The quality of financial information in the extractive industries: a value relevance analysis

The extractive industry is characterized by high levels of risk and uncertainty. These attributes create challenges when applying traditional accounting concepts (such as the revenue recognition and matching concepts) to the preparation of financial statements in the industry. The International Accounting Standards Board (2010) states that the objective of general purpose financial statements is to provide useful financial information to assist the capital allocation decisions of existing and potential providers of capital. The usefulness of information is defined as being relevant and faithfully represented so as to best aid in the investment decisions of capital providers. Value relevance research utilizes adaptations of the Ohlson (1995) to assess the attribute of value relevance which is one part of the attributes resulting in useful information. This study firstly examines the value relevance of the financial information disclosed in the financial reports of extractive firms. The findings reveal that the value relevance of information disclosed in the financial reports depends on the circumstances of the firm including sector, size and profitability. Traditional accounting concepts such as the matching concept can be ineffective when applied to small firms who are primarily engaged in nonproduction activities that involve significant levels of uncertainty such as exploration activities or the development of sites. Standard setting bodies such as the International Accounting Standards Board and the Financial Accounting Standards Board have addressed the financial reporting challenges in the extractive industry by allowing a significant amount of accounting flexibility in industryspecific accounting standards, particularly in relation to the accounting treatment of exploration and evaluation expenditure. Therefore, secondly this study examines whether the choice of exploration accounting policy has an effect on the value relevance of information disclosed in the financial reports. The findings show that, in general, the Successful Efforts method produces value relevant information in the financial reports of profitable extractive firms. However, specifically in the oil & gas sector, the Full Cost method produces value relevant asset disclosures if the firm is lossmaking. This indicates that investors in production and non-production orientated firms have different information needs and these needs cannot be simultaneously fulfilled by a single accounting policy. In the mining sector, a preference by large profitable mining companies towards a more conservative policy than either the Full Cost or Successful Efforts methods does not result in more value relevant information being disclosed in the financial reports. This finding supports the fact that the qualitative characteristic of prudence is a form of bias which has a downward effect on asset values. The third aspect of this study is an examination of the effect of corporate governance on the value relevance of disclosures made in the financial reports of extractive firms. The findings show that the key factor influencing the value relevance of financial information is the ability of the directors to select accounting policies which reflect the economic substance of the particular circumstances facing the firms in an effective way. Corporate governance is found to have an effect on value relevance, particularly in the oil & gas sector. However, there is no significant difference between the exploration accounting policy choices made by directors of firms with good systems of corporate governance and those with weak systems of corporate governance.

The differences in the social competence of children who attend integrated junior infant classes and children who attend segregated learning environments

There are a number of reasons why this researcher has decided to undertake this study into the differences in the social competence of children who attend integrated Junior Infant classes and children who attend segregated learning environments. Theses reasons are both personal and professional. My personal reasons stem from having grown up in a family which included both an aunt who presented with Down Syndrome and an uncle who presented with hearing impairment. Both of these relatives' experiences in our education system are interesting. My aunt was considered ineducable while her brother - my uncle - was sent to Dublin (from Cork) at six years of age to be educated by a religious order. My professional reasons, on the other hand, stemmed from my teaching experience. Having taught in both special and integrated classrooms it became evident to me that there was somewhat 'suspicion' attached to integration. Parents of children without disabilities questioned whether this process would have a negative impact on their children's education. While parents of children with disabilities debated whether integrated settings met the specific needs of their children. On the other hand, I always questioned whether integration and inclusiveness meant the same thing. My research has enabled me to find many answers. Increasingly, children with special educational needs (SEN) are attending a variety of integrated and inclusive childcare and education settings. This contemporary practice of educating children who present with disabilities in mainstream classrooms has stimulated vast interest on the impact of such practices on children with identified disabilities. Indeed, children who present with disabilities "fare far better in mainstream education than in special schools" (Buckley, cited in Siggins, 2001,p.25). However, educators and practitioners in the field of early years education and care are concerned with meeting the needs of all children in their learning environments, while also upholding high academic standards (Putman, 1993). Fundamentally, therefore, integrated education must also produce questions about the impact of this practice on children without identified special educational needs. While these questions can be addressed from the various areas of child development (i.e. cognitive, physical, linguistic, emotional, moral, spiritual and creative), this research focused on the social domain. It investigates the development of social competence in junior infant class children without identified disabilities as they experience different educational settings.