Corporate governance mechanisms and earnings management in transitional countries – evidence from Chinese listed firms

The objective of this thesis is to investigate whether the corporate governance practices adopted by Chinese listed firms are associated with the quality of earnings information. Based on a review of agency and institutional theory, this study develops hypotheses that predict the monitoring effectiveness of the board and the audit committee. Using a combination of univariate and multivariate analyses, the association between corporate governance mechanisms and earnings management are tested from 2004 to 2008. Through analysing the empirical results, a number of findings are summarised as below. First, board independence is weakened by the introduction of government officials as independent directors on the boards. Government officials acting as independent directors, claim that they meet the definition of independent director set by the regulation. However, they have some connection with the State, which is the controlling shareholder in listed SOEs affiliated companies. Consequently, the effect of the independent director’s expertise in constraining earnings management is mitigated as demonstrated by an insignificant association between board expertise and earnings management. An alternative explanation for the inefficiency of board independence may point to the pre-selection of independent directors by the powerful CEO. It is argued that a CEO can manipulate the board composition and choose the "desirable" independent directors to monitor themselves. Second, a number of internal mechanisms, such as board size, board activities, and the separation of the roles of the CEO and chair are found to be significantly associated with discretionary accruals. This result suggests that there are advantages in having a large and active board in the Chinese setting. This can offset the disadvantages associated with large boards, such as increased bureaucracy, and hence, increase the constraining effects of a large and resourceful board. Third, factor analysis identifies two factors: CEO power and board power. CEO power is the factor which consists of CEO duality and turnover, and board power is composed of board size and board activity. The results of CEO power show that if a Chinese listed company has CEO duality and turnover at the same time, it is more likely to have a high level of earnings management. The significant and negative relationship between board power and accruals indicate that large boards with frequent meetings can be associated with low level of earnings management. Overall, the factor analysis suggests that certain governance mechanisms complement each other to become more efficient monitors of opportunistic earnings management. A combination of board characteristics can increase the negative association with earnings management. Fourth, the insignificant results between audit committees and earnings management in Chinese listed firms suggests that the Chinese regulator should strengthen the audit committee functions. This thesis calls for listed firms to disclose more information on audit committee composition and activities, which can facilitate future research on the Chinese audit committee’s monitoring role. Fifth, the interactive results between State ownership and board characteristics show that dominant State ownership has a moderating effect on board monitoring power as the State totally controls 42% of the issued shares. The high percentage of State ownership makes it difficult for the non-controlling institutional shareholders to challenge the State’s dominant status. As a result, the association between non-controlling institutional ownership and earnings management is insignificant in most situations. Lastly, firms audited by the international Big4 have lower abnormal accruals than firms audited by domestic Chinese audit firms. In addition, the inverse U-shape relationship between audit tenure and earnings quality demonstrates the changing effects of audit quality after a certain period of appointment. Furthermore, this thesis finds that listing in Hong Kong Stock Exchanges can be an alternative governance mechanism to discipline Chinese firms to follow strict Hong Kong listing requirements. Management of Hong Kong listed companies are exposed to the scrutiny of international investors and Hong Kong regulators. This in turn reduces their chances of conducting self-interested earnings manipulation. This study is designed to fill the gap in governance literature in China that is related to earnings management. Previous research on corporate governance mechanisms and earnings management in China is not conclusive. The current research builds on previous literature and provides some meaningful implications for practitioners, regulators, academic, and international investors who have investment interests in a transitional country. The findings of this study contribute to corporate governance and earnings management literature in the context of the transitional economy of China. The use of alternative measures for earnings management yields similar results compared with the accruals models and produces additional findings.

Collision warning dissemination in vehicles strings : an empirical measurement

Inter-Vehicular Communications (IVC) are considered a promising technological approach for enhancing transportation safety and improving highway efficiency. Previous theoretical work has demonstrated the benefits of IVC in vehicles strings. Simulations of partially IVC-equipped vehicles strings showed that only a small equipment ratio is sufficient to drastically reduce the number of head on collisions. However, these results are based on the assumptions that IVC exhibit lossless and instantaneous messages transmission. This paper presents the research design of an empirical measurement of a vehicles string, with the goal of highlighting the constraints introduced by the actual characteristics of communication devices. A warning message diffusion system based on IEEE 802.11 wireless technology was developed for an emergency breaking scenario. Preliminary results are presented as well, showing the latencies introduced by using 802.11a and discussing early findings and experimental limitations

Fast detection of exact clones in business process model repositories

As organizations reach higher levels of business process management maturity, they often find themselves maintaining very large process model repositories, representing valuable knowledge about their operations. A common practice within these repositories is to create new process models, or extend existing ones, by copying and merging fragments from other models. We contend that if these duplicate fragments, a.k.a. ex- act clones, can be identified and factored out as shared subprocesses, the repository’s maintainability can be greatly improved. With this purpose in mind, we propose an indexing structure to support fast detection of clones in process model repositories. Moreover, we show how this index can be used to efficiently query a process model repository for fragments. This index, called RPSDAG, is based on a novel combination of a method for process model decomposition (namely the Refined Process Structure Tree), with established graph canonization and string matching techniques. We evaluated the RPSDAG with large process model repositories from industrial practice. The experiments show that a significant number of non-trivial clones can be efficiently found in such repositories, and that fragment queries can be handled efficiently.

Trust, reputation and the small firm : building online brand reputation for SMEs

Social media provides numerous opportunities for small businesses to promote their products and services, build brand communities and reach diverse market niches. An important factor in seizing these opportunities is developing trust and creating reputation among consumers. This qualitative study examines how a group of Australian small business managers utilize social media websites to connect to, communicate with and maintain their customer base. For the purpose of this paper we are using case studies of four companies physically based in Victoria, Australia. These businesses have a high presence in online consumer groups, being both active members of communities and representatives of their businesses. The duality of their role as participant and company representative imposes difficulties in creating reputation among community members. We have used in-depth interviews as a primary research method, additionally monitoring their activities on social media sites such as forums, social networking services, blogs and micro-blogs. We have identified practices helpful for developing trust, building reputation and create a brand image in online communities.

The NetWorkPlace(TM) Phenomenon: any time and any place - reality or a seductive myth?

A new spatial logic encompassing redefined concepts of time and place, space and distance, requires a comprehensive shift in the approach to designing workplace environments for today’s adaptive, collaborative organizations operating in a dynamic business world. Together with substantial economic and cultural shifts and an increased emphasis on lifestyle considerations, the advances in information technology have prompted a radical re-ordering of organizational relationships and the associated structures, processes, and places of doing business. Within the duality of space and an augmentation of the traditional notions of place, organizational and institutional structures pose new challenges for the design professions. The literature reveals that there has always been a mono-organizational focus in relation to workplace design strategies and the burgeoning trend towards inter-organizational collaboration, enabled the identification of a gap in the knowledge relative to workplace design. The NetWorkPlaceTM© constitutes a multi-dimensional concept having the capacity to deal with the fluidity and ambiguity characteristic of the network context, as both a topic of research and the way of going about it.

The unfinished landscape fractal geometry and the aesthetics of ecological design

During the late 20th century it was proposed that a design aesthetic reflecting current ecological concerns was required within the overall domain of the built environment and specifically within landscape design. To address this, some authors suggested various theoretical frameworks upon which such an aesthetic could be based. Within these frameworks there was an underlying theme that the patterns and processes of Nature may have the potential to form this aesthetic — an aesthetic based on fractal rather than Euclidean geometry. In order to understand how fractal geometry, described as the geometry of Nature, could become the referent for a design aesthetic, this research examines the mathematical concepts of fractal Geometry, and the underlying philosophical concepts behind the terms ‘Nature’ and ‘aesthetics’. The findings of this initial research meant that a new definition of Nature was required in order to overcome the barrier presented by the western philosophical Nature¯culture duality. This new definition of Nature is based on the type and use of energy. Similarly, it became clear that current usage of the term aesthetics has more in common with the term ‘style’ than with its correct philosophical meaning. The aesthetic philosophy of both art and the environment recognises different aesthetic criteria related to either the subject or the object, such as: aesthetic experience; aesthetic attitude; aesthetic value; aesthetic object; and aesthetic properties. Given these criteria, and the fact that the concept of aesthetics is still an active and ongoing philosophical discussion, this work focuses on the criteria of aesthetic properties and the aesthetic experience or response they engender. The examination of fractal geometry revealed that it is a geometry based on scale rather than on the location of a point within a three-dimensional space. This enables fractal geometry to describe the complex forms and patterns created through the processes of Wild Nature. Although fractal geometry has been used to analyse the patterns of built environments from a plan perspective, it became clear from the initial review of the literature that there was a total knowledge vacuum about the fractal properties of environments experienced every day by people as they move through them. To overcome this, 21 different landscapes that ranged from highly developed city centres to relatively untouched landscapes of Wild Nature have been analysed. Although this work shows that the fractal dimension can be used to differentiate between overall landscape forms, it also shows that by itself it cannot differentiate between all images analysed. To overcome this two further parameters based on the underlying structural geometry embedded within the landscape are discussed. These parameters are the Power Spectrum Median Amplitude and the Level of Isotropy within the Fourier Power Spectrum. Based on the detailed analysis of these parameters a greater understanding of the structural properties of landscapes has been gained. With this understanding, this research has moved the field of landscape design a step close to being able to articulate a new aesthetic for ecological design.

Concept combination and the origins of complex cognition

At the core of our uniquely human cognitive abilities is the capacity to see things from different perspectives, or to place them in a new context. We propose that this was made possible by two cognitive transitions. First, the large brain of Homo erectus facilitated the onset of recursive recall: the ability to string thoughts together into a stream of potentially abstract or imaginative thought. This hypothesis is sup-ported by a set of computational models where an artificial society of agents evolved to generate more diverse and valuable cultural outputs under conditions of recursive recall. We propose that the capacity to see things in context arose much later, following the appearance of anatomically modern humans. This second transition was brought on by the onset of contextual focus: the capacity to shift between a minimally contextual analytic mode of thought, and a highly contextual associative mode of thought, conducive to combining concepts in new ways and ‘breaking out of a rut’. When contextual focus is implemented in an art-generating computer program, the resulting artworks are seen as more creative and appealing. We summarize how both transitions can be modeled using a theory of concepts which high-lights the manner in which different contexts can lead to modern humans attributing very different meanings to the interpretation of one concept.

Corporate governance and misappropriation

This study examines the occurrence of misappropriation-type fraud within Australian listed firms and the relation between the incidence of this type of fraud and a firm's governance strength. We measure governance strength using factors relating to traditional corporate governance, such as board composition, CEO duality, and audit committee composition, as well as factors relating to information technology governance. In our study, we use actual dollar amount of fraud reported by listed companies responding to the 2004 KPMG Fraud Survey as one of three different misappropriation measures and publicly available firm-specific data to measure the other variables in the model. Our study found that where the chief executive officer (CEO) also holds the position of chairperson of the board of directors, the likelihood of fraud increases. We also find that the greater the number of independent directors on the audit committee, the lower the level of fraud. Taken together, these results are particularly encouraging as they provide support for regulatory bodies such as the Australian Stock Exchange (ASX) and the Australian Securities and Investment Commission (ASIC), which place considerable emphasis on the importance of establishing good corporate governance practices. The study provides empirical evidence that employing good corporate governance reduces the risk of the misappropriation of assets.

Revisiting the debate about public service media exceptionalism

The development of public service broadcasters (PSBs) in the 20th century was framed around debates about its difference compared to commercial broadcasting. These debates navigated between two poles. One concerned the relationship between non‐commercial sources of funding and the role played by statutory Charters as guarantors of the independence of PSBs. The other concerned the relationship between PSBs being both a complementary and a comprehensive service, although there are tensions inherent in this duality. In the 21st century, as reconfigured public service media organisations (PSMs) operate across multiple platforms in a convergent media environment, how are these debates changing, if at all? Is the case for PSM “exceptionalism” changed with Web‐based services, catch‐up TV, podcasting, ancillary product sales, and commissioning of programs from external sources in order to operate in highly diversified cross‐media environments? Do the traditional assumptions about non‐commercialism still hold as the basis for different forms of PSM governance and accountability? This paper will consider the question of PSM exceptionalism in the context of three reviews into Australian media that took place over 2011‐2012: the Convergence Review undertaken through the Department of Broadband, Communications and the Digital Economy; the National Classification Scheme Review undertaken by the Australian Law Reform Commission; and the Independent Media Inquiry that considered the future of news and journalism.

PartSS : An efficient partition-based filtering for edit distance constraints

This paper introduces PartSS, a new partition-based fil- tering for tasks performing string comparisons under edit distance constraints. PartSS offers improvements over the state-of-the-art method NGPP with the implementation of a new partitioning scheme and also improves filtering abil- ities by exploiting theoretical results on shifting and scaling ranges, thus accelerating the rate of calculating edit distance between strings. PartSS filtering has been implemented within two major tasks of data integration: similarity join and approximate membership extraction under edit distance constraints. The evaluation on an extensive range of real-world datasets demonstrates major gain in efficiency over NGPP and QGrams approaches.

Simulation architecture for cooperative ITS applications and augmented perception

Cooperative Systems provide, through the multiplication of information sources over the road, a lot of potential to improve the safety of road users, especially drivers. However, developing cooperative ITS applications requires additional resources compared to non-cooperative applications which are both time consuming and expensive. In this paper, we present a simulation architecture aimed at prototyping cooperative ITS applications in an accurate and detailed, close-to-reality environment; the architecture is designed to be modular and generalist. It can be used to simulate any type of CS applications as well as augmented perception. Then, we discuss the results of two applications deployed with our architecture, using a common freeway emergency braking scenario. The first application is Emergency Electronic Brake Light (EEBL); we discuss improvements in safety in terms of the number of crashes and the severity of crashes. The second application compares the performance of a cooperative risk assessment using an augmented map against a non-cooperative approach based on local-perception only. Our results show a systematic improvement of forward warning time for most vehicles in the string when using the augmented-map-based risk assessment.

The architecture of children’s use of language and tools when problem solving collaboratively with robotics

This paper demonstrates, following Vygotsky, that language and tool use has a critical role in the collaborative problem-solving behaviour of school-age children. It reports original ethnographic classroom research examining the convergence of speech and practical activity in children’s collaborative problem solving with robotics programming tasks. The researchers analysed children’s interactions during a series of problem solving experiments in which Lego Mindstorms toolsets were used by teachers to create robotics design challenges among 24 students in a Year 4 Australian classroom (students aged 8.5–9.5 years). The design challenges were incrementally difficult, beginning with basic programming of straight line movement, and progressing to more complex challenges involving programming of the robots to raise Lego figures from conduit pipes using robots as pulleys with string and recycled materials. Data collection involved micro-genetic analysis of students’ speech interactions with tools, peers, and other experts, teacher interviews, and student focus group data. Coding the repeated patterns in the transcripts, the authors outline the structure of the children’s social speech in joint problem solving, demonstrating the patterns of speech and interaction that play an important role in the socialisation of the school-age child’s practical intellect.

Towards positive organisation austerity : combining austerity measures with Positive Organisational Scholarship (POS)

The purpose of this paper is to explore the potential and value of positive management practices to address the pain and suffering that frequently accompanies periods of large-scale austerity in public sectors. Public managers are increasingly asked to implement severe austerity measures and at the same time to build service delivery capacity; contradictory tasks. We draw on and further develop Cameron’s (2012) model of Positive Leadership to identify seven positive shared leadership practices that, while not eliminating the pain and suffering associated with austerity measures at least offer some scope, compared to traditional public management practices, for managing the austerity-build capacity duality in ways that respond to those affected with compassion and respect. We draw on published reports of a large-scale austerity program to highlight the potential and value of positive shared leadership practices for creating what we refer to as positive organisational austerity. The paper contributes to the literature on public management response to crises in two main ways. First, the paper introduces and develops the concept of shared positive leadership (Cameron, 2012; Carson et al. 2007) as a way of managing in austerity. Second, the paper introduces the concept of positive organisational austerity as a means of highlighting a reorientation in thinking about austerity measures and their implementation.

Count-min sketches for estimating password frequency within Hamming distance two

The count-min sketch is a useful data structure for recording and estimating the frequency of string occurrences, such as passwords, in sub-linear space with high accuracy. However, it cannot be used to draw conclusions on groups of strings that are similar, for example close in Hamming distance. This paper introduces a variant of the count-min sketch which allows for estimating counts within a specified Hamming distance of the queried string. This variant can be used to prevent users from choosing popular passwords, like the original sketch, but it also allows for a more efficient method of analysing password statistics.

Cascaded DC-DC converter connection of photovoltaic modules

New residential scale photovoltaic (PV) arrays are commonly connected to the grid by a single dc-ac inverter connected to a series string of pv panels, or many small dc-ac inverters which connect one or two panels directly to the ac grid. This paper proposes an alternative topology of nonisolated per-panel dc-dc converters connected in series to create a high voltage string connected to a simplified dc-ac inverter. This offers the advantages of a "converter-per-panel" approach without the cost or efficiency penalties of individual dc-ac grid connected inverters. Buck, boost, buck-boost, and Cu´k converters are considered as possible dc-dc converters that can be cascaded. Matlab simulations are used to compare the efficiency of each topology as well as evaluating the benefits of increasing cost and complexity. The buck and then boost converters are shown to be the most efficient topologies for a given cost, with the buck best suited for long strings and the boost for short strings. While flexible in voltage ranges, buck-boost, and Cu´k converters are always at an efficiency or alternatively cost disadvantage.