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.

Serious tax non compliance : motivation and guardianship

This article reviews what international evidence exists on the impact of civil and criminal sanctions upon serious tax noncompliance by individuals. This construct lacks sharp definitional boundaries but includes large tax fraud and large-scale evasion that are not dealt with as fraud. Although substantial research and theory have been developed on general tax evasion and compliance, their conclusions might not apply to large-scale intentional fraudsters. No scientifically defensible studies directly compared civil and criminal sanctions for tax fraud, although one U.S. study reported that significantly enhanced criminal sanctions have more effects than enhanced audit levels. Prosecution is public, whereas administrative penalties are confidential, and this fact encourages those caught to pay heavy penalties to avoid publicity, a criminal record, and imprisonment.

A framework for strategic infrastructure asset management

The concept of asset management is not a new but an evolving idea that has been attracting attention of many organisations operating and/or owning some kind of infrastructure assets. The term asset management have been used widely with fundamental differences in interpretation and usage. Regardless of the context of the usage of the term, asset management implies the process of optimising return by scrutinising performance and making key strategic decisions throughout all phases of an assets lifecycle (Sarfi and Tao, 2004). Hence, asset management is a philosophy and discipline through which organisations are enabled to more effectively deploy their resources to provide higher levels of customer service and reliability while balancing financial objectives. In Australia, asset management made its way into the public works in 1993 when the Australian Accounting Standard Board issued the Australian Accounting Standard 27 – AAS27. Standard AAS27 required government agencies to capitalise and depreciate assets rather than expense them against earnings. This development has indirectly forced organisations managing infrastructure assets to consider the useful life and cost effectiveness of asset investments. The Australian State Treasuries and the Australian National Audit Office was the first organisation to formalise the concepts and principles of asset management in Australia in which they defined asset management as “ a systematic, structured process covering the whole life of an asset”(Australian National Audit Office, 1996). This initiative led other Government bodies and industry sectors to develop, refine and apply the concept of asset management in the management of their respective infrastructure assets. Hence, it can be argued that the concept of asset management has emerged as a separate and recognised field of management during the late 1990s. In comparison to other disciplines such as construction, facilities, maintenance, project management, economics, finance, to name a few, asset management is a relatively new discipline and is clearly a contemporary topic. The primary contributors to the literature in asset management are largely government organisations and industry practitioners. These contributions take the form of guidelines and reports on the best practice of asset management. More recently, some of these best practices have been made to become a standard such as the PAS 55 (IAM, 2004, IAM, 2008b) in UK. As such, current literature in this field tends to lack well-grounded theories. To-date, while receiving relatively more interest and attention from empirical researchers, the advancement of this field, particularly in terms of the volume of academic and theoretical development is at best moderate. A plausible reason for the lack of advancement is that many researchers and practitioners are still unaware of, or unimpressed by, the contribution that asset management can make to the performance of infrastructure asset. This paper seeks to explore the practices of organisations that manage infrastructure assets to develop a framework of strategic infrastructure asset management processes. It will begin by examining the development of asset management. This is followed by the discussion on the method to be adopted for this paper. Next, is the discussion of the result form case studies. It first describes the goals of infrastructure asset management and how they can support the broader business goals. Following this, a set of core processes that can support the achievement of business goals are provided. These core processes are synthesised based on the practices of asset managers in the case study organisations.

ePortfolio use by university students in Australia : Informing excellence in policy and practice. Supplementary report : October 2010

In April 2007, the Australian Learning and Teaching Council (ALTC)commissioned a study to examine the diverse approaches to ePortfolio use by students in Australian universities. The goals were to consider the scope, penetration and reasons for use of ePortfolios, and to examine the issues associated with their implementation in higher education. One of the central research activities in the project was a national audit which sought to establish a picture of current and emerging ePortfolio activities in Australian academic institutions. The data collection activities took place in late 2007 and the findings were presented and discussed in the final project report, published in October 2008. In 2010, the idea of a ‘follow up survey’ was developed. The resulting supplementary research activity was undertaken to update the data collected by the AeP project team in late 2007. The plan behind this ‘postscript to AeP’ project was to refresh the picture of ePortfolio practice in Australia by collecting new data to identify and map the use of ePortfolios in adult learning across the higher education, vocational education and training (VET) and the adult community education (ACE) sectors. The supplementary project has been referred to as the ‘AeP PS survey’.

A snapshot of Australian nurse practitioners’ extended practice activities

Introduction The Australian Nurse Practitioner Project (AUSPRAC) was initiated to examine the introduction of nurse practitioners into the Australian health service environment. The nurse practitioner concept was introduced to Australia over two decades ago and has been evolving since. Today, however, the scope of practice, role and educational preparation of nurse practitioners is well defined (Gardner et al, 2006). Amendments to specific pre-existing legislation at a State level have permitted nurse practitioners to perform additional activities including some once in the domain of the medical profession. In the Australian Capital Territory, for example 13 diverse Acts and Regulations required amendments and three new Acts were established (ACT Health, 2006). Nurse practitioners are now legally authorized to diagnose, treat, refer and prescribe medications in all Australian states and territories. These extended practices differentiate nurse practitioners from other advanced practice roles in nursing (Gardner, Chang & Duffield, 2007). There are, however, obstacles for nurse practitioners wishing to use these extended practices. Restrictive access to Medicare funding via the Medicare Benefit Scheme (MBS) and the Pharmaceutical Benefit Scheme (PBS) limit the scope of nurse practitioner service in the private health sector and community settings. A recent survey of Australian nurse practitioners (n=202) found that two-thirds of respondents (66%) stated that lack of legislative support limited their practice. Specifically, 78% stated that lack of a Medicare provider number was ‘extremely limiting’ to their practice and 71% stated that no access to the PBS was ‘extremely limiting’ to their practice (Gardner et al, in press). Changes to Commonwealth legislation is needed to enable nurse practitioners to prescribe medication so that patients have access to PBS subsidies where they exist; currently patients with scripts which originated from nurse practitioners must pay in full for these prescriptions filled outside public hospitals. This report presents findings from a sub-study of Phase Two of AUSPRAC. Phase Two was designed to enable investigation of the process and activities of nurse practitioner service. Process measurements of nurse practitioner services are valuable to healthcare organisations and service providers (Middleton, 2007). Processes of practice can be evaluated through clinical audit, however as Middleton cautions, no direct relationship between these processes and patient outcomes can be assumed.

Comparative communication research : Australian and New Zealand communication research in an international context

This paper raises the question of whether comparative national models of communications research can be developed, along the lines of Hallin and Mancini’s (2004) analysis of comparative media policy, or the work of Perraton and Clift (2004) on comparative national capitalisms. Taking consideration of communications research in Australia and New Zealand as its starting point, the paper will consider what are relevant variables in shaping an “intellectual milieu” for communications research in these countries, as compared to those of Europe, North America and Asia. Some possibly relevant variables include: • Type of media system (e.g. how significant is public service media?); • Political culture (e.g. are there significant left-of-centre political parties?); • Dominant intellectual traditions; • Level and types of research funding; • Overall structure of higher education system, and where communications sits within it. In considering whether such an exercise can or should be undertaken, we can also evaluate, as Hallin and Mancini do, the significance of potentially homogenizing forces. These would include globalization, new media technologies, and the rise of a global “audit culture”. The paper will raise these issues as questions that emerge as we consider, as Curran and Park (2000) and Thussu (2009) have proposed, what a “de-Westernized” media and communications research paradigm may look like.

Differences in Treatment and Management of Indigenous and Non-Indigenous Patients Presenting with Chest Pain: Results of the Heart Protection Partnership (HPP) Study

BACKGROUND: Indigenous patients with acute coronary syndromes represent a high-risk group. There are however few contemporary datasets addressing differences in the presentation and management of Indigenous and non-Indigenous patients with chest pain. METHODS: The Heart Protection Project, is a multicentre retrospective audit of consecutive medical records from patients presenting with chest pain. Patients were identified as Indigenous or non-Indigenous, and time to presentation and cardiac investigations as well as rates of cardiac investigations and procedures were compared between the two groups. RESULTS: Of the 2380 patients included, 199 (8.4%) identified as Indigenous, and 2174 (91.6%) as non-Indigenous. Indigenous patients were younger, had higher rates hyperlipidaemia, diabetes, smoking, known coronary artery disease and a lower rate of prior PCI; and were significantly less likely to have private health insurance, be admitted to an interventional facility or to have a cardiologist as primary physician. Following adjustment for difference in baseline characteristics, Indigenous patients had comparable rates of cardiac investigations and delay times to presentation and investigations. CONCLUSIONS: Although the Indigenous population was identified as a high-risk group, in this analysis of selected Australian hospitals there were no significant differences in treatment or management of Indigenous patients in comparison to non-Indigenous.

Alexithymia in alcohol dependent patients is partially mediated by alcohol expectancy

Background: Up to fifty percent of alcohol dependent individuals have alexithymia, a personality trait characterised by difficulties identifying and describing feelings, a lack of imagination and an externalised cognitive style. Although studies have examined alexithymia in relation to alcohol dependence, no research exists on mechanisms underlying this relationship. The present study examined the mediational effect of alcohol expectancies on alexithymia and alcohol dependence.----- ----- Methods: 230 outpatients completed the Toronto Alexithymia Scale (TAS-20), the Drinking Expectancy Questionnaire (DEQ) and the Alcohol Use Disorder Identification Test (AUDIT). Results: Regression analysis showed that alexithymia and alcohol dependence was, in two of three cases, partially mediated through alcohol expectancy.----- ----- Conclusions: Alcohol expectancies of assertion and affective change show promise as mediators of alcohol dependence in individuals with alexithymia.

Alexithymia, craving and attachment in a heavy drinking population

Up to fifty per cent of individuals with Alcohol use disorders (AUD) also have alexithymia a personality construct hypothesized to be related to attachment difficulties. The relationship between alexithymia, craving, anxious attachment and alcohol-dependence severity was examined in 254 patients participating in a Cognitive-Behavioral Therapy (CBT) program for alcohol-dependence. Participants completed the Toronto Alexithymia Scale (TAS-20), the Obsessive Compulsive Drinking Scale (OCDS), the Revised Adult Attachment Anxiety Subscale (RAAS-Anxiety) and the Alcohol Use Disorder Identification Test (AUDIT). MANOVA indicated that individuals with alexithymia reported significantly higher levels of total OCDS, obsessive thoughts about alcohol, and compulsive drinking urges and behavior, compared to the non-alexithymic group. Regression analyses found that anxious attachment partially mediated the relationship between alexithymia and craving. Anxious attachment may be a potential treatment target to reduce alcohol consumption in those with alcohol-dependence and alexithymia. Research Highlights ► There were significant relationships of alexithymia, craving and anxious attachment. ► Alexithymic alcoholics reported higher levels of craving and alcoholism severity. ► Anxious attachment partially mediated the relationship of alexithymia and craving.

The obsessive compulsive drinking scale is a valid measure of alcohol craving in young adults

Background: Alcohol craving is associated with greater alcohol-related problems and less favorable treatment prognosis. The Obsessive Compulsive Drinking Scale (OCDS) is the most widely used alcohol craving instrument. The OCDS has been validated in adults with alcohol use disorders (AUDs), which typically emerge in early adulthood. This study examines the validity of the OCDS in a nonclinical sample of young adults. Methods: Three hundred and nine college students (mean age of 21.8 years, SD = 4.6 years) completed the OCDS, Alcohol Use Disorders Identification Test (AUDIT), and measures of alcohol consumption. Subjects were randomly allocated to 2 samples. Construct validity was examined via exploratory factor analysis (n = 155) and confirmatory factor analysis (n = 154). Concurrent validity was assessed using the AUDIT and measures of alcohol consumption. A second, alcohol-dependent sample (mean age 42 years, SD 12 years) from a previously published study (n = 370) was used to assess discriminant validity. Results: A unique young adult OCDS factor structure was validated, consisting of Interference/Control, Frequency of Obsessions, Alcohol Consumption and Resisting Obsessions/Compulsions. The young adult 4-factor structure was significantly associated with the AUDIT and alcohol consumption. The 4 factor OCDS successfully classified nonclinical subjects in 96.9% of cases and the older alcohol-dependent patients in 83.7% of cases. Although the OCDS was able to classify college nonproblem drinkers (AUDIT <13, n = 224) with 83.2% accuracy, it was no better than chance (49.4%) in classifying potential college problem drinkers (AUDIT score ≥13, n = 85). Conclusions: Using the 4-factor structure, the OCDS is a valid measure of alcohol craving in young adult populations. In this nonclinical set of students, the OCDS classified nonproblem drinkers well but not problem drinkers. Studies need to further examine the utility of the OCDS in young people with alcohol misuse.

Pedagogy of feedback on student academic writing : research supervisor practices for the end of the research degree candidature

All academic writing is advanced with the benefit of feedback about the writing. In the case of the academic writing genres of the research proposal and the dissertation, feedback is usually provided by the research supervisor. Given that academic writing development is a process, and in the case of the research proposal and dissertation, writing which develops over time, it seems likely that the nature of feedback on drafts written early in the candidature may be different from feedback provided by the research supervisor later in a student’s candidature. ----- ----- When a research supervisor has been reading a student’s writing over a period of time, their own familiarity with the writing generates a risk to their ability to provide critical and objective feedback. Particularly by the end of a student’s candidature, the research supervisor’s familiarity with the work may cause them to miss elements of writing improvement. ----- ----- The author, as a research supervisor, has developed a feedback grid to facilitate feedback on the final drafts of a dissertation. This feedback grid is generated by the embedded promises in the early sections of the dissertation, which are then used to audit the content of the final sections of the dissertation to ascertain whether promises made have been fulfilled. This provides a strategy for the research supervisor to step back from the work and read the dissertation with the agenda of a dissertation examiner. ----- ----- The grid is one strategy within a broader pedagogy of providing feedback on writing samples.

A case for addressing the literacy demands of student assessment

The development and implementation of the Australian Curriculum together with national testing of students and the publication of school results place new demands on teachers. In this article we address the importance of teachers becoming attuned to the silent assessors in assessment generally and in the National Literacy and Numeracy Program (NAPLAN) more specifically. Using the concept of literacies, we develop a method to conduct a literacy audit of assessment tasks that teachers can use to help both themselves and their students. Providing assistance to students as a consequence of such an audit is imperative to improve the outcomes for students and to address issues of equity.

An analysis of the nature and effectiveness of corporate governance in smaller listed Australian companies

The objective of this thesis is to investigate the corporate governance attributes of smaller listed Australian firms. This study is motivated by evidence that these firms are associated with more regulatory concerns, the introduction of ASX Corporate Governance Recommendations in 2004, and a paucity of research to guide regulators and stakeholders of smaller firms. While there is an extensive body of literature examining the effectiveness of corporate governance, the literature principally focuses on larger companies, resulting in a deficiency in the understanding of the nature and effectiveness of corporate governance in smaller firms. Based on a review of agency theory literature, a theoretical model is developed that posits that agency costs are mitigated by internal governance mechanisms and transparency. The model includes external governance factors but in many smaller firms these factors are potentially absent, increasing the reliance on the internal governance mechanisms of the firm. Based on the model, the observed greater regulatory intervention in smaller companies may be due to sub-optimal internal governance practices. Accordingly, this study addresses four broad research questions (RQs). First, what is the extent and nature of the ASX Recommendations that have been adopted by smaller firms (RQ1)? Second, what firm characteristics explain differences in the recommendations adopted by smaller listed firms (RQ2), and third, what firm characteristics explain changes in the governance of smaller firms over time (RQ3)? Fourth, how effective are the corporate governance attributes of smaller firms (RQ4)? Six hypotheses are developed to address the RQs. The first two hypotheses explore the extent and nature of corporate governance, while the remaining hypotheses evaluate its effectiveness. A time-series, cross-sectional approach is used to evaluate the effectiveness of governance. Three models, based on individual governance attributes, an index of six items derived from the literature, and an index based on the full list of ASX Recommendations, are developed and tested using a sample of 298 smaller firms with annual observations over a five-year period (2002-2006) before and after the introduction of the ASX Recommendations in 2004. With respect to (RQ1) the results reveal that the overall adoption of the recommendations increased from 66 per cent in 2004 to 74 per cent in 2006. Interestingly, the adoption rate for recommendations regarding the structure of the board and formation of committees is significantly lower than the rates for other categories of recommendations. With respect to (RQ2) the results reveal that variations in rates of adoption are explained by key firm differences including, firm size, profitability, board size, audit quality, and ownership dispersion, while the results for (RQ3) were inconclusive. With respect to (RQ4), the results provide support for the association between better governance and superior accounting-based performance. In particular, the results highlight the importance of the independence of both the board and audit committee chairs, and of greater accounting-based expertise on the audit committee. In contrast, while there is little evidence that a majority independent board is associated with superior outcomes, there is evidence linking board independence with adverse audit opinion outcomes. These results suggest that board and chair independence are substitutes; in the presence of an independent chair a majority independent board may be an unnecessary and costly investment for smaller firms. The findings make several important contributions. First, the findings contribute to the literature by providing evidence on the extent, nature and effectiveness of governance in smaller firms. The findings also contribute to the policy debate regarding future development of Australia’s corporate governance code. The findings regarding board and chair independence, and audit committee characteristics, suggest that policy-makers could consider providing additional guidance for smaller companies. In general, the findings offer support for the “if not, why not?” approach of the ASX, rather than a prescriptive rules-based approach.

Pre-Admission and Post-Hospital Management of Heart Failure in Patients not Enrolled in Specialist Programs

Aim: To review the management of heart failure in patients not enrolled in specialist multidisciplinary programs. Method: A prospective clinical audit of patients admitted to hospital with either a current or past diagnosis of heart failure and not enrolled in a specialist heart failure program or under the direct care of the cardiology unit. Results: 81 eligible patients were enrolled (1 August to 1 October 2008). The median age was 81 9.4 years and 48% were male. Most patients (63%) were in New York Heart Association Class II or Class III heart failure. On discharge, 59% of patients were prescribed angiotensin converting enzyme inhibitors and 43% were prescribed beta-blockers. During hospitalisation, 8.6% of patients with a past diagnosis of heart failure were started on an angiotensin converting enzyme inhibitor and 4.9% on a beta-blocker. There was evidence of suboptimal dosage on admission and discharge for angiotensin converting enzyme inhibitors (19% and 7.4%) and beta-blockers (29% and 17%). The results compared well with international reports regarding the under-treatment of heart failure. Conclusion: The demonstrated practice gap provides excellent opportunities for the involvement of pharmacists to improve the continuation of care for heart failure patients discharged from hospital in the areas of medication management review, dose titration and monitoring.