Corporate governance mechanisms and earnings management in transitional countries – evidence from Chinese listed firms

The objective of this thesis is to investigate whether the corporate governance practices adopted by Chinese listed firms are associated with the quality of earnings information. Based on a review of agency and institutional theory, this study develops hypotheses that predict the monitoring effectiveness of the board and the audit committee. Using a combination of univariate and multivariate analyses, the association between corporate governance mechanisms and earnings management are tested from 2004 to 2008. Through analysing the empirical results, a number of findings are summarised as below. First, board independence is weakened by the introduction of government officials as independent directors on the boards. Government officials acting as independent directors, claim that they meet the definition of independent director set by the regulation. However, they have some connection with the State, which is the controlling shareholder in listed SOEs affiliated companies. Consequently, the effect of the independent director’s expertise in constraining earnings management is mitigated as demonstrated by an insignificant association between board expertise and earnings management. An alternative explanation for the inefficiency of board independence may point to the pre-selection of independent directors by the powerful CEO. It is argued that a CEO can manipulate the board composition and choose the "desirable" independent directors to monitor themselves. Second, a number of internal mechanisms, such as board size, board activities, and the separation of the roles of the CEO and chair are found to be significantly associated with discretionary accruals. This result suggests that there are advantages in having a large and active board in the Chinese setting. This can offset the disadvantages associated with large boards, such as increased bureaucracy, and hence, increase the constraining effects of a large and resourceful board. Third, factor analysis identifies two factors: CEO power and board power. CEO power is the factor which consists of CEO duality and turnover, and board power is composed of board size and board activity. The results of CEO power show that if a Chinese listed company has CEO duality and turnover at the same time, it is more likely to have a high level of earnings management. The significant and negative relationship between board power and accruals indicate that large boards with frequent meetings can be associated with low level of earnings management. Overall, the factor analysis suggests that certain governance mechanisms complement each other to become more efficient monitors of opportunistic earnings management. A combination of board characteristics can increase the negative association with earnings management. Fourth, the insignificant results between audit committees and earnings management in Chinese listed firms suggests that the Chinese regulator should strengthen the audit committee functions. This thesis calls for listed firms to disclose more information on audit committee composition and activities, which can facilitate future research on the Chinese audit committee’s monitoring role. Fifth, the interactive results between State ownership and board characteristics show that dominant State ownership has a moderating effect on board monitoring power as the State totally controls 42% of the issued shares. The high percentage of State ownership makes it difficult for the non-controlling institutional shareholders to challenge the State’s dominant status. As a result, the association between non-controlling institutional ownership and earnings management is insignificant in most situations. Lastly, firms audited by the international Big4 have lower abnormal accruals than firms audited by domestic Chinese audit firms. In addition, the inverse U-shape relationship between audit tenure and earnings quality demonstrates the changing effects of audit quality after a certain period of appointment. Furthermore, this thesis finds that listing in Hong Kong Stock Exchanges can be an alternative governance mechanism to discipline Chinese firms to follow strict Hong Kong listing requirements. Management of Hong Kong listed companies are exposed to the scrutiny of international investors and Hong Kong regulators. This in turn reduces their chances of conducting self-interested earnings manipulation. This study is designed to fill the gap in governance literature in China that is related to earnings management. Previous research on corporate governance mechanisms and earnings management in China is not conclusive. The current research builds on previous literature and provides some meaningful implications for practitioners, regulators, academic, and international investors who have investment interests in a transitional country. The findings of this study contribute to corporate governance and earnings management literature in the context of the transitional economy of China. The use of alternative measures for earnings management yields similar results compared with the accruals models and produces additional findings.

From Absence to Presence, from Silence to Voice: Victims in Transitional Justice Since the Nuremberg Trials

As much as victims have been absent in traditional and national criminal justice for a long time, they were invisible in transitional and international criminal justice after World War II. The Nuremberg Trials were dominated by the perpetrators, and documents were mainly used instead of victim testimony. Contemporaries shared the perspective that transitional justice, both international and national procedures should channel revenge by the victims and their families into the more peaceful venues of courts and legal procedures. Since then, victims have gained an ever more important role in transitional, post-conflict and international criminal justice. Non-judicial tribunals, Truth and Reconciliation Commissions, and international criminal courts and tribunals are relying on the testimony of victims and thus provide a prominent role for victims who often take centre stage in such procedures and trials. International criminal law and the human rights regime have provided victims with several routes to make themselves heard and fight against impunity. This paper tracks the road from absence to presence, and from invisibility to the visibility of victims during the second half of the last and the beginning of the present century. It shows in which ways their presence has shaped and changed transitional and international justice, and in particular how their absence or presence is linked to amnesties.

New organisational leadership capabilities : transitional engineer the new designer?

Traditionally, design has been centred within the manufacturing and production areas of companies and or as a styling afterthought. Increasingly, design is viewed as a vital and important strategic business resource (Dell’Era, Marchesi & Verganti, 2010) and consequently companies worldwide look to design to help them innovate, differentiate and compete in the global marketplace. The role of the professional designer is evolving to a point where they are needed to work beyond being a specialist in the manufacturing and aesthetics of an artefact (Wrigley & Bucolo, 2011). This paper challenges the values held by academics and industry regarding the traditional role of designers in business. It investigates the emerging transitional engineering framework and puts forward a proposal for the next generation designer in the future era of design. Questions surrounding how designers will develop these new skills and how the Authors’ new framework of design led innovation can contribute to the future of design will be presented. This research is needed to better equip future designers to have a more central role in business.

Beat phenomena in metal nanowires, and their implications for resonance-based elastic property measurements

The elastic properties of 1D nanostructures such as nanowires are often measured experimentally through actuation of the nanowire at its resonance frequency, and then relating the resonance frequency to the elastic stiffness using elementary beam theory. In the present work, we utilize large scale molecular dynamics simulations to report a novel beat phenomenon in [110]oriented Ag nanowires. The beat phenomenon is found to arise from the asymmetry of the lattice spacing in the orthogonal elementary directions of the [110] nanowire, i.e. the [-110] and [001] directions, which results in two different principal moments of inertia. Because of this, actuations imposed along any other direction are found to decompose into two orthogonal vibrational components based on the actuation angle relative to these two elementary directions, with this phenomenon being generalizable to <110> FCC nanowires of different materials (Cu, Au, Ni, Pd and Pt). The beat phenomenon is explained using a discrete moment of inertia model based on the hard sphere assumption, the model is utilized to show that surface effects enhance the beat phenomenon, while the effect is reduced with increasing nanowires cross-sectional size or aspect ratio. Most importantly, due to the existence of the beat phenomena, we demonstrate that in resonance experiments only a single frequency component is expected to be observed, particularly when the damping ratio is relatively large or very small. Furthermore, for a large range of actuation angles, the lower frequency is more likely to be detected than the higher one, which implies that experimental predictions of Young’s modulus obtained from resonance may in fact be under predictions. The present study therefore has significant implications for experimental interpretations of Young’s modulus as obtained via resonance testing.

Influencing innovation in SME’s : from designer to transitional engineer

The following paper presents insights found during an ongoing industry engagement with a family-owned manufacturing SME in Australia. The study seeks to unpack cultural, strategic, product opportunities and challenges available to the firm engaging in a design led approach to innovation. Design led innovation finds new market opportunities to innovate through a holistic perspective of both the internal business operations, focusing on the customer experience and external stakeholders. The action research based methodology consisted of 25 semi-structured interviews, a reflective journal and focus group, all of which were analysed thematically. This paper focuses on the resultant themes of the focus group data constituting a discussion around the best strategies to try and integrate design thinking as a fundamental skill across the company. The main thematic results included the participant’s limited views of themselves (in current roles) as being to create ‘buy-in’ to change initiatives, a preference to act as a group to gain traction in the firm, importance of better defining the problem before reaching a design solution and lastly the time required to implement versus the need for change. These findings are valuable in assisting other family owned firms in managing core growth activities with design and innovation initiatives, particularly in the area of new product development.

Making Arrangements : Remote proposal sequences and attendant structural phenomena in social interaction

In this thesis, I contribute to the study of how arrangements are made in social interaction. Using conversation analysis, I examine a corpus of 375 telephone calls between employees and clients of three Community Home Care (CHC) service agencies in metropolitan Adelaide, South Australia. My analysis of the CHC data corpus draws upon existing empirical findings within conversation analysis in order to generate novel findings about how people make arrangements with one another, and some of the attendant considerations that parties to such an activity can engage in: Prospective informings as remote proposals for a future arrangement – Focusing on how employees make arrangements with clients, I show how the employees in the CHC data corpus use ‘prospective informings’ to detail a future course of action that will involve the recipient of that informing. These informings routinely occasion a double-paired sequence, where informers pursue a response to their informing. This pursuit often occurs even after recipients have provided an initial response. This practice for making arrangements has been previously described by Houtkoop (1987) as ‘remote proposing.’ I develop Houtkoop’s analysis to show how an informing of a future arrangement can be recompleted, with response solicitation, as a proposal that is contingent upon a recipient’s acceptance. Participants’ understanding of references to non-present third parties – In the process of making arrangements, references are routinely made to non-present third parties. In the CHC data corpus, these third parties are usually care workers. Prior research (e.g., Sacks & Schegloff, 1979; Schegloff, 1996b) explains how the use of ‘recognitional references’ (such as the bare name ‘Kerry’), conveys to recipients that they should be able to locate the referent from amongst their acquaintances. Conversely, the use of ‘non-recognitional references’ (such as the description ‘a lady called Kerry’), conveys that recipients are unacquainted with the referent. I examine instances where the selection of a recognitional or non-recognitional reference form is followed by a recipient initiating repair on that reference. My analysis provides further evidence thatthe existing analytic account of these references corresponds to the way in which participants themselves make sense of them. My analysis also advances an understanding of how repair can be used, by recipients, to indicate the inappositeness of a prior turn. Post-possible-completion accounts – In a case study of a problematic interaction, I examine a misunderstanding that is not resolved within the repair space, the usual defence of intersubjectivity in interaction (cf. Schegloff, 1992b). Rather, I explore how the source of trouble is addressed, outside of the sequence of its production, with a ‘post-possible-completion account.’ This account specifies the basis of a misunderstanding and yet, unlike repair, does so without occasioning a revised response to a trouble-source turn. By considering various aspects of making arrangements in social interaction, I highlight some of the rich order that underpins the maintenance of human relationships across time. In the concluding section of this thesis I review this order, while also discussing practical implications of this analysis for CHC practice.

Chinese teaching English as a foreign language (TEFL) academics' perceptions about research in a transitional culture

Research capacity building has become a prominent theme in higher education institutions in China and across the world. However, Chinese Teaching English as a Foreign Language academics' research output has been quite limited. In order to build their research capacity, it is necessary to understand their perceptions about research. This case study presents the perceptions about research of six Chinese Teaching English as a Foreign Language academics in a context of growing institutional demands for research. One-on-one interviews of 35-60 minutes' duration were conducted with these academics from an institution in north China. Thematic analysis of the transcribed interviews indicated that the Chinese Teaching English as a Foreign Language academics held positive perceptions about the teaching-research nexus. However, the value of research to them seemed to be limited to teaching and career advancement. They also expressed varied concerns about the institutional research requirements. The findings suggested several implications for the institution's administrators to further enhance academics' research capacity building.

The phenomena of auditory hallucination as described by Indonesian people living with schizophrenia

This study was a phenomenological inquiry of the experience of auditory hallucinations as described by 13 Indonesian people diagnosed with schizophrenia. The interviewees included 6 men and 7 women and they were aged between 19 and 56 years. Four themes emerged from this study: feeling more like a robot than a human being; voices of contradiction - a point of confusion; tattered relationships and family disarray; and normalizing the presence of voices as part of everyday life. The findings of this study have the potential to contribute to new understandings of how people live with and manage auditory hallucinations and so enhance client-centered nursing care.

A modified particle swarm optimization for correlated phenomena

The wide applicability of correlation analysis inspired the development of this paper. In this paper, a new correlated modified particle swarm optimization (COM-PSO) is developed. The Correlation Adjustment algorithm is proposed to recover the correlation between the considered variables of all particles at each of iterations. It is shown that the best solution, the mean and standard deviation of the solutions over the multiple runs as well as the convergence speed were improved when the correlation between the variables was increased. However, for some rotated benchmark function, the contrary results are obtained. Moreover, the best solution, the mean and standard deviation of the solutions are improved when the number of correlated variables of the benchmark functions is increased. The results of simulations and convergence performance are compared with the original PSO. The improvement of results, the convergence speed, and the ability to simulate the correlated phenomena by the proposed COM-PSO are discussed by the experimental results.

The implementation of a guideline of care for patients with a Sengstaken-Blakemore tube in situ in a general intensive care unit using transitional change theory

The use of the Sengstaken–Blakemore tube as a life-saving treatment for bleeding oesophageal varices is slowly becoming the least preferred method possibly due to the potential complications associated with its placement. Nursing practice pertaining to the care of this patient group appears ad hoc and reliant on local knowledge and experience as opposed to recognised evidence of best practice. Therefore, this paper focuses on the application of Lewin's transitional change theory used to introduce a change in nursing practice with the application of a guideline to enhance the care of patients with a Sengstaken–Blakemore tube in situ within a general intensive care unit. This method identified some of the complexities surrounding the change process including the driving and restraining forces that must be harnessed and minimised in order for the adoption of change to be successful.