Control, accounting and value-for-money implications of utility regulation:a literature review

This paper reviews and evaluates the literature concerning the privatisation and regulation of the utility industries in the UK. The economic theories behind and political reasons for the programme are considered to give the reader an appreciation of the environment from which these organisations were born and the implications for their continued existence. Once this has been established the paper then considers the role that accounting has played and will continue to play in these industries. This includes consideration of the technical questions which these new organisations are asking and also the role that accounting has in the organisational structure and culture. It draws as a conclusion that these recently privatised industries provide a unique and rich source for further accounting research.

Energy conservation measures on an industrial site

World and UK energy resources and use are reviewed and the role of energy conservation in energy policy identified. In considering various energy conservation measures, a distinction is made between energy intensive and non-intensive industries and also between direct and indirect uses of energy. Particular attention is given to the non-intensive user of energy. Energy use on one such industrial site has been studied to determine the most effective energy saving measures in the short term. Here it is estimated that over 65% of energy is consumed for indirect purposes, mainly for heating and lighting buildings. Emphasis is placed on energy auditing techniques and those energy saving measures requiring greater technical, economic and organisational resources to secure their implementation. Energy auditing techniques include the use of aerial thermography and snow formation surveys to detect heat losses. Qualitative and quantitative interpretations are carried out, but restricted mainly to evaluating building roof heat losses. From the energy auditing exercise, it is confirmed that the intermittent heating of buildings is the largest and most cost effective fuel saving measure. This was implemented on the site and a heat monitoring programme established to verify results. Industrial combined heat and power generation is investigated. A proposal for the site demonstrates that there are several obstacles to its successful implementation. By adopting an alternative financial rationale, a way of overcoming these obstacles is suggested. A useful by-product of the study is the classification of industrial sites according to the nature of industrial energy demand patterns. Finally, energy saving measures implemented on the site are quantlfied using comparative verification methods. Overall fuel savings of 13% are indicated. Cumulative savings in heating fuel amount to 26% over four years although heated area increased by approximately 25%.

Drying processess in the United Kingdom:assessment of industrial energy utilisation and efficiency of drying systems and the modelling of drying characters using neural networks (BL)

Drying is an important unit operation in process industry. Results have suggested that the energy used for drying has increased from 12% in 1978 to 18% of the total energy used in 1990. A literature survey of previous studies regarding overall drying energy consumption has demonstrated that there is little continuity of methods and energy trends could not be established. In the ceramics, timber and paper industrial sectors specific energy consumption and energy trends have been investigated by auditing drying equipment. Ceramic products examined have included tableware, tiles, sanitaryware, electrical ceramics, plasterboard, refractories, bricks and abrasives. Data from industry has shown that drying energy has not varied significantly in the ceramics sector over the last decade, representing about 31% of the total energy consumed. Information from the timber industry has established that radical changes have occurred over the last 20 years, both in terms of equipment and energy utilisation. The energy efficiency of hardwood drying has improved by 15% since the 1970s, although no significant savings have been realised for softwood. A survey estimating the energy efficiency and operating characteristics of 192 paper dryer sections has been conducted. Drying energy was found to increase to nearly 60% of the total energy used in the early 1980s, but has fallen over the last decade, representing 23% of the total in 1993. These results have demonstrated that effective energy saving measures, such as improved pressing and heat recovery, have been successfully implemented since the 1970s. Artificial neural networks have successfully been applied to model process characteristics of microwave and convective drying of paper coated gypsum cove. Parameters modelled have included product moisture loss, core gypsum temperature and quality factors relating to paper burning and bubbling defects. Evaluation of thermal and dielectric properties have highlighted gypsum's heat sensitive characteristics in convective and electromagnetic regimes. Modelling experimental data has shown that the networks were capable of simulating drying process characteristics to a high degree of accuracy. Product weight and temperature were predicted to within 0.5% and 5C of the target data respectively. Furthermore, it was demonstrated that the underlying properties of the data could be predicted through a high level of input noise.

The global audit profession and the international financial architecture:understanding regulatory relationships at a time of financial crisis

This paper explores how regulatory relationships in the global audit arena are being affected by the current financial crisis. Key policy initiatives and debates are analyzed, along with institutional interactions, in particular between the International Federation of Accountants (IFAC), international regulators and the large audit firms. The events are placed in the context of the new international financial architecture which has developed over the last decade. Using the illustrative lens of bank auditing, questions are asked of the nature and status of audit practice and the regulatory arrangements governing such practice. The paper shows the active nature of the regulatory responses to the crisis and the shifting and competing influences among key regulatory and professional participants in the global audit arena. Emphasis is placed on the need for audit researchers to be sensitive to the developing global financial architecture, and its potential implications for the study of audit practice in different national and international contexts.

Green supply chain performance measurement using the analytic hierarchy process:a comparative analysis of manufacturing organisations

The main purpose of this research is to develop and deploy an analytical framework for measuring the environmental performance of manufacturing supply chains. This work's theoretical bases combine and reconcile three major areas: supply chain management, environmental management and performance measurement. Researchers have suggested many empirical criteria for green supply chain (GSC) performance measurement and proposed both qualitative and quantitative frameworks. However, these are mainly operational in nature and specific to the focal company. This research develops an innovative GSC performance measurement framework by integrating supply chain processes (supplier relationship management, internal supply chain management and customer relationship management) with organisational decision levels (both strategic and operational). Environmental planning, environmental auditing, management commitment, environmental performance, economic performance and operational performance are the key level constructs. The proposed framework is then applied to three selected manufacturing organisations in the UK. Their GSC performance is measured and benchmarked by using the analytic hierarchy process (AHP), a multiple-attribute decision-making technique. The AHP-based framework offers an effective way to measure and benchmark organisations’ GSC performance. This study has both theoretical and practical implications. Theoretically it contributes holistic constructs for designing a GSC and managing it for sustainability; and practically it helps industry practitioners to measure and improve the environmental performance of their supply chain. © 2013 Copyright Taylor and Francis Group, LLC. CORRIGENDUM DOI 10.1080/09537287.2012.751186 In the article ‘Green supply chain performance measurement using the analytic hierarchy process: a comparative analysis of manufacturing organisations’ by Prasanta Kumar Dey and Walid Cheffi, Production Planning & Control, 10.1080/09537287.2012.666859, a third author is added which was not included in the paper as it originally appeared. The third author is Breno Nunes.

The cost of sin:the effect of social norms on audit pricing

In this paper we provide evidence for the effects of social norms on audit pricing by studying companies belonging to the alcohol, firearms, gambling, military, nuclear power, and tobacco industries,which are often described as “sin” companies. We hypothesize that the disparities between “sin” firms operations and prevailing social norms create an adverse context which heightens the client's business risk assessment by auditors and is, thereby, reflected in the pricing decisions for audit and consulting services. Having controlled for the impact of variables relating to client attributes, auditor attributes and engagement attributes, we demonstrate that audit firms charge significantly higher audit and consulting fees to companies that deviate from prevailing social norms. Additionally,we show that audit pricing levels within the “sin” group depend both on prevailing political views and on the level of “vice” exhibited by “sin” companies.

An empirical investigation of audit pricing in the public sector:the case of Greek LGOs

This paper investigates the associations between audit pricing and multidimensional characteristics of local governments by using a sample of Greek municipalities. The Greek institutional setting is interesting because it is politically pluralistic. Moreover, independent auditors appointed through a bid process exclusively perform the audits. Our results suggest a considerable variation on audit fees which is mainly driven by politically related factors indicating the importance of relevant theoretical anticipations in audit pricing in the public sector. Agency costs appear strong enough to explain audit pricing. We also confirm prior findings on the significance of audit complexity and size. Results also suggest that audit fees are reduced when an internal team dedicated to accrual accounting is appointed. Therefore, our conclusions offer practical implications for policy setters and regulators in the public sector in relation to audit quality.

Extreme events, organizations and the politics of decision making

Purpose – Threats of extreme events, such as terrorist attacks or infrastructure breakdown, are potentially highly disruptive events for all types of organizations. This paper seeks to take a political perspective to power in strategic decision making and how this influences planning for extreme events. Design/methodology/approach – A sample of 160 informants drawn from 135 organizations, which are part of the critical national infrastructure in the UK, forms the empirical basis of the paper. Most of these organizations had publicly placed business continuity and preparedness as a strategic priority. The paper adopts a qualitative approach, coding data from focus groups. Findings – In nearly all cases there is a pre-existing dominant coalition which keeps business continuity decisions off the strategic agenda. The only exceptions to this are a handful of organizations which provide continuous production, such as some utilities, where disruption to business as usual can be readily quantified. The data reveal structural and decisional elements of the exercise of power. Structurally, the dominant coalition centralizes control by ensuring that only a few functional interests participate in decision making. Research limitations/implications – Decisional elements of power emphasize the dominance of calculative rationality where decisions are primarily made on information and arguments which can be quantified. Finally, the paper notes the recursive aspect of power relations whereby agency and structure are mutually constitutive over time. Organizational structures of control are maintained, despite the involvement of managers charged with organizational preparedness and resilience, who remain outside the dominant coalition. Originality/value – The paper constitutes a first attempt to show how planning for emergencies fits within the strategy-making process and how politically controlled this process is.

Introducing International Accounting Standards to an emerging capital market:Relative familiarity and language effect in Egypt

The purpose of this study is to assess the effect of relative familiarity and language accessibility on the International Accounting Standards (IASs) disclosures when IASs are first introduced in an emerging capital market. The study focuses on the annual reports of listed non-financial companies in Egypt when IASs were first introduced. The method used applies a disclosure index measurement to a sample of listed company annual reports and evaluates relative compliance with IASs in relation to corporate characteristics. The results show that for relatively less familiar requirements of IASs, the extent of compliance is related to the type of audit firm used and to the presence of a specific statement of compliance with IASs. A lower degree of compliance with less familiar IASs disclosure is observed consistently across a range of company characteristics. Consideration of agency theory and capital need theory would lead to prior expectation of a distinction in disclosure practices between different categories of companies. The results were, therefore, counterintuitive to expectations where the regulations were unfamiliar or not available in the native language, indicating that new variables have to be considered and additional theoretical explanations have to be found in future disclosure studies on emerging capital markets. © 2003 Elsevier Science Inc. All rights reserved.

Corporate governance and the timeliness of corporate internet reporting by U.K. listed companies

This study is an examination of the timeliness of corporate internet reporting by U.K. companies listed on the London Stock Exchange (LSE). The research examines the significance of several corporate governance and firm-specific characteristics as potential determinants of the timeliness of corporate internet reporting. Our primary analysis provides evidence of a significant association between timely corporate internet reporting and the corporate governance characteristics of board experience and board independence. Our findings provide evidence that boards with less cross directorships, more experience in terms of the average age of directors, and lower length in service for executive directors provide more timely corporate internet reporting. We find that board independence is negatively associated with timely corporate internet reporting. Follow-up analysis provides additional evidence of a significant association between the timeliness of corporate internet reporting and board experience. The evidence indicates that role duality and block ownership are associated with less timely corporate internet reporting. Our findings also reveal strengths and weaknesses in the Internet reporting of U.K. listed companies. Companies need to voluntarily focus on improving the timeliness dimension of their corporate internet reporting so that the EU and U.K. accounting regulators do not replace recommendations with regulations. © 2007 Elsevier Inc. All rights reserved.

Risk management in organizations:an integrated case study approach

In any organization, risk plays a huge role in the success or failure of any business endeavour. Measuring and managing risk is a difficult and often complicated task and the global financial crisis of the late noughties can be traced to a worldwide deficiency in risk management regimes. One of the problems in understanding how best to manage risk is a lack of detailed examples of real world practice. In this accessible textbook the author sets the world of risk management in the context of the broader corporate governance agenda, as well as explaining the core elements of a risk management system. Material on the differences between risk management and internal auditing is supplemented by a section on the professionalization of risk – a relatively contemporary evolution. Enterprise risk management is also fully covered. With a detailed array of risk management cases – including Tesco, RBS and the UK government – lecturers will find this a uniquely well researched resource, supplemented by materials that enable the cases to be easily integrated into the classroom. Risk managers will be delighted with the case materials made available for the first time with the publication of this book.