Regulation, compliance and the Australian forensic accounting profession

Legacies of the Global Financial Crisis and major domestic corporate collapses – such as HIH Insurance Pty Ltd and One.Tel Ltd (telecommunications) – have significantly changed Australia‟s financial regulatory landscape. Legal requirements for auditors have attracted particular attention as have practice standards more broadly around disclosure and conflict of interest. Conversely, although successful detection and prosecution of breaches may rest in significant part on forensic accounting activities, Australia‟s practitioners in this field have no minimum training or qualifications standards other than the baseline requirements mandated by the country‟s three professional accounting bodies. For those unaffiliated with these organizations, no professional oversight exists. In Australia, growth in the forensic accounting industry has been in direct response to public demand for expertise in a broad range of fraud, forensic and business analytics areas in order to improve the corporate governance practices of Australian organizations. During the 1990s, Australian forensic accounting firms expanded and diversified into a number of different areas going well beyond just the examination of financial documents and involvement in financial litigation disputes. “Big 4” accounting firms such as PriceWaterhouseCoopers, KPMG, Deloitte and Ernst and Young formed independent forensic accounting or forensic services units; a number of mid-tier and „boutique‟ forensic accounting firms similarly expanded into forensic investigative, analytical and advisory services. By 2008, 800 forensic accountants were registered with the country‟s largest specialist forensic accounting group, the Forensic Accounting Special Interest Group (FASIG) of the ICAA1. Currently, obtaining more precise figures on numbers of forensic accounting practitioners is problematic: professional accounting bodies either do not keep a register or have ceased registering their forensic accounting members; lack of formal recognition, admission or certification processes complicate identification of candidates; and diversity of the skills sets the industry requires has meant the influx of non-accounting based specialists.

Corporate governance and misappropriation

This study examines the occurrence of misappropriation-type fraud within Australian listed firms and the relation between the incidence of this type of fraud and a firm's governance strength. We measure governance strength using factors relating to traditional corporate governance, such as board composition, CEO duality, and audit committee composition, as well as factors relating to information technology governance. In our study, we use actual dollar amount of fraud reported by listed companies responding to the 2004 KPMG Fraud Survey as one of three different misappropriation measures and publicly available firm-specific data to measure the other variables in the model. Our study found that where the chief executive officer (CEO) also holds the position of chairperson of the board of directors, the likelihood of fraud increases. We also find that the greater the number of independent directors on the audit committee, the lower the level of fraud. Taken together, these results are particularly encouraging as they provide support for regulatory bodies such as the Australian Stock Exchange (ASX) and the Australian Securities and Investment Commission (ASIC), which place considerable emphasis on the importance of establishing good corporate governance practices. The study provides empirical evidence that employing good corporate governance reduces the risk of the misappropriation of assets.

Benchmarking introductory accounting curricula : Experience from Australia

Within the context of debate about the state of accounting education in general, introductory accounting subjects have been the target of considerable criticism, particularly in terms of narrow content, technical focus, use of transmissive models of teaching, and inattention to the development of students‟ generic skills. This paper reports on the results of an exploratory study of these issues in introductory accounting and which involved the review of subject outlines and prescribed textbooks, and the conduct of a cross-sectional survey of the introductory accounting teaching coordinators in Australian universities (n=21). The primary aims of the study were to establish and apply benchmarks in evaluating existing curricula with respect to subject orientation, learning objectives, topics, teaching delivery, learning strategies, and assessment. The results of our study suggest that traditional approaches to subject content and delivery continue to dominate, with limited indicators of innovations to enhance the diversity and quality of learning experiences and learning outcomes.

An investigation into the use of a blended model of learning in a first year accounting subject

The weaknesses of ‗traditional‘ modes of instruction in accounting education have been widely discussed. Many contend that the traditional approach limits the ability to provide opportunities for students to raise their competency level and allow them to apply knowledge and skills in professional problem solving situations. However, the recent body of literature suggests that accounting educators are indeed actively experimenting with ‗non-traditional‘ and ‗innovative‘ instructional approaches, where some authors clearly favour one approach over another. But can one instructional approach alone meet the necessary conditions for different learning objectives? Taking into account the ever changing landscape of not only business environments, but also the higher education sector, the premise guiding the collaborators in this research is that it is perhaps counter productive to promote competing dichotomous views of ‗traditional‘ and ‗non-traditional‘ instructional approaches to accounting education, and that the notion of ‗blended learning‘ might provide a useful framework to enhance the learning and teaching of accounting. This paper reports on the first cycle of a longitudinal study, which explores the possibility of using blended learning in first year accounting at one campus of a large regional university. The critical elements of blended learning which emerged in the study are discussed and, consistent with the design-based research framework, the paper also identifies key design modifications for successive cycles of the research.

Accounting : building business skills, 3rd ed.

The new edition of this widely used and respected introductory accounting textbook continues to provide students and academics with a well written and accessible resource, with ample illustrations and applications to business for a first study of accounting. The text effectively maintains the balance between a 'user' and 'preparer' perspective by integrating real financial information and business decisions throughout. Through the use of real company information and financial statements students will quickly appreciate the use and users of accounting information. The textbook clearly outlines to students how a financial statement - such as a balance sheet, income statement, cash flow statement - communicates the financing, operating, and investing activities of a business. The text builds a strong conceptual understanding and develops skills in the application of accounting principles and techniques, providing students with a solid foundation for further studies in accounting. The integral role of financial statements for decision making is also emphasised in this text and is reinforced throughout by the Decision Toolkit in each chapter. Students are provided with an extensive set of tools necessary to make business decisions based on financial information.

Financial accounting: building accounting knowledge

Financial Accounting: Building Accounting Knowledge is a new textbook written for the first financial accounting subject that a student majoring in accounting is required to study. Based on the successful introductory accounting textbook, 'Accounting: building business skills', this text will provide students and academics with a well written and accessible textbook on the principles of financial accounting, with ample illustrations and applications to business. The text maintains the balance between a 'user' and 'preparer' perspective effectively by integrating real financial information and business decision choices throughout the chapters. Through the use of real company information and financial statements students will quickly appreciate the use of accounting information. The textbook clearly outlines to students how accounting information communicates the financing, operating, and investing activities of a business. The text builds a strong conceptual understanding and develops skills in the application of accounting principles and techniques, providing students with a solid foundation for studying accounting.

The successful influence of teaching ethics on Malaysian accounting students

The Malaysian accounting profession is committed to promoting education that results in a strong ethical culture within accountants. However, some consider ethical training unproductive since trainees may have their ethical values formed pre-commencement. This paper investigates the impact of ethics instruction on final year accounting students, the future accountants of Malaysia. 85 final year accounting students were given five ethical scenarios, and asked what action they considered appropriate. They were then subject to two ethical training methodologies, a traditional lecture/tutorial process and a group assignment. After a significant gap, students were re-presented with the ethical scenarios and asked what action they now considered appropriate. In all five instances students offered a more ethical response the second time. Also, participants rated both training methods and their combined effect as effective. Results suggest there is benefit in including ethics teaching and indeed emphasising its importance in accountancy courses, if the profession’s goal of ethical practitioners is to be achieved.

Governance issues in accounting

Purpose – The purpose of this paper is to identify some key issues for the analysis of corporate governance based on the papers within this special issue including the Guest Editor's perspectives. Design/methodology/approach – The five papers included in this special issue are summarized and their main contribution to the literature is highlighted. Findings – The paper collectively deal with the role and impact of corporate boards on the quality of information provided to capital markets. Practical implications – The theoretical and empirical research included in the special issue advance the understanding of corporate governance which provides impetus for practitioner and policy change. Originality/value – The normative concepts of best practice need to be validated by empirical testing in the context of firms and their institutional settings. This suite of papers provides evidence of the effectiveness of corporate governance in improving accounting quality