Are East Asian companies benefiting from western board practices?

Since the Asian crisis, East Asian nations have strived to introduce corporate governance codes, directing companies how to best improve their corporate governance practices. However, these codes have not been universally accepted by East Asian companies. This study examines the adoption of major board-related corporate governance recommendations by large nonfinancial companies in seven East Asian nations and investigates whether improvements in these board governance mechanisms have been associated with increased operating performance and market value. The results indicate that family-owned companies started with worse board governance and have been least likely to improve their board governance since the crisis. Overall, bigger, faster growing, non-family-owned companies with less concentrated ownership have been more likely to improve their board governance. Splitting of the positions of Chairman and CEO, creation of audit and nomination committees and improvements in overall board governance were found to have a positive relationship with subsequent operating performance and/or market value.

A Knight without a Sword? The Effects of Audit Courts on Tax Morale

The intention of this paper is to analyse how audit courts affect tax morale, controlling in a multivariate analysis for a broad variety of potential factors. Switzerland, with its variety of audit-court competence among the cantons, has been analysed. With data from the ISSP [1998] (Swiss data 1999), evidence has been found that higher audit-court competence has a significantly positive effect on tax morale. Thus, the results in Switzerland suggest that in the cantons where audit courts are not just knights without swords; they help improve taxpayers' tax morale and thus citizens' intrinsic motivation to pay taxes.

QUT Medical Engineering Research Facility (MERF) annual report 2009

DIRECTOR’S OVERVIEW by Professor Mark Pearcy This report for 2009 is the first full year report for MERF. The development of our activities in 2009 has been remarkable and is testament to the commitment of the staff to the vision of MERF as a premier training and research facility. From the beginnings in 2003, when a need was identified for the provision of specialist research and training facilities to enable close collaboration between researchers and clinicians, to the realisation of the vision in 2009 has been an amazing journey. However, we have learnt that there is much more that can be achieved and the emphasis will be on working with the university, government and external partners to realise the full potential of MERF by further development of the Facility. In 2009 we conducted 28 workshops in the Anatomical and Surgical Skills Laboratory providing training for surgeons in the latest techniques. This was an excellent achievement for the first full year as our reputation for delivering first class facilities and support grows. The highlight, perhaps, was a course run via our video link by a surgeon in the USA directing the participants in MERF. In addition, we have continued to run a small number of workshops in the operating theatre and this promises to be an avenue that will be of growing interest. Final approval was granted for the QUT Body Bequest Program late in 2009 following the granting of an Anatomical Accepting Licence. This will enable us to expand our capabilities by provide better material for the workshops. The QUT Body Bequest Program will be launched early in 2010. The Biological Research Facility (BRF) conducted over 270 procedures in 2009. This is a wonderful achievement considering less then 40 were performed in 2008. The staff of the BRF worked very hard to improve the state of the old animal house and this resulted in approval for expanded use by the ethics committees of both QUT and the University of Queensland. An external agency conducted an Occupational Health and Safety Audit of MERF in 2009. While there were a number of small issues that require attention, the auditor congratulated the staff of MERF on achieving a good result, particularly for such an early stage in the development of MERF. The journey from commissioning of MERF in 2008 to the full implementation of its activities in 2009 has demonstrated the potential of this facility and 2010 will be an exciting year as its activities are recognised and further expanded building development is pursued.

Audit of the Care of the Dying in a Network of Hospitals and Institutions in Queensland

Background: Most Australians die in institutions and there is evidence to suggest that the care of these patients is not always optimal. Care pathways for the dying have been designed to transfer benchmarked hospice care to other settings (e.g. acute hospitals and residential age-care facilities) by defining goals of best care, providing guidelines to provide that care and documenting outcome. Method: A retrospective audit was undertaken across a network of health-care institutions in Queensland. The 18 goals considered essential for the care of the dying within the Liverpool Care Pathway were taken as a benchmark. Documentation of achievement of each of these goals was sought. Results: The notes of 160 patients who had died in eight institutions (four hospitals, three hospices, one nursing home) were reviewed. Several areas for improvement were identified, particularly in those goals relating to communication, resuscitation orders and care after death. Few units documented the provision of written information to families. Most patients were prescribed medications in anticipation of pain and agitation but less were prescribed drugs for other common symptoms in the dying. Most of the goals were achieved in a higher percentage of cases in hospice units. Marked differences in practice were noted between different institutions. Conclusion: The audit identified several aspects in the care of the terminally ill that could be improved. End-stage pathways may provide a model for improving the care of patients dying in hospitals and institutions in Australia.

Internal audit department characteristics/activities and audit fees : some evidence from Hong Kong firms

This study provides preliminary support for the notion that internal audit function assists in reducing external audit effort and fees. Data on internal audit characteristics and activities are obtained from survey respondents of Hong Kong companies and audit fee model data are acquired from their annual reports. The results of this study suggest that the external auditor of firms in Hong Kong rely on the internal audit function and subsequently charge a lower fee. Lower external audit fees are associated with a larger internal audit department and certain activities carried out by the internal audit. Specifically, lower external audit fees are associated with more internal audit effort spent on activities relating to financial statements, systems development and maintenance, operating efficiency and effectiveness, fraud investigations and unlimited access to internal auditors’ working papers. The results of this study suggest that the contribution of the internal audit may substitute for some substantive external auditing processes and lower monitoring costs.

Legislative and security requirements of audit material for evidentiary purpose

This research used the Queensland Police Service, Australia, as a major case study. Information on principles, techniques and processes used, and the reason for the recording, storing and release of audit information for evidentiary purposes is reported. It is shown that Law Enforcement Agencies have a two-fold interest in, and legal obligation pertaining to, audit trails. The first interest relates to the situation where audit trails are actually used by criminals in the commission of crime and the second to where audit trails are generated by the information systems used by the police themselves in support of the recording and investigation of crime. Eleven court cases involving Queensland Police Service audit trails used in evidence in Queensland courts were selected for further analysis. It is shown that, of the cases studied, none of the evidence presented was rejected or seriously challenged from a technical perspective. These results were further analysed and related to normal requirements for trusted maintenance of audit trail information in sensitive environments with discussion on the ability and/or willingness of courts to fully challenge, assess or value audit evidence presented. Managerial and technical frameworks for firstly what is considered as an environment where a computer system may be considered to be operating “properly” and, secondly, what aspects of education, training, qualifications, expertise and the like may be considered as appropriate for persons responsible within that environment, are both proposed. Analysis was undertaken to determine if audit and control of information in a high security environment, such as law enforcement, could be judged as having improved, or not, in the transition from manual to electronic processes. Information collection, control of processing and audit in manual processes used by the Queensland Police Service, Australia, in the period 1940 to 1980 was assessed against current electronic systems essentially introduced to policing in the decades of the 1980s and 1990s. Results show that electronic systems do provide for faster communications with centrally controlled and updated information readily available for use by large numbers of users who are connected across significant geographical locations. However, it is clearly evident that the price paid for this is a lack of ability and/or reluctance to provide improved audit and control processes. To compare the information systems audit and control arrangements of the Queensland Police Service with other government departments or agencies, an Australia wide survey was conducted. Results of the survey were contrasted with the particular results of a survey, conducted by the Australian Commonwealth Privacy Commission four years previous, to this survey which showed that security in relation to the recording of activity against access to information held on Australian government computer systems has been poor and a cause for concern. However, within this four year period there is evidence to suggest that government organisations are increasingly more inclined to generate audit trails. An attack on the overall security of audit trails in computer operating systems was initiated to further investigate findings reported in relation to the government systems survey. The survey showed that information systems audit trails in Microsoft Corporation's “Windows” operating system environments are relied on quite heavily. An audit of the security for audit trails generated, stored and managed in the Microsoft “Windows 2000” operating system environment was undertaken and compared and contrasted with similar such audit trail schemes in the “UNIX” and “Linux” operating systems. Strength of passwords and exploitation of any security problems in access control were targeted using software tools that are freely available in the public domain. Results showed that such security for the “Windows 2000” system is seriously flawed and the integrity of audit trails stored within these environments cannot be relied upon. An attempt to produce a framework and set of guidelines for use by expert witnesses in the information technology (IT) profession is proposed. This is achieved by examining the current rules and guidelines related to the provision of expert evidence in a court environment, by analysing the rationale for the separation of distinct disciplines and corresponding bodies of knowledge used by the Medical Profession and Forensic Science and then by analysing the bodies of knowledge within the discipline of IT itself. It is demonstrated that the accepted processes and procedures relevant to expert witnessing in a court environment are transferable to the IT sector. However, unlike some discipline areas, this analysis has clearly identified two distinct aspects of the matter which appear particularly relevant to IT. These two areas are; expertise gained through the application of IT to information needs in a particular public or private enterprise; and expertise gained through accepted and verifiable education, training and experience in fundamental IT products and system.

Can an effective audit committee help to mitigate earnings management in Chinese firms listed in Hong Kong?

This paper attempts to determine whether the adoption of recommended corporate governance practices by Chinese firms is associated with less earnings management proxied by abnormal accruals. We examine the role of the audit committee and ownership concentration in preventing earnings management using Chinese firms listed in Hong Kong. The results of this preliminary analysis show that the frequency of audit committee meetings is associated with reduced levels of abnormal accruals, our measure of earnings management. We conclude that audit committee activity is an important factor in constraining the propensity of managers to engage in earnings management. In contrast, we find that the size of the audit committee is associated with increased levels of abnormal accruals and suggest that increasing the size of the audit committee creates information asymmetry between the audit committee and management that reduces the monitoring capacity of the audit committee. We do not find any association between audit committee independence, financial and industry experience, or ownership concentration and abnormal accruals.

Towards beneficence for young children in research : challenges for bioethics committees

Bioethics committees are the focus of international scrutiny,particularly in relation to their application of the principle of beneficence,ensuring that risks incurred in research are outweighed by benefits to those involved directly and to the broader society. Beneficence, in turn, has become an international focus in research with young children, who hitherto had been rarely seen or heard in their own right in research.Twenty years ago, The United Nations Convention on the Rights of the Child 1989 raised global awareness of children’s human rights to both participation and protection, and articulation of children’s rights came to inform understandings of young children’s rights in research. In the intervening period, countries such as Australia came to favour child protection and risk minimisation in research over the notion of children’s bone fide participation in research. A key element of the protection regime was the theoretical understanding of young children as developmentally unable and, therefore, unfit to understand, consent to and fully participate as research participants. This understanding has been challenged in recent decades by new theoretical understandings of children’s competence, where children can be seen to demonstrate competence, even at an early age, in consenting to, participating in and withdrawing from research. The paper draws on these understandings to provide insights for human research gatekeepers, such as bioethics committees, to deal with the challenges of research with young children and to realize the benefits that may accrue to children in research.

Diarrhoea risk factors in enterally tube fed critically ill patients : a retrospective audit

Objective: Diarrhoea in the enterally tube fed (ETF) intensive care unit (ICU) patient is a multifactorial problem. Diarrhoeal aetiologies in this patient cohort remain debatable; however, the consequences of diarrhoea have been well established and include electrolyte imbalance, dehydration, bacterial translocation, peri anal wound contamination and sleep deprivation. This study examined the incidence of diarrhoea and explored factors contributing to the development of diarrhoea in the ETF, critically ill, adult patient. ---------- Method: After institutional ethical review and approval, a single centre medical chart audit was undertaken to examine the incidence of diarrhoea in ETF, critically ill patients. Retrospective, non-probability sequential sampling was used of all emergency admission adult ICU patients who met the inclusion/exclusion criteria. ---------- Results: Fifty patients were audited. Faecal frequency, consistency and quantity were considered important criteria in defining ETF diarrhoea. The incidence of diarrhoea was 78%. Total patient diarrhoea days (r = 0.422; p = 0.02) and total diarrhoea frequency (r = 0.313; p = 0.027) increased when the patient was ETF for longer periods of time. Increased severity of illness, peripheral oxygen saturation (Sp02), glucose control, albumin and white cell count were found to be statistically significant factors for the development of diarrhoea. ---------- Conclusion: Diarrhoea in ETF critically ill patients is multi-factorial. The early identification of diarrhoea risk factors and the development of a diarrhoea risk management algorithm is recommended.

Parliamentary committees are important in developing policy: evidence from a Queensland case study

Abstract This paper uses a case study to identify the impact of a Queensland parliamentary committee on policy. In 2003, the Travelsafe Committee undertook two inquiries investigating young driver and rider issues. In 2007, the Queensland Parliament passed legislation that provided the power to make regulations that changed the graduated driver licensing laws in Queensland. The analysis of the second reading speeches for this bill suggests that parliamentary committees can help set the agenda for government policy. The role of the Travelsafe Committee in this process was recognised by both government and non-government members of Parliament and by those that had been, or were currently, members of the committee and by those that had no membership experience of the Travelsafe Committee prior to the debate of the legislation. This paper suggests that in order for committees to successfully participate in policy work they need to have strong ideas, work to a consistently high standard and the chair needs to be dedicated to the work of the committee. This case study indicates the importance of parliamentary committees in the policy work of a parliament.

An analysis of the nature and effectiveness of corporate governance in smaller listed Australian companies

The objective of this thesis is to investigate the corporate governance attributes of smaller listed Australian firms. This study is motivated by evidence that these firms are associated with more regulatory concerns, the introduction of ASX Corporate Governance Recommendations in 2004, and a paucity of research to guide regulators and stakeholders of smaller firms. While there is an extensive body of literature examining the effectiveness of corporate governance, the literature principally focuses on larger companies, resulting in a deficiency in the understanding of the nature and effectiveness of corporate governance in smaller firms. Based on a review of agency theory literature, a theoretical model is developed that posits that agency costs are mitigated by internal governance mechanisms and transparency. The model includes external governance factors but in many smaller firms these factors are potentially absent, increasing the reliance on the internal governance mechanisms of the firm. Based on the model, the observed greater regulatory intervention in smaller companies may be due to sub-optimal internal governance practices. Accordingly, this study addresses four broad research questions (RQs). First, what is the extent and nature of the ASX Recommendations that have been adopted by smaller firms (RQ1)? Second, what firm characteristics explain differences in the recommendations adopted by smaller listed firms (RQ2), and third, what firm characteristics explain changes in the governance of smaller firms over time (RQ3)? Fourth, how effective are the corporate governance attributes of smaller firms (RQ4)? Six hypotheses are developed to address the RQs. The first two hypotheses explore the extent and nature of corporate governance, while the remaining hypotheses evaluate its effectiveness. A time-series, cross-sectional approach is used to evaluate the effectiveness of governance. Three models, based on individual governance attributes, an index of six items derived from the literature, and an index based on the full list of ASX Recommendations, are developed and tested using a sample of 298 smaller firms with annual observations over a five-year period (2002-2006) before and after the introduction of the ASX Recommendations in 2004. With respect to (RQ1) the results reveal that the overall adoption of the recommendations increased from 66 per cent in 2004 to 74 per cent in 2006. Interestingly, the adoption rate for recommendations regarding the structure of the board and formation of committees is significantly lower than the rates for other categories of recommendations. With respect to (RQ2) the results reveal that variations in rates of adoption are explained by key firm differences including, firm size, profitability, board size, audit quality, and ownership dispersion, while the results for (RQ3) were inconclusive. With respect to (RQ4), the results provide support for the association between better governance and superior accounting-based performance. In particular, the results highlight the importance of the independence of both the board and audit committee chairs, and of greater accounting-based expertise on the audit committee. In contrast, while there is little evidence that a majority independent board is associated with superior outcomes, there is evidence linking board independence with adverse audit opinion outcomes. These results suggest that board and chair independence are substitutes; in the presence of an independent chair a majority independent board may be an unnecessary and costly investment for smaller firms. The findings make several important contributions. First, the findings contribute to the literature by providing evidence on the extent, nature and effectiveness of governance in smaller firms. The findings also contribute to the policy debate regarding future development of Australia’s corporate governance code. The findings regarding board and chair independence, and audit committee characteristics, suggest that policy-makers could consider providing additional guidance for smaller companies. In general, the findings offer support for the “if not, why not?” approach of the ASX, rather than a prescriptive rules-based approach.

Preventing injuries on a state-wide basis : researchers and parliamentary committees are partners in turning injury prevention and safety research into practice and policy

Context: Parliamentary committees established in Westminster parliaments, such as Queensland, provide a cross-party structure that enables them to recommend policy and legislative changes that may otherwise be difficult for one party to recommend. The overall parliamentary committee process tends to be more cooperative and less adversarial than the main chamber of parliament and, as a result, this process permits parliamentary committees to make recommendations more on the available research evidence and less on political or party considerations. Objectives: This paper considers the contributions that parliamentary committees in Queensland have made in the past in the areas of road safety, drug use as well as organ and tissue donation. The paper also discusses the importance of researchers actively engaging with parliamentary committees to ensure the best evidence based policy outcomes. Key messages: In the past, parliamentary committees have successfully facilitated important safety changes with many committee recommendations based on research results. In order to maximise the benefits of the parliamentary committee process it is essential that researchers inform committees about their work and become key stakeholders in the inquiry process. Researchers can keep committees informed by making submissions to their inquiries, responding to requests for information and appearing as witnesses at public hearings. Researchers should emphasise the key findings and implications of their research as well as considering the jurisdictional implications and political consequences. It is important that researchers understand the differences between lobbying and providing informed recommendations when interacting with committees. Discussion and conclusions: Parliamentary committees in Queensland have successfully assisted in the introduction of evidence based policy and legislation. In order to present best practice recommendations, committees rely on the evidence presented to them including the results of researchers. Actively engaging with parliamentary committees will help researchers to turn their results into practice with a corresponding decrease in injuries and fatalities. Developing an understanding of parliamentary committees, and the typical inquiry process used by these committees, will help researchers to present their research results in a manner that will encourage the adoption of their ideas by parliamentary committees, the presentation of these results as recommendations within the report and the subsequent enactment of the committee’s recommendations by the government.