A study of the informal interactions between audit committees and internal auditors in Australia

This paper finds evidence for the growing importance of informal interactions between the internal audit function and the audit committee (AC) in Australia – a relatively unexplored topic in the literature – using a survey of Chief Audit Executives (CAEs). It also describes the nature of these informal interactions. The most innovative elements of this paper are the findings that certain personal characteristics of CAEs, the specific knowledge and expertise of the AC chair, as well as some of the AC chair’s personal characteristics are associated with the existence (and increase) of informal interactions.

Do Big-Four affilitates earn audit fee premiums in emerging markets?

The paper investigates whether Big-Four affiliated (B4A) firms earn audit premiums in an emerging economy context, using Bangladesh as a case. The joint determination of audit and non-audit service fees is also examined using a sample of 122 companies listed in the Dhaka Stock Exchange. Our findings reveal that although the B4A firms do not generally earn a fee premiumin Bangladesh, they charge higher audit fees for clients not purchasing non-audit services. This suggests that the B4A firms may actually lower audit fees to attract non-audit services, and cross subsidizes audit fees through non-audit-services fees. The lack of a B4A premium implies that there is lack of quality audit in emerging markets. We also document that audit and non-audit service fees are jointly determined in Bangladesh. Thus, we provide evidence of joint determination of audit and non-audit service fees in an emerging economy context.

Informal interactions between audit committees and internal audit functions : exploratory evidence and directions for future research

Purpose – This paper aims to recognise the importance of informal processes within corporate governance and complement existing research in this area by investigating factors associated with the existence of informal interactions between audit committees and internal audit functions and in providing directions for future research. Design/methodology/approach – To examine the existence and drivers of informal interactions between audit committees and internal audit functions, this paper relies on a questionnaire survey of chief audit executives (CAEs) in the UK from listed and non-listed, as well as financial and non-financial, companies. While prior qualitative research suggests that informal interactions do take place, most of the evidence is based on particular organisational setting or on a very small range of interviews. The use of a questionnaire enabled the examination of the existence of internal interactions across a relatively larger number of entities. Findings – The paper finds evidence of audit committees and internal audit functions engaging in informal interactions in addition to formal pre-scheduled regular meetings. Informal interactions complement formal meetings with the audit committee and as such represent additional opportunities for the audit committees to monitor internal audit functions. Audit committees’ informal interactions are significantly and positively associated with audit committee independence, audit chair’s knowledge and experience, and internal audit quality. Originality/value – The results demonstrate the importance of the background of the audit committee chair for the effectiveness of the governance process. This is possibly the first paper to examine the relationship between audit committee quality and internal audit, on the existence and driver of informal interactions. Policy makers should recognize that in addition to formal mechanisms, informal processes, such as communication outside of formal pre-scheduled meetings, play a significant role in corporate governance.

Audit pricing and product differentiation in small private firms : evidence from Thailand

Purpose – There is limited evidence on how differences in economic environments affect the demand for and supply of auditing. Research on audit pricing has mainly focused on large client markets in developed economies; in contrast, the purpose of this paper is to focus on the small client segment in the emerging economy of Thailand which offers a choice between auditors of two different qualities. Design/methodology/approach – This paper is based on a random stratified sample of small clients in Thailand qualifying for audit exemption. The final sample consists of 1,950 firm-year observations for 2002-2006. Findings – The authors find evidence of product differentiation in the small client market, suggesting that small firms view certified public accountants as superior and pay a premium for their services. The authors also find that audit fees have a positive significant association with leverage, metropolitan location and client size. Audit risk and audit opinion are not, however, significantly associated with audit fees. Furthermore, the authors find no evidence that clients whose financial year ends in the auditors’ busy period pay significantly higher audit fees, and auditors engage in low-balling on initial engagements to attract audit clients. Research limitations/implications – The research shows the importance of exploring actual decisions regarding audit practice and audit pricing in different institutional and organizational settings. Originality/value – The paper extends the literature from developed economies and large/listed market setting to the emerging economy and small client market setting. As far as the authors are aware, this is the first paper to examine audit pricing in the small client market in an emerging economy.

The Corporate Governance Effects of Audit Committee

This chapter provides a synthesis and evaluation of empirical research on the governance effects associated with audit committees. Given recent policy recommendations in several countries aimed at strengthening these committees, it is important to establish what research evidence demonstrates about their existing governance contribution. A framework for analyzing the impact of audit committees is described, identifying potential perceived effects which may have led to their adoption and documented effects on aspects of the audit function, on financial reporting quality and on corporate performance. It is also shown that most of the existing research has focused on factors associated with audit committee existence, characteristics, and measures of activity and there is very little evidence on the processes associated with the operation of audit committees and the manner in which they influence organizational behavior. It is clear that there is no automatic relationship between the adoption of audit committee structures or characteristics and the achievement of particular governance effects, and caution may be needed over expectations that greater codification around factors such as audit committee members’ independence and expertise as the means of ‘‘correcting’’ past weaknesses in the arrangements for audit committees. The most fundamental question concerning what difference audit committees make in practice continues to be an important area for research development. For future research we suggest: (1) greater consideration of the organizational and institutional contexts in which audit committees operate; (2) explicit theorization of the processes associated with audit committee operation; (3) complementing extant research methods with field studies; and (4) investigation of unintended as well as expected consequences of audit committees.

Giving and volunteering in Australia 2014 : Environmental Scan/Literature Review

Giving and Volunteering in Australia: literature review summarises the findings of a comprehensive literature search that identifies relevant research on giving and volunteering in Australia. The report comments on the strengths and weaknesses of the methods used and the lessons that can be learned for the development of a future research agenda. The report arranges the findings in separate sections under the headings government sources, industry sources, university/peer-reviewed sources and international comparative sources. We learned that in the last 25 years there has been a growing body of knowledge about the dimensions of giving and volunteering in Australia, but much of the available data is not easily comparable or collected at regular intervals.

Spinning a sustainable yarn : environmental sustainability and brand story in the Australian fashion industry

In the Australian fashion industry, few fashion brands have intervened in the design of their products or the systems around their product to tackle environmental pollution and waste. Instead, support of charities (whether social or environmental) has become conflated with sustainability in the eyes of the public. Thus it is difficult to assess with any accuracy fashion brands’ response to sustainability. This article aims to address this through proposing a categorization system to structure the various interventions that a company may make. This system is applied to two case studies, analysing campaigns that respond to environmental sustainability by two established Australian brands, Country Road and Billabong. The case studies demonstrate how the interventions employed by a company, at least in the Australian context, are carefully developed to align with their brand story, revealing the interplay between the intangible aspects of a brand’s positioning and the tangible, measurable impacts of their garments.

Reconciliation and Early Childhood Education for Sustainability : Broadening the Environmental Paradigm

The uptake of sustainability initiatives in early childhood education curricula continues to gain momentum in Australia and internationally. Growing awareness about the fragility of natural environments in local and global contexts, along with prioritising sustainability in educational policy, has resulted in more broad-scale responses to sustainability in early years settings. To address issues of sustainability, many childcare centres and schools focus on environmental initiatives such as garden projects, recycling and water conservation. While important, such initiatives respond to just one dimension of sustainability. With expanding focus on sustainability initiatives in early childhood education, it is timely to consider why the environmental dimension receives the most attention and what this means for social, political and economic areas of concern.

Wheeze, asthma diagnosis and medication use : a national adult survey in a developing country

Background As relatively little is known about adult wheeze and asthma in developing countries, this study aimed to determine the predictors of wheeze, asthma diagnosis, and current treatment in a national survey of South African adults. Methods A stratified national probability sample of households was drawn and all adults (>14 years) in the selected households were interviewed. Outcomes of interest were recent wheeze, asthma diagnosis, and current use of asthma medication. Predictors of interest were sex, age, household asset index, education, racial group, urban residence, medical insurance, domestic exposure to smoky fuels, occupational exposure, smoking, body mass index, and past tuberculosis. Results A total of 5671 men and 8155 women were studied. Although recent wheeze was reported by 14.4% of men and 17.6% of women and asthma diagnosis by 3.7% of men and 3.8% of women, women were less likely than men to be on current treatment (OR 0.6; 95% confidence interval (CI) 0.5 to 0.8). A history of tuberculosis was an independent predictor of both recent wheeze (OR 3.4; 95% CI 2.5 to 4.7) and asthma diagnosis (OR 2.2; 95% CI 1.5 to 3.2), as was occupational exposure (wheeze: OR 1.8; 95% CI 1.5 to 2.0; asthma diagnosis: OR 1.9; 95% CI 1.4 to 2.4). Smoking was associated with wheeze but not asthma diagnosis. Obesity showed an association with wheeze only in younger women. Both wheeze and asthma diagnosis were more prevalent in those with less education but had no association with the asset index. Independently, having medical insurance was associated with a higher prevalence of diagnosis. Conclusions Some of the findings may be to due to reporting bias and heterogeneity of the categories wheeze and asthma diagnosis, which may overlap with post tuberculous airways obstruction and chronic obstructive pulmonary disease due to smoking and occupational exposures. The results underline the importance of controlling tuberculosis and occupational exposures as well as smoking in reducing chronic respiratory morbidity. Validation of the asthma questionnaire in this setting and research into the pathophysiology of post tuberculous airways obstruction are also needed.

Environmental colour and well-being

Significance of colour schemes in appraisal of the urban aesthetic has been traditionally recognised by design professionals. However, the proven psychological and emotional impacts of urban colour remain overlooked in design thinking. This paper argues that health-conscious approach to environmental colour design requires consideration of phenomenological human needs in addition to aesthetic and stylistic preferences of a designer. A body of knowledge accumulated in environmental colour psychology provides a foundation for a shift in the environmental colour design. Though, some architectural critics suggest that design professionals have little understanding of how different aspects of colour psychology can be integrated in design process. Lack of an explicit design methodology has been described as a main constraint to applicability of the related knowledge in design process. Understanding the notion of environmental colour is essential in developing health-conscious approach to environmental colour design. Therefore, this paper is primarily focused on conceptualisation of environmental colour and experiential environmental colour design. Additionally, a role of environmental colour design in the delivery of health-enhancing environments and balanced sensorial experiences is briefly discussed.

Participation in Environmental Organizations

For decades, social scientists have searched for factors that shape pro-environmental behaviour. However, only a few studies have investigated the causes and consequences of participation in environmental organizations. This book fills the gap by analysing in detail the determinants of environmental participation and its consequences in different parts of the world. Benno Torgler, María A. García-Valinas and Alison Macintyre seek the answer to several questions regarding who is working towards positive outcomes for our environment, what sort of social and institutional context will assist voluntary participation, what sort of attitudes are related to positive environmental behavior, and which countries are active on the intergovernmental stage. By focusing on voluntary participation in environmental organizations, we are able to determine the level of willingness to work towards a solution for environmental problems. This allows an insight into the motivations and attitudes of individuals and nations and how these factors can affect environmental cooperation. Participation in Environmental Organizations sheds light on who is liable to participate and will help to see whose priorities and values are forwarded through voluntary activities and to what extent voluntary participation can become representative. Thus, the book provides a unique examination of citizens’ willingness to participate in environmental organizations. The book will be of interest to Economics students and researchers alike who seek a deeper understanding of the theory and practice of environmental participation.

Estimating the burden of disease attributable to four selected environmental risk factors in South Africa

INTRODUCTION: The first South African National Burden of Disease study quantified the underlying causes of premature mortality and morbidity experienced in South Africa in the year 2000. This was followed by a Comparative Risk Assessment to estimate the contributions of 17 selected risk factors to burden of disease in South Africa. This paper describes the health impact of exposure to four selected environmental risk factors: unsafe water, sanitation and hygiene; indoor air pollution from household use of solid fuels; urban outdoor air pollution and lead exposure. METHODS: The study followed World Health Organization comparative risk assessment methodology. Population-attributable fractions were calculated and applied to revised burden of disease estimates (deaths and disability adjusted life years, [DALYs]) from the South African Burden of Disease study to obtain the attributable burden for each selected risk factor. The burden attributable to the joint effect of the four environmental risk factors was also estimated taking into account competing risks and common pathways. Monte Carlo simulation-modeling techniques were used to quantify sampling, uncertainty. RESULTS: Almost 24 000 deaths were attributable to the joint effect of these four environmental risk factors, accounting for 4.6% (95% uncertainty interval 3.8-5.3%) of all deaths in South Africa in 2000. Overall the burden due to these environmental risks was equivalent to 3.7% (95% uncertainty interval 3.4-4.0%) of the total disease burden for South Africa, with unsafe water sanitation and hygiene the main contributor to joint burden. The joint attributable burden was especially high in children under 5 years of age, accounting for 10.8% of total deaths in this age group and 9.7% of burden of disease. CONCLUSION: This study highlights the public health impact of exposure to environmental risks and the significant burden of preventable disease attributable to exposure to these four major environmental risk factors in South Africa. Evidence-based policies and programs must be developed and implemented to address these risk factors at individual, household, and community levels.

Environmental exposures : an underrecognized contribution to noncommunicable diseases

Previous attempts to determine the degree to which exposure to environmental factors contribute to noncommunicable diseases (NCDs) have been very conservative and have significantly underestimated the actual contribution of the environment for at least two reasons. Firstly, most previous reports have excluded the contribution of lifestyle behavioral risk factors, but these usually involve significant exposure to environmental chemicals that increase risk of disease. Secondly, early life exposure to chemical contaminants is now clearly associated with an elevated risk of several diseases later in life, but these connections are often difficult to discern. This is especially true for asthma and neurodevelopmental conditions, but there is also a major contribution to the development of obesity and chronic diseases. Most cancers are caused by environmental exposures in genetically susceptible individuals. In addition, new information shows significant associations between cardiovascular diseases and diabetes and exposure to environmental chemicals present in air, food, and water. These relationships likely reflect the combination of epigenetic effects and gene induction. Environmental factors contribute significantly more to NCDs than previous reports have suggested. Prevention needs to shift focus from individual responsibility to societal responsibility and an understanding that effective prevention of NCDs ultimately relies on improved environmental management to reduce exposure to modifiable risks.

Environmental contributions to the leading causes of disease burden among Australian children

Although the effect of adverse environments on the well-being of children is an important global health issue, it remains underrecognized in health care and underconsidered in terms of both research and public policy. Children have developmentally distinct patterns of environmental exposure and susceptibilities that increase their risk of disease. Young children, especially those who are impoverished, have disproportionately heavier exposures to environmental threats in a given environment. They also have decreased metabolic capacity to detoxify and eliminate contaminants. Furthermore, rapid growth and development before and after birth and the continuing growth and postnatal maturation of the respiratory, immune, and neurological systems, in particular, make them increasingly vulnerable to environmental threats...

Are Australia’s universities in deficit? A tale of generic managers, audit culture, and casualisation

Managerial changes to Australian universities have had considerable impact on employees. In this paper we consider some of these changes and apply a theory known as the democratic deficit to them. This theory was developed from the democratic critique of managerialism, as it has been applied in the public sector in countries with Westminster-type political systems. This deficit covers the weakening of accountability through politicisation, the denial of public values through the use of private sector performance practices, and the hollowing out of the state through the contracting out and privatisation of public goods and services, and the redefinition of citizens as customers and clients. We suggest that the increased power of managers, expansion of the audit culture, and the extensive use of contract employment seem to be weakening the democratic culture and role of universities in part by replacing accountability as responsibility with accountability as responsiveness.