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.

Innovative and entrepreneurial activity in the public sector : the changing face of public sector institutions

This paper investigates the elements which support innovative and entrepreneurial activity in New Zealand’s state owned enterprises (SOEs). An inductive case study design, involving interview data, textual analysis, and observation, was applied to three SOEs. Findings reveal that those aspects typically associated with entrepreneurship, such as innovation, risk acceptance, pro-activeness and growth, are often supported by a number of unexpected elements within the public sector. These elements include culture, branding, operational excellence, cost efficiency, and knowledge transfer. The implications are twofold. First, that innovative and entrepreneurial activity in the public sector can go beyond policy-making, with SOEs representing an important policy decision and sector of the New Zealand Government. And second, that the impact of several SOEs on international markets suggests competition on the global stage will increasingly come from both public and private sector organizations.

Scaffolding children’s robot building and programming activities

Since 2001 the School of Information Technology and Electrical Engineering (ITEE) at the University of Queensland has been involved in RoboCupJunior activities aimed at providing children with the Robot building and programming knowledge they need to succeed in RoboCupJunior competitions. These activities include robotics workshops, the organization of the State-wide RoboCupJunior competition, and consultation on all matters robotic with schools and government organizations. The activities initiated by ITEE have succeeded in providing children with the scaffolding necessary to become competent, independent robot builders and programmers. Results from state, national and international competitions suggest that many of the children who participate in the activities supported by ITEE are subsequently able to purpose- build robots to effectively compete in RoboCupJunior competitions. As a result of the scaffolding received within workshops children are able to think deeply and creatively about their designs, and to critique their designs in order to make the best possible creation in an effort to win.

International rigid contact lens prescribing

Rigid lenses have been fitted less since the introduction of soft lenses nearly 40 years ago. Data that we have gathered from annual contact lens fitting surveys conducted in Australia, Canada, Japan, the Netherlands, Norway, the UK and the USA between 2000 and 2008 facilitate an accurate characterization of the pattern of the decline of rigid lens fitting during the first decade of this century. There is a trend for rigid lenses to be utilized primarily for refitting those patients who are already successful rigid lens wearers—most typically older females being refit with higher Dk materials. Rigid lenses are generally fitted on a full-time basis (four or more days of wear per week) without a planned replacement schedule. Orthokeratology is especially popular in the Netherlands, but is seldom prescribed in the other countries surveyed.

Twenty first century trends in silicone hydrogel contact lens fitting : an international perspective

Silicone hydrogel contact lenses were introduced into the market in 1999. To assess prescribing trends of this lens type since then, up to 1000 survey forms were sent to contact lens fitters in Australia, Canada, Japan, the Netherlands, Norway, the UK and the USA each year between 2000 and 2008. Practitioners were asked to record data relating to the first 10 contact lens fits or refits performed after receiving the survey form. Analysis of returned forms revealed a rapid increase in the prescribing of silicone hydrogel lenses over the survey period. In 2008, silicone hydrogel lenses represented 36% of all soft lenses prescribed. The categorization of the majority of lenses prescribed as ‘refits’ is primarily attributed to the mass conversion of lens wearers from hydrogel to silicone hydrogel lenses. Silicone hydrogels may soon represent the majority of soft contact lenses prescribed.

Demographics of international contact lens prescribing

Knowledge of differences in the demographics of contact lens prescribing between nations, and changes over time, can assist (a) the contact lens industry in developing and promoting various product types in different world regions, and (b) practitioners in understanding their prescribing habits in an international context. Data that we have gathered from annual contact lens fitting surveys conducted in Australia, Canada, Japan, the Netherlands, Norway, the UK and the USA between 2000 and 2008 reveal an ageing demographic, with Japan being the most youthful. The majority of fits are to females, with statistically significant differences between nations, ranging from 62 per cent of fits in Norway to 68 per cent in Japan. The small overall decline in the proportion of new fits, and commensurate increase in refits, over the survey periodmay indicate a growing rate of conversion of lens wearers to more advanced lens types, such as silicone hydrogels. � 2009 British Contact Lens Association.

Advanced Gen-1, 2 and 3 biofuels research in Australia - Fuelling advanced biofuels training for international scientists

Flinders University and Queensland University of Technology, biofuels research interests cover a broad range of activities. Both institutions are seeking to overcome the twin evils of "peak oil" (Hubbert 1949 & 1956) and "global warming" (IPPC 2007, Stern 2006, Alison 2010), through development of Generation 1, 2 and 3 (Gen-1, 2 & 3) biofuels (Clarke 2008, Clarke 2010). This includes development of parallel Chemical Biorefinery, value-added, co-product chemical technologies, which can underpin the commercial viability of the biofuel industry. Whilst there is a focused effort to develop Gen-2 & 3 biofuels, thus avoiding the socially unacceptable use of food based Gen-1 biofuels, it must also be recognized that as yet, no country in the world has produced sustainable Gen-2 & 3 biofuel on a commercial basis. For example, in 2008 the United States used 38 billion litres (3.5% of total fuel use) of Gen-1 biofuel; in 2009/2010 this will be 47.5 billion litres (4.5% of fuel use) and in 2018 this has been estimated to rise to 96 billion litres (9% of total US fuel use). Brazil in 2008 produced 24.5 billion litres of ethanol, representing 37.3% of the world’s ethanol use for fuel and Europe, in 2008, produced 11.7 billion litres of biofuel (primarily as biodiesel). Compare this to Australia’s miserly biofuel production in 2008/2009 of 180 million litres of ethanol and 75 million litres of biodiesel, which is 0.4% of our fuel consumption! (Clarke, Graiver and Habibie 2010) To assist in the development of better biofuels technologies in the Asian developing regions the Australian Government recently awarded the Materials & BioEnergy Group from Flinders University, in partnership with the Queensland University of Technology, an Australian Leadership Award (ALA) Biofuel Fellowship program to train scientists from Indonesia and India about all facets of advanced biofuel technology.

Money laundering and FATF compliance by the international community

This paper examines the anti-money laundering systems of Australia, the United Arab Emirates (UAE), the United Kingdom (UK) and the United States of America (USA), the extent to which they have implemented the Financial Action Task Force (FATF) recommendations, and how compliance with these recommendations is affected by local cultural and economic factors. The paper makes use of FATF evaluation reports to compare the countries’ compliance; it examines some of the underlying cultural considerations and culture-specific ethical issues that affect the extent of compliance, and how cultural and ethical considerations may affect good governance. The findings indicate that the UK and the USA are the most advanced with regards to their compliance with the FATF recommendations and Australia and the UAE less so. The UAE is in particular found to be least compliant. We relate this finding to previous work on how a country’s legal and financial systems develop in line with its religion, culture and socio-economic situation, and examine how such local factors have affected the UAE’s financial and anti-money laundering and combating the financing of terrorism (AML/CFT) systems. This research will be of interest to policy-makers and government agencies involved in addressing money laundering and its successful detection and prosecution.

Using a design led disruptive innovation approach to develop new services : practising innovation in times of discontinuity

Organisations face increasing competition from new firms in emerging markets and their past superior products may no longer provide competitive advantage in markets based on different cost and value differentials. A shift in design practices from product solutions to health services which are accessible and affordable by all is required. This paper explores a design led approach to innovation to assist medical device companies develop new services and experiences and reshape their notions of the nature, development and deployment of health care services. This approach uses design tools and methodologies that are grounded in the authentic understandings of stakeholder experiences, to assist an organisation create a vision of likely future health care scenarios. Through this process, organisations can explore the complexities in the delivery of future health care services in new and emerging markets allowing them to tailor product and service solutions which focus on being accessible and affordable by all. The industry based case study for the design of health services in carried out in emerging economies. The contribution of this work in advancing research into design innovation and future research directions are also presented.

The comparison of international and local sustainable assessment tools of landscape design for housing estate developments : case of Bangkok Metropolitan Region, Thailand

Various countries have been introducing sustainable assessment tools for real estate design to produce integrated sustainability components not just for the building, but also the landscape component of the development. This paper aims to present the comparison between international and local assessment tools of landscape design for housing estate developments in Bangkok Metropolitan Region (BMR), Thailand. The methodologies used are to review, then compare and identify discrepancy indicators among the tools. This paper will examine four international tools; LEED for Neighbourhood Development (LEED – ND) of United State of America (USA), EnviroDevelopment standards of Australia, Residential Landscape Sustainability of United Kingdom (UK) and Green Mark for Infrastructure of Singapore; and three BMR’s existing tools; Land Subdivision Act B.E. 2543, Environmental Impact Assessment Monitoring Awards (EIA-MA) and Thai’s Rating for Energy and Environmental Sustainability of New construction and major renovation (TREES-NC). The findings show that there are twenty two elements of three categories which are neighbourhood design, community management, and environmental condition. Moreover, only one element in neighbourhood designs different between the international and local tools. The sustainable assessment tools have existed in BMR but they are not complete in only one assessment tool. Thus, the development of new comprehensive assessment tool will be necessary in BMR; however, it should meet the specific environment and climate condition for housing estate development at BMR.

Fashion as consumer entrepreneurship : emergent risk culture, social network markets, and the launch of Vogue in China

China has a reputation as an economy based on utility: the large-scale manufacture of low-priced goods. But useful values like functionality, fitness for purpose and efficiency are only part of the story. More important are what Veblen called ‘honorific’ values, arguably the driving force of development, change and value in any economy. To understand the Chinese economy therefore, it is not sufficient to point to its utilitarian aspect. Honorific status-competition is a more fundamental driver than utilitarian cost-competition. We argue that ‘social network markets’ are the expression of these honorific values, relationships and connections that structure and coordinate individual choices. This paper explores how such markets are developing in China in the area of fashion and fashion media. These, we argue, are an expression of ‘risk culture’ for high-end entrepreneurial consumers and producers alike, providing a stimulus to dynamic innovation in the arena of personal taste and comportment, as part of an international cultural system based on constant change. We examine the launch of Vogue China in 2005, and China’s reception as a fashion player among the international editions of Vogue, as an expression of a ‘decisive moment’ in the integration of China into an international social network market based on honorific values.

The utilisation of skilled immigrants and skilled Refugees in countries of destination

about 82 million immigrants in the OECD area; and worldwide, there are about 191 million immigrants and displaced persons, and some 30-40 million unauthorised immigrants. Also according to recent OECD report, little in-depth research has been carried out to-date to help decision makers in government, business, and society at large, to better understand the complexities and wider consequences of future migration flows. Literatures have also indicated that the lack of a skilled population in muchneeded occupations in countries of destination have contributed to the need to bring in skilled foreign workers. Furthermore, despite current global financial crisis, some areas of occupation are in need of skilled workers such that in a job-scarce environment jobs become fewer and employers are more likely to demand skilled workers from both natives and immigrants. Global competition for labour is expected to intensify, especially for top talent, highly qualified and semi-skilled individuals. This exacerbate the problems faced by current skilled immigrants and skilled refugees, particularly those from non-main English speaking countries who are not employed at optimal skill level in countries of destination. The research study investigates whether skilled immigrants are being effectively utilised in their countries of destination, in the context of employment. In addition to skilled immigrants, data sampling will also include skilled refugees who, although arriving under the humanitarian program, possess formal qualifications from their country of origin. Underlying variables will be explored such as the strength of social capital or interpersonal ties; and human capital in terms of educational attainment and proficiency in the English Language. The aim of the study is to explain the relationship between the variables; and whether the variables influence the employment outcomes. A broad-ranging preliminary literature review has been undertaken to explore the substantial bodies of knowledge on skilled immigrants worldwide, including skilled refugees; and to investigate whether the utilisation issues are universal or specific to a country. In addition, preliminary empirical research and analysis has been undertaken, to set the research focus and to identify the problems beyond literature. Preliminary findings have indicated that immigrants and refugees from non-main English speaking countries are particularly impacted by employment issues regardless of their skills and qualifications acquired in their country of origins; compared with immigrants from main-English speaking countries. Preliminary findings from the literature review also indicate that gaps in knowledge still exist. Although the past two decades have witnessed a virtual explosion of theory and research on international migration, no in-depth research has been located that specifically links immigrants and refugees social and human capitals in terms of employment outcomes. This research study aims to fill these gaps in research; and subsequently contribute to contemporary body of knowledge in literatures on the utilisation of skilled immigrants and skilled refugees, specifically those from non-main English speaking countries. A mixed methods design will be used, which incorporates techniques from both quantitative and qualitative research traditions that will be triangulated at the end of the data collection stage.