The Australian nonprofit sector legal and accounting almanac 2011

Summaries of legal cases, legislation and developments in law and accounting relevant to nonprofit organisations and charity law during 2011; including articles on special issues such as accounting standards and the chart of accounts; law reform (e.g. the new national regulator, the Australian Charities and Not-for-profits Commission); and taxation.

Assessing financial reporting comparability across institutional settings : the case of pension accounting

The drive for comparability of financial information is to enable users to distinguish similarities and differences in economic activities for an entity over time and between entities so that their resource allocation decisions are facilitated. With the increased globalisation of economic activities, the enhanced international comparability of financial statements is often used as an argument to advance the convergence of local accounting standards to international financial reporting standards (IFRS). Differences in the underlying economic substance of transactions between jurisdictions plus accounting standards allowing alternative treatments may render this expectation of increased comparability unrealistic. Motivated by observations that, as a construct, comparability is under-researched and not well understood, we develop a comparability framework that distinguishes between four types of comparability. In applying this comparability framework to pension accounting in the Australian and USA contexts, we highlight a dilemma: while regulators seek to increase the likelihood that similar events are accounted for similarly, an unintended consequence may be that preparers are forced to apply similar accounting treatment to events that are, in substance, different.

The traditional rationale of the arm’s length approach to transfer pricing : should the separate accounting model be maintained for modern multinational entities?

This article examines the current transfer pricing regime to consider whether it is a sound model to be applied to modern multinational entities. The arm's length price methodology is examined to enable a discussion of the arguments in favour of such a regime. The article then refutes these arguments concluding that, contrary to the very reason multinational entities exist, applying arm's length rules involves a legal fiction of imagining transactions between unrelated parties. Multinational entities exist to operate in a way that independent entities would not, which the arm's length rules fail to take into account. As such, there is clearly an air of artificiality in applying the arm's length standard. To demonstrate this artificiality with respect to modern multinational entities, multinational banks are used as an example. The article concluded that the separate entity paradigm adopted by the traditional transfer pricing regime is incongruous with the economic theory of modern multinational enterprises.

From 'Neighbours' to 'Packed to the Rafters': accounting for longevity in the evolution of Aussie soaps

If there is one television programming staple for which Australian television drama is known internationally, it is the long-running television soap, with Neighbours (originally produced by Grundy in 1985) lauded as 'the most outstanding example of Australian series export' (Cunningham and Jacka, 1996). Twenty-five years on, this program still airs on domestic and international TV schedules five days a week, despite waning popularity with local Australian audiences. Considering past interest in the success and longevity of this soap, it is apposite to look again at the continuing progress of Neighbours foremost as a global brand. In comparison, Packed to the Rafters is treated here as a contemporary version of familiar Aussie themes related to everyday middle-class suburbia, populated with blue skies and feel-good characters expressing wholesome family values, but with a stylistic innovation defined here as domestic realism. As part of the production ecology of the late 2000s, Packed to the Rafters demonstrates the considerable role for local drama productions as loss leaders and flagship programming for commercial free-to-air networks up against an increasingly difficult domestic market.

Accounting for calibration uncertainty in phylogenetic estimation of evolutionary divergence times

The estimation of phylogenetic divergence times from sequence data is an important component of many molecular evolutionary studies. There is now a general appreciation that the procedure of divergence dating is considerably more complex than that initially described in the 1960s by Zuckerkandl and Pauling (1962, 1965). In particular, there has been much critical attention toward the assumption of a global molecular clock, resulting in the development of increasingly sophisticated techniques for inferring divergence times from sequence data. In response to the documentation of widespread departures from clocklike behavior, a variety of local- and relaxed-clock methods have been proposed and implemented. Local-clock methods permit different molecular clocks in different parts of the phylogenetic tree, thereby retaining the advantages of the classical molecular clock while casting off the restrictive assumption of a single, global rate of substitution (Rambaut and Bromham 1998; Yoder and Yang 2000).

An accounting standard for nonprofits : the missing essential building blocks

There have been numerous calls over the years for the development of an accounting standard for not-for-profit entities (NFPEs). Probably the most commonly quoted in this regard is that from the Industry Commission Report No. 45 in 1995 which contained the following recommendation: The Commonwealth government should provide funds to the Australian Accounting Standards Board and the Public Sector Accounting Standards Board to develop within two years suitable accounting standards for Community Social Welfare Organisations. This recommendation was made over 5-years ago. Why has no action been taken towards its implementation?...

Collaborative organisational structures : implications for the accounting profession

The IT systems drive the financial reporting processes in modern business environments. The result is an integrative system of initialing, authorizing, recording, and processing of financial transactions. This IT-related change inextricably links to the overall financial reporting process, requiring a deeper level of understanding and commitment. Firm’s IT governance initiatives provide this commitment by enforcing controls to IT components to ensure compliance to overall financial reporting requirements. The IT governance institute (ITGI) and other authorities have developed a number of frameworks and guidelines (e.g., COBIT) to help management in managing IT-intensive processes.

Accounting at home in developing economies : Current practices and implications for the accounting professional

We determine the extent of accounting at home in developing economies in this research. We then consider the role of the accounting profession may have in promoting accounting values at home. A language of business, accounting today plays a fundamental support role within the business community to evaluate the impact past decisions, and foresees directions for future initiatives. Sound accounting practices are fundamental to ensure symmetrical information dissemination across various stakeholders. Accounting literature has sought to investigate a number of questions that attempt to improve the practice of accounting in the corporate world. Equally, we must obtain adequate understanding of how we use accounting in our everyday life, and how accounting could assist the people most affected by the effects of accounting scandals, economic conditions, and corporate collapses.

Accounting for costs

In Golder Associates Pty Ltd v Challen [2012] QDC 11 Samios DCJ recognised a solicitor’s lien over the file for unpaid fees and confirmed that a lien should not be lightly set aside. The decision, which is under appeal, adds to the range of authorities which are now grappling with some of the provisions of the Legal Profession Act 2007 (Qld) (the LPA) relating to costs billing and assessment. These would appear to have been drafted without a great deal of intellectual rigour (cf. Turner v Mitchells Solicitors [2011] QDC 61 at [26]).

Four obstacles facing the management accounting professionals as they seek to step up as global leaders

No matter how aspirational they are, management accountants face a series of roadblocks in the course of building careers in organisations. Experts reveal the four key obstacles that need to be addressed in the course of becoming global leaders.

Comments on the Australian Accounting Research Foundation's Legislation Policy Discussion Paper NO.4 (A framework for financial reporting by incorporated associations)

The Australian Accounting Research Foundation (AARF) recently issued Legislative Policy Discussion Paper No.4 which proposes a framework for financial reporting by Australian incorporated associations.This paper comments on both the merits and deficiencies of the proposal. In particular it notes that the proposal simply advocates that the application of differential reporting, accounting standards, and the conceptual framework be imposed on incorporated associations by amended statutes. It is noted that in light of long experience in the corporate sector, he espoused benefits of such a move may not eventuate. Further, concern is expressed that the proposal is a blank cheque one because of the inadequacy of existing relevant accounting standards and the proposal to introduce new relevant standards. Another major defect in the proposal is that it emanates from accountants who acknowledge in their conceptual framework, the need for external reports to report on performance through both financial and non-financial reporting methods. Despite that acknowledgment, the standard set of external reports prepared by accountants do not measure performance as defined in their own conceptual framework (SAC 2) and in their auditing pronouncements (AUP 33), and they have restricted their domain to financial reporting (SAC 2). Accordingly the proposal appears to be seriously deficient and it is suggested that it be rejected and a new proposal be prepared by a multi-party group free from vested interests.

Accounting Research Journal Editorial : "ARJ – The First 25 Years"

In this 25th year of publication of the Accounting Research Journal we pay tribute to the efforts of the dedicated Editors who have successfully guided and developed the journal since its inception in 1988. After the rapid growth in accounting and finance research in the 1970s and 1980s the absence of outlets in Asia-Pacific region to publish novel, timely and applied research became increasingly apparent. In response to this gap, ARJ’s first volume was published in 1988 by the School of Accountancy at the Queensland Institute of Technology (QIT), which became the Queensland University of Technology (QUT) in the following year. The founding Editor was Myles McGregor-Lowndes and his editorship continued for three years until Scott Holmes took over as Editor in 1991. In 1992, Robert Faff joined Scott Holmes as Joint Editor, and their joint editorship continued for six years until Robert Faff took the reins as Editor in 1998. At that time Scott remained as Associate Editor and the editorial team was joined by Roger Willett as Consulting Editor and Chris Lambert as Associate Editor. This arrangement continued until 2002 when Tim Brailsford was newly appointed as Managing Editor. The editorship returned to QUT in 2008 and was taken on by Chris Ryan with our support as Co-editors. Since 2011 we have been the Joint Editors. Table 1 lists the individuals who have been involved in editing ARJ over the 25-year period and their roles...