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.

The role of gender and framing in shaping community activists' perceptions of environmental risks

campaign to oppose projects proposed in their local community. The social constructionist perspective advocates that these motivations are driven by activists’ interpretation of reality, such that activists will assign multiple meanings to and frame environmental issues in a way that reflects their view of reality. Past research suggest that these are also influenced by patterns of shared meaning and interpretation that develop over time in protest movements that shape activists’ perceptions of the environmental risks and impacts associated with construction activity. This paper explores the role of gender distinctions in shaping perceptions of environmental risk and how this affects their framing of the environmental, social, cultural/ historical impacts associated with a construction project. Using Snow and Benford’s (1988) 3-prong analytical tool for framing: diagnostic framing, prognostic framing and motivational framing, this paper presents findings from the content analysis of in-depth interviews of 24 activists protesting against a highly controversial housing project in the greater Sydney metropolitan area. The research adopts a single case study approach, and is particularly significant as it investigates an extensive and on-going community-based protest campaign (dating back almost 20 years) that has generated the longest standing 24-hour community picket in Australia.

A way forward to managing the transition to professional practice for beginning teachers

The high attrition rate of beginning teachers in Australia and overseas is well-documented. This trend is easily understood as many beginning teachers enter the profession with little support or mentoring (Department of Education, Science and Training (DEST), 2002; Herrington & Herrington, 2004; Ramsey, 2000). Continual calls for more comprehensive approaches to teacher induction in which universities and employing bodies share the responsibilities of the transition to professional practice (House of Representatives Standing Committee on Education and Vocational Training, 2007) have, to date, largely been ignored. This paper reports on a trial project conducted at a university in south-east Queensland, Australia that addresses these shortfalls. The aim of the project is to facilitate and support the development of high quality teachers and teaching through an extended model of teacher preparation. The model comprises a 1+2 program of formal teacher preparation: a one-year teacher education course (the Graduate Diploma in Education), followed by a comprehensive two year program of workplace induction and ongoing professional learning tailored to meet graduate and employer needs. This paper reports on graduating students’ perceptions of their preparedness to teach as they transition from the Graduate Diploma in Education program to professional practice. The study concludes that innovative programs, including university-linked, ongoing professional learning support for teacher education graduates, may provide the way forward for enhancing the transition to practice for beginning teachers.

Sociopathic attitudes to road safety

Injuries and deaths due to unsafe driving practices are a substantial health and socioeconomic burden to the community. Young socially disadvantaged males who are involved in a lifestyle of risky behaviour, crime and motor vehicle accidents seem unaffected by educational campaigns to improve safer driving. The aim is to develop a driving and social behavioural profile that may explain the lack of effectiveness of road safety advertising and suggest ways to refine educational strategies to reduce the risky lifestyle and associated harms among those most vulnerable, the 15-25 year olds. The procedure involved a quantitative and qualitative analysis through questionnaires, surveys and focus groups involving a comparison of populations (n = 668) by age, gender and socioeconomic status in three discrete Australian sites. Information gathered included issues related to road safety awareness, knowledge of advertising, personal and peer group attitudes as well as driving and life style history. The results indicate that within the community a highly visible profile of strong anti-social road safety activities by an educationally and economically disadvantaged sub-culture exists and this group seem impervious to road safety advertising and education initiatives. As the overall unsafe driving and risky antisocial behaviour is significant among 15-25 year olds within the community the solution is seen to be community based. A long-term (five to ten year) program has been posited; promoting community partnerships through consultative and local action committees at all levels creating locally designed formal and informal educational and mutual support programs.

Perceived gender differences in STEM learning in the middle school

Women are underrepresented in science, technology, engineering and mathematics (STEM) university coursework, reflecting long-standing gender issues that have existed in core middle-school STEM subject areas. Using data from a survey and written responses, we report on findings following the introduction of engineering education in middle school classes across three schools (grade level 7, n=122). The engineering experiences fused science, technology and mathematics concepts. The survey revealed higher percentages for girls than boys in 13 of the 24 items; however there were six items with a 20% difference in their perceptions about learning in STEM. For instance, despite girls recording that they have been provided equal or more opportunities than boys in STEM, they believed they do not do as well as boys (80% boys, 48% girls) or want to seek a career in STEM (39% boys, 17% girls). The written responses revealed gender differences across a number of themes in the students’ responses, including resources, group work, the nature and type of learning experiences, content knowledge, and teachers’ instructional style. Exposing students to STEM education facilitates an awareness of their learning and may assist girls to consider studying STEM subjects or STEM careers.

A way forward to managing the transition to professional practice for beginning teachers

The high attrition rate of beginning teachers in Australia and overseas is well-documented. This trend is easily understood as many beginning teachers enter the profession with little support or mentoring (Department of Education, Science and Training (DEST), 2002; Herrington & Herrington, 2004; Ramsey, 2000). Continual calls for more comprehensive approaches to teacher induction in which universities and employing bodies share the responsibilities of the transition to professional practice (House of Representatives Standing Committee on Education and Vocational Training, 2007) have, to date, largely been ignored. This paper reports on a trial project conducted at a university in south-east Queensland, Australia that addresses these shortfalls. The aim of the project is to facilitate and support the development of high quality teachers and teaching through an extended model of teacher preparation. The model comprises a 1+2 program of formal teacher preparation: a one-year teacher education course (the Graduate Diploma in Education), followed by a comprehensive two year program of workplace induction and ongoing professional learning tailored to meet graduate and employer needs. This paper reports on graduating students’ perceptions of their preparedness to teach as they transition from the Graduate Diploma in Education program to professional practice. The study concludes that innovative programs, including university-linked, ongoing professional learning support for teacher education graduates, may provide the way forward for enhancing the transition to practice for beginning teachers.

Fundamentals of process integration

Technologies and languages for integrated processes are a relatively recent innovation. Over that period many divergent waves of innovation have transformed process integration. Like sockets and distributed objects, early workflow systems ordered programming interfaces that connected the process modelling layer to any middleware. BPM systems emerged later, connecting the modelling world to middleware through components. While BPM systems increased ease of use (modelling convenience), long-standing and complex interactions involving many process instances remained di±cult to model. Enterprise Service Buses (ESBs), followed, connecting process models to heterogeneous forms of middleware. ESBs, however, generally forced modellers to choose a particular underlying middleware and to stick to it, despite their ability to connect with many forms of middleware. Furthermore ESBs encourage process integrations to be modelled on their own, logically separate from the process model. This can lead to the inability to reason about long standing conversations at the process layer. Technologies and languages for process integration generally lack formality. This has led to arbitrariness in the underlying language building blocks. Conceptual holes exist in a range of technologies and languages for process integration and this can lead to customer dissatisfaction and failure to bring integration projects to reach their potential. Standards for process integration share similar fundamental flaws to languages and technologies. Standards are also in direct competition with other standards causing a lack of clarity. Thus the area of greatest risk in a BPM project remains process integration, despite major advancements in the technology base. This research examines some fundamental aspects of communication middleware and how these fundamental building blocks of integration can be brought to the process modelling layer in a technology agnostic manner. This way process modelling can be conceptually complete without becoming stuck in a particular middleware technology. Coloured Petri nets are used to define a formal semantics for the fundamental aspects of communication middleware. They provide the means to define and model the dynamic aspects of various integration middleware. Process integration patterns are used as a tool to codify common problems to be solved. Object Role Modelling is a formal modelling technique that was used to define the syntax of a proposed process integration language. This thesis provides several contributions to the field of process integration. It proposes a framework defining the key notions of integration middleware. This framework provides a conceptual foundation upon which a process integration language could be built. The thesis defines an architecture that allows various forms of middleware to be aggregated and reasoned about at the process layer. This thesis provides a comprehensive set of process integration patterns. These constitute a benchmark for the kinds of problems a process integration language must support. The thesis proposes a process integration modelling language and a partial implementation that is able to enact the language. A process integration pilot project in a German hospital is brie°y described at the end of the thesis. The pilot is based on ideas in this thesis.

National Environmental Law Review Issue 2011: 3, Editorial: Federal Developments

Clean Energy Agreement of the MPCCC On 10 July 2011, details of the Multi-Party Climate Change Committee’s Clean Energy Agreement for implementing a carbon price were released. This included an agreed package of measures that the Committee considered would enable Australia to meet its emissions reduction targets in an environmentally and economically efficient way. A copy of the agreement can be found on the website of the Department of Climate Change and Energy Efficiency...

Community protest groups' perceptions of environmental risks using social contagion theory

Local communities are vulnerable to the potential environmental risks associated with construction activity. Currently, little is understood about how perceptions of environmental risks are shaped and spread within a community. A better understanding of this process can help bridge the gap between developers and communities and bring about more sustainable development practices. This paper reports a research methodology which uses social contagion theory to investigate this process. The research adopts a single case study approach of a highly controversial housing project in the greater Sydney metropolitan area. The case study is particularly significant as it investigates an extensive and on-going community-based protest campaign (dating back almost 20 years) that has generated the longest standing 24 hour community picket in the New South Wales.

On IT governance structures and their effectiveness in collaborative organizational structures

Organizations today engage in various forms of alliances to manage their existing business processes or to diversify into new processes to sustain their competitive positions. Many of today’s alliances use the IT resources as their backbone. The results of these alliances are collaborative organizational structures with little or no ownership stakes between the parties. The emergence of Web 2.0 tools is having a profound effect on the nature and form of these alliance structures. These alliances heavily depend on and make radical use of the IT resources in a collaborative environment. This situation requires a deeper understanding of the governance of these IT resources to ensure the sustainability of the collaborative organizational structures. This study first suggests the types of IT governance structures required for collaborative organizational structures. Semi-structured interviews with senior executives who operate in such alliances reveal that co-created IT governance structures are necessary. Such structures include co-created IT-steering committees, co-created operational committees, and inter-organizational performance management and communication systems. The findings paved the way for the development of a model for understanding approaches to governing IT and evaluating the effectiveness for such governance mechanisms in today’s IT dependent alliances. This study presents a sustainable IT-related capabilities approach to assessing the effectiveness of suggested IT governance structures for collaborative alliances. The findings indicate a favourable association between organizations IT governance efforts and their ability to sustain their capabilities to leverage their IT resources. These IT-related capabilities also relate to measures business value at the process and firm level. This makes it possible to infer that collaborative organizations’ IT governance efforts contribute to business value.

Improving posture and decreasing pain with novel shoe insoles

A single subject longevity study is presented as a case study for the Medical Device Partnering Program (MDPP). The MDPP supports the development of cutting-edge medical devices and assistive technologies, through unique collaborations between researchers, industry, clinical end-users and government. The study aimed to identify what effect the innersole has on specific muscles that may influence stability and whether the innersole had any influence on gait. Three tests were conducted; a standard gait test, dynamic balance test and a standing balance test. Results from the kinematic analysis showed reduced variability in post testing results when compared to pre testing results. Reductions in muscle activation levels were also found across all tests. Further testing with a larger sample size is required to determine if these effects are due to the innersole.

The Corio Oval tribe: Geelong Football Club in colonial times

Geelong, Victoria’s second city, has an AFL football club whose culture and identity is closely tied to the city itself. An analysis of its playing group for the colonial period demonstrates that this local tribalism began early. As football became professionalised towards the end of the nineteenth century, country Victoria lost power in relative terms to metropolitan Melbourne: for example, Ballarat’s three main clubs lost their senior status. But Geelong, with its one remaining senior club, prospered and was admitted to the VFL ranks in 1897. The Geelong players were the sons and nephews of the Western District squattocracy and so had access to networks of power and influence. Many attended the prestigious Geelong Grammar School and the worthy Geelong College (in surprisingly equal numbers). They pursued careers both on the land and in professional roles, and maintained the social connections they had built through the club and other local institutions. Despite their elite standing, however, they continued to be regarded by the supporter base as an embodiment of the city and a defence against the city’s Melbourne critics that Geelong was a mere ‘sleepy hollow’.

Kiss

In an age of mobile phones, Facebook, Twitter and online dating, interactions in mediated environments often outnumber face to face encounters. Kiss is an interactive light artwork by artists Priscilla Bracks & Gavin Sade. Kiss reacts to people standing in front of the artwork looking at each other - the moment before kissing. Without interaction the work generates a seductive, ambient, red lighting display, that creates the restful sense of staring into a fire. A fleeting response of white light – like sparks flying in the air – occurs the moment before two faces touch. These sparks are visible in peripheral vision, but fade when the kissing couple turns to look at the work. This moment - as two people look at each other - is a primal moment when two people recognise each other. Face to face encounters with another person are a privileged phenomenon in which the other person's presence and proximity are strongly felt. Kiss does not respond to every instance of a kiss or a look. Its recognition algorithms are fussy, selecting some faces and not others. As in life it’s difficult to tell why sparks fly with some people but not with others. For some this will be felt as a glitch. “This machine should be part of my social life!” But it does promote trial and error, asking viewers to be intimate in public and look at each other for longer than otherwise socially normal. 10 minutes continuous eye contact is said in most cases to arouse sexual feelings in both parties. But even if we don’t look that long, a short time may be all that is needed to explore the face of the person we are looking at. We see that they are human like us. We experience beauty, difference, discomfort, perhaps even nervous laughing, before turning to a more intimate moment of recognition.

IT governance in collaborative organizational structures

Organizations today engage in various forms of alliances to manage their existing business processes or to diversify into new processes to sustain their competitive positions. Many of today’s alliances use the IT resources as their backbone. The results of these alliances are collaborative organizational structures with little or no ownership stakes between the parties. The emergence of Web 2.0 tools is having a profound effect on the nature and form of these alliance structures. These alliances heavily depend on and make radical use of the IT resources in a collaborative environment. This situation requires a deeper understanding of the governance of these IT resources to ensure the sustainability of the collaborative organizational structures. This study reports on the first stage of this initiative. It suggest the types of IT governance structures required for collaborative organizational structures. Semi-structured interviews with senior executives who operate in such alliances reveal that co-created IT governance structures are necessary. Such structures include co-created IT-steering committees, cocreated operational committees, and inter-organizational performance management and communication systems. The findings pave the way for the development of a model for understanding approaches to governing IT and evaluating the effectiveness for such governance mechanisms in today’s IT dependent alliances.

Towards a Deeper Understanding of Information Technology Governance Effectiveness : A Capabilities-Based Approach

We examine the relationship between the effectiveness of IT steering committee-driven IT governance initiatives and firm’s IT management and IT infrastructure related capabilities. We test these relationships empirically by a field survey of 216 firms. Results of this study suggest that a firms’ effectiveness of IT steering committee-driven IT governance initiatives positively relate to the level of their IT-related capabilities. We also found positive relationships between IT-related capabilities and internal process-level performance, which positively relate to improvement in customer service and firm-level performance. For researchers, we demonstrate that the resourcebased theory provides a more robust explanation of the determinants of firms IT governance initiatives. This would be ideal in evaluating other IT governance initiatives effectiveness in relation to how they contribute to building performance-differentiating IT-related capabilities. For decision makers, we hope our study has reiterated the notion that IT governance is truly a coordinated effort, embracing all levels of human resources.