Earnings behaviour of financially distressed firms:The role of institutional ownership

Using a sample of 859 U.S. bankruptcy-filing firms over the period 1986-2004, we examine the earnings behaviour of managers during the distressed period by looking at sources of abnormal accruals prior to the bankruptcy-filing year. Results show that managers of highly distressed firms shift earnings downwards prior to the bankruptcy filing. We test and provide evidence in support of two potential contributing factors. First, top-level management turnover among distressed firms leads new managers to earnings bath choices during the distressed period. Second, qualified audit opinions exert pressure on managers to follow more conservative earnings behaviour during the distressed period. Evidence is also provided that the management of distressed firms with lower (higher) institutional ownership has greater (lesser) tendency to manage earnings downwards. Results also show that higher institutional ownership mitigates the negative abnormal returns of firms with top management turnover. To the authors' knowledge, this is the first study that attempts to examine whether institutional ownership relates to market reaction in conjunction with a top management turnover or a qualified audit opinion during the distressed period. Prior studies focused on the investigation of earnings management or institutional ownership (separately) during the distressed period, but did not examine if the effect of institutional ownership on earnings behaviour also influences subsequent returns. Thus, the results of this study should be of interest to analysts, standard setters and regulatory bodies since our results show that management turnover, qualified audit opinions and firm governance mechanisms affect the quality of earnings and the level of abnormal returns. © 2007 Accounting Foundation, The University of Sydney.

The clinical assessment of systemic hypertension in optometric practice

This thesis sets out to examine in detail the condition of systemic hypertension (high Blood Pressure) in relation to optometric practice in the United Kingdom. Systemic hypertension, which is asymptomatic in the early stages, is diagnosed from the Blood Pressure (BP) measurement recorded by a sphygmomanometer and/or from the complications that have developed in target organs. Optometric practice based surveys revealed that diagnosed systemic hypertension was the most prevalent cardiovascular medical condition (20.5%). Measurement of BP of patients in this sample revealed that if an optometrist included sphygmomanometry into the sight examination then at least one patient each day would be referred for suspect systemic hypertension. Optometric opinion felt that the measurement of BP in optometric practice would advance the profession, being appreciated by both patients and General Practitioners (GPs), but was felt to be an unnecessary routine procedure. The present sight examination for the systemic hypertensive is similar to that of the normotensive patient, but may involve an altered fundus examination and a visual field test. The GPs were in favour of optometric BP measurement and a future role in the share care management of the systemic hypertensive. The application of a new pictorial grading scale for the grading of vascular changes associated with pre-malignant systemic hypertension was found to be both accurate and reliable. Clinical trial of the grading scale in optometric practice found positive correlations between BP and increasing severity of the retinal vascular features. The subtle pre-malignant vascular changes require reliable accurate detection and analysis to assist in the management of the systemic hypertensive patient. Vessel width was shown to decrease with increasing age. Image analysis of the A/V ratio, arteriolar tortuosity and focal calibre changes revealed a positive correlation to the patient's BP (p<0.001). The retinal vasculature is relatively stable longitudinally with only minor changes in response to early disease states. Age and elevated BP increased a patient's risk of developing systemic medical conditions over a two-year period. The application of the pictorial grading scale to optometric practice and training the optometrist in the use of sphygmomanometry would improve the management of the systemic hypertensive patient in optometric practice. Future advances in image analysis hold substantial benefits for the detection and monitoring of subtle vascular changes associated with systemic hypertension.

Review of doctoral research in second-language teaching and learning in Australia (2003–2006)

This article reviews recent doctoral research in Australian universities in the area of language teaching and learning. Doctoral work in three main areas of research concentration is described: language teaching, language learning, and writing. The authors whose studies are reviewed are graduates of the Australian National University, Griffith University, Macquarie University, the University of Technology, Sydney, the University of Sydney, the University of New South Wales, the University of Melbourne, Monash University, La Trobe University, Deakin University and Murdoch University.

Is measurement of blood pressure worthwhile in the diabetic eye clinic?

Purpose - The UK Prospective Diabetic Study has confirmed the importance of blood pressure (BP) as a major risk factor for diabetic retinopathy (DR). We wanted to investigate whether measuring the BP in the diabetic eye clinic could identify new hypertensive patients and monitor control in existing ones. Patients and methods - We compared BP in patients attending the diabetic eye clinic with home blood pressure measurement (HBPM) and ambulatory BP measurement (ABPM). In all, 106 patients attending a diabetic eye clinic were selected at random from clinic attendees. BP measurement (on an Omron 705 CP) was performed in the eye clinic and also compared to HBPM three times per day with an Omron 705 CP machine, and was compared to diabetic clinic measurements. In addition, 11 randomly chosen patients had 24 h ABPM to validate the above techniques. Results - In all, 106 patients (70 male and 36 female) were recruited for the study, of which 71 were known to be hypertensive on antihypertensive medication. Of the total, 75 patients (70.8%) had BP>140/85 in the eye clinic, of which 51 (68%) were known to be hypertensive on treatment and this was confirmed in 46 (90%) on HBPM. A total of, 24 patients (22.6%) were newly diagnosed as hypertensive in the eye clinic, which was confirmed by HBPM in 22 patients (92%). The mean BP of the measurements performed in the eye clinic was significantly higher than that carried out in the diabetic clinic (P<0.01). Tropicamide 1% and phenylephrine 2.5% eye drop instillation had no effect on BP. In 11 randomly chosen patients, 24 h ABPM validated both diabetic eye clinic and home BP measurements. Conclusion - Attendance at the diabetic eye clinic is an important chance to detect both new patients with systemic hypertension and those with inadequate BP control. Ophthalmologists should be encouraged to measure BP in their diabetic patients attending diabetic eye clinics, as it is an important risk factor for DR. On the basis of our findings, good BP control is a goal yet to be achieved in diabetic patients with retinopathy.

The effect of past earnings and dividend patterns on the information content of dividends when earnings are reduced

This study pursues two objectives: first, to provide evidence on the information content of dividend policy, conditional on past earnings and dividend patterns prior to an annual earnings decline; second, to examine the effect of the magnitude of low earnings realizations on dividend policy when firms have more-or-less established dividend payouts. The information content of dividend policy for firms that incur earnings reductions following long patterns of positive earnings and dividends has been examined (DeAngelo et al., 1992, 1996; Charitou, 2000). No research has examined the association between the informativeness of dividend policy changes in the event of an earnings drop, relative to varying patterns of past earnings and dividends. Our dataset consists of 4,873 U.S. firm-year observations over the period 1986-2005. Our evidence supports the hypotheses that, among earnings-reducing or loss firms, longer patterns of past earnings and dividends: (a) strengthen the information conveyed by dividends regarding future earnings, and (b) enhance the role of the magnitude of low earnings realizations in explaining dividend policy decisions, in that earnings hold more information content that explains the likelihood of dividend cuts the longer the past earnings and dividend patterns. Both results stem from the stylized facts that managers aim to maintain consistency with respect to historic payout policy, being reluctant to proceed with dividend reductions, and that this reluctance is higher the more established is the historic payout policy. © 2010 The Authors. Journal compilation © 2010 Accounting Foundation, The University of Sydney.

Foreword:first workshop requirements@run.time

The first edition of the Workshop requirements@run.time was held at the Eighteenth International Conference on Requirements Engineering (RE 2010) in the city of Sydney, NSW, Australia on the 28th of September 2010. It was organized by Pete Sawyer, Jon Whittle, Nelly Bencomo, Daniel Berry, and Anthony Finkelstein. This foreword presents a digest of the presentations and discussions that took place during the workshop. © 2010 IEEE.

Distress risk, growth and earnings quality

We extend and complement prior work by investigating the earnings quality of firms with different financial health characteristics and growth prospects. By using three alternative measures of default likelihood and two alternative measures of growth options, without being limited to a specific event, we provide a more comprehensive setup for analysing the earnings characteristics of the universe of firms than examining distressed firms with persistent losses, dividend reductions or bankruptcy-filings. Our dataset consists of 15,049 healthy U.S. firms over the period 1990-2004. Results show that the relation between earnings quality and financial health is not monotonic. Distressed firms have a low level of earnings timeliness for bad news and a high level for good news, and manage earnings toward a positive target more frequently than healthy firms. On the other hand, healthy firms have a high level of earnings timeliness for bad news. Growth aspects play an important role in a firm's ability to manage earnings. In contrast to the findings of prior studies, growth firms have greater earnings timeliness for bad news, whereas value firms manage earnings toward a positive target more frequently than growth firms. © 2011 The Authors. Abacus© 2011 Accounting Foundation, The University of Sydney.

From icon to naturalised icon:a linguistic analysis of media representations of the BP Deepwater Horizon crisis

This research explores how news media reports construct representations of a business crisis through language. In an innovative approach to dealing with the vast pool of potentially relevant texts, media texts concerning the BP Deepwater Horizon oil spill are gathered from three different time points: immediately after the explosion in 2010, one year later in 2011 and again in 2012. The three sets of 'BP texts' are investigated using discourse analysis and semi-quantitative methods within a semiotic framework that gives an account of language at the semiotic levels of sign, code, mythical meaning and ideology. The research finds in the texts three discourses of representation concerning the crisis that show a movement from the ostensibly representational to the symbolic and conventional: a discourse of 'objective factuality', a discourse of 'positioning' and a discourse of 'redeployment'. This progression can be shown to have useful parallels with Peirce's sign classes of Icon, Index and Symbol, with their implied movement from a clear motivation by the Object (in this case the disaster events), to an arbitrary, socially-agreed connection. However, the naturalisation of signs, whereby ideologies are encoded in ways of speaking and writing that present them as 'taken for granted' is at its most complete when it is least discernible. The findings suggest that media coverage is likely to move on from symbolic representation to a new kind of iconicity, through a fourth discourse of 'naturalisation'. Here the representation turns back towards ostensible factuality or iconicity, to become the 'naturalised icon'. This work adds to the study of media representation a heuristic for understanding how the meaning-making of a news story progresses. It offers a detailed account of what the stages of this progression 'look like' linguistically, and suggests scope for future research into both language characteristics of phases and different news-reported phenomena.