Exploratory study into the accountancy firms chosen by industrial company IPOs in Australia from 1994 to 2004

This study is an exploration into the choice of independent accountants made by industrial initial public offering (IPO) companies in Australia between the years 1994 to 2004. The aim of this research is to determine which companies are more likely to use one of the Top 5 accountancy firms and in so doing we seek to offer some insight into understanding the likelihood of IPQ companies adopting the services of the big accounting firms. Our findings show, as predicted, that the majority of industrial IPO companies, and particularly the larger companies, used one of the Top 5 accountancy firms as their independent accountant. However, unexpected was that certain industry types were less likely to hire a Top 5 accounting finn for their independent accounting services compared to other industry categories. Our studies also found that after the year 2000 a smaller percentage of companies used independent accountants than between 1994 and 1999. Many factors contribute to the selection of an independent accountant and this paper provides some understanding of identified factors and the influence that they have over the choice of independent accountants by industrial company IPOs.

How prepared was Australia for international financial reporting standards? The case of listed firms

We measure the preparedness of listed firms for international financial reporting standards (IFRS) by changes in explanations from Australian GAAP to IFRS between the half-year and annual accounts. About one-third of sample firms changed their explanations for earnings, cashflows or equity by averages of about −7%, 67% and 3% respectively. Most changes are less than 5% for earnings and equity, and tax is the item most commonly revised. More profitable firms and firms with more reconciling items are most likely to change an explanation. In a telephone survey of chief financial officers, 70% revealed that the change followed an incorrect application of an accounting rule in the half-year accounts.

Icon and markor : links and performance in South African firms

Market orientation and innovation orientation are two concepts that seem to contradict each other. Whether they intend to or not, firms adopt a strategic mode of focus, a way of directing efforts towards markets, products, both, or neither. However, little information exists on whether managers within these organizations are content with the strategic archetype they have adopted, and if not, what their preferred mode of focus would be. This paper reports the results of a study that identified the modes of focus of South African firms as perceived by senior marketing managers, and then matched these to their preferences. Limitations are identified, implications for management singled out, and avenues for future research highlighted.

Academic staff take the lead : experimenting with social software at Deakin University

This paper reports on a two staged staff development exercise to help new academic staff to integrate Web 2.0 technologies including web-based communication and some digital technologies into their curricula. It involved professional development for the teaching staff in the first stage followed by these teachers providing professional development for the course participants. The teachers engaged in a blended community of inquiry with face-to-face sessions and online work while the professional development for the course participants included technical support, training and a peer group environment with formal allocation of time for the course, finally leading to an institutionally recognised qualification. Evaluations conducted through focus group interviews revealed that collegial networks and time were important for effective professional development. The paper reflects on the successes and limitations of the model and its potential for further development. It also highlights the importance of providing professional development in a safe environment for academics to adopt technologies for teaching and learning.

Testing some myths about I.T. outsourcing : a survey of Australia's top 1000 firms

This study examines the extent to which surveyed outcomes of IT outsourcing supported several commonly-argued propositions. Following confirmatOl), factor analysis, eight measures of success were used: access to skilled staff, technology benefits, economies of scale, cost reductions, strategic benefits, technical service quality, capacity to concentrate on core business, and overall satisfaction/value. The analysis produced some surprising findings. Some widely-promoted benefits of outsourcing were reported by most respondents, but other benefits that have been similarly promoted (such as cost savings) were reported by only a minority of respondents. There were no differences in success outcomes between medium-sized «500 employees), large (500 to 1000 employees), and very large (1000+ employees) organizations. There were some minor differences between government agencies and finns from the private sector, but no differences for key outcomes. Contrary to findings from case study research, "selective" outsourcing was no more successful than "total" outsourcing, although "total" outsourcing was uncommon. On the basis of these results, decision makers are urged to be cautious when planning to outsource IT services, and to be critical of claims that they will make substantial savings from outsourcing, or that outsourcing will automatically allow them to refocus more on their core business.

The Chihuahua sustainability practice: lots of shivering but no real action. Practical sustainability acceptance is low in German and New Zealand firms

Purpose – This paper aims to describe the extent to which corporate organizations in Germany and in New Zealand have included sustainability practices as part of their strategic planning process.

Design/methodology/approach – Current literature is reviewed to make a case for sustainability to be a driver behind corporate decision making and long-term performance. The results of surveys of several hundred firms in both Germany and New Zealand, countries with a publicly stated commitment to sustainability, are reviewed to compare the adoption rates of sustainability practices.

Findings – There is a significant difference between what firms do and what their managers think is important. Managers largely consider sustainability practices an important factor for their future careers, while firms to a large extent do not include sustainability as part of their strategic or operational planning process.

Research limitations/implications – The International Sustainability Acceptance Measurement (ISAM) collects data in several countries through local-language versions of the same online survey tool (www.worldreply.com). The findings in this report are specific only to New Zealand and Germany.

Practical implications – The paper points academics, corporate executives and sustainability fanatics to an alarming inconsistency between what is publicly reported as commitment to sustainability and what is practically achieved.

Originality/value – This paper adds value to the discussion of how sustainability practices have migrated into the operation of firms.

Do governments lead or lag in fighting crime?

We examine the Granger causal relationship between police strength and a variety of different types of crime for South Australia. We find that with the exception of assault and homicide in the long run, the crime rate and police strength are neutral.

Accounting services and SMEs : an Australian study

Background: The observance of regulation has become a fundamental part of life for the conduct of business around the world. Governments and their duly appointed designates, acting in the interest of the collective public, have relied on regulation to moderate economic and social behaviour through the imposition and enforcement of rules. While it can be commonly accepted that such a prescriptive framework may be necessary for the achievement of desired economic and social outcomes, regulation does impose costs on society and on individual firms. These costs, which can include the costs for government departments to administer, the cost for firms to comply, and the multitude of indirect costs such as lost innovation and productivity or their interrelated opportunity costs, have received ample attention.

Accountants are key advisers to all businesses on all aspects of doing business, including regulation. As such, it is appropriate that ACCA has sponsored this study, which explores the regulatory issues facing SMEs and the critical role that accountants and other organisations play in helping SMEs be aware of, comply with and generally manage effectively the regulations that apply to their business.

ACCA has consistently argued for a balanced view to be taken on regulation, recognising that certain rules are necessary for the fair development of business and for employees’ rights. Yet at the same time, ACCA recognises that SMEs are likely to be disproportionately burdened by regulatory requirements and, as a consequence, it actively campaigns for fairness in regulation, recognising the issue as a significant factor in the success, productivity and growth of small businesses.

Overview: This study complements similar research commissioned by ACCA in the United Kingdom and Canada (Blackburn et al. 2006), with the aim of helping to provide a more international picture of the effects of regulation on adviceseeking by SMEs and how accountants can help SMEs meet their regulatory obligations.

The research commenced in November 2006 and was conducted over the Australian summer period 2006/7, among SMEs and accounting practices, as follows:

* telephone survey among 250 SMEs
* postal survey among 130 accounting practitioner firms.

Key findings: The SME section of this study revealed the following points.

* Most SMEs (between 70% and 80%), agreed that the regulations under review were reasonable, however there were significantly high levels of concern regarding:
* the number of regulations affecting their business (80%)
* staying up to date with changing regulations (80%)
* complexity of regulation or the ease of understanding regulations (77%)
* inequity, or the cost of regulation in proportion to the business (66%)
* duplication, or being required to provide the same information to more than one government department (55%).
* External accountants were the most common source of advice, being used by 72% of SMEs; this was followed by federal government agencies,    62%; trade or industry bodies, 61%; and a lawyer or solicitor, 53%.
* Highest levels of satisfaction with the advice provided were recorded for lawyers/solicitors (94%), banks (91%) and external accountants (90%).
* Overall, 80% of SMEs who had used accountants rated their service as excellent or good. Thirty per cent gave accountants an excellent rating.
* Accountants rated particularly well on the following attributes:
* the potential for a long-term relationship with the business (81% excellent/good)
* technical understanding of the regulatory requirements that apply to the business (79%)
* ability to meet the needs of the business (77%)
* understanding of the business of the SME and its operations (73%).

The survey of accounting practitioners produced the following information.
* The results indicate that SME firms with fewer than 10 employees are the main source of revenue for the respondent accounting practitioners.
* Virtually all accountants provide regulatory advice, primarily in the areas of taxation (particularly Goods and Services Tax, GST), and Do-It-      Yourself (DIY) superannuation requirements. These services provided the accountants with their largest business growth in the two years before the time of the survey.

Seventy-nine per cent of accountants referred their SME clients to external professional advisers. Their comments indicate (see Appendix 4) that some accountants consider their role to be as convenors or advisers for their SME clients. Importantly, according to the accountants, SME firms with fewer than 10 employees did not update their knowledge of regulatory requirements; they relied on their accountant for the right advice. The main types of external adviser to whom accountants referred their SME clients were lawyers and financial planners.

* Accountants expressed their concern regarding the complexity and amount of regulations affecting their SME clients.
* The accountants also stated that they would like to provide additional advice to their SME clients.
 
Confidence intervals – SME survey:  The survey sample size was 250 SMEs from the total of 1.2 million Australian SMEs. Any estimate of proportions agreeing or disagreeing with particular statements must be considered with respect to the margin of possible statistical error. Owing to the small sample size, generalising the results from this study to a wider population of SMEs may be constrained.

A 95% confidence interval of the sample mean for the following estimates based on a percentage agreement of 75% to a proposition with a sample size of 250 would be from 69.5% to 80.5%. The 95% confidence interval for estimates of any other value will diverge slightly in magnitude from the numbers given.

In general then we can be highly confident that the actual sample mean will be within approximately ± 5% of the figure given, with a survey of this size. Confidence intervals – acounting practitioner survey IBISWorld estimates reveal a figure of 9,222 accounting practices in Australia as at June 2006 (IBISWorld 2007). The sample size of 133 accounting practitioners gives a 95% confidence limit that the results reported from the mail-out survey are within the ± 5% confidence interval of the reported values.

Conclusions:  This report describes the results of two parallel surveys undertaken on the impact of business regulation on small and medium-sized enterprises in Australia and on the perceptions of accounting firms about the ways in which the regulatory impact on the SME sector drove their business.

The survey of SMEs provides empirical support for many of the concerns raised with the Regulation Taskforce, which reported to the Australian government in 2006. Many businesses are concerned about the volume and complexity of government legislation as it applies to their business. They are concerned that they are unable to keep up with new legislation and that there is apparent duplication of reporting requirements across the various tiers of government.

The survey of accountants revealed that accounting firms derive a significant proportion of their revenue from SMEs. While the SMEs are concerned with regulatory changes, the accountants surveyed reported that the major growth areas in their businesses were in what could be seen as traditional accounting areas of tax and superannuation. Some SMEs sought advice on areas such as employment law, environmental regulation and health and safety but it appears that many accountants refer their clients to specialists in these areas. Recent changes to the laws regarding financial planning in Australia may lead to changes in the market for financial advice in Australia, with many accountants apparently regarding this as a key driver of future business opportunities.

The surveys were conducted using a similar instrument to similar surveys conducted in the UK and Canada and reported in Blackburn et al. (2006). Comparisons of the Australian survey results with those from the UK and Canada seem to support the perception that Australian business is not over-regulated, but the SME sector is concerned with the volume and complexity of regulation. This suggests that the SME sector wants to see improvements to Australia’s regulatory regime as a result of the work of the Regulation Taskforce undertaken in 2005/6. In its response to the work of the Taskforce the government agreed with 158 of the 178 specific recommendations of the Taskforce. This now needs to be followed through at all levels of government.

Accountants in all three countries understand their SME clients’ concerns with the burden of regulation and they are prepared to advise their clients where appropriate or refer them to specialist advisers. Most business growth for accountants has come from the taxation area. Very few accountants in the UK or Australia specialise in providing advice in the areas of environmental regulation or health and safety regulation.

International comparisons show that in all three countries accountants are generally highly regarded by SMEs for their professionalism and competence. The major area of client concern is the value for money offered by the accountant’s service. In an era of rapidly shifting professional and technical boundaries, accountants need to be more strongly attuned to levels of client satisfaction. Lawyers, financial planners and a plethora of specialist advisers operate in the business services market and if they have an opportunity to take business from accountants by competing on price they may well do so. This suggests a stronger role for professional accounting bodies in monitoring the broader business services market for opportunities and threats on behalf of their membership.

Does self-management lead to sustainable health benefits in people with arthritis? A 2-year transition study of 452 Australians.

Objective: To evaluate the Arthritis Self-Management Course (ASMC) when applied in a nationwide context.

Methods: Four hundred fifty-two people who participated in the ASMC across Australian states took part in a longitudinal followup study. ASMC is a 6 week, 2 h group educational program designed to assist people with chronic illness to better manage their condition. Measures of program effectiveness included health status and service utilization. Data were collected on 3 occasions: before intervention (baseline) and 6 months and 2 years after the program.

Results: Several indicators of health status showed improvement at 6 months following the ASMC. These included reduction in pain (4%; p < 0.001), fatigue (3%; p < 0.01), and health distress (12%; p < 0.001) as well as increase in self-efficacy (6%; p < 0.001). Increased self-efficacy was a significant predictor of positive change in health status. Health-related behaviors such as aerobic exercise also increased, with the proportion of people who did little or no exercise decreasing by up to 8%. These changes were sustained at 2 years. There was an increase in use of analgesics at 6 months and an increase in use of nonsteroidal antiinflammatory drugs at 2 years. No changes in healthcare utilization (physician visits, allied health visits, and hospitalizations) were observed.

Conclusion: The ASMC is a widely applied program in which participants benefit through a reduction in pain, fatigue, and health distress. Although the absolute changes in health status are small, the low cost and wide application of the intervention suggests the program may have a substantial public health effect.