The provision of business advice to SMEs by external accountants

Purpose – Business advisory services are an emerging service category for external accountants in the small and medium-sized enterprise (SME) environment. The purpose of this study is to investigate determinants of SME demand for business advice, drawing on the agency theory, relational marketing and resource-based literatures.

Design/methodology/approach – The study empirically tested theoretical predictions based on an Australia-wide survey of SMEs, in which 485 firms responded to a questionnaire.

Findings – The results show that the purchase of business advice is significantly and positively associated with the perceived competence of the external accountant, but significantly and negatively associated with length of the relationship. However, the authors observe a significant positive interaction between tenure of the relationship and competence. A unique contribution of this study is the development of the understanding of the combined role of the external accountant’s competence and the tenure of the relationship. The findings indicate that SMEs require time to verify whether accountants have the competence to provide business advice, suggesting that information asymmetry and uncertainty is minimised only after SMEs have nurtured relationships with their external accountants, and after they have developed some confidence in the competence of their external accountants. At the same time, the negative association with tenure suggests that when accountants are not perceived as competent advisors, SMEs purchase less advice over time.

Research limitations/implications – The paper has important theoretical implications by augmenting agency theory, the relational marketing and the resource-based literature, and it clarifies which antecedent factors are important in explaining demand for business advisory services provided by accountants to their SME clients. In particular, the paper highlights the importance of the combined roles that the external accountant’s competence and tenure play in the SME–accountant relationship, highlighting how these two factors can overcome credence issues and ex ante information problems.

Practical implications – The findings have practical implications for government initiatives targeting support to SMEs, as the findings identify small firms and firms planning to grow as likely to gain the greatest benefit from external advice and support.

Originality/value – This study adds to the limited literature and scant theoretical discussions on the emergence of business advisory services that accountants provide to their SME clients by drawing on several theories to explain the determinants of business advice.

Capital structure of Chinese listed SMEs: an agency theory perspective

Prior work examining the antecedents of capital structure for small and medium-sized enterprises in emerging markets is limited. This paper sheds light on how the corporate governance mechanisms adopted by firms on the newly established Growth Enterprise Market (GEM) in China influence their use of debt. We find that the financial leverage of GEM firms is positively influenced by executives’ shareholding and their excess cash compensation. Ownership concentration appears to reduce leverage, whereas the percentage of tradable shares increases leverage. In contrast, institutional investors’ shareholding does not influence the level of debt. Traditional factors such as tax and operating cash flow are insignificant in explaining the debt levels among GEM firms.

Fire and climatic extremes shape mammal distributions in a fire-prone landscape

Aim: Extreme climatic events and large wildfires are predicted to increase as the world's climate warms. Understanding how they shape species' distributions will be critical for conserving biodiversity. We used a 7-year dataset of mammals collected during and after south-east Australia's Millennium Drought to assess the roles of fire history, climatic extremes and their interactions in shaping mammal distributions. Location: Grampians National Park, south-eastern Australia.

Methods: We surveyed mammals at 36 sites along a ~50-year post-fire chronosequence in each of the 7 years. We modelled ten mammal species in relation to fire history, productivity and recent rainfall. Next, we examined the consistency of species' fire response curves across each of three climatic phases relating to the Millennium Drought. Finally, we identified the optimal distribution of fire ages for small and medium-sized mammal conservation in each of the three climatic phases.

Results: The majority of species were influenced by fire history, and all native species were negatively associated with recently burned vegetation. Seven of ten species responded positively to the end of the Millennium Drought, but six of these declined quickly thereafter. Species' responses to fire history differed depending on the climatic conditions. However, the optimal distribution of fire-age classes consistently emphasized the importance of older age classes, regardless of climatic phase. This distribution is in stark contrast to the current distribution of fire ages across the study region.

Main conclusions: Mammals in the study region face an uncertain future. The negative impact of drought, the short-lived nature of post-drought recovery and, now, the possibility of a new drought beginning forewarn of further declines. The stark contrast between the optimal and current fire-age distributions means that reducing the incidence of further fires is critical to enhance the capacity of native mammal communities to weather an increasingly turbulent climate.

Recruiting and maintaining SME involvement when designing voluntary inter-organisational IS

This research investigates government experiences maintaining small and medium enterprise (SME) involvement when designing voluntary inter-organisational information systems (VIOIS). It proposes a novel combination of stakeholder management and diffusion of innovation perspectives to help governments identify industry-specific change agents, communication channels and VIOIS design approaches leading to effective SME involvement.