Detecting Fraud: The Role of the Anonymous Reporting Channel

The purpose of this paper is to examine whether anonymous reporting channels (ARCs) are effective in detecting fraud against companies. Fraud, which comprises predominantly asset misappropriation, represents a key operational risk and a major cost to organisations (ACFE, http://www.acfe.com/uploadedFiles/ACFE_Website/Content/rttn/2012-report-to-nations.pdf, 2012; KPMG, http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Fraud-Survey/Documents/fraud-bribery-corruption-survey-2012v2.pdf, 2012). The fraud triangle (incentives, opportunities and attitudes) provides a framework for developing our understanding of how ARCs can increase detection of fraud. Using publicly listed company survey data collected by KPMG in Australia—where ARCs are not mandated—we find a positive association between ARCs and reported fraud. These results indicate that ARCs are effective in detecting fraud. Additional analysis reveals that small firms derive the greatest benefit from adopting ARCs. We also find that independent boards do not directly influence the detection of fraud, but companies with independent boards detect more fraud because they implement ARCs.

Mortgages and bonds: the asset management practices of Australian life insurers to 1960

Recent studies of the experience of the British life insurance industry indicate that a period of transition, and the development of more diversified investment strategies, began in the interwar period. Australian life insurers lagged behind their British counterparts in the introduction of such strategies. This paper investigates why this was the case. It argues that in the Australian market there was both a lack of opportunity and incentive to broaden asset portfolios. However, this did not mean that asset management practices did not advance. Australian life offices became progressively more sophisticated in their approach to portfolio management during this period. Developments in the interwar period provided a grounding for post-war expansion into the equity market.

The future of Victoria's greatest asset : the coast. An independent review of the Coastal Management Act 1995 after ten years of operation

This report is in essence a critique of the Victorian Coastal Management Act 1995 (VCMA), followed by recommendations for improving the Act and its implementation. The author recognises that of course the Coastal Management Act 1995 is far from the sole piece of legislation or element of governance for Victorian coastal planning and management (see Wescott, 1988.1990,1993,1995, Birrell,1994). But the Act is the leading element of Victorian coastal governance and hence an analysis and critique of its operation after ten years, and recommendations for improvements to the Act, should enhance future coastal planning and management.

Multifractality and long-range dependence of asset returns: the scaling behavior of the Markov-switching multifractal model with lognormal volatility components

In this paper, we consider daily financial data from various sources (stock market indices, foreign exchange rates and bonds) and analyze their multiscaling properties by estimating the parameters of a Markov-switching multifractal (MSM) model with Lognormal volatility components. In order to see how well estimated models capture the temporal dependency of the empirical data, we estimate and compare (generalized) Hurst exponents for both empirical data and simulated MSM models. In general, the Lognormal MSM models generate "apparent" long memory in good agreement with empirical scaling provided that one uses sufficiently many volatility components. In comparison with a Binomial MSM specification [11], results are almost identical. This suggests that a parsimonious discrete specification is flexible enough and the gain from adopting the continuous Lognormal distribution is very limited.

The TOC-ABC choice debate for product mix decisions : introducing asset specificity as an alternate explanation

Though constructed with different purposes, the theory of constraints and activity based costing systems pose a choice problem in respect of product mix decisions. We believe that the existing explanation of short versus long run criterion to explain firms' choice between these two systems is incomplete and offer an alternate explanation based on asset specificity. We argue that the extent to which specialized resources are deployed to make products in a mix determines the choice. We present a 2*2 matrix stating that when asset specificity is high, a firm is likely to choose ABC instead of TOC since ABC makes a large portion of costs visible to enable control. However, the choice is likely to be a TOC-ABC combination when the manufacture of asset specific products is also constrained by bottlenecks.

Asset-selling problem with an uncertain deadline, quitting offer, and search skipping option

This paper presents a discrete-time sequential stochastic asset-selling problem with an infinite planning horizon, where the process of selling the asset may reach a deadline at any point in time with a probability. It is assumed that a quitting offer is available at every point in time and search skipping is permitted. Thus, decisions must be made as to whether or not to accept the quitting offer, to accept an appearing buyer’s offer, and to conduct a search for a buyer. The main purpose of this paper is to clarify the properties of the optimal decision rules in relation to the model’s parameters.

A switching model of dynamic asset selling problem

This paper proposes an asset selling problem with a new selling strategy called the switching strategy where multiple homogeneous assets on hand must be sold up to a specified deadline. At each point in time the seller is permitted to decide between 1) proposing a selling price up front to an appearing buyer and 2) concealing the price and letting the buyer come up with an offer. Our analysis indicates that under certain conditions there emerges a time threshold after which the seller switches from concealing his idea for the selling price to proposing this price, and vice versa.

Resolving conflicts in fire management using decision theory: asset-protection versus biodiversity conservation

Agencies charged with nature conservation and protecting built-assets from fire face a policy dilemma because management that protects assets can have adverse impacts on biodiversity. Although conservation is often a policy goal, protecting built-assets usually takes precedence in fire management implementation. To make decisions that can better achieve both objectives, existing trade-offs must first be recognized, and then policies implemented to manage multiple objectives explicitly. We briefly review fire management actions that can conflict with biodiversity conservation. Through this review, we find that common management practices might not appreciably reduce the threat to built-assets but could have a large negative impact on biodiversity. We develop a framework based on decision theory that could be applied to minimize these conflicts. Critical to this approach is (1) the identification of the full range of management options and (2) obtaining data for evaluating the effectiveness of those options for achieving asset protection and conservation goals. This information can be used to compare explicitly the effectiveness of different management choices for conserving species and for protecting assets, given budget constraints. The challenge now is to gather data to quantify these trade-offs so that fire policy and practices can be better aligned with multiple objectives

An examination of conditional asset pricing models in the Australian equities market

This article examines the link between macroeconomic variables and equity returns in Australia by testing conditional asset pricing models. We find that conditioning the Fama-French model with a series of macroeconomic variables does not considerably improve its performance. However, we do find that the Fama-French factors, SMB and HML, retain their ability to explain equity returns even after the model is conditioned on macroeconomic variables. Our findings suggest that investors do not adjust their risk premiums according to the changes in the macroeconomic variables we employ.