Financial Accounting: Reporting, Analysis and Decision Making [5th ed.]

In recent years accounting education has seen numerous changes to the way financial accounting is taught. These changes reflect the demands of an ever-changing business world, opportunities created by new technology and instructional technologies, and an increased understanding of how students learn. The foundation of Financial Accounting is based on a number of unique principles and innovations in accounting education. The objective of Financial Accounting is to provide students with an understanding of those concepts that are fundamental to the preparation and use of accounting information. Most students will forget procedural details within a short period of time. On the other hand, concepts, if well taught, should be remembered for a lifetime. Concepts are especially important in a world where the details are constantly changing. Students learn best when they are actively engaged. The overriding pedagogical objective of Financial Accounting is to provide students with continual opportunities for active learning. One of the best tools for active learning is strategically placed questions. Discussions are framed by questions, often beginning with rhetorical questions and ending with review questions, and our analytical devices, called decision-making toolkits, use key questions to demonstrate the purpose of each.

Energy gap in the aetiology of body weight gain and obesity: A challenging concept with a complex evaluation and pitfalls

The concept of energy gap(s) is useful for understanding the consequence of a small daily, weekly, or monthly positive energy balance and the inconspicuous shift in weight gain ultimately leading to overweight and obesity. Energy gap is a dynamic concept: an initial positive energy gap incurred via an increase in energy intake (or a decrease in physical activity) is not constant, may fade out with time if the initial conditions are maintained, and depends on the 'efficiency' with which the readjustment of the energy imbalance gap occurs with time. The metabolic response to an energy imbalance gap and the magnitude of the energy gap(s) can be estimated by at least two methods, i.e. i) assessment by longitudinal overfeeding studies, imposing (by design) an initial positive energy imbalance gap; ii) retrospective assessment based on epidemiological surveys, whereby the accumulated endogenous energy storage per unit of time is calculated from the change in body weight and body composition. In order to illustrate the difficulty of accurately assessing an energy gap we have used, as an illustrative example, a recent epidemiological study which tracked changes in total energy intake (estimated by gross food availability) and body weight over 3 decades in the US, combined with total energy expenditure prediction from body weight using doubly labelled water data. At the population level, the study attempted to assess the cause of the energy gap purported to be entirely due to increased food intake. Based on an estimate of change in energy intake judged to be more reliable (i.e. in the same study population) and together with calculations of simple energetic indices, our analysis suggests that conclusions about the fundamental causes of obesity development in a population (excess intake vs. low physical activity or both) is clouded by a high level of uncertainty.

Exploring the role of energy, trade and financial development in explaining economic growth in South Africa: A revisit

South Africa is an emerging and industrializing economy which is experiencing remarkable progress. We contend that amidst the developments in the economy, the role of energy, trade openness and financial development are critical. In this article, we revisit the pivotal role of these factors. We use the ARDL bounds [72], the Bayer and Hanck [11] cointegration techniques, and an extended Cobb–Douglas framework, to examine the long-run association with output per worker over the sample period 1971–2011. The results support long-run association between output per worker, capital per worker and the shift parameters. The short-run elasticity coefficients are as follows: energy (0.24), trade (0.07), financial development (−0.03). In the long-run, the elasticity coefficients are: trade openness (0.05), energy (0.29), and financial development (−0.04). In both the short-run and the long-run, we note the post-2000 period has a marginal positive effect on the economy. The Toda and Yamamoto [91] Granger causality results show that a unidirectional causality from capital stock and energy consumption to output; and from capital stock to trade openness; a bidirectional causality between trade openness and output; and absence (neutrality) of any causality between financial development and output thus indicating that these two variables evolve independent of each other.

Broadening generic skills development: Improving financial literacy of university students

Research has demonstrated the importance of financial literacy as one of the key life skills for sound financial decision-making. Despite the vast availability of educational resources, young adults were consistently found to have low levels of financial capability. Of particular concern is that many of these young people do not have adequate money skills to manage their freedom during university time, which may contribute to suboptimal financial behaviours. This study surveyed university students by assessing their financial literacy and perception of the financial education they received in school. Illiteracy across different domains of financial topics was evident. Results also indicate that majority of respondents viewed that high school has not taught them financial knowledge that will prepare them for adult life. Accordingly, it is proposed that graduate skills development in higher education should be broadened to incorporate financial literacy to help university students to navigate the financial maze.

Volatility transmission in global financial markets

This paper considers the transmission of volatility in global foreign exchange, equity and bond markets. Using a multivariate GARCH framework which includes measures of realised volatility as explanatory variables, significant volatility and news spillovers are found to occur on the same trading day between Japan, Europe, and the United States. All markets exhibit significant degrees of asymmetry in terms of the transmission of volatility associated with good and bad news. There are also strong links between diffusive volatilities in all three markets, whereas jumpactivity is only importantwithin the equitymarkets. The results of this paper deepen our understanding of how news and volatility are propagated through global financial markets.

Identifying the financial barriers to deliberative, affordable apartment development in Australia

Purpose The purpose of this paper is to identify the financial barriers to the supply of affordable apartments in Australia and examine whether demand aggregation and ‘deliberative development’ (self-build) can form a new affordable housing ‘structure of provision’. Design/methodology/approach Market design, an offshoot of game theory, is used to analyse the existing apartment development model, with ‘deliberative development’ proposed as an innovative alternative. Semi-structured interviews with residential development financiers are used to evaluate whether deliberative development could obtain the requisite development finance. Findings Our investigation into the financial barriers of a deliberative development model suggest that while there are hurdles, these can be addressed if key risks in the exchange process can be mitigated. Hence, affordability can be enhanced by ‘deliberative development’ replacing the existing speculative development model. Research implications Market design is a new innovative theoretical approach to understanding the supply of housing, offering practical solutions to affordable apartment supply in Australia. Originality/value This research identifies financial barriers to the supply of affordable apartments; introduces theoretical understandings gained from market design as an innovative solution; provides evidence that a new structure of building provision based on ‘deliberative development’ could become a key means of achieving more affordable and better designed apartments.

Implications of gain functions in fisheries management

The appealing concept of optimal harvesting is often used in fisheries to obtain new management strategies. However, optimality depends on the objective function, which often varies, reflecting the interests of different groups of people. The aim of maximum sustainable yield is to extract the greatest amount of food from replenishable resources in a sustainable way. Maximum sustainable yield may not be desirable from an economic point of view. Maximum economic yield that maximizes the profit of fishing fleets (harvesting sector) but ignores socio-economic benefits such as employment and other positive externalities. It may be more appropriate to use the maximum economic yield that which is based on the value chain of the overall fishing sector, to reflect better society's interests. How to make more efficient use of a fishery for society rather than fishing operators depends critically on the gain function parameters including multiplier effects and inclusion or exclusion of certain costs. In particular, the optimal effort level based on the overall value chain moves closer to the optimal effort for the maximum sustainable yield because of the multiplier effect. These issues are illustrated using the Australian Northern Prawn Fishery.

Analytical studies of gain optimization in CO2-N2 gasdynamic lasers employing two-dimensional wedge nozzles

An analytical method has been proposed to optimise the small-signaloptical gain of CO2-N2 gasdynamic lasers (gdl) employing two-dimensional (2D) wedge nozzles. Following our earlier work the equations governing the steady, inviscid, quasi-one-dimensional flow in the wedge nozzle of thegdl are reduced to a universal form so that their solutions depend on a single unifying parameter. These equations are solved numerically to obtain similar solutions for the various flow quantities, which variables are subsequently used to optimize the small-signal-gain. The corresponding optimum values like reservoir pressure and temperature and 2D nozzle area ratio also have been predicted and graphed for a wide range of laser gas compositions, with either H2O or He as the catalyst. A large number of graphs are presented which may be used to obtain the optimum values of small signal gain for a wide range of laser compositions without further computations.

A Bayesian decision approach for sample size determination in phase II trials

Stallard (1998, Biometrics 54, 279-294) recently used Bayesian decision theory for sample-size determination in phase II trials. His design maximizes the expected financial gains in the development of a new treatment. However, it results in a very high probability (0.65) of recommending an ineffective treatment for phase III testing. On the other hand, the expected gain using his design is more than 10 times that of a design that tightly controls the false positive error (Thall and Simon, 1994, Biometrics 50, 337-349). Stallard's design maximizes the expected gain per phase II trial, but it does not maximize the rate of gain or total gain for a fixed length of time because the rate of gain depends on the proportion: of treatments forwarding to the phase III study. We suggest maximizing the rate of gain, and the resulting optimal one-stage design becomes twice as efficient as Stallard's one-stage design. Furthermore, the new design has a probability of only 0.12 of passing an ineffective treatment to phase III study.

Variation in liveweight gain of feedlot steers in southern Queensland

The rise in demand by domestic and export markets for a high quality uniform beef carcase has led to more steers being finished in feedlots. However, the profitability of feedlotting is small and economic survival hinges on efficiency (Ryan 1990). Lack of published data prevents conclusions being drawn about the level of efficiency of Australian feedlotting operations but the few studies reported show considerable variation in liveweight performance and carcase characteristics such as fat depth and marbling (Baud et al.) 21st Biennial Conference. 8-12 July, University of Queensland, Brisbane.

Parameterizing Unconditional Skewness in Models for Financial Time Series

In this paper we consider the third-moment structure of a class of time series models. It is often argued that the marginal distribution of financial time series such as returns is skewed. Therefore it is of importance to know what properties a model should possess if it is to accommodate unconditional skewness. We consider modeling the unconditional mean and variance using models that respond nonlinearly or asymmetrically to shocks. We investigate the implications of these models on the third-moment structure of the marginal distribution as well as conditions under which the unconditional distribution exhibits skewness and nonzero third-order autocovariance structure. In this respect, an asymmetric or nonlinear specification of the conditional mean is found to be of greater importance than the properties of the conditional variance. Several examples are discussed and, whenever possible, explicit analytical expressions provided for all third-order moments and cross-moments. Finally, we introduce a new tool, the shock impact curve, for investigating the impact of shocks on the conditional mean squared error of return series.

Diet quality and liveweight gain of steers grazing Leucaena-grass pasture estimated with faecal near infrared reflectance spectroscopy (F.NIRS)

Three drafts of Bos indicus cross steers (initially 178-216 kg) grazed Leucaena-grass pasture [Leucaena leucocephala subspecies glabrata cv. Cunningham with green panic (Panicum maximum cv. trichoglume)] from late winter through to autumn during three consecutive years in the Burnett region of south-east Queensland. Measured daily weight gain (DWGActual) of the steers was generally 0.7-1.1 kg/day during the summer months. Estimated intakes of metabolisable energy and dry matter (DM) were calculated from feeding standards as the intakes required by the steers to grow at the DWGActual. Diet attributes were predicted from near infrared reflectance spectroscopy spectra of faeces (F.NIRS) using established calibration equations appropriate for northern Australian forages. Inclusion of some additional reference samples from cattle consuming Leucaena diets into F.NIRS calibrations based on grass and herbaceous legume-grass pastures improved prediction of the proportion of Leucaena in the diet. Mahalanobis distance values supported the hypothesis that the F.NIRS predictions of diet crude protein concentration and DM digestibility (DMD) were acceptable. F.NIRS indicated that the percentage of Leucaena in the diet varied widely (10-99%). Diet crude protein concentration and DMD were usually high, averaging 12.4 and 62%, respectively, and were related asymptotically to the percentage of Leucaena in the diet (R2 = 0.48 and 0.33, respectively). F.NIRS calibrations for DWG were not satisfactory to predict this variable from an individual faecal sample since the s.e. of prediction were 0.33-0.40 kg/day. Cumulative steer liveweight (LW) predicted from F.NIRS DWG calibrations, which had been previously developed with tropical grass and grass-herbaceous legume pastures, greatly overestimated the measured steer LW; therefore, these calibrations were not useful. Cumulative steer LW predicted from a modified F.NIRS DWG calibration, which included data from the present study, was strongly correlated (R2 = 0.95) with steer LW but overestimated LW by 19-31 kg after 8 months. Additional reference data are needed to develop robust F.NIRS calibrations to encompass the diversity of Leucaena pastures of northern Australia. In conclusion, the experiment demonstrated that F.NIRS could improve understanding of diet quality and nutrient intake of cattle grazing Leucaena-grass pasture, and the relationships between nutrient supply and cattle growth.

Perceptions on the causes of individual and fraudulent co-offending: Views of forensic accountants

Individual and/or co-offenders fraudulent activities can have a devastating effect on a company’s reputation and credibility. Enron, Xerox, WorldCom, HIH Insurance and One.Tel are examples where stakeholders incurred substantial financial losses as a result of fraud and led to a loss of confidence in corporate dealings by the public in general. There are numerous theoretical approaches that attempt to explain how and why fraudulent acts occur, drawing on the fields of sociology, organisational, management and economic literature, but there is limited empirical evidence published in accounting literature. This qualitative inductive study analyses perceptions and experiences of forensic accountants to gain insights into individual fraud and co-offending in order to determine whether the conceptual framework developed from literature accurately depicts the causes of fraud committed by individuals and groups in the twenty-first century. Findings from the study both support and extend the conceptual framework, demonstrating that strain and anomie can result in fraud, that deviant sub-groups recruit and coerce members by providing relief from strain, and that inadequate corporate governance mechanisms both contribute to fraud occurring, and provide the opportunity for fraudulent activities to be executed and often remain undetected. Additional factors emerging from this study (the ‘technoconomy’, addiction and IT measures) were also identified as contributors to fraud, particularly relevant to the twenty-first century, and consequently, a refined conceptual framework is presented in the discussion and conclusion to the paper.

Social enterprises: Examining accountability for social and financial performance

This research examined the influence commercial customers have on the social and financial accountability of social enterprises, specifically considering whether a dominant or diversified customer base impacts on social enterprise accountability. Findings revealed that social enterprise accountability was influenced by social enterprises' main stakeholder(s), not necessarily the dominant customer. Accountability practices focused on fulfilling social enterprises' main stakeholders' accountability demands, and reporting to them rather than reporting on performance to a broader range of stakeholders. This research enhances the understanding of stakeholder impact on social enterprises' accountability, and develops an understanding of accountability theory in a social enterprise context.

Seasonal changes in pasture quality and diet selection and their relationship with liveweight gain of steers grazing tropical grass and grass-legume pastures in northern Australia.

The variation in liveweight gain in grazing beef cattle as influenced by pasture type, season and year effects has important economic implications for mixed crop-livestock systems and the ability to better predict such variation would benefit beef producers by providing a guide for decision making. To identify key determinants of liveweight change of Brahman-cross steers grazing subtropical pastures, measurements of pasture quality and quantity, and diet quality in parallel with liveweight were made over two consecutive grazing seasons (48 and 46 weeks, respectively), on mixed Clitoria ternatea/grass, Stylosanthes seabrana/grass and grass swards (grass being a mixture of Bothriochloa insculpta cv. Bisset, Dichanthium sericeum and Panicum maximum var. trichoglume cv. Petrie). Steers grazing the legume-based pastures had the highest growth rate and gained between 64 and 142 kg more than those grazing the grass pastures in under 12 months. Using an exponential model, green leaf mass, green leaf %, adjusted green leaf % (adjusted for inedible woody legume stems), faecal near infrared reflectance spectroscopy predictions of diet crude protein and diet dry matter digestibility, accounted for 77, 74, 80, 63 and 60%, respectively, of the variation in daily weight gain when data were pooled across pasture types and grazing seasons. The standard error of the regressions indicated that 95% prediction intervals were large (+/- 0.42-0.64 kg/head.day) suggesting that derived regression relationships have limited practical application for accurately estimating growth rate. In this study, animal factors, especially compensatory growth effects, appeared to have a major influence on growth rate in relation to pasture and diet attributes. It was concluded that predictions of growth rate based only on pasture or diet attributes are unlikely to be accurate or reliable. Nevertheless, key pasture attributes such as green leaf mass and green leaf% provide a robust indication of what proportion of the potential growth rate of the grazing animals can be achieved.