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.

What do beginning English teachers want from professional development?

This qualitative, interpretive case study allows insights into the reflective emerging teacher practitioner as it explores pre-service and beginning teachers’ preparedness to deal with curriculum change and the demands of the classroom and school community. Five beginning teachers were asked what they want from professional development in a period of rapid curriculum change. The study aligns with emerging local and national agendas for teacher professional development and accreditation in Australia. The data analysis, based on “community of practice” perspectives, shows that new teachers have clear ideas about the professional development they need and want. Professional development is seen as integral to their developing professional identities. The paper has implications for the way leadership teams offer and how new teachers take up professional development opportunities, upon which registration is contingent.

Policy analysis of disaster health management in China

Humankind has been dealing with all kinds of disasters since the dawn of time. The risk and impact of disasters producing mass casualties worldwide is increasing, due partly to global warming as well as to increased population growth, increased density and the aging population. China, as a country with a large population, vast territory, and complex climatic and geographical conditions, has been plagued by all kinds of disasters. Disaster health management has traditionally been a relatively arcane discipline within public health. However, SARS, Avian Influenza, and earthquakes and floods, along with the need to be better prepared for the Olympic Games in China has brought disasters, their management and their potential for large scale health consequences on populations to the attention of the public, the government and the international community alike. As a result significant improvements were made to the disaster management policy framework, as well as changes to systems and structures to incorporate an improved disaster management focus. This involved the upgrade of the Centres for Disease Control and Prevention (CDC) throughout China to monitor and better control the health consequences particularly of infectious disease outbreaks. However, as can be seen in the Southern China Snow Storm and Wenchuan Earthquake in 2008, there remains a lack of integrated disaster management and efficient medical rescue, which has been costly in terms of economics and health for China. In the context of a very large and complex country, there is a need to better understand whether these changes have resulted in effective management of the health impacts of such incidents. To date, the health consequences of disasters, particularly in China, have not been a major focus of study. The main aim of this study is to analyse and evaluate disaster health management policy in China and in particular, its ability to effectively manage the health consequences of disasters. Flood has been selected for this study as it is a common and significant disaster type in China and throughout the world. This information will then be used to guide conceptual understanding of the health consequences of floods. A secondary aim of the study is to compare disaster health management in China and Australia as these countries differ in their length of experience in having a formalised policy response. The final aim of the study is to determine the extent to which Walt and Gilson’s (1994) model of policy explains how disaster management policy in China was developed and implemented after SARS in 2003 to the present day. This study has utilised a case study methodology. A document analysis and literature search of Chinese and English sources was undertaken to analyse and produce a chronology of disaster health management policy in China. Additionally, three detailed case studies of flood health management in China were undertaken along with three case studies in Australia in order to examine the policy response and any health consequences stemming from the floods. A total of 30 key international disaster health management experts were surveyed to identify fundamental elements and principles of a successful policy framework for disaster health management. Key policy ingredients were identified from the literature, the case-studies and the survey of experts. Walt and Gilson (1994)’s policy model that focuses on the actors, content, context and process of policy was found to be a useful model for analysing disaster health management policy development and implementation in China. This thesis is divided into four parts. Part 1 is a brief overview of the issues and context to set the scene. Part 2 examines the conceptual and operational context including the international literature, government documents and the operational environment for disaster health management in China. Part 3 examines primary sources of information to inform the analysis. This involves two key studies: • A comparative analysis of the management of floods in China and Australia • A survey of international experts in the field of disaster management so as to inform the evaluation of the policy framework in existence in China and the criteria upon which the expression of that policy could be evaluated Part 4 describes the key outcomes of this research which include: • A conceptual framework for describing the health consequences of floods • A conceptual framework for disaster health management • An evaluation of the disaster health management policy and its implementation in China. The research outcomes clearly identified that the most significant improvements are to be derived from improvements in the generic management of disasters, rather than the health aspects alone. Thus, the key findings and recommendations tend to focus on generic issues. The key findings of this research include the following: • The health consequences of floods may be described in terms of time as ‘immediate’, ‘medium term’ and ‘long term’ and also in relation to causation as ‘direct’ and ‘indirect’ consequences of the flood. These two aspects form a matrix which in turn guides management responses. • Disaster health management in China requires a more comprehensive response throughout the cycle of prevention, preparedness, response and recovery but it also requires a more concentrated effort on policy implementation to ensure the translation of the policy framework into effective incident management. • The policy framework in China is largely of international standard with a sound legislative base. In addition the development of the Centres for Disease Control and Prevention has provided the basis for a systematic approach to health consequence management. However, the key weaknesses in the current system include: o The lack of a key central structure to provide the infrastructure with vital support for policy development, implementation and evaluation. o The lack of well-prepared local response teams similar to local government based volunteer groups in Australia. • The system lacks structures to coordinate government action at the local level. The result of this is a poorly coordinated local response and lack of clarity regarding the point at which escalation of the response to higher levels of government is advisable. These result in higher levels of risk and negative health impacts. The key recommendations arising from this study are: 1. Disaster health management policy in China should be enhanced by incorporating disaster management considerations into policy development, and by requiring a disaster management risk analysis and disaster management impact statement for development proposals. 2. China should transform existing organizations to establish a central organisation similar to the Federal Emergency Management Agency (FEMA) in the USA or the Emergency Management Australia (EMA) in Australia. This organization would be responsible for leading nationwide preparedness through planning, standards development, education and incident evaluation and to provide operational support to the national and local government bodies in the event of a major incident. 3. China should review national and local plans to reflect consistency in planning, and to emphasize the advantages of the integrated planning process. 4. Enhance community resilience through community education and the development of a local volunteer organization. China should develop a national strategy which sets direction and standards in regard to education and training, and requires system testing through exercises. Other initiatives may include the development of a local volunteer capability with appropriate training to assist professional response agencies such as police and fire services in a major incident. An existing organisation such as the Communist Party may be an appropriate structure to provide this response in a cost effective manner. 5. Continue development of professional emergency services, particularly ambulance, to ensure an effective infrastructure is in place to support the emergency response in disasters. 6. Funding for disaster health management should be enhanced, not only from government, but also from other sources such as donations and insurance. It is necessary to provide a more transparent mechanism to ensure the funding is disseminated according to the needs of the people affected. 7. Emphasis should be placed on prevention and preparedness, especially on effective disaster warnings. 8. China should develop local disaster health management infrastructure utilising existing resources wherever possible. Strategies for enhancing local infrastructure could include the identification of local resources (including military resources) which could be made available to support disaster responses. It should develop operational procedures to access those resources. Implementation of these recommendations should better position China to reduce the significant health consequences experienced each year from major incidents such as floods and to provide an increased level of confidence to the community about the country’s capacity to manage such events.

University students’ depression : a cross-cultural investigation

Australian, Iranian and Portuguese university students (N = 967) completed University Students Depression Inventory (USDI; Khawaja & Bryden, 2006) in English, Persian, and Portuguese languages respectively. A series of MANOVA were used to examine differences in depression symptoms as an effect of the country and demographic variables. Interactions were also examined. The results indicated that country, gender, and year level had some impact on the depressive symptoms of the university students. Australian students were more depressed than the Iranian and Portuguese students, while Iranian students were more depressed than the Portuguese students. Subscales of USDI: Lethargy, Motivation, and Cognitive/Emotional were also used to compare the depressive symptoms of students. The Australian female students reported a significantly higher level of lethargy than their male counterparts. Similarly, the first year male students from Iran were significantly more lethargic than the first year Iranian female students. Iranian and Portuguese male students, compared to the female students of these countries, experienced a lower level of motivation. The Australian and Iranian students, compared to the Portuguese students, reported a significantly higher level of cognitive and affective symptoms. The scores on the Cognitive/Emotional subscale increased with the year level. Differences among students’ depression are described and implications discussed.

Engineering-based modelling experiences in the elementary classroom

Introducing engineering-based model-eliciting experiences in the elementary curriculum is a new and increasingly important domain of research by mathematics, science, technology, and engineering educators. Recent research has raised questions about the context of engineering problems that are meaningful, engaging, and inspiring for young students. In the present study an environmental engineering activity was implemented in two classes of 11-year-old students in Cyprus. The problem required students to develop a procedure for selecting among alternative countries from which to buy water. Students created a range of models that adequately solved the problem although not all models took into account all of the data provided. The models varied in the number of problem factors taken into consideration and also in the different approaches adopted in dealing with the problem factors. At least two groups of students integrated into their models the environmental aspect of the problem (energy consumption, water pollution) and further refined their models. Results indicate that engineering model-eliciting activities can be introduced effectively into the elementary curriculum, providing rich opportunities for students to deal with engineering contexts and to apply their learning in mathematics and science to solving real-world engineering problems.

Knowing about the English language: “a wrinkle in time”

Beryl & Gael discuss the ‘new’ metalanguage for knowledge about language presented in the Australian Curriculum English (ACARA, 2010). Their discussion connects to practice by recounting how one teacher scaffolds her students through detailed understandings of noun and adjective groups in reading activities. The stimulus text is the novel ‘A wrinkle in time’ (L’Engle, 1962, reproduced 2007) and the purpose is to build students’ understandings so they can work towards ‘expressing and developing ideas’ in written text (ACARA, 2010).

Parsing the Australian curriculum English : grammar, multimodality and cross-cultural texts

The release of the Australian Curriculum English (ACE) by the Australian Curriculum, Assessment and Reporting Authority (ACARA) has revived debates about the role of grammar as English content knowledge. We consider some of the discussion circulating in the mainstream media vis-à-vis the intent of the ACE. We conclude that this curriculum draws upon the complementary tenets of traditional Latin-based grammar and systemic functional linguistics across the three strands of Language, Literature and Literacy in innovative ways. We argue that such an approach is necessary for working with contemporary multimodal and cross-cultural texts. To demonstrate the utility of this new approach, we draw out a set of learning outcomes from Year 6 and then map out a framework for relating the outcomes to the form and function of multimodal language. As a case in point, our analysis is of two online Coca-Cola advertising texts, one each from South Korea and Australia.

Teaching English : some remarks on the emergence of the sympathetic teacher in the English classroom

The chapter explores the concept of the teacher-student relationship within the English classroom and proposes that this relationship has a specific purpose in building a civil society by inculcating practices of self-reflection, empathy and ethics. The topic is explored through the example of teaching Australian literature, specifically, Tim Winton’s Lockie Leonard, Human Torpedo to secondary school students. Ian Hunter’s work on literature education and the construction of socio-ethical practices provides a conceptual framework for the chapter.

The inherent challenges of knowledge transfer across countries and cultures

Purpose — The purpose of this chapter is to outline the findings of research into knowledge transfer across countries and culture and the implications of the findings for human resource practitioners. Methodology/approach — Use of a qualitative case study methodology approach was employed. Findings — The findings highlight the inherent difficulty of knowledge transfer and the broad range of factors that influence the knowledge transfer process and which are connected together in a complex and non-linear manner. Research implications — The research revealed insight into those managers most likely to be effective at knowledge transfer and what characteristics and experiences had supported this openness to knowledge from outside of their cultural context. The lessons from the research can be incorporated into the selection and development processes for expatriates. Originality value — The study affirmed the critical importance of face-to-face interaction in knowledge transfer. The research also resulted in the development of a practical model and tool, which pulls together the broad range of factors that impact on knowledge transfer.

The ascendancy of oracy in university courses: Implications for teachers and second language users

This chapter reports on a study of oracy in a first-year university Business course, with particular interest in the oracy demands for second language-using international students. The research is relevant at a time when Higher Education is characterised by the confluence of increased international enrolments, more dialogic teaching and learning, and imperatives for teamwork and collaboration. Data sources for the study included videotaped lectures and tutorials, course documents, student surveys, and an interview with the lecturer. The findings pointed to a complex, oracy-laden environment where interactive talk fulfilled high-stakes functions related to social inclusion, the co-construction of knowledge, and the accomplishment of assessment tasks. The salience of talk posed significant challenges for students negotiating these core functions in their second language. The study highlights the oracy demands in university courses and foregrounds the need for university teachers, curriculum writers and speaking test developers to recognise these demands and explicate them for the benefit of all students.

On IT and business value in developing countries : A complementarities-based approach

Developing economies accommodate more than three quarters of the world's population. This means understanding their growth and well-being is of critical importance. Information technology (IT) is one resource that has had a profound effect in shaping the global economy. IT is also an important resource for driving growth and development in developing economies. Investments in developing economies, however, have focused on the exploitation of labor and natural resources. Unlike in developed economies, focus on IT investment to improve efficiency and effectiveness of business process in developing economies has been sparse, and mechanisms for deriving better IT-related business value is not well understood. This study develops a complementarities-based business value model for developing economies, and tests the relationship between IT investments, IT-related complementarities, and business process performance. It also considers the relationship between business processes performance and firm-level performance. The results suggest that a coordinated investment in IT and IT-related complementarities related favorably to business process performance. Improvements in process-level performance lead to improvements in firm-level performance. The results also suggest that the IT-related complementarities are not only a source of business value on their own, but also enhance the IT resources' ability to contribute to business process performance. This study demonstrates that a coordinated investment approach is required in developing economies. With this approach, their IT resources and IT-related complementaries would help them significantly in improving their business processes, and eventually their firm-level performances.

Understanding successful use of technology in organisations in developing countries : a structurational perspective

Information Technology and its relationship to organisational performance has been a subject of continued interest to researchers and other stakeholders in developing countries. While there is concurrence that IT does contribute to performance, and we are efficiently expanding our knowledge on what factors cause better leveraging of IT resources in organisations, we have done little to understand how these factors interact with technology that results in improved performance. This paper suggests looking that the interaction between organisational resources and technology within the structurational lens, which recognises the recursive interaction between technology and people in the presence of social practices, and the norms that inform their ongoing practices. An ethnographic approach to understanding this interaction between technology and resources, as suggested by the structuration perspective, is suggested, aiming to provide richer insights on the nature of the environment that promotes better use of IT resources in developing countries. Such insights could provide the IT users in developing countries with at least an initial conception of the “IT usage platform” that they could promote in their organisations to leverage the most from their IT resources.

Johnno

The field of research was internationally-oriented contemporary theatre practice. The research challenge was to adapt an iconic Queensland novel – David Malouf’s Johnno - to the stage in a way that would engage, resonate with and be relevant to national and international audiences. This project represented an international collaboration between La Boite Theatre Company, the Derby Playhouse, UK, and the Brisbane Festival. It was the first time that an English and an Australian company had collaborated in such a way, sharing both creative vision and financial costs and providing performances on both continents. The production was well received in both countries, suggesting that a culturally idiosyncratic work such as Johnno can be created that can fulfil not only the needs of the localised audience but also have broad global cultural resonance. The work was performed at the Brisbane Festival and the Derby Playhouse. In Brisbane, it was performed at the Brisbane Powerhouse as the signature work of the 2006 festival, with 30 performances, receiving favourable national reviews and achieving 90% box office. In the UK, it was performed at the Derby Playhouse for 22 performances, once again to favourable national reviews and 60% audiences, a good result for a new work in a regional theatre in the UK. The success of Johnno was also in the power of the collaboration between the three creative companies involved in the work.

L1 Learning Strategy Instruction does make a difference in EFL listening: An empirical study.

In language learning, listening is the basic skill which learners should begin to develop other skills, namely speaking, reading and writing. This sequence of language learning in most English as Foreign Language (EFL) settings goes against the stream, learning first reading and writing and later listening and speaking. This study investigates the effects of cognitive, process-based approach to instructing EFL listening strategies over 11 weeks during a semester in Persian (L1). Lower intermediate female participants (N = 50) came from a couple of EFL classrooms in an English Language Institute in Iran. The experimental group (n = 25) listened to their classroom activities using a methodology that led learners through four cognitive processes (guessing, making inference, identifying topics and repetition) in Persian was basically successful in EFL listening. The same teacher taught the control group (n = 25), which listened to the same classroom listening activities without any guided attention to the learning strategy process in Persian. A pre and post listening test made by a group of experts in the language institute tracked any development in light of cognitive learning strategy instruction in EFL listening through L1. The hypothesis was that the experimental group received the guided attention in L1 during the classroom listening activities made greater gains and was verified despite the partial improvement of the control group.

Editor's introduction

It is a very rare event when a book by a senior Chinese policy adviser gets published in English. More often the accepted format is biography or auto-biography, generally published once the person has retired. This book was first published by Xinhua Press in Chinese in a longer version in 2009. Initially it was directed at the Chinese reader, more specifically the Chinese cultural academic, and for this reason some of the material is not repeated in this abridged version. Nevertheless, it is important to point out that the author represents four speaking positions, and the messages that emerge from this work need to be contextualized accordingly.