Can accreditation help a leopard change its spots? Social accountability and stakeholder engagement in business schools

Purpose: Neo-institutional theory suggests that organisations change occurs when institutional contradictions, caused by exogenous and endogenous dynamics, increase over time to the point where change can no longer be resisted. Human praxis will result, but only when sufficiently powerful interests are motivated to act. This paper aims to examine the role that the accreditation of business schools can play in increasing institutional contradictions and hence fostering organisational change towards stakeholder engagement and engagement with social responsibility and sustainability issues. Numerous accreditations are promulgated within the higher education and business school contexts and a number of these relate to, or have aspects that relate to, ethics, social responsibility and sustainability. Design/methodology/approach: The paper first analyses the take up of accreditations across UK business schools and then uses a case study to illustrate and explore stakeholder engagement and changes related to ethics, social responsibility and sustainability linked to accreditation processes. Findings: Accreditations are found to be an increasingly common interest for UK business schools. Further, a number of these accreditations have evolved to incorporate issues related to ethics, social responsibility and sustainability that may cause institutional contradictions and may, therefore, have the potential to foster organisational change. Accreditation alone, however, is not sufficient and the authors find that sufficiently powerful interests need to be motivated to act and enable human praxis to affect change. Research limitations/implications: This paper draws on previous research that considers the role of accreditation in fostering change that has also been carried out in healthcare organisations, public and professional bodies. Its findings stem from an individual case study and as such further research is required to explore whether these findings can be extended and apply more generally in business schools and universities in different contexts. Practical implications: This paper concludes by recommending that the newly established UK & Ireland Chapter of PRME encourages and supports signatory schools to further embed ethics, social responsibility and sustainability into all aspects of university life in the UK. This also provides an opportunity to engage with the accrediting bodies in order to further support the inclusion of stakeholder engagement and issues related to this agenda in their processes. Originality/value: This paper contributes by introducing accreditation as an institutional pressure that may lead indirectly to organisational change and supports this with new evidence from an illustrative case study. Further, it draws on the role of institutional contradictions and human praxis that engender organisational change. © Emerald Group Publishing Limited.

Representing the assessment process for psychodynamic psychotherapy within a computerized model of human classification

This research describes a computerized model of human classification which has been constructed to represent the process by which assessments are made for psychodynamic psychotherapy. The model assigns membership grades (MGs) to clients so that the most suitable ones have high values in the therapy category. Categories consist of a hierarchy of components, one of which, ego strength, is analysed in detail to demonstrate the way it has captured the psychotherapist's knowledge. The bottom of the hierarchy represents the measurable factors being assessed during an interview. A questionnaire was created to gather the identified information and was completed by the psychotherapist after each assessment. The results were fed into the computerized model, demonstrating a high correlation between the model MGs and the suitability ratings of the psychotherapist (r = .825 for 24 clients). The model has successfully identified the relevant data involved in assessment and simulated the decision-making process of the expert. Its cognitive validity enables decisions to be explained, which means that it has potential for therapist training and also for enhancing the referral process, with benefits in cost effectiveness as well as in the reduction of trauma to clients. An adapted version measuring client improvement would give quantitative evidence for the benefit of therapy, thereby supporting auditing and accountability. © 1997 The British Psychological Society.

Practitioners are from Mars; academics are from Venus? An investigation of the research-practice gap in management accounting

Purpose: The aim of this paper is to identify and gain insights into the significance of barriers contributing to the purported "gap" between academic management accounting research and practice. Design/methodology/approach: Drawing on diffusion of innovations theory, this study collects and analyses data from a questionnaire survey and follow-up interviews with 19 representatives of the four principal professional accounting bodies in Australia. Findings: Professional accounting bodies perceive the gap between academic research and practice in management accounting to be of limited concern to practitioners. The two most significant barriers to research utilisation by practitioners are identified as: difficulties in understanding academic research papers; and limited access to research findings. In acting as a conduit between the worlds of academia and practice, professional bodies have an important role to play by demonstrating the mutual value to both academics and practitioners resulting from a closer engagement between MA research and practice. Research limitations/implications: As one of the few empirically-based, theoretically informed investigations exploring the research-practice gap in management accounting, this study provides insights rather than "answers". Its findings therefore serve as a foundational basis for further empirical and theoretical enquiry. Originality/value: This study contributes to the conversation about the "research-practice gap" in management accounting by adopting a distinct theoretical vantage point to organize, analyse and interpret empirical evidence obtained from Australian professional accounting bodies about management accounting practice. © Emerald Group Publishing Limited.

I am the very model of a special purpose vehicle

Purpose – This paper aims to provide a critical comment on complex funding systems. Design/methodology/approach – This is a critical comment written in the form of a poem. The poem is in the style of the English light opera composers Gilbert and Sullivan, and is a variation on their song “I Am the Very Model of a Modern Major General”, from The Pirates of Penzance. Findings - The poem spotlights financial failure. Originality/value - The poem spotlights the crazy names and poor transparency of special purpose vehicles.

Climate change performance measurement, control and accountability in English local areas

Purpose – This paper aims to consider how climate change performance is measured and accounted for within the performance framework for local authority areas in England adopted in 2008. It critically evaluates the design of two mitigation and one adaptation indicators that are most relevant to climate change. Further, the potential for these performance indicators to contribute to climate change mitigation and adaptation is discussed. Design/methodology/approach – The authors begin by examining the importance of the performance framework and the related Local Area Agreements (LAAs), which were negotiated for all local areas in England between central government and Local Strategic Partnerships (LSPs). This development is located within the broader literature relating to new public management. The potential for this framework to assist in delivering the UK's climate change policy objectives is researched in a two-stage process. First, government publications and all 150 LAAs were analysed to identify the level of priority given to the climate change indicators. Second, interviews were conducted in spring 2009 with civil servants and local authority officials from the English West Midlands who were engaged in negotiating the climate change content of the LAAs. Findings – Nationally, the authors find that 97 per cent of LAAs included at least one climate change indicator as a priority. The indicators themselves, however, are perceived to be problematic – in terms of appropriateness, accuracy and timeliness. In addition, concerns were identified about the level of local control over the drivers of climate change performance and, therefore, a question is raised as to how LSPs can be held accountable for this. On a more positive note, for those concerned about climate change, the authors do find evidence that the inclusion of these indicators within the performance framework has helped to move climate change up the agenda for local authorities and their partners. However, actions by the UK's new coalition government to abolish the national performance framework and substantially reduce public expenditure potentially threaten this advance. Originality/value – This paper offers an insight into a new development for measuring climate change performance at a local level, which is relatively under-researched. It also contributes to knowledge of accountability within a local government setting and provides a reference point for further research into the potential role of local actions to address the issue of climate change.

Private climate change reporting: an emerging discourse of risk and opportunity?

Purpose – This paper aims to explore the nature of the emerging discourse of private climate change reporting, which takes place in one-on-one meetings between institutional investors and their investee companies. Design/methodology/approach – Semi-structured interviews were conducted with representatives from 20 UK investment institutions to derive data which was then coded and analysed, in order to derive a picture of the emerging discourse of private climate change reporting, using an interpretive methodological approach, in addition to explorative analysis using NVivo software. Findings – The authors find that private climate change reporting is dominated by a discourse of risk and risk management. This emerging risk discourse derives from institutional investors' belief that climate change represents a material risk, that it is the most salient sustainability issue, and that their clients require them to manage climate change-related risk within their portfolio investment. It is found that institutional investors are using the private reporting process to compensate for the acknowledged inadequacies of public climate change reporting. Contrary to evidence indicating corporate capture of public sustainability reporting, these findings suggest that the emerging private climate change reporting discourse is being captured by the institutional investment community. There is also evidence of an emerging discourse of opportunity in private climate change reporting as the institutional investors are increasingly aware of a range of ways in which climate change presents material opportunities for their investee companies to exploit. Lastly, the authors find an absence of any ethical discourse, such that private climate change reporting reinforces rather than challenges the “business case” status quo. Originality/value – Although there is a wealth of sustainability reporting research, there is no academic research on private climate change reporting. This paper attempts to fill this gap by providing rich interview evidence regarding the nature of the emerging private climate change reporting discourse.

Crunch time for bank audits? Questions of practice and scope for dialogue

Purpose – The purpose of this paper is to review the way in which auditing issues have been raised and addressed during the credit crunch and developing global financial crisis. Design/methodology/approach – Analysis is based on a review of the academic auditing literature, regulatory and audit reports, together with papers from the financial press. Findings – After highlighting the relative lack of media attention devoted to the external auditing function in the light of major corporate collapses, the paper considers what, contrastingly, is an active and ongoing series of responses to the current crisis on the part of auditing firms and the profession more generally. Through such analysis the paper explores a number of implications of the credit crunch for both auditing practice and research. Research limitations/implications – The paper is constrained in part by the rapidly unfolding nature of events, with important policy developments arising almost on a daily basis. The paper draws primarily on events up to the beginning of October 2008. Practical implications – The paper has important messages for audit practice and research, including the technical capacities of external audits in the banking sector, the contributions of standard setting bodies and regulatory oversight, and the scope for enhanced dialogue between such parties and audit researchers. Originality/value - The paper serves both to focus and stimulate analysis of the credit crunch on the audit profession. It demonstrates the complexity of contemporary practice and highlights the importance, especially from an educational perspective, of developing understanding of banking audit practice and associated regulatory interactions – including the presented possibilities both for research and enhanced academic‐practitioner dialogue.

Does audit improve quality in a hospital manufacturing unit?

OBJECTIVE - To establish whether auditing improves the overall quality of a hospital manufacturing unit. DESIGN - Continuous assessment of the quality level of a hospital manufacturing unit using 14 quality indicators over a nine-month period, and two periods of audit carried out towards the beginning and end of the assessment period. SETTING - The non-sterile manufacturing, sterile manufacturing and repackaging services areas at the pharmacy manufacturing unit at Queens Hospital, Burton-on- Trent. RESULTS - Compliance ratings for the second audit were better than those for the first audit, but there was no overall improvement in quality over the study period. CONCLUSION - Auditing probably improves compliance by focusing the minds of the staff involved, rather than by initiating a sustained improvement in overall quality.

The rise and fall of stand-alone social reporting in a multinational subsidiary in Bangladesh:a case study

Purpose -The main aim of this paper is to examine the underlying drivers for the development and subsequent discontinuation of stand-alone corporate social responsibility (CSR) reporting in a multinational subsidiary in Bangladesh. Design/Methodology/Approach - The research approach employed for this purpose is a case study using evidence from a series of in depth interviews conducted during the period 2002-2010. Interview data is supplemented by examining other sources of information including annual reports, stand-alone social reports and relevant newspaper articles during the study period. Findings - It appears that the stand-alone CSR reporting process was initiated to give the subsidiary a formal space in which to legitimise its activities in Bangladesh where both tobacco control regulation and a strong anti-tobacco movement were gaining momentum. At the start of the process in 2002 corporate interviewees were very receptive of this initiative and strongly believed that it would not be a one off exercise. However, in the face of subsequent significant national policy shifts concerning tobacco control, irreconcilable stakeholder demands and increasing criticism of the CSR activities of the organisation at home and abroad the process was brought to an abrupt end in 2009. Research Limitations/Implications - The paper has a number of implications for policy makers concerning the future prospects for stand-alone social/sustainability reporting as a means of enhancing organisational transparency and accountability. In addition the paper discusses a number of theoretical implications for the development of legitimacy theory. Originality/value - Using the lens of legitimacy the paper theorises the circumstances leading to the initiation and subsequent cessation of CSR reporting in the organisation concerned. As far as we know this is the first study which theorises and provides significant fieldwork based empirical evidence regarding the discontinuation of stand-alone social reporting by a multinational company operating in a developing country. Thus, it extends previous desk-based attempts at using legitimacy theory to explain a decrease (or discontinuity) in CSR disclosures by de Villiers and van Staden (2006) and Tilling and Tilt (2010).

The big 4 in Bangladesh:caught between the global and the local

Purpose- This article explores the work practices of Big 4 firms in Bangladesh with the aim of exploring the extent to which Global Professional Service Firms can be thought of as being genuinely ‘global’. Methodology/Approach- Interviews were undertaken with the vast majority of Big 4 partners in Bangladesh. These interviews explored a number of themes related to the professional service work context in Bangladesh and the relationship between local and global firms. Findings- The central finding of this paper is that although the Big 4 have a long-established presence in Bangladesh, local societal factors heavily influence the realities of work for accountants there. In most cases the Big 4 firms establish correspondent firms (instead of full member firms) in Bangladesh and tend to offer restricted service lines. Additionally, the paper identifies professional, commercial and cultural barriers to greater Big 4 involvement in the local market. Conceptually, the chief contribution of this paper is to explore how the effects of globalising capitalism and standardised ‘best practices’ in global professional service work are mediated through the societal effects of Bangladeshi society, resulting in the Big 4 having only a tentative presence in the Bangladeshi market. Research implications- The findings cast doubt on the extent to which self-styled Global Professional Service firms are truly ‘global’ in nature. Future work examining the Big 4, or accounting more generally, in the context of globalization, would do well to pay greater attention to the experience of professionals in emerging markets. Originality/Value- Whilst there has been much work looking at accounting and accountants in the context of globalization, this work has tended to privilege ‘core’ western empirical settings. Very little is known about Professional Service Firms in ‘peripheral’ or emerging markets. Furthermore, this study extends the application of the System, Society and Dominance framework by mapping the interactions and dynamics of these three sources of influence in the setting of PSFs.

Cutting the Gordian knot [?]:a response to Lukka and Vinnari (2014)

Purpose – The purpose of this paper is to constructively discuss the meaning and nature of (theoretical) contribution in accounting research, as represented by Lukka and Vinnari (2014) (hereafter referred to as LV). The authors aim is to further encourage debate on what constitutes management accounting theory (or theories) and how to modestly clarify contributions to the extant literature. Design/methodology/approach – The approach the authors take can be seen as (a)n interdisciplinary literature sourced analysis and critique of the movement’s positioning and trajectory” (Parker and Guthrie, 2014, p. 1218). The paper also draws upon and synthesizes the present authors and other’s contributions to accounting research using actor network theory. Findings – While a distinction between domain and methods theories … may appear analytically viable, it may be virtually impossible to separate them in practice. In line with Armstrong (2008), the authors cast a measure of doubt on the quest to significantly extend theoretical contributions from accounting research. Research limitations/implications – Rather than making (apparently) grandiose claims about (theoretical) contributions from individual studies, the authors suggest making more modest claims from the research. The authors try to provide a more appropriate and realistic approach to the appreciation of research contributions. Originality/value – The authors contribute to the debate on how theoretical contributions can be made in the accounting literature by constructively debating some views that have recently been outlined by LV. The aim is to provide some perspective on the usefulness of the criteria suggested by these authors. The authors also suggest and highlight (alternative) ways in which contributions might be discerned and clarified.

Losses, dividend reductions, and market reaction associated with past earnings and dividends patterns

This paper examines investors' reactions to dividend reductions or omissions conditional on past earnings and dividend patterns for a sample of eighty-two U.S. firms that incurred an annual loss. We document that the market reaction for firms with long patterns of past earnings and dividend payouts is significantly more negative than for firms with lessestablished past earnings and dividends records. Our results can be explained by the following line of reasoning. First, consistent with DeAngelo, DeAngelo, and Skinner (1992), a loss following a long stream of earnings and dividend payments represents an unreliable indicator of future earnings. Thus, established firms have higher loss reliability than less-established firms. Second, because current earnings and dividend policy are a substitute source of means of forecasting future earnings, lower loss reliability increases the information content of dividend reductions. Therefore, given the presence of a loss, the longer the stream of prior earnings and dividend payments, (1) the lower the loss reliability and (2) the more reliably dividend cuts are perceived as an indication that earnings difficulties will persist in the future.

Corporate governance disclosure in the Gulf countries

Corporate governance disclosure is important for countries aiming to attract international investors and reduce companies’ cost of capital. The relationship between corporate governance disclosure (CGD) and its determinants is the main objective of the current research. Accordingly, the research aimed to: (i) assess CGD level in the Gulf countries; (ii) investigate the impact of ownership structure (proportion of institutional, governmental, managerial and family ownership) on CGD; (iii) explore the effect of board characteristics (proportion of independent board members, proportion of family members on board, CEO/chairman duality and board size) on CGD; (iv) examine the relationship between diversity (proportion of foreign and female members on a board and in the senior management team) and CGD; and (v) test the association between firm characteristics (company size, age, liquidity, profitability, leverage, industry and auditor types) and CGD. Gulf countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) were selected for the study since they share similar characteristics and represent a relatively homogeneous category in the Middle East and North African region. A CGD index of 232 items was developed and divided into six categories: ownership structure and investor rights; financial transparency and information disclosure; information on auditors; board and senior management structure and process; board committees; and finally corporate behaviour and responsibility. Annual reports available for listed non-financial companies of the Gulf countries were 270 for the year 2009. The maximum CGD level was 63%, whereas the minimum was 5%, with an average disclosure level of 32%. Several regression models were conducted to enhance the robustness of the results and conclusions of the study. The results indicated that five variables had a significant positive relationship with CGD: proportion of independent members on a board, proportion of foreign members on a board, proportion of foreign members in the senior management team, auditor type and profitability. The research contributes to the literature on corporate governance voluntary disclosure in developing countries. Practical contributions consist of several recommendations to policy makers, regulators, and professional institutions in the Gulf countries.

A versenyképesség és a társaságok belső ellenőrzése (Competitiveness and corporate internal audit)

A cikk a belső ellenőrzésnek a hatékony társaságirányításhoz való hozzájárulását és ennek a versenyképességre gyakorolt hatását vizsgálja. A belső ellenőrzés és a társaságirányítás kölcsönös összefüggésben áll egymással. Nemcsak a belső ellenőrzés hat a társaságirányításra, hanem a releváns társaságirányítási struktúrák, emberi kapcsolatok és magatartásformák jelentős hatást gyakorolnak a belső ellenőrzés színvonalára és hatékonyságára. A cikk ezért különös figyelmet szentel a belső ellenőröknek az igazgatósággal, az auditbizottsággal/felügyelőbizottsággal, a menedzsmenttel és a könyvvizsgálóval való kapcsolatainak vizsgálatára. Rávilágít a belső ellenőrzés legfőbb funkciójára, amely objektív bizonyosságot nyújt az igazgatóság és a felső vezetők számára a kockázatok azonosítására, kezelésére és elfogadható szintre történő csökkentésére szolgáló kontrollfolyamatok megfelelőségéről és hatékonyságáról. A bemutatott belső ellenőrzési modell azt a szemléletet közvetíti, hogy a belső ellenőrzés által nyújtott objektív bizonyosság megszerzése nemcsak a jogszabályoknak vagy az ajánlásoknak való megfelelés, hanem a társaságok versenyképessége szempontjából is kiemelkedő jelentőségű. _________ The purpose of this paper is to consider the contribution of internal audit to the sound corporate governance and the impact of that on the competitiveness of the companies. There is a mutual dependency between internal audit and corporate governance. Not only the internal audit has impact on the corporate governance but the relevant governance structures, relationships and behaviour influence the level and effectiveness of the internal audit. Therefore the present paper is highly concerned with the internal auditors` relationships with the board, audit committee/supervisory board, senior management and the external auditor. It highlights the internal audit function, that provides objective assurance to the board and senior management about the adequacy and effectiveness of the processes by which risks are identified, managed, controlled and mitigated to acceptable levels. The internal audit model demonstrated represents an approach, according to that getting objective assurance provided by internal audit is important not only to be in line with laws and recommendations but to facilitate the corporate competitiveness.

A bizonyosságfüggvények elméletének alkalmazása a pénzügyi kimutatások ellenőrzésében (The application of the theory of belief functions in the audit of financial statements)

A könyvvizsgálati kockázat a téves auditjelentés kiadásának kockázata olyan esetekben, amikor a beszámoló lényeges hibás állítást tartalmaz. Ez a kockázat indirekt módon a hitelintézetek és pénzügyi vállalkozások működésében is megjelenik azokban az esetekben, amikor a lényeges hibás állítást a finanszírozott vállalkozás auditált beszámolója tartalmazza, amelynek az alapján finanszírozási döntést hoznak, vagy a finanszírozás folytatásáról a beszámolóban szereplő, hibás információkból számított hitelkovenánsok alapján döntenek. A könyvvizsgálat kockázatában a vizsgált gazdálkodó üzleti kockázatai tükröződnek vissza, ezért a kockázat felmérése és az ellenőrzés ennek alapján való megtervezése, majd végrehajtása kulcsfontosságú. Jelen tanulmány – kapcsolódva a Hitelintézeti Szemle 2011. évi 4. számához – szintén a kockázat és bizonytalanság témakörét tárgyalja, pontosabban ennek egy gyakorlati vetületét: a bizonyosságfüggvények (belief functions) alkalmazását a könyvvizsgálatban; mindezt a teljesség és a tankönyvszerű rendszerfelépítés igénye nélkül. A módszer ugyanis hazánkban szinte ismeretlen, nemzetközi viszonylatban viszont empirikus kutatásban is rámutattak már az alkalmazás lehetséges előnyeire a hagyományos valószínűségelméleten alapuló számszerű kockázatbecslésekkel szemben. Eszerint a bizonyosságfüggvények jobban reprezentálják a könyvvizsgálóknak a kockázatról alkotott képét, mint a valószínűségek, mert – szemben a hagyományos modellel – nem két, hanem három állapotot kezelnek: a pozitív bizonyíték létezését, a negatív bizonyíték létezését és a bizonyíték hiányának esetét. _______ Audit risk is the risk that the auditor expresses an inappropriate audit opinion when the fi nancial statements are materially misstated. This kind of risk indirectly appears in the fi nancial statements of fi nancial institutions, when the material misstatement is in the fi nanced entity’s statements that serve as a basis for lending decisions or when the decision is made based upon credit covenants calculated from misstated information. The risks of the audit process refl ect the business risks of the auditee, so the assessment of risks, and further the planning and performance of the audit based on it is of key importance. The current study – connecting to No 4 2011 of Hitelintézeti Szemle – also discusses the topic of risk and uncertainty, or to be more precise a practical implementation of the aforementioned: the application of belief functions in the fi eld of external audit. All this without the aim of achieving completeness or textbook-like scrutiny in building up the theory. While the formalism is virtually unknown in Hungary, on the international scene empirical studies pointed out the possible advantages of the application of the method in contrast to risk assessments based on the traditional theory of probability. Accordingly, belief functions provide a better representation of auditors’ perception of risk, as in contrast to the traditional model, belief functions deal with three rather than two states: the existence of supportive evidence, that of negative evidence and the lack of evidence.