Were regulatory changes in reporting "abnormal items" justified? : evidence of intra-period classificatory earnings management practices in Australia

Purpose Managers generally have discretion in determining how components of earnings are presented in financial statements in distinguishing between ‘normal’ earnings and items classified as unusual, special, significant, exceptional or abnormal. Prior research has found that such intra-period classificatory choice is used as a form of earnings management. Prior to 2001, Australian accounting standards mandated that unusually large items of revenue and expense be classified as ‘abnormal items’ for financial reporting, but this classification was removed from accounting standards from 2001. This move by the regulators was partly in response to concerns that the abnormal classification was being used opportunistically to manage reported pre-abnormal earnings. This study extends the earnings management literature by examining the reporting of abnormal items for evidence of intra-period classificatory earnings management in the unique Australian setting. Design/methodology/approach This study investigates associations between reporting of abnormal items and incentives in the form of analyst following and the earnings benchmarks of analysts’ forecasts, earnings levels, and earnings changes, for a sample of Australian top-500 firms for the seven-year period from 1994 to 2000. Findings The findings suggest there are systematic differences between firms reporting abnormal items and those with no abnormal items. Results show evidence that, on average, firms shifted expense items from pre-abnormal earnings to bottom line net income through reclassification as abnormal losses. Originality/value These findings suggest that the standard setters were justified in removing the ‘abnormal’ classification from the accounting standard. However, it cannot be assumed that all firms acted opportunistically in the classification of items as abnormal. With the removal of the standardised classification of items outside normal operations as ‘abnormal’, firms lost the opportunity to use such disclosures as a signalling device, with the consequential effect of limiting the scope of effectively communicating information about the nature of items presented in financial reports.

Creating value in project management using PRINCE2

This important research is published at a critical time in the history of PRINCE2. The world’s project managers are under incredible scrutiny and pressure to ensure their projects deliver quality on time and on budget – and even more so during a world recession. The research shows that PRINCE2 goes a long way to helping them achieve these goals. Although its origins began in the UK, PRINCE2 now has a truly international reach. We are delighted that the Queensland University of Technology (QUT) has undertaken this global, thorough and informative research project. While it highlights the strengths of the methodology itself, the report also looks at the challenges organisations face when using a project management method such as PRINCE2. We’re sure the challenges will resonate with project managers around the world. Securing executive support to champion the adoption of PRINCE2, creating a robust business case and prioritising project governance are key issues that all project managers will grapple with during their career. The research also shows that to be thoroughly effective, organisations need to properly embed PRINCE2 and tailor it to suit their particular circumstances. Many successful organisations have sought the effective help of accredited consulting organisations to assist them in developing a programme to tailor and inculcate this method into their organisational culture. The latest version incorporates a whole chapter on tailoring PRINCE2. We believe that the publication of PRINCE2 Directing Successful Projects using PRINCE2 and the development of further support in the form of materials, mentoring and training for senior executives will be of significant benefit to contemporary project based organisations. The APM Group has already developed a qualification for sponsors in conjunction with the UK’s Home Office to help with this.

Program and project management

Program management serves as an overall vehicle for the transformation effort. It aims to support the implementation of the decided strategy in order to achieve the expected benefits in a business transformation initiative. A program is defined as a group of related projects managed in a coordinated way to obtain benefits and control not available when managing them individually . A project on the other hand, is a temporary endeavor undertaken to create a unique product, service, or result. Projects tend to have definite start and finish points, with the aim of delivering a predetermined output, giving them relatively clear development paths from initiation to delivery. Programs, on the contrary, exist to create value by enriching the management of projects in isolation. Programs typically have a more strategic vision of the desired end goal, but no clearly defined path to get there. Therefore, program management is expected to deal with the uncertainty surrounding the achievement of the vision, whereas projects work best where the outputs can be well defined.

Mapping the dynamics of the project management field : project management in action (part 6)

This is the sixth part of a Letter from the Editor series where the results are presented of an ongoing research undertaken in order to investigate the dynamic of the evolution of the field of project management and the key trends. Dynamics of networks is a key feature in strategic diagrams analysis. The radical change in the configuration of a network between two periods, or the change at subnetwork level reflects the dynamic of science. I present here an example of subnetwork comparison over the four periods of time considered in this study. I will develop and discuss an example of subnetwork transformation in future Letter from the Editor article..

Mapping the dynamics of the project management field : project management in action (part 5)

This is the fifth part of a Letter From the Editor series where the results are presented of an ongoing research undertaken in order to investigate the dynamic of the evolution of the field of project management and the key trends. I present some general findings and the strategic diagrams generated for each of the time periods introduced herein and discuss what we can learn from them on a general standpoint. I will develop and discuss some detailed findings in future Letter From the Editor articles...

Investigating the deployment of project management : a new perspective based on the concept of certification

Purpose – The purpose of this paper is to provide a summary description of the doctoral thesis investigating the field of project management (PM) deployment. Researchers will be informed of the current contributions within this topic and of the possible further investigations and researches. The decision makers and practitioners will be aware of a set of tools addressing the PM deployment with new perspectives. Design/methodology/approach – Research undertaken with the thesis is based on quantitative methods using time series statistics (time distance analysis) and comparative and correlation analysis aimed to better define and understand the PM deployment within and between countries or groups. Findings – The results suggest a project management deployment index (PMDI) to objectively measure the PM deployment based on the concept of certification. A proposed framework to empirically benchmark the PM deployment between countries by integrating the PMDI time series with the two dimensional comparative analysis of Sicherl. The correlation analysis within Hoftsede cultural framework shows the impact of the national culture dimensions on the PM deployment. The forecasting model shows a general continual growth trend of the PM deployment, with continual increase in the time distance between the countries. Research limitations/implications – The PM researchers are offered an empirical quantification on which they can construct further investigations and understanding of this phenomenon. The number of possible units that can be studied offers wide possibilities to replicate the thesis work. New researches can be undertaken to investigate further the contribution of other social or economical indicators, or to refine and enrich the definition of the PMDI indicator. Practical implications – These results have important implications on the PM deployment approaches. The PMDI measurements and time series comparisons facilitate considerably the measurement and benchmarking between the units (e.g. countries) and against targets, while the readiness setting of the studied unit (in terms of development and cultural levels) impacts the PM deployment within this country. Originality/value – This paper provides a summary of cutting-edge research work in the studied field of PM deployment and a link to the published works that researchers can use to help them understand the thesis research as well as how it can be extended.

Waste and resource management practices, legislation and policy encouraging and influencing ‘regeneration reuse’ of property assets

Carbon taxation governance is becoming increasingly popular, further evolving the polluter pays concept already well established in the built environment as a mechanism to controlling and licensing waste generation. This paper presents an explanation of property asset ‘regeneration reuse’ principles following deconstruction, which reduce waste generation associated with the process of demolition, construction and operation. An analysis is made of strategies in Australia and the United Kingdom, comparing jurisdiction targets pertaining to construction and demolition waste that encourage ‘regeneration reuse’. From examination of applicable Australian and United Kingdom legislation, strategic, fiscal and policy that influence on the 'regeneration reuse' of property assets, an evaluation to the variety of issues relevant to waste and resource management practices is reached. The paper concludes that a systematic evaluation framework to selecting building components and structures suitable for reuse after deconstruction must be considered in legislation.

Delphi study for improving sustainable construction project management in universities

As sustainability becomes an important principle guiding various human activities around the globe, the higher education sector is being asked to take an active part in educating and promoting sustainability due to its moral responsibility, social obligation and its own needs to adapt to new circumstances. There is a global trend of higher education institutions embarking on responses to the sustainability challenge. On-campus building performance is one of the most important indicators for “sustainable universities”, because buildings carry substantially environmental burden such as considerable consumption of raw materials and energy as well as huge amount of waste generation and greenhouse gas emission. Plus, much research proves that building performance can impact on students and staff’s awareness about and behaviours related to sustainability. The past studies rarely discussed about sustainable construction projects in universities’ unique context. Universities are labeled with distinct characteristics such as complex governance, multiple cultures and juggling missions and so on. It is necessary and meaningful to examine the project management system in terms of universities’ organizational environment. Thus, this research project applies Delphi study to identify primary barriers to green technology application in on-campus buildings, critical factors for sustainable project success, key actions in project phases and strategies for project improvement. Through three rounds of questionnaires among panel experts, the authors obtain a profound understanding of project delivery system in universities. The research results are expected to provide sustainability practitioners with holistic understanding and generic information about sustainable construction project performance on campus as an assistance tool.

Project management under uncertainty

Morris' (1986) analysis of the factors affecting project success and failure is considered in relation to the psychology of judgement under uncertainty. A model is proposed whereby project managers may identify the specific circumstances in which human decision-making is prone to systematic error, and hence may apply a number of de-biasing techniques.

Project management office a knowledge broker in project-based organisations

Current research into project management offices (PMOs) has stressed the PMOs' potential to act as knowledge brokers between projects, and between project and top management. Nonetheless, the literature does not provide sufficient evidence of the brokering role of PMOs. The research reported here aims to examine PMO's functions from a knowledge sharing perspective and explore whether or not these functions reflect the knowledge sharing needs of project managers (PMs). These issues are investigated through a cross-case analysis of seven organisations. The main contribution is insight into how PMs share knowledge and awareness of the need to structure PMOs to align with PMs' nature, needs and expectations in order to improve knowledge sharing in PBOs. Finally, some practical steps for helping PMOs to better adapt their functions to the needs of PMs and their learning and knowledge sharing style are proposed.

The Relation between work motivation and project management success in case of temporary organizations : theoretical lenses

The purpose of this paper is to present theoretical lenses that explain the relation between work motivation and project management success in case of temporary organizations such as projects. This paper is a part of the larger research study that first empirically identifies the constructs of work motivation in case of temporary organizations, and then empirically determines the relation between work motivation, and project management success. In the current paper, we have briefly reviewed the theories of work motivation from the work design school. These theories are predominantly drawn from the industrial/ organizational psychology literature. Then, we have considered the recent research on Nine Schools of Project Management as a point of departure to review theory on project management success. These theoretical perspectives are drawn from project management literature. We then illustrate the points of overlap for the theories drawn from these two disciplines. This review helps us to position our research study within the industrial/ organizational psychology, and project management literature as a cross-discipline study.

Perspectives on research in project management : the nine schools

This paper demonstrates that project management is a developing field of academic study in management, of considerable diversity and richness, which can make a valuable contribution to the development of management knowledge, as well as being of considerable economic importance. The paper reviews the substantial progress and trends of research in the subject, which has been grouped into nine major schools of thought: optimization, modelling, governance, behaviour, success, decision, process, contingency, and marketing. The paper addresses interactions between the different schools and with other related management fields, and provides insights into current and potential research in each and across these schools.

Theory based production and project management

This paper gives an overview of an ongoing project endeavouring to advance theory-based production and project management, and the rationale for this approach is briefly justified. The status of the theoretical foundation of production management, project management and allied disciplines is discussed, with emphasis on metaphysical grounding of theories, as well as the nature of the heuristic solution method commonly used in these disciplines. Then, on-going work related to different aspects of production and project management is reviewed from both theoretical and practical orientation. Next, information systems agile project management is explored with a view to its re-use in generic project management. In production management, the consequences and implementation of a new, wider theoretical basis are analyzed. The theoretical implications and negative symptoms of the peculiarities of the construction industry for supply chains and supply chain management in construction are observed. Theoretical paths for improvements of inter-organisational relationships in construction which are fundamental for improvement of construction supply chains are described. To conclude, the observations made in this paper vis-à-vis production, project and supply chain management are related again to the theoretical basis of this paper, and finally directions for theory development and future research are given and discussed.