking was implemented in a plantation structure where indentured labourers were controlled hierarchically through a variety of calculative monitoring practices. This resulted in the exploitation and consequent economic, social and racial marginalisation of indentured workers. Originality: The paper contributes to the growing body of literature highlighting the social effects of accounting control systems. It exposes the social costs borne by indentured workers employed on Fijian sugar plantations. Practice/ Research Implications: The study promotes better understanding of the practice and impact of accounting as a technology of government and control within a particular institutional setting, in this case the British colony of Fiji. By highlighting the social implications of these controls in their historical context, we alert corporations, government policy makers, accountants and workers to the socially damaging effects of exploitive management control systems.

Computational methods for Bayesian model choice

In this note, we shortly survey some recent approaches on the approximation of the Bayes factor used in Bayesian hypothesis testing and in Bayesian model choice. In particular, we reassess importance sampling, harmonic mean sampling, and nested sampling from a unified perspective.

Accounting for student/educator diversity: resurrecting coaction theory

This chapter challenges current approaches to defining the context and process of entrepreneurship education. In modeling our classrooms as a microcosm of the world our current and future students will enter, this chapter brings to life (and celebrates) the everpresent diversity found within. The chapter attempts to make an important (and unique) contribution to the field of enterprise education by illustrating how we can determine the success of (1) our efforts as educators, (2) our students, and (3) our various teaching methods. The chapter is based on two specific premises, the most fundamental being the assertion that the performance of student, educator and institution can only be accounted for by accepting the nature of the dialogic relationship between the student and educator and between the educator and institution. A second premise is that at any moment in time, the educator can be assessed as being either efficient or inefficient, due to the presence of observable heterogeneity in the learning environment that produces differential learning outcomes. This chapter claims that understanding and appreciating the nature of heterogeneity in our classrooms provides an avenue for improvement in all facets of learning and teaching. To explain this claim, Haskell’s (1949) theory of coaction is resurrected to provide a lens through which all manner of interaction occurring within all forms of educational contexts can be explained. Haskell (1949) asserted that coaction theory had three salient features.

Organizational competencies and dynamic Accounting Information System capability: Impact on AIS processes and firm performance

Accounting information systems (AIS) capture and process accounting data and provide valuable information for decision-makers. However, in a rapidly changing environment, continual management of the AIS is necessary for organizations to optimise performance outcomes. We suggest that building a dynamic AIS capability enables accounting process and organizational performance. Using the dynamic capabilities framework (Teece 2007) we propose that a dynamic AIS capability can be developed through the synergy of three competencies: a flexible AIS, having a complementary business intelligence system and accounting professionals with IT technical competency. Using survey data, we find evidence of a positive association between a dynamic AIS capability, accounting process performance, and overall firm performance. The results suggest that developing a dynamic AIS resource can add value to an organization. This study provides guidance for organizations looking to leverage the performance outcomes of their AIS environment.

Accounting for risk: The advent of capped conveyancing title insurance

Title insurance companies originating from America, have, in the past 15 years become part of the Australian conveyancing landscape. However for most residential freehold owners, their activities would be a mystery. A purchaser does not routinely obtain title insurance, with the companies presently focussing on servicing the mortgagee sector. While the lack of penetration in the residential purchaser market may be attributed to the consumer’s lack of knowledge, evidence from Ontario and New Zealand illustrates that title insurance is likely to become an additional cost in the conveyancing process in Australia. In this article we highlight the reasons why, and demonstrate how title insurers have, by working with the legal profession been able to subtly move the risk of responsibility for compensation for loss, (at least in the first instance) from the state to the insurer, but with the added benefit for the state and the conveyancing agents that the cost of the insurance is ultimately borne by the consumer. In New Zealand this development is being accelerated by the introduction of capped conveyancing title insurance. Whether title insurance will become part of the conveyancing process is no longer the relevant question for Australia, (it undoubtedly will), but the unknown issue is just how title insurance companies will work with conveyancing agents to infiltrate the market, and what response this infiltration will have in terms of the state’s view as to their continued role in the provision of assurance. We suggest that developments from New Zealand in relation to capped conveyancing insurance are likely to be replicated in Australia in the near future, and that the state’s role in providing an assurance fund will continue, though the state may seek to expand the areas in which the right to compensation is restricted.

Digital videos in financial accounting: A sociocognitive approach to learning

Understanding the important concepts necessary to undertake the preparation of consolidated financial statements has proven challenging for many accounting undergraduate students. As a result, the development of multimedia modelling concepts such as acquisition analysis, business combination valuation entries, reacquisition entries and intragroup transactions were embedded within an e-learning environment. The principle of modelling, derived from social cognitive theory, was applied to the design of the multimedia. A study was conducted to gauge the effectiveness of the approach and consider student perceptions with regard to learning through this approach. Quantitative data were collected from accounting undergraduate students (n= 464) enrolled across three different cohorts including international campuses (n=386), an Australian campus (n=49) and a distance education cohort (n=29). Analyses were undertaken to show significant differences between these cohorts. This research paper presents findings that indicate a positive and significant association between the number of times the videos were accessed, and the assignment score (p<0.05) was evident, suggesting that students that referred to the videos relatively frequently were able to utilise the knowledge gained from the videos to assist them in completing the assignment.

Carbon emission accounting fraud

This chapter explores the motivation behind potential carbon emission accounting fraud by corporations. There are several different possible risks of carbon emission accounting fraud which remain mostly overlooked by researchers to date, despite the fact that such frauds have a negative impact on a country’s economy as well as the real purpose of mitigating carbon emissions. The chapter offers discussion of some potential risks of carbon emission accounting fraud as well as related prevention policy. The study suggests that an effective mandatory carbon emission related fraud prevention policy is essential to eliminate opportunities to commit such fraud by corporations.

The ethics of professional accountants: An Aristotelian perspective

Purpose The purpose of this paper is to examine how Aristotle’s ethics can be applied to the ethics of professional accountants, in relation to the approach adopted by the International Federation of Accountants (IFAC), and to consider the reasons that justify the Aristotelian approach. Design/methodology/approach The paper outlines IFAC’s approach and identifies several weaknesses. Three themes of Aristotle’s Nicomachean Ethics are applied to the work of professional accountants. Reasons why this perspective is more suitable for professional accountants are then articulated. Findings Several aspects of Aristotle’s ethics can be fruitfully applied to the ethics of professional accountants. These include the relationship between function, goals and the good, an awareness of the human goal to achieve eudaimonia, the development of both excellences of character and of intelligence, and the significance of non-rational aspects of morality, including emotions, will, responsibility and choice. Research limitations/implications This perspective provides an alternative conceptualisation of the ethics of professional accountants. Although it does not provide concrete guidance regarding what the ethical approach to specific situations may be, it presents a useful counterpoint to existing approaches that are largely deontological and utilitarian. Practical implications This paper provides accountants in practice with a more comprehensive and adequate perspective on what it means for a professional accountant to be ethical, and raises several issues related to how ethics is included in the education and training of accountants. Originality/value Investigating the philosophical basis for professional ethics approaches professional codes of ethics in a way that it is not typically considered. The paper also provides a more comprehensive application of Aristotelian ethics than previous work.

The accounting and accountability practices of Fairtrade International (FLO)

This study examines the accounting and accountability practices of Fairtrade International (FLO), one of the largest Fair Trade umbrella organizations. Our aim is to explore whether new forms of accounting and related disclosures emerge in the reporting practices of FLO and how these reflect their self-declared social mission towards the emancipation and sustainability of producers. Using thematic analysis and reflecting on Bourdieu’s theory of symbolic power, we analyse FLO’s reporting practices from 2006 to 2013. Our findings reveal that FLO mobilises the taken-for-granted images and symbols of ’fairness’ in the Fair Trade system by using descriptive statistics of Fair Trade premium distributions and pictures of producers but keeps silent to current concerns surrounding the limitations of Fair Trade. Such findings extend important insights into how new forms of accounting and related disclosure are used to legitimise the practice of Fair Trade.

R&D in clean technology: A project choice model with learning

In this study, we investigate the qualitative and quantitative effects of an R&D subsidy for a clean technology and a Pigouvian tax on a dirty technology on environmental R&D when it is uncertain how long the research takes to complete. The model is formulated as an optimal stopping problem, in which the number of successes required to complete the R&D project is finite and learning about the probability of success is incorporated. We show that the optimal R&D subsidy with the consideration of learning is higher than that without it. We also find that an R&D subsidy performs better than a Pigouvian tax unless suppliers have sufficient incentives to continue cost-reduction efforts after the new technology success-fully replaces the old one. Moreover, by using a two-project model, we show that a uniform subsidy is better than a selective subsidy.

Corporate board and corporate social responsibility assurance: Evidence from China

This paper investigates the association between board characteristics and the company’s corporate social responsibility (CSR) assurance decision in China. By examining 2054 firm-years of Chinese listed companies with CSR reports from 2008 to 2012, we find that firms with a large board size, more female directors, and separation of CEO and chairman positions are more likely to engage in CSR assurance. Gender diversity also influences the CSR assurance provider choice. However, board independence and overseas background of the CEO do not affect the CSR assurance decision. Inconsistent with our prediction, firms with foreign directors are less likely to engage in voluntary CSR assurance. In summary, this research provides in-depth insights into the determinants of Chinese firms’ voluntary CSR assurance.

Affirmative action and effort choice: An experimental investigation

We study the effect of affirmative action on effort in an experiment conducted in high schools in socioeconomically disadvantaged areas in Queensland, Australia. All participating schools have a large representation of indigenous Australians, a population group that is frequently targeted by affirmative action. Our participants perform a simple real-effort task in a competitive setting. Those ranked in the top third receive a high piece-rate payment and all the others receive a low payment. We introduce affirmative action by providing the lowest (bottom third) performers with a positive handicap increasing their chances to achieve the high payment target. Our findings show that the policy increases effort of those that it aims to favour, without discouraging effort of those who are indirectly penalized by affirmative action.

Novel application of a discrete choice experiment to identify preferences for a national healthcare-associated infection surveillance programme: A cross-sectional study

Objective: To identify key stakeholder preferences and priorities when considering a national healthcare-associated infection (HAI) surveillance programme through the use of a discrete choice experiment (DCE). Setting: Australia does not have a national HAI surveillance programme. An online web-based DCE was developed and made available to participants in Australia. Participants: A sample of 184 purposively selected healthcare workers based on their senior leadership role in infection prevention in Australia. Primary and secondary outcomes: A DCE requiring respondents to select 1 HAI surveillance programme over another based on 5 different characteristics (or attributes) in repeated hypothetical scenarios. Data were analysed using a mixed logit model to evaluate preferences and identify the relative importance of each attribute. Results: A total of 122 participants completed the survey (response rate 66%) over a 5-week period. Excluding 22 who mismatched a duplicate choice scenario, analysis was conducted on 100 responses. The key findings included: 72% of stakeholders exhibited a preference for a surveillance programme with continuous mandatory core components (mean coefficient 0.640 (p<0.01)), 65% for a standard surveillance protocol where patient-level data are collected on infected and non-infected patients (mean coefficient 0.641 (p<0.01)), and 92% for hospital-level data that are publicly reported on a website and not associated with financial penalties (mean coefficient 1.663 (p<0.01)). Conclusions: The use of the DCE has provided a unique insight to key stakeholder priorities when considering a national HAI surveillance programme. The application of a DCE offers a meaningful method to explore and quantify preferences in this setting.

Aaishah’s choice: Choosing home education in the Muslim community

In Australia, the decision to home educate is becoming increasingly popular (cf. Townsend, 2012). In spite of its increasing popularity, the reasons home education is chosen by Australian families is under-researched (cf. Jackson & Allan, 2010). In addition, the decision to home educate among minority groups, such as Australian Muslim families, is absent from the literature. This paper reports on an interview with one Muslim mother who chose to home educate her children. An in-depth, qualitative interview was conducted with Aaishah (pseudonym), a mother who lived in one of Australia’s most populated cities. Data were analysed using the Discourse Historical Approach to Critical Discourse Analysis. The analysis revealed that there were similarities between the discourses of Christian parents described in the literature, in terms of the reasons Aaishah had given for her decision to home educate. In particular, analysis reveals Aaishah’s fears about schools, their negative experiences on her children and her hopes for her children’s futures.