Compliance with international financial reporting standards (IFRS) and the value relevance of accounting information in emerging stock markets : evidence from Kuwait

Since the 1960s, the value relevance of accounting information has been an important topic in accounting research. The value relevance research provides evidence as to whether accounting numbers relate to corporate value in a predicted manner (Beaver, 2002). Such research is not only important for investors but also provides useful insights into accounting reporting effectiveness for standard setters and other users. Both the quality of accounting standards used and the effectiveness associated with implementing these standards are fundamental prerequisites for high value relevance (Hellstrom, 2006). However, while the literature comprehensively documents the value relevance of accounting information in developed markets, little attention has been given to emerging markets where the quality of accounting standards and their enforcement are questionable. Moreover, there is currently no known research that explores the association between level of compliance with International Financial Reporting Standards (IFRS) and the value relevance of accounting information. Motivated by the lack of research on the value relevance of accounting information in emerging markets and the unique institutional setting in Kuwait, this study has three objectives. First, it investigates the extent of compliance with IFRS with respect to firms listed on the Kuwait Stock Exchange (KSE). Second, it examines the value relevance of accounting information produced by KSE-listed firms over the 1995 to 2006 period. The third objective links the first two and explores the association between the level of compliance with IFRS and the value relevance of accounting information to market participants. Since it is among the first countries to adopt IFRS, Kuwait provides an ideal setting in which to explore these objectives. In addition, the Kuwaiti accounting environment provides an interesting regulatory context in which each KSE-listed firm is required to appoint at least two external auditors from separate auditing firms. Based on the research objectives, five research questions (RQs) are addressed. RQ1 and RQ2 aim to determine the extent to which KSE-listed firms comply with IFRS and factors contributing to variations in compliance levels. These factors include firm attributes (firm age, leverage, size, profitability, liquidity), the number of brand name (Big-4) auditing firms auditing a firm’s financial statements, and industry categorization. RQ3 and RQ4 address the value relevance of IFRS-based financial statements to investors. RQ5 addresses whether the level of compliance with IFRS contributes to the value relevance of accounting information provided to investors. Based on the potential improvement in value relevance from adopting and complying with IFRS, it is predicted that the higher the level of compliance with IFRS, the greater the value relevance of book values and earnings. The research design of the study consists of two parts. First, in accordance with prior disclosure research, the level of compliance with mandatory IFRS is examined using a disclosure index. Second, the value relevance of financial statement information, specifically, earnings and book value, is examined empirically using two valuation models: price and returns models. The combined empirical evidence that results from the application of both models provides comprehensive insights into value relevance of accounting information in an emerging market setting. Consistent with expectations, the results show the average level of compliance with IFRS mandatory disclosures for all KSE-listed firms in 2006 was 72.6 percent; thus, indicating KSE-listed firms generally did not fully comply with all requirements. Significant variations in the extent of compliance are observed among firms and across accounting standards. As predicted, older, highly leveraged, larger, and profitable KSE-listed firms are more likely to comply with IFRS required disclosures. Interestingly, significant differences in the level of compliance are observed across the three possible auditor combinations of two Big-4, two non-Big 4, and mixed audit firm types. The results for the price and returns models provide evidence that earnings and book values are significant factors in the valuation of KSE-listed firms during the 1995 to 2006 period. However, the results show that the value relevance of earnings and book values decreased significantly during that period, suggesting that investors rely less on financial statements, possibly due to the increase in the available non-financial statement sources. Notwithstanding this decline, a significant association is observed between the level of compliance with IFRS and the value relevance of earnings and book value to KSE investors. The findings make several important contributions. First, they raise concerns about the effectiveness of the regulatory body that oversees compliance with IFRS in Kuwait. Second, they challenge the effectiveness of the two-auditor requirement in promoting compliance with regulations as well as the associated cost-benefit of this requirement for firms. Third, they provide the first known empirical evidence linking the level of IFRS compliance with the value relevance of financial statement information. Finally, the findings are relevant for standard setters and for their current review of KSE regulations. In particular, they highlight the importance of establishing and maintaining adequate monitoring and enforcement mechanisms to ensure compliance with accounting standards. In addition, the finding that stricter compliance with IFRS improves the value relevance of accounting information highlights the importance of full compliance with IFRS and not just mere adoption.

Automatic spoken language identification utilizing acoustic and phonetic speech information

Automatic spoken Language Identi¯cation (LID) is the process of identifying the language spoken within an utterance. The challenge that this task presents is that no prior information is available indicating the content of the utterance or the identity of the speaker. The trend of globalization and the pervasive popularity of the Internet will amplify the need for the capabilities spoken language identi¯ca- tion systems provide. A prominent application arises in call centers dealing with speakers speaking di®erent languages. Another important application is to index or search huge speech data archives and corpora that contain multiple languages. The aim of this research is to develop techniques targeted at producing a fast and more accurate automatic spoken LID system compared to the previous National Institute of Standards and Technology (NIST) Language Recognition Evaluation. Acoustic and phonetic speech information are targeted as the most suitable fea- tures for representing the characteristics of a language. To model the acoustic speech features a Gaussian Mixture Model based approach is employed. Pho- netic speech information is extracted using existing speech recognition technol- ogy. Various techniques to improve LID accuracy are also studied. One approach examined is the employment of Vocal Tract Length Normalization to reduce the speech variation caused by di®erent speakers. A linear data fusion technique is adopted to combine the various aspects of information extracted from speech. As a result of this research, a LID system was implemented and presented for evaluation in the 2003 Language Recognition Evaluation conducted by the NIST.

Raising the Standards: An Integrated Approach to Promoting Professional Standards and Avoiding Professional Criminality

Crime in the Professions critically examines the nature and extent of crime and deviance in the professions and how it should be dealt with. The increasing professionalization of the work force and the changes in the way in which professionals carry out their work, such as through the use of computing and communications technology, have created new opportunities for professionals to break the law. Looking in detail at the nature and extent of crime committed by professionals such as doctors, accountants and nurses the book offers some innovative solutions on preventing and controlling professional crime. In addition to examining the nature and extent of crime in the professions, it also addresses some critical issues of regulation for the future, concerning new and emerging professional groups and issues relating to emerging technologies.

Role and purpose of standards in the context of national curriculum and assessment reform for accountability, improvement and equity in student learning

In this article our starting point is the current context of national curriculum change and intense speculation about the assessment, standards and reporting. It is written against a background of accountability measures and improvement imperatives, and focuses attention on standards as offering representations of quality. We understand standards to be constructs that aim to achieve public credibility and utility. Further, they can be examined for the purposes they seek to serve and also their expected functions. Fitness for purpose is therefore a useful notion in considering the nature of standards. Our interest in the discussion is the ‘fit’ between how standards are formulated and how they are used in practice, by whom and for what purposes. A related interest is in the matter of how standards can be harnessed to realise improvement.

Governance in the Australian superannuation industry

In the Superannuation/Pension industry ordinary investors entrust their retirement savings to the trustees of the superannuation plan. Investors rely on the trustees to ensure ethical business and risk management practices are implemented to protect their retirement savings. Governance practices ensure the monitoring of ethical risk management (Drennan, 2004). The Australian superannuation industry presents a unique scenario. Legislation requires employers to contribute a minimum of 9% of the employees wage to retirement savings. However, there are no legislated governance standards, although there are standards of recommended governance practices. In this paper, we examine the level of voluntary adoption of governance practices by the trustees of Australian public sector and industry superannuation funds. We also assess whether superannuation governance practices are associated with performance and volatility/riskiness of returns. Survey results show that the majority of superannuation plans adopt recommended governance practices supporting the concept of ethical management of the member’s retirement savings. The examination of governance principles that impact returns and risk show that board size and regular review of conflicts are positively associated with return. Superannuation plans with higher volatility in returns meet more frequently.

From domestic violence to sustainable employment

International research has found that domestic violence is a significant barrier to accessing and sustaining work (Lloyd and Taluc 1999, 385; Browne et al. 1999, 398). In the Australian context, the Bureau of Crime Statistics and Research reports that between 6 and 9 per cent of Australian women aged 18 and over are physically assaulted each year and that more than half of all women in Australia experience sexual or physical violence across their adult lifetime. Such behaviour has been estimated to cost $8.1 billion, of which $4.4 billion is estimated to be borne by the victims themselves, $1.2 billion by the general community and smaller amounts by friends and family and various levels of government (Access Economics 2004). This assessment underestimates the costs of domestic violence in terms of the inability of those who have experienced domestic violence to move into and secure sustainable employment options. Despite these statistics there is a dearth of Australian research focussing on the link between domestic violence and its impact on long-term sustainable employment for those who have been subjected to such violence. This paper explores the issue of domestic violence and access to work opportunities. In so doing, it links the work of Gianakos (1999) and her Career Development theory with that of Bandura‘s (1989) Social Cognitive Career Theory to develop a framework which would provide a pathway to enable those who have suffered domestic violence to achieve sustainable employment and economic independence.

Standards-driven reform years 1-10 : moderation an optional extra?

While externally moderated standards-based assessment has been practised in Queensland senior schooling for more than three decades, there has been no such practice in the middle years. With the introduction of standards at state and national levels in these years, teacher judgement as developed in moderation practices is now vital. This paper argues, that in this context of assessment reform, standards intended to inform teacher judgement and to build assessment capacity are necessary but not sufficient for maintaining teacher and public confidence in schooling. Teacher judgement is intrinsic to moderation, and to professional practice, and can no longer remain private. Moderation too is intrinsic to efforts by the profession to realise judgements that are defensible, dependable and open to scrutiny. Moderation can no longer be considered an optional extra and requires system-level support especially if, as intended, the standards are linked to system-wide efforts to improve student learning. In presenting this argument we draw on an Australian Research Council funded study with key industry partners (the Queensland Studies Authority and the National Council for Curriculum and Assessment of the Republic of Ireland). The data analysed included teacher interview data and additional teacher talk during moderation sessions. These were undertaken during the initial phase of policy development. The analysis identified those issues that emerge in moderation meetings that are designed to reach consistent, reliable judgements. Of interest are the different ways in which teachers talked through and interacted with one another to reach agreement about the quality of student work in the application of standards. There is evidence of differences in the way that teachers made compensations and trade-offs in their award of grades, dependent on the subject domain in which they teach. This article concludes with some empirically derived insights into moderation practices as policy and social events.

The centrality of teachers’ judgement practice in assessment : a study of standards in moderation

There is a strong quest in several countries including Australia for greater national consistency in education and intensifying interest in standards for reporting. Given this, it is important to make explicit the intended and unintended consequences of assessment reform strategies and the pressures to pervert and conform. In a policy context that values standardisation, the great danger is that the technical, rationalist approaches that generalise and make superficial assessment practices, will emerge. In this article, the authors contend that the centrality and complexity of teacher judgement practice in such a policy context need to be understood. To this end, we discuss and analyse recorded talk in teacher moderation meetings showing the processes that teachers use as they work with stated standards to award grades (A to E). We show how they move to and fro between (1) supplied textual artefacts, including stated standards and samples of student responses, (2) tacit knowledge of different types, drawing into the moderation, and (3) social processes of dialogue and negotiation. While the stated standards play a part in judgement processes, in and of themselves they are shown to be insufficient to account for how the teachers ascribe value and award a grade to student work in moderation. At issue is the nature of judgement as cognitive and social practice in moderation and the legitimacy (or otherwise) of the mix of factors that shape how judgement occurs.

The social work & human services workforce : report from a national study of education, training and workforce needs

This report analyses the national curriculum and workforce needs of the social work and human services workforce. Australia’s community and health services are among the fastest growing sectors of employment in the nation but the sustainability of an appropriately qualified workforce is threatened. Yet there is little integration of education and workforce planning for the community services sector. This contrasts markedly with the health services sector, where key stakeholders are collaboratively addressing workforce challenges. Our research confirmed rapid growth in the social work and human services workforce and it also identified: • an undersupply of professionally qualified social work and human service practitioners to meet workforce demand; • the rapid ageing of the workforce with many workers approaching retirement; • limited career and salary structures creating disincentives to retention; • a highly diverse qualification base across the workforce. This diversity is inconsistent with the specialist knowledge and skills required of practitioners in many domains of community service provision. Our study revealed a lack of co-ordination across VET and higher education to meet the educational needs of the social work and human services workforce. Our analysis identified: • strong representation of equity groups in social work and related human service programs, although further participation of these groups is still needed; • the absence of clear articulation pathways between VET and higher education programs due the absence of co-ordination and planning between these sectors; • substantial variation in the content of the diverse range of social work and human service programs, with accredited programs conforming to national standards and some others in social and behavioural sciences lacking any external validation; • financial obstacles and disincentives to social work and human service practitioners in achieving postgraduate level qualifications. We recommend that: • DEEWR identify accredited social work and human services courses as a national education priority (similar to education and nursing). This will help ensure the supply of professional workers to this sector; • VET and higher education providers are encouraged to collaboratively develop clear and accessible educational pathways across the educational sectors; • DEEWR undertake a national workforce analysis and planning processes in collaboration with CSDMAC, and all social and community services stakeholders, to ensure workforce sustainability; and • COAG develop a national regulation framework for the social and community services workforce. This would provide sound accountability systems, and rigorous practice and educational standards necessary for quality service provision. It will also ensure much needed public confidence in this workforce.

Assessment for learning in the accountability era : Queensland, Australia

Developments in school education in Australia over the past decade have witnessed the rise of national efforts to reform curriculum, assessment and reporting. Constitutionally the power to decide on curriculum matters still resides with the States. Higher stakes in assessment, brought about by national testing and international comparative analyses of student achievement data, have challenged State efforts to maintain the emphasis on assessment to promote learning while fulfilling accountability demands. In this article lessons from the Queensland experience indicate that it is important to build teachers' assessment capacity and their assessment literacy for the promotion of student learning. It is argued that teacher assessment can be a source of dependable results through moderation practice. The Queensland Studies Authority has recognised and supported the development of teacher assessment and moderation practice in the context of standards-driven, national reform. Recent research findings explain how the focus on learning can be maintained by avoiding an over-interpretation of test results in terms of innate ability and limitations and by encouraging teachers to adopt more tailored diagnosis of assessment data to address equity through focus on achievement for all. Such efforts are challenged as political pressures related to the Australian government’s implementation of national testing and national partnership funding arrangements tied to the performance of students at or below minimum standards become increasingly apparent.

The high road or the low road? Alternatives for Australia's future

The OECD suggests that countries now have a choice. They can focus on development based on either:  competition via investment in technology and innovation - which is important in high knowledge industries and high innovation economies, or  competition via exchange rates and wages - which is important in industries producing standardised, lower-tech goods and services. The first route will maximise higher-skilled, higher-paid employment growth and living standards. Given the lack of control over the exchange rate, the second route requires competition based on wages. It is essential to understand that markets themselves won’t shift a country from one path to the other. These conclusions arise from the OECD’s recognition that technical progress - the creation of new products or the adoption of more efficient methods of production - is the main source of economic growth and enhanced quality of life. Technological change is, the OECD suggests, ...also the engine for job creation as higher wages and profits resulting from technology-induced productivity gains and lower prices lead to increased demand for new products from existing as well as new industries (1997: 4).Further, Competitiveness in high-technology industries is mainly driven by technology factors and much less by wage and exchange rate movements, while the reverse is true in low-technology industries (OECD 1996e: 12). The OECD has shown that sound macroeconomic conditions, such as the low inflation and reduced public sector debt visible in almost all member countries in the 1990s, are not enough to deal with high levels of unemployment and the need to increase levels of income: If economic performance is to improve, additional structural reform, which can increase innovation and the diffusion of technologies within and among national economies, seems necessary (OECD 1997: 4 Emphasis added).

Double standards in cultural judgements

The author, a teacher of television and film from a cultural studies perspective, endeavours to persuade his students to give up snobbery when they judge culture. The author has found that most students enter university with a series of middle class value judgements very strongly in place. Essentially, the judgements are that commercial culture is 'bad' and non-commercial culture is 'good'.

Voluntary employment agreements in the pioneer state

Research Paper examining the introduction of VEA’s on the industrial and political framework of Queensland

Gender patterns for aspirations for transitional employment and training and development in local government

Purpose – The purpose of this paper is to determine the patterns of transitional employment (TE) aspirations and training and development (T&D) needs of women within local government. Design/methodology/approach – A quantitative survey methodology was used to identify aspirations in a sample of 1,068 employees from the Australian Local Government Association. Findings – Mature-aged women were very interested in continuous learning at work despite their limited formal education. Their training preferences consisted of informal delivery face-to-face or online in the areas of management or administration. Younger women were interested in undertaking university courses, while a minority were interested in blue collar occupations. Practical implications – Through the identification of patterns of TE and T&D aspirations, long term strategies to develop and retain women in local government may be developed. Findings suggest that mature-aged women would benefit from additional T&D to facilitate entry into management and senior administration positions, as well as strategies to facilitate a shift in organizational climate. Social implications – Mature-aged women were found to be a potentially untapped resource for management and senior administrative roles owing to their interest in developing skills in these fields and pursuing TE. Younger women may also benefit from T&D to maintain their capacity during breaks from employment. Encouragement of women in non-traditional areas may also address skill shortages in the local government. Originality/value – Mature-aged women were found to be a potentially untapped resource for management and senior administrative roles owing to their interest in developing skills in these fields and pursuing TE. Younger women may also benefit from T&D to maintain their capacity during breaks from employment. Encouragement of women in non-traditional areas may also address skill shortages in the local government.