Why do family firms congregate in certain industries?

We propose that family firm involvement and performance across industries is not random and is related to specific industry conditions. Using the population of listed companies on the Taiwan Stock Exchange over the period 1997-2007 we find that family firms are more involved in industries with more fixed assets, consistent with the long-term view of family owners, and in industry conditions that make it potentially easier for family owners to consume private benefits of control. Overall, we document a positive relationship between family firm involvement and performance, which indicates a net advantage for family firm shareholders in industries where family firms congregate. However, we also find that family firm performance is negatively affected when family firms use more debt and maintain a higher control wedge than their industry counterparts.

Dashboards adoption in the business controller’s decision making process

There has been discussion whether corporate decision-making can be helped by decision support systems regarding qualitative aspects of decision making (e.g. trouble shooting)(Löf and Möller, 2003). Intelligent decision support systems have been developed to help business controllers to perform their business analysis. However, few papers investigated the user’s point of view regarding such systems. How do decision-makers perceive the use of decision support systems, in general, and dashboards in particular? Are dashboards useful tools for business controllers? Based on the technology acceptance model and on the positive mood theory, we suggest a series of antecedent factors that influence the perceived usefulness and perceived ease of use of dashboards. A survey is used to collect data regarding the measurement constructs. The managerial implications of this paper consist in showing the degree of penetration of dashboards in the decision making in organizations and some of the factors that explain this respective penetration rate.

An accounting standard for nonprofits : the missing essential building blocks

There have been numerous calls over the years for the development of an accounting standard for not-for-profit entities (NFPEs). Probably the most commonly quoted in this regard is that from the Industry Commission Report No. 45 in 1995 which contained the following recommendation: The Commonwealth government should provide funds to the Australian Accounting Standards Board and the Public Sector Accounting Standards Board to develop within two years suitable accounting standards for Community Social Welfare Organisations. This recommendation was made over 5-years ago. Why has no action been taken towards its implementation?...

Defining and Accounting for Fundraising Income and Expenses

Charities' fundraising financial transactions should be reported in the interests of accountability, and the report should be publicly available. However, research shows that at present there is little consistency in how fundraising is defined or in how such transactions are reported, and little guidance from accounting standards. This report examines whether the current reporting of fundraising in annual financial statements by Australian charities is fit for the purposes of informing the donating public and other stakeholders, whether through the Australian Charities and Not-for-profits Commission’s registry strategy or through other means such as private ratings agencies. The authors endeavour to suggest a way forward if it is not.

Defining and Accounting for Fundraising Income and Expenses : Executive Summary : ACPNS Current issues Information Sheet 2014/2

Executive summary of Report examining definitions of fundraising and formal Australian accounting standards to ascertain their impact on reporting fundraising transactions by not-for-profit entities.

Formative and Summative Assessment and the Notion of Constructive Allignment

This paper discusses perceptions of first year accounting students about their tutorial activities and their engagements in assessment. As the literature suggests, unless participation in learning activities forms part of graded assessment it is often difficult to engage students in these activities. Using an action research model, this paper reports the study of first year accounting students' responses to action-orientated learning tasks in tutorials. The paper focuses on the importance of aligning curriculum objectives, learning and teaching activities and assessment,i.e. the notion of constructive alignment. However, as the research findings indicate, without support at institutional level, applying constructive alignment to facilitate quality student learning outcomes is a difficult task. Thus, the impacts of policy constraints on curriculum issues are also discussed, focusing on the limitations faced by tutors and their lack of involvement in curriculum development.

Discount rates in disarray : evidence on flawed goodwill impairment testing

Carlin and Finch, this issue, compare goodwill impairment discount rates used by a sample of large Australian firms with ‘independently’ generated discount rates. Their objective is to empirically determine whether managers opportunistically select goodwill discount rates subsequent to the 2005 introduction of International Financial Reporting Standards (IFRS) in Australia. This is a worthwhile objective given that IFRS introduced an impairment regime, and within this regime, discount rate selection plays a key role in goodwill valuation decisions. It is also timely to consider the goodwill valuation issue. Following the recent downturn in the economy, there is a high probability that many firms will be forced to write down impaired goodwill arising from boom period acquisitions. Hence, evidence of bias in rate selection is likely to be of major concern to investors, policymakers and corporate regulators. Carlin and Finch claim their findings provide evidence of such bias. In this commentary I review the validity of their claims.

Role of corporate governance in mitigating the selective disclosure of executive stock option information

We examine the nature and extent of statutory executive stock option (ESO) disclosures by Australian listed companies over the 2001 to 2004 period, and the influence of corporate governance mechanisms on these disclosures. Our results show a progressive increase in overall compliance from 2001 to 2004. However, despite the improved compliance, the results reveal managements’ continued reluctance to disclose more sensitive ESO information. Factors associated with good internal governance, including board independence, audit committee independence and effectiveness, and compensation committee independence and effectiveness are found to contribute to improved compliance. Similarly, certain external governance factors are associated with improved disclosure, including external auditor quality, shareholder activism (as proxied by companies identified as poor performers by the Australian Shareholders’ Association), and regulatory intervention.

Assetti proprietari e meccanismi di governance nelle imprese familiari [Finacial reporting in small family firms : searching for a new framework]

SOMMARIO: 1. La “governance” nelle aziende familiari: rilevanza, aspetti distintivi e criticità. 2. Il ruolo della compagine proprietaria nella definizione dei meccanismi di governo. 3. Composizione e funzioni del consiglio d’amministrazione. 4. I patti di famiglia come strumento di disciplina dei rapporti impresa-famiglia. 5. Considerazioni conclusive: prospettive di analisi e scenari futuri negli studi sulla governance delle imprese familiari.

L'informativa di bilancio nelle imprese familiari di piccole dimensioni : caratteri distintivi e aspetti evolutivi

SOMMARIO: 1. I fattori che incidono sulla funzione informativa del bilancio nelle imprese familiari. 2. Funzione, obiettivi e attese informative nella comunicazione esterna delle imprese familiari. 3. I caratteri del “familismo” nei prospetti di bilancio. 4. Verso un nuovo modello di bilancio per le imprese familiari: riflessioni critiche e spunti per la ricerca.

Accelerated leap methods for simulating discrete stochastic chemical kinetics

Biologists are increasingly conscious of the critical role that noise plays in cellular functions such as genetic regulation, often in connection with fluctuations in small numbers of key regulatory molecules. This has inspired the development of models that capture this fundamentally discrete and stochastic nature of cellular biology - most notably the Gillespie stochastic simulation algorithm (SSA). The SSA simulates a temporally homogeneous, discrete-state, continuous-time Markov process, and of course the corresponding probabilities and numbers of each molecular species must all remain positive. While accurately serving this purpose, the SSA can be computationally inefficient due to very small time stepping so faster approximations such as the Poisson and Binomial τ-leap methods have been suggested. This work places these leap methods in the context of numerical methods for the solution of stochastic differential equations (SDEs) driven by Poisson noise. This allows analogues of Euler-Maruyuma, Milstein and even higher order methods to be developed through the Itô-Taylor expansions as well as similar derivative-free Runge-Kutta approaches. Numerical results demonstrate that these novel methods compare favourably with existing techniques for simulating biochemical reactions by more accurately capturing crucial properties such as the mean and variance than existing methods.

Were regulatory changes in reporting "abnormal items" justified? : evidence of intra-period classificatory earnings management practices in Australia

Purpose Managers generally have discretion in determining how components of earnings are presented in financial statements in distinguishing between ‘normal’ earnings and items classified as unusual, special, significant, exceptional or abnormal. Prior research has found that such intra-period classificatory choice is used as a form of earnings management. Prior to 2001, Australian accounting standards mandated that unusually large items of revenue and expense be classified as ‘abnormal items’ for financial reporting, but this classification was removed from accounting standards from 2001. This move by the regulators was partly in response to concerns that the abnormal classification was being used opportunistically to manage reported pre-abnormal earnings. This study extends the earnings management literature by examining the reporting of abnormal items for evidence of intra-period classificatory earnings management in the unique Australian setting. Design/methodology/approach This study investigates associations between reporting of abnormal items and incentives in the form of analyst following and the earnings benchmarks of analysts’ forecasts, earnings levels, and earnings changes, for a sample of Australian top-500 firms for the seven-year period from 1994 to 2000. Findings The findings suggest there are systematic differences between firms reporting abnormal items and those with no abnormal items. Results show evidence that, on average, firms shifted expense items from pre-abnormal earnings to bottom line net income through reclassification as abnormal losses. Originality/value These findings suggest that the standard setters were justified in removing the ‘abnormal’ classification from the accounting standard. However, it cannot be assumed that all firms acted opportunistically in the classification of items as abnormal. With the removal of the standardised classification of items outside normal operations as ‘abnormal’, firms lost the opportunity to use such disclosures as a signalling device, with the consequential effect of limiting the scope of effectively communicating information about the nature of items presented in financial reports.

Positive experiences for participants in suicide bereavement groups : a grounded theory model of elements that contribute to the process of adjusting to the loss

Grounded Theory was used to examine the experiences of 13 participants who had attended psycho-educational support groups for those bereaved by suicide. Results demonstrated core and central categories which fit well with group therapeutic factors developed by Yalom (1995) and emphasised the importance of universality, imparting information and instilling hope, catharsis and self-disclosure, and broader meaning making processes surrounding acceptance or adjustment. Participants were commonly engaged in a lengthy process of oscillating between loss oriented and restoration focused reappraisals. The functional experience of the group comprised feeling normal within the group, providing a sense of permission to feel and to express emotions and thoughts and to bestow meaning. Structural variables of information and guidance and different perspectives on the suicide and bereavement were gained from other participants, the facilitators, group content and process. Personal changes, including in relationships and in their sense of self, assisted participants to develop an altered and more positive personal narrative.

Accounting for student/educator diversity: resurrecting coaction theory

This chapter challenges current approaches to defining the context and process of entrepreneurship education. In modeling our classrooms as a microcosm of the world our current and future students will enter, this chapter brings to life (and celebrates) the everpresent diversity found within. The chapter attempts to make an important (and unique) contribution to the field of enterprise education by illustrating how we can determine the success of (1) our efforts as educators, (2) our students, and (3) our various teaching methods. The chapter is based on two specific premises, the most fundamental being the assertion that the performance of student, educator and institution can only be accounted for by accepting the nature of the dialogic relationship between the student and educator and between the educator and institution. A second premise is that at any moment in time, the educator can be assessed as being either efficient or inefficient, due to the presence of observable heterogeneity in the learning environment that produces differential learning outcomes. This chapter claims that understanding and appreciating the nature of heterogeneity in our classrooms provides an avenue for improvement in all facets of learning and teaching. To explain this claim, Haskell’s (1949) theory of coaction is resurrected to provide a lens through which all manner of interaction occurring within all forms of educational contexts can be explained. Haskell (1949) asserted that coaction theory had three salient features.

Digital videos in financial accounting: A sociocognitive approach to learning

Understanding the important concepts necessary to undertake the preparation of consolidated financial statements has proven challenging for many accounting undergraduate students. As a result, the development of multimedia modelling concepts such as acquisition analysis, business combination valuation entries, reacquisition entries and intragroup transactions were embedded within an e-learning environment. The principle of modelling, derived from social cognitive theory, was applied to the design of the multimedia. A study was conducted to gauge the effectiveness of the approach and consider student perceptions with regard to learning through this approach. Quantitative data were collected from accounting undergraduate students (n= 464) enrolled across three different cohorts including international campuses (n=386), an Australian campus (n=49) and a distance education cohort (n=29). Analyses were undertaken to show significant differences between these cohorts. This research paper presents findings that indicate a positive and significant association between the number of times the videos were accessed, and the assignment score (p<0.05) was evident, suggesting that students that referred to the videos relatively frequently were able to utilise the knowledge gained from the videos to assist them in completing the assignment.