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.

The development of a serological-based diagnostic test for Dasheen mosaic potyvirus (DsMV)

Dasheen mosaic potyvirus (DsMV) is an important virus affecting taro. The virus has been found wherever taro is grown and infects both the edible and ornamental aroids, causing yield losses of up to 60%. The presence of DsMV, and other viruses,prevents the international movement of taro germplasm between countries. This has a significant negative impact on taro production in many countries due to the inability to access improved taro lines produced in breeding programs. To overcome this problem, sensitive and reliable virus diagnostic tests need to be developed to enable the indexing of taro germplasm. The aim of this study was to generate an antiserum against a recombinant DsMV coat protein (CP) and to develop a serological-based diagnostic test that would detect Pacific Island isolates of the virus. The CP-coding region of 16 DsMV isolates from Papua New Guinea, Samoa, Solomon Islands, French Polynesia, New Caledonia and Vietnam were amplified,cloned and sequenced. The size of the CP-coding region ranged from 939 to 1038 nucleotides and encoded putative proteins ranged from 313 to 346 amino acids, with the molecular mass ranging from 34 to 38 kDa. Analysis ofthe amino acid sequences revealed the presence of several amino acid motifs typically found in potyviruses,including DAG, WCIE/DN, RQ and AFDF. When the amino acid sequences were compared with each other and the DsMV sequences on the database, the maximum variability was21.9%. When the core region ofthe CP was analysed, the maximum variability dropped to 6% indicating most variability was present in the N terminus. Within seven PNG isolates ofDsMV, the maximum variability was 16.9% and 3.9% over the entire CP-coding region and core region, respectively. The sequence ofPNG isolate P1 was most similar to all other sequences. Phylogenetic analysis indicated that almost all isolates grouped according to their provenance. Further, the seven PNG isolates were grouped according to the region within PNG from which they were obtained. Due to the extensive variability over the entire CP-coding region, the core region ofthe CP ofPNG isolate Pl was cloned into a protein expression vector and expressed as a recombinant protein. The protein was purified by chromatography and SDS-PAGE and used as an antigen to generate antiserum in a rabbit. In western blots, the antiserum reacted with bands of approximately 45-47 kDa in extracts from purified DsMV and from known DsMV -infected plants from PNG; no bands were observed using healthy plant extracts. The antiserum was subsequently incorporated into an indirect ELISA. This procedure was found to be very sensitive and detected DsMV in sap diluted at least 1:1,000. Using both western blot and ELISA formats,the antiserum was able to detect a wide range ofDsMV isolates including those from Australia, New Zealand, Fiji, French Polynesia, New Caledonia, Papua New Guinea, Samoa, Solomon Islands and Vanuatu. These plants were verified to be infected with DsMV by RT-PCR. In specificity tests, the antiserum was also found to react with sap from plants infected with SCMV, PRSV-P, PRSV-W, but not with PVY or CMV -infected plants.

Gene transfer to plants by diverse species of bacteria

Agrobacterium is widely considered to be the only bacterial genus capable of transferring genes to plants. When suitably modified, Agrobacterium has become the most effective vector for gene transfer in plant biotechnology1. However, the complexity of the patent landscape2 has created both real and perceived obstacles to the effective use of this technology for agricultural improvements by many public and private organizations worldwide. Here we show that several species of bacteria outside the Agrobacterium genus can be modified to mediate gene transfer to a number of diverse plants. These plant-associated symbiotic bacteria were made competent for gene transfer by acquisition of both a disarmed Ti plasmid and a suitable binary vector. This alternative to Agrobacterium-mediated technology for crop improvement, in addition to affording a versatile ‘open source’ platform for plant biotechnology, may lead to new uses of natural bacteria– plant interactions to achieve plant transformation.

The Biology, Epidemiology, and Management of Rice Tungro Disease in Asia

Many farmers in South and Southeast Asia describe rice tungro disease as a cancer disease because of the severe damage it causes and the difficulty of controlling it (121). As the most important of the 14 rice viral diseases, tungro was first recognized as a leafhopper-transmitted virus disease in 1963 (88). However, tungro, which means “degenerated growth” in a Filipino dialect, has a much longer history. It is almost certain that tungro was responsible for a disease outbreak that occurred in 1859 in Indonesia, which was referred to at the time as mentek (83). In the past, a variety of names has been given to tungro, including accep na pula in the Philippines, penyakit merah in Malaysia, and yelloworange leaf in Thailand (83).

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.

Biological monitoring of occupational exposure to polycyclic aromatic hydrocarbons in prebake smelting

In 1984, the International Agency for Research on Cancer determined that working in the primary aluminium production process was associated with exposure to certain polycyclic aromatic hydrocarbons (PAHs) that are probably carcinogenic to humans. Key sources of PAH exposure within the occupational environment of a prebake aluminium smelter are processes associated with use of coal-tar pitch. Despite the potential for exposure via inhalation, ingestion and dermal adsorption, to date occupational exposure limits exist only for airborne contaminants. This study, based at a prebake aluminium smelter in Queensland, Australia, compares exposures of workers who came in contact with PAHs from coal-tar pitch in the smelter’s anode plant (n = 69) and cell-reconstruction area (n = 28), and a non-production control group (n = 17). Literature relevant to PAH exposures in industry and methods of monitoring and assessing occupational hazards associated with these compounds are reviewed, and methods relevant to PAH exposure are discussed in the context of the study site. The study utilises air monitoring of PAHs to quantify exposure via the inhalation route and biological monitoring of 1-hydroxypyrene (1-OHP) in urine of workers to assess total body burden from all routes of entry. Exposures determined for similar exposure groups, sampled over three years, are compared with published occupational PAH exposure limits and/or guidelines. Results of paired personal air monitoring samples and samples collected for 1-OHP in urine monitoring do not correlate. Predictive ability of the benzene-soluble fraction (BSF) in personal air monitoring in relation to the 1-OHP levels in urine is poor (adjusted R2 < 1%) even after adjustment for potential confounders of smoking status and use of personal protective equipment. For static air BSF levels in the anode plant, the median was 0.023 mg/m3 (range 0.002–0.250), almost twice as high as in the cell-reconstruction area (median = 0.013 mg/m3, range 0.003–0.154). In contrast, median BSF personal exposure in the anode plant was 0.036 mg/m3 (range 0.003–0.563), significantly lower than the median measured in the reconstruction area (0.054 mg/m3, range 0.003–0.371) (p = 0.041). The observation that median 1-OHP levels in urine were significantly higher in the anode plant than in the reconstruction area (6.62 µmol/mol creatinine, range 0.09–33.44 and 0.17 µmol/mol creatinine, range 0.001–2.47, respectively) parallels the static air measurements of BSF rather than the personal air monitoring results (p < 0.001). Results of air measurements and biological monitoring show that tasks associated with paste mixing and anode forming in the forming area of the anode plant resulted in higher PAH exposure than tasks in the non-forming areas; median 1-OHP levels in urine from workers in the forming area (14.20 µmol/mol creatinine, range 2.02–33.44) were almost four times higher than those obtained from workers in the non-forming area (4.11 µmol/mol creatinine, range 0.09–26.99; p < 0.001). Results justify use of biological monitoring as an important adjunct to existing measures of PAH exposure in the aluminium industry. Although monitoring of 1-OHP in urine may not be an accurate measure of biological effect on an individual, it is a better indicator of total PAH exposure than BSF in air. In January 2005, interim study results prompted a plant management decision to modify control measures to reduce skin exposure. Comparison of 1-OHP in urine from workers pre- and post-modifications showed substantial downward trends. Exposure via the dermal route was identified as a contributor to overall dose. Reduction in 1-OHP urine concentrations achieved by reducing skin exposure demonstrate the importance of exposure via this alternative pathway. Finally, control measures are recommended to ameliorate risk associated with PAH exposure in the primary aluminium production process, and suggestions for future research include development of methods capable of more specifically monitoring carcinogenic constituents of PAH mixtures, such as benzo[a]pyrene.

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.