Auditor independence: regulation, oversight and inspection

Much of what auditors do is unobservable. Indeed, what goes on in an audit has been described as ‘secret audit business’. Audits in this context are of financial reports and those financial reports are the representations of the management of those companies, not the auditors. The audits of financial reports are of value in that they provide a competent and independent (of auditee management) attestation of the validity of those management representations. This attestation lowers the ‘information risk’ for the users of these financial reports. There has been a marked increase in activity to regulate matters relating to independence. The proposals outlined in CLERP 9 are one example of this. The requirements in the United States under the Sarbanes-Oxley Act are a further example.

Audit firms operate in a highly regulated yet highly competitive market. Evidence exists to suggest that audit firms are active competitors in respect of audit pricing and competency, including specialist industry expertise. Until recently, there has been little or no observable evidence that audit firms compete in respect of independence. The issues as they relate to audit independence are complex. One issue is that threats to independence are frequently subtle and difficult to observe and measure. Hence, controlling the decisions that relate to them cannot rely solely on regulation which itself inevitably relies on crude definitions and imprecise measures. Additionally, further regulation may not achieve the desired end without other processes being but in place in tandem.

This paper argues that:

1. auditors of certain classes of companies (in particular, those that are publicly traded) should be provided with incentives or requirements to have observable processes on independence
2. the means of observability should be in the form of an inspection and review process focussing on issues critical to the audit, such as independence
3. expert persons not having a current or past financial interest in the firm or in the commercial outcomes of the review should be used in the inspection and review process
4. the review process should have wide-ranging powers of inspection to examine the policies, processes, structures and ‘culture’ of audit firms
5. the report of the inspection and review should be made public, unedited and in full, and in a timely fashion. The primary objectives of this proposal are to (1) make more transparent to the market for information the characteristics of the audit firms and their process to ensure audit independence, and (2) provide a rigorous oversight of independence decision-making by persons who have no commercial interest in the outcome of the decision.

Fit for intended use : a manufacturing metaphor applied to international business students and learning outcomes

It is no secret that contemporary tertiary education in Australia is significantly reliant on international student fee income in a competitive market. Accordingly, the need to attract fee paying students involves strategies for increasing competitive advantage, new course structures, flexible learning initiatives and marketing. However Jackling (1) has found that employers are reluctant to employ graduate international students in the accounting field as they consider them to lack the skills required to effectively meet employment needs. This paper seeks to focus the spotlight on the role of academics/universities in ensuring that graduates have the skills necessary for employment as part of the education process.

Critical reflections on professional education for the environment

Evidence exists to suggest that in Australia many environmental issues remain unresolved even though the community has apparently become more environmentally aware. Although universities have undertaken responsibility to educate future environmental professionals to address this concern, there are numerous tensions underpinning professional environmental education. This folio explores my perceptions of these tensions and their effect on my professional practice as an academic. I refer to this as the relationships among theories and practices experienced in my work. Four perspectives are taken in this research as I appraise professional environmental education. This Dissertation (Vol. 1) focuses on views informing my professional environmental education, inclusive of my own reflexivity. From interviews with students, academics, professionals and environmentalists, and other sources of information, I consider various tensions arising from what I regard as dehumanising social and political forces. The conventional elite and authoritative roles for universities and professionals dominate most participants' understanding of professional activities. Professional practices often endorse these conventions. Juxtaposed to this authoritative view of professional education, and prescribing a different interpretation for professional practice, is my theoretical position informed by criticality and a need to challenge the status quo. I suggest that Leopold's The Land Ethic is an exemplar of criticality and a suitable basis for examining professional environmental education. The Land Ethic is used as a foundation to my thesis because it encapsulates suitable arguments to examine ideologies supportive of my understanding of professional environmental education. My thesis investigates the nature of participants' (including my own) understanding of their land ethic or land ethics suggesting that interpretations of 'place' provide an emotional and ethical appreciation of the land. I suggest that 'place', as a culturally derived construct, is central to the concept of a land ethic or land ethics, and a characteristic of an environmental ethic or ethics. To incorporate these different perspectives into professional environmental education perhaps land could be viewed, not just as a 'client' as in Schön's (1983) reflective contract, but expanded so that professionals form ethical partnerships with the land, which implies a greater equity between roles and responsibilities. This perspective challenges elite interpretations of the roles for environmental professionals by asking them to be advocates for their land, and to work with the land. Searching for my own land ethic or land ethics has promoted a discourse that encompasses a language of possibility and opportunity. This language of possibility and opportunity stands in contrast to the constraining language of reproduction that has promoted stasis. My reflexivity, a holistic and ecological view that in this thesis is an expression of my searching for a land ethic or land ethics, has encouraged me to develop critical and ethical questions to challenge my professional environmental education practice. As such the process of theorising about my theory and practice has been personally transformative as it encourages my development as a 'critical person'. Elective 1 (Vol. 2 ) reviews public information promoting a selected range of Australian environmental courses. Analysis demonstrates environmental courses are mainly technocratic, promoting technical-scientific and vocational perspectives. This orientation, I consider, is aligned to an emerging corporate agenda as universities attempt to be more accountable to the government within a competitive market dominated by economic interests. Elective 2 (Vol. 2 ) considers the providers of professional environmental education where I explore a diversity of tensions undermining current academic life found in many Australian universities. I suggest that corporatisation and vocationalisation dominate university culture to such an extent that any examination of professional environmental education is prejudiced. Professional environmental education appears to be biased toward maintaining the status quo. My conclusion is that professional environmental education does not promote graduates as 'critical persons' (Barnett 1997), and this may affect graduates' understandings of the purpose and aspirations of environmental professionalism. I suggest that elite and technical understandings of professionalism may affect the professionals' ability to implement environmental policy. Australia has an admirable record of developing environmental policy. However, public concern about a lack of resolution for many environmental issues suggests that professionals may be struggling to successfully implement policy in any meaningful way. Such challenges for environmental professionals may be a result of a professional environmental education that does not engage graduates within ideas that professional practice may require community participation and collaboration as key themes. Elective 3 (Vol. 2) is a case study investigating the development of conservation policies by the Ballarat community. The case demonstrates how the dominant social paradigm informs community views about environmental issues emphasising a technical emphasis and hierarchical arrangements of power and authority between local government and the community. The community view appears to be that environmental action should be mainly individualistic and behaviourist, which I suggest may have resulted from a technical framework for environmental knowledge. The community view of environmental issues resonates with the dominant view promoted by professional environmental education in most universities. In conclusion, my thesis is a representation of my challenges to critically engage in possible relationships among theories, practices and circumstances in my workplace, with a view to addressing what I perceive as a 'gap' between my own theory and practice. The motivation for this critical examination is to question the purpose of my professional environmental education practice in relation to the challenges of my emergent environmental ideology. The difficulty of promoting my critical theorising in a traditional small science faculty, within a corporate university, with my scientific background, is acknowledged. Nevertheless, based on my own experiences, I recommend that academics involved in professional environmental education should be encouraged to explore relationships between their own theories and practices in their own professional settings. I suggest that the search for a land ethic or land ethics, and one's 'place' in the 'land', can be an effective platform for this process.

Internationalisation of SMEs : European comparative studies

We examine new research on the internationalisation of Small and Medium-sized Enterprises (SMEs) in 27 European countries. We find that, in both established market economies and in transition economies, SME international entrepreneurship is driven by internal resources and capabilities, membership in networks or clusters, favourable government policies, economy, competitive market conditions, and industry structure. We then develop a conceptual model and propositions of the drivers of European SME internationalisation. Our findings have important implications for managers in improving their firms' international market performance.

One plus one equals three; proactive partnering multiplies CSR benefits

With companies now linking corporate social responsibility to their aggressive business strategies to achieve a competitive market advantage (Porter and Kramer, 2006), non profit organisations should also extract shared value from this strategic corporate social responsibility movement (Eweje and Palakshappa, 2009). Questions arise, however, as to the actual role which should be played by the non profit organisation (Muthuri, Chapple and Moon, 2009). This conceptual paper firstly provides evidence that corporate social responsibility (CSR) from the perspective of the non profit requires investigation. Secondly, by integrating two existing CSR frameworks, a new CSR framework is proposed which will redefine the role of the non profit organisation in marketing itself and proactively working with business. This collaborative approach is likely to ensure mutual CSR benefits for non profit organisations and small businesses in particular, plus the broader community in which they both operate.

Virtual and physical prototyping for compression sportswear

For high end compression sportswear it has increasingly become a crowded and highly competitive market with almost all sportswear companies having some form of offering. This work done in conjunction with a multinational sportswear group explores the use of virtual (FEA) and physical prototyping for a new garment design to ensure a competitive product in the market place. It was found that using a variety of processes, validation and feedback was given at several stages of the development program and highlighted areas of concern well before a final product was developed.

A preliminary study on machinability of super austenitic stainless steel

Stainless steel is the most widely used alloys of steel. The reputed variety of stainless steel having customised material properties as per the design requirements is Duplex Stainless Steel and Austenitic Stainless Steel. The Austenite Stainless Steel alloy has been developed further to be Super Austenitic Stainless Steel (SASS) by increasing the percentage of the alloying elements to form the half or more than the half of the material composition. SASS (Grade-AL-6XN) is an alloy steel containing high percentages of nickel (24%), molybdenum (6%) and chromium (21%). The chemical elements offer high degrees of corrosion resistance, toughness and stability in a large range of hostile environments like petroleum, marine and food processing industries. SASS is often used as a commercially viable substitute to high cost non-ferrous or non-metallic metals. The ability to machine steel effectively and efficiently is of utmost importance in the current competitive market. This paper is an attempt to evaluate the machinability of SASS which has been a classified material so far with very limited research conducted on it. Understanding the machinability of this alloy would assist in the effective forming of this material by metal cutting. The novelty of research associated with this is paper is reasonable taking into consideration the unknowns involved in machining SASS. The experimental design consists of conducting eight milling trials at combination of two different feed rates, 0.1 and 0.15 mm/tooth; cutting speeds, 100 and 150 m/min; Depth of Cut (DoC), 2 and 3 mm and coolant on for all the trials. The cutting tool has two inserts and therefore has two cutting edges. The trial sample is mounted on a dynamometer (type 9257B) to measure the cutting forces during the trials. The cutting force data obtained is later analyzed using DynaWare supplied by Kistler. The machined sample is subjected to surface roughness (Ra) measurement using a 3D optical surface profilometer (Alicona Infinite Focus). A comprehensive metallography process consisting of mounting, polishing and etching was conducted on a before and after machined sample in order to make a comparative analysis of the microstructural changes due to machining. The microstructural images were capture using a digital microscope. The microhardness test were conducted on a Vickers scale (Hv) using a Vickers microhardness tester. Initial bulk hardness testing conducted on the material show that the alloy is having a hardness of 83.4 HRb. This study expects an increase in hardness mostly due to work hardening may be due to phase transformation. The results obtained from the cutting trials are analyzed in order to judge the machinability of the material. Some of the criteria used for machinability evaluation are cutting force analysis, surface texture analysis, metallographic analysis and microhardness analysis. The methodology followed in each aspect of the investigation is similar to and inspired by similar research conducted on other materials. However, the novelty of this research is the investigation of various aspects of machinability and drawing comparisons between each other while attempting to justify each result obtained to the microstructural changes observed which influence the behaviour of the alloy. Due to the limited scope of the paper, machinability criteria such as chip morphology, Metal Removal Rate (MRR) and tool wear are not included in this paper. All aspects are then compared and the optimum machining parameters are justified with a scope for future investigations

Differences between differentiators and cost leaders in market research and internal CRM usage

The Porter strategy types of Differentiation and Cost Leadership are put forward as strategies leading to competitive advantage (Porter 1980). These types have quite contrasting implementation guidelines in terms of human resources, organisational structure, job design decision-making process, control systems, and information systems. These internal contrasts suggest Differentiators and Cost Leaders require contrasting roles for market research and internal CRM systems. Very few studies have explored the contingent role business strategy may have in explaining contrasting roles in marketing information systems or market research.

This study involved a cross-industry postal survey of 240 Australian marketing managers. One contribution of this study was to find market research having quite different roles in supporting Marketing (i.e. brand) Differentiators compared to Product (i.e. innovative feature) Differentiators. Surprisingly only one market research role differed when comparing Cost Leaders with Marketing Differentiator strategies. A final contribution was to find that no one strategy having a greater reliance on internal CRM systems in supporting decisionmaking.

Consumer choice, information product quality, and market implications

The paper concerns with the peculiarities of consumer choice in information product markets. This is a multidisciplinary study based on both information system research and microeconomic theory. An extension is introduced to the conventional general theory of consumer choice for explicitly taking into account the impact of information product quality on consumer behaviour. Multiple quality characteristics, considered against the price of product, are an essential reason for consumer choice of high tech product in general and information product in particular. We assume that consumers are able to aggregate their preferences of multiple product characteristics into a product preference order. On the supply side, the product quality characteristics incur costs. In the case of information product, those costs are the costs of the first copy, and marginal costs are near zero. All of the above constitute the distinctive characteristics of the competitive mechanism in the digital economy and in information product markets. A model, based on the game theory is used to consider two special cases. The first one deals with monopolistic competition for a share of the market with a limited number of customers. Conditions are derived for IT firm survival. The second one considers conditions at which a monopoly is able to successfully introduce a new version if its information product.

The market for financial report audits : regulation of and competition for auditor independence

The independence of auditors and the quality of financial report audits generally are rarely tested except in circumstances of corporate failure when alleged sub-optimality is present. Often auditors have good defences as to their expertise or competency, but rarely do they have equally convincing defences for the independence of their audit. A major issue for the regulation of auditor independence is that the threats to independence are often subtle and difficult to measure. This paper argues that firms undertaking financial report audits need to be transparent and competitive in respect of auditor independence. Two models that adopt this premise are proposed.

Market orientation and organisational performance: the influence of moderators

The concept of market orientation has received a great deal of attention from marketing scholars, indicating its conceptual and practical importance. The concept has been investigated from many perspectives and examined in many ways. The current general understanding is that market orientation, in most cases, is positively related to some measures of organisational performance and that different internal and external situations moderate this relationship. This paper aims to (1) introduce a measure of market orientation effectiveness, which represents a synthesis of the influence of different internal and external moderators on market orientation, and (2) measure the association of market orientation effectiveness with (a) a marketing performance outcome and (b) the overall organisational financial performance. The results from a survey of 216 large Australian businesses indicated that some variables (an organisation’s strategy of cost leadership, market strength, implementation effectiveness, and market volatility) have positive contributions at different degrees to market orientation effectiveness, while anticipated competitive reaction contributes negatively. Results also indicated that in the sample studied, both market orientation and market orientation effectiveness were more strongly associated with a measure of marketing performance, than with the overall financial performance, which is a function of both marketing and non-marketing initiatives.

The mediating role of competitive advantage in the relationship between organisational capabilities and retail performance

This paper investigates the relationships between market, learning and brand orientation with competitive advantage and organisational performance in the context of the UK retail industry. The results indicate that competitive advantage contributes to strategic effectiveness and mediates the relationship between learning and brand orientation and strategic effectiveness. No significant relationship was found in relation to financial performance. Moreover, market orientation was not found to have a significant direct effect on competitive advantage or indirect affect on performance.

A resource-based view of retail competitive advantage

This paper investigates the relationships between brand, market and learning orientation with competitive advantage in the context of the UK retail industry. The results indicate that both brand and learning orientations have a significant positive relationship with competitive advantage. However, market orientation was not found to have a significant influence on retail competitive advantage. These findings suggest that market orientation may result in competitive parity only, while superiority in the retail sector is dependent on the speed of earning and the application of knowledge in the form of a strong brand orientation.

Considerations for performing arts organisations in a climate of transition to the open market context in Vietnam

The emergence of a global economy and culture has created a worldwide climate of change since the 1980s. These changes impact on the growth of a national economy and change the significance of sectors in society, for example the service sector, which increasingly accounts for an important part of the economy (Burbules & Torres, 2000). The arts have also been profoundly influenced by social changes, and technological development. While these changes pose new challenges for the arts, most of which struggle for financial viability in an era of globalisation, privatisation and reduced public funding, the developments also open new opportunities for arts companies/artists but require them to possess the capability to identify and adapt to change. This process underlines the necessary new capacities of arts management, arts marketing, arts leaders and artists.

Doi moi - Vietnamese economic reforms in 1986 - provided impetus for change in every sector, resulting in growth of the service sector in Vietnam (UNDP, 2002). Arts organisations in Vietnam found themselves operating in a more competitive environment, forcing them to adjust to this new economic structure. Improved Vietnamese living standards helped to create more demands for a diverse entertainment industry and allowed both the government and individuals to spend more on the arts. A new cultural policy - socialisation (somewhat equivalent to privatisation in Western countries) was implemented in the arts and cultural sector, producing for performing arts organisations (PAOs) as well as a broader cultural milieu in Vietnam, challenges of being self-sustaining but also more autonomy and greater funding diversity. Simultaneously, this led to upgraded artistic standards, improved infrastructure and higher musicians’ salaries; the latter having only experienced slow improvement during the subsidised era.

This paper investigates how social changes affected organisational operations of selected PAOs in Vietnam and Australia. The analysis of how PAOs in each country adjusted to rapid changes will provide experience for learning from each other, particularly for the Vietnamese case. These analyses provide points of discussion, comparison and implications for development of arts management training in Vietnam. Case studies, personal interviews with key participants and policy actors have been used to discern which direction performing arts management should take in order to correspond with Vietnam’s present and future economic situation and its political position in the world.