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.

Importance of soil ecology in vegetation rehabilitation on a North Stradbroke Island sand mine

Sibelco Australia Limited (SAL), a mineral sand mining operation on North Stradbroke Island, undertakes progressive rehabilitation of mined areas. Initial investigations have found that some areas at SAL’s Yarraman Mine have failed to redevelop towards approved criteria. This study, undertaken in 2010, examined ground cover rehabilitation of different aged plots at the Yarraman Mine to determine if there was a relationship between key soil and vegetation attributes. Vegetation and soil data were collected from five plots rehabilitated in 2003, 2006, 2008, 2009 and 2010, and one unmined plot. Cluster (PATN) analysis revealed that vegetation species composition, species richness and ground cover differed between plots. Principal component analysis (PCA) extracted ten soil attributes that were then correlated with vegetation data. The attributes extracted by PCA, in order of most common variance, were: water content, pH, terrolas depth, elevation, slope angle, leaf litter depth, total organic carbon, and counts of macrofauna, fungi and bacteria. All extracted attributes differed between plots, and all except bacteria correlated with at least one vegetation attribute. Water content and pH correlated most strongly with vegetation cover suggesting an increase in soil moisture and a reduction in pH are required in order to improve vegetation rehabilitation at Yarraman Mine. Further study is recommended to confirm these results using controlled experiments and to test potential solutions, such as organic amendments.

The influence of vegetation and soil type on the speciation of iron in soil water

Soluble organic matter derived from exotic Pinus species has been shown to form stronger complexes with iron (Fe) than that derived from most native Australian species. It has also been proposed that the establishment of exotic Pinus plantations in coastal southeast Queensland may have enhanced the solubility of Fe in soils by increasing the amount of organically complexed Fe, but this remains inconclusive. In this study we test whether the concentration and speciation of Fe in soil water from Pinus plantations differs significantly from soil water from native vegetation areas. Both Fe redox speciation and the interaction between Fe and dissolved organic matter (DOM) were considered; Fe - DOM interaction was assessed using the Stockholm Humic Model. Iron concentrations (mainly Fe 2+) were greatest in the soil waters with the greatest DOM content collected from sandy podosols (Podzols), where they are largely controlled by redox potential. Iron concentrations were small in soil waters from clay and iron oxide-rich soils, in spite of similar redox potentials. This condition is related to stronger sorption on to the reactive clay and iron oxide mineral surfaces in these soils, which reduces the amount of DOM available for electron shuttling and microbial metabolism, restricting reductive dissolution of Fe. Vegetation type had no significant influence on the concentration and speciation of iron in soil waters, although DOM from Pinus sites had greater acidic functional group site densities than DOM from native vegetation sites. This is because Fe is mainly in the ferrous form, even in samples from the relatively well-drained podosols. However, modelling suggests that Pinus DOM can significantly increase the amount of truly dissolved ferric iron remaining in solution in oxic conditions. Therefore, the input of ferrous iron together with Pinus DOM to surface waters may reduce precipitation of hydrous ferric oxides (ferrihydrite) and increase the flux of dissolved Fe out of the catchment. Such inputs of iron are most probably derived from podosols planted with Pinus.

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.

Vertical vegetation design decisions and their impact on energy consumption in subtropical cities

Vertical vegetation is vegetation growing on, or adjacent to, the unused sunlit exterior surfaces of buildings in cities. Vertical vegetation can improve the energy efficiency of the building on which it is installed mainly by insulating, shading and transpiring moisture from foliage and substrate. Several design parameters may affect the extent of the vertical vegetation's improvement of energy performance. Examples are choice of vegetation, growing medium geometry, north/south aspect and others. The purpose of this study is to quantitatively map out the contribution of several parameters to energy savings in a subtropical setting. The method is thermal simulation based on EnergyPlus configured to reflect the special characteristics of vertical vegetation. Thermal simulation results show that yearly cooling energy savings can reach 25% with realistic design choices in subtropical environments. Heating energy savings are negligible. The most important parameter is the aspect of walls covered by vegetation. Vertical vegetation covering walls facing north (south for the northern hemisphere) will result in the highest energy savings. In making plant selections, the most significant parameter is Leaf Area Index (LAI). Plants with larger LAI, preferably LAI>4, contribute to greater savings whereas vertical vegetation with LAI<2 can actually consume energy. The choice of growing media and its thickness influence both heating and cooling energy consumption. Change of growing medium thickness from 6cm to 8cm causes dramatic increase in energy savings from 2% to 18%. For cooling, it is best to use a growing material with high water retention, due to the importance of evapotranspiration for cooling. Similarly, for increased savings in cooling energy, sufficient irrigation is required. Insufficient irrigation results in the vertical vegetation requiring more energy to cool the building. To conclude, the choice of design parameters for vertical vegetation is crucial in making sure that it contributes to energy savings rather than energy consumption. Optimal design decisions can create a dramatic sustainability enhancement for the built environment in subtropical climates.

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.

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.

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.

Late Quaternary vegetation history of North Stradbroke Island, Queensland, eastern Australia

Currently there is a paucity of records of late Quaternary palaeoenvironmental variability available from the subtropics of Australia. The three continuous palaeoecological records presented here, from North Stradbroke Island, subtropical Queensland, assist in bridging this large spatial gap in the current state of knowledge. The dominance of arboreal taxa in the pollen records throughout the past >40,000 years is in contrast with the majority of records from temperate Australia, and indicates a positive moisture balance for North Stradbroke Island. The charcoal records show considerable inter-site variability indicating the importance of local-scale events on individual records, and highlighting the caution that needs to be applied when interpreting a single site as a regional record. The variability in the burning regimes is interpreted as being influenced by both climatic and human factors. Despite this inter-site variability, broad environmental trends are identifiable, with changes in the three records comparable with the OZ-INTIMATE climate synthesis for the last 35,000 years.

BioCondition assessment tool : a mobile application to aid vegetation assessment

Environmental degradation has become increasingly aggressive in recent years due to rapid urban development and other land use pressures. This chapter looks at BioCondition, a newly developed vegetation assessment framework by Queensland Department of Resource Management (DERM) and how mobile technology can assist beginners in conducting the survey. Even though BioCondition is designed to be simple, it is still fairly inaccessible to beginners due to its complex, time consuming, and repetitive nature. A Windows Phone mobile application, BioCondition Assessment Tool, was developed to provide on-site guidance to beginners and document the assessment process for future revision and comparison. The application was tested in an experiment at Samford Conservation Park with 12 students studying ecology in Queensland University of Technology.