BROWN, P, FERGUSON, A & JACKSON, AB 2009, 'Pierpont and the Capital Market', Abacus, vol. 45, no. 2, pp. 147-170.
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For almost forty years Trevor Sykes was one of the most recognizable business journalists in Australia. Sykes created his Pierpont character in February 1972 while writing for Australia's leading financial paper, the Australian Financial Review. Pierpont was a take on J. Pierpont Morgan, founder of the J. P. Morgan banking house. Sykes used his Pierpont column to research and reflect on the curious world of Australian business. Articles were mostly in narrative form, comprising an in‐depth critique of one or more companies and written with more than a touch of humour. Over the years Pierpont garnered a large following, and it is therefore quite possible his musings influenced investors' beliefs about company fundamentals. We assess this possibility by examining the share price movements of companies around the time they found themselves featured in a Pierpont column. We extend previous work in this area by examining the market reaction to a popular columnist's writings published regularly over a lengthy period, and by implementing an extensive double‐coding procedure that allows us to more finely and reliably partition trading recommendations based on the content of each column. In brief, we find evidence that stocks with positive coverage by Pierpont enjoyed abnormal returns averaging 6.4 per cent over thirty days around the publication date, while stocks with negative coverage suffered abnormal losses of 5.5 per cent. Trading volume was also affected.
Bugeja, M 2009, 'Monitoring and the acquiring firm reaction to bad takeover bids', Corporate Ownership & Control, vol. 7, no. 2, pp. 208-223.
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This study investigates variables that explain why bidding firms raise their offer price following a negative capital market reaction to a takeover announcement. We find that whilst an increasing number of blockholders restrains the pursuit of unprofitable takeovers, greater institutional ownership and takeover hostility increases the likelihood a bidder will raise their offer price. Multiple bidders and board independence are unrelated to an increase in takeover price. Inconsistent with agency theory, management ownership and free cash flow do not explain bidder actions.
Bugeja, M, Rosa, RDS & Lee, A 2009, 'The Impact of Director Reputation and Performance on the Turnover and Board Seats of Target Firm Directors', JOURNAL OF BUSINESS FINANCE & ACCOUNTING, vol. 36, no. 1-2, pp. 185-209.
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Green, W, Czernkowski, R & Wang, Y 2009, 'Special treatment regulation in China: potential unintended consequences', Asian Review of Accounting, vol. 17, no. 3, pp. 198-211.
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PurposeThe purpose of this paper is to trace the behaviour of Chinese companies receiving a special treatment (ST) designation in order to determine the extent to which the application of this regulation may have led companies to engage in activities conducive to the removal of the ST designation. In particular, the paper examines evidence of opinion shopping or earnings manipulation by these companies.Design/methodology/approachEmpirical analysis of annual report databases for Chinese‐listed companies, including statistical significance testing relating to ST companies.FindingsMost ST companies have removed the ST status by the third year after the initial ST designation. Compared to non‐ST companies, ST companies losing the ST status are more likely to engage in practices indicating earnings manipulation. Also, compared to non‐ST companies, ST companies are more likely to change auditors after an initial or second year of ST designation. However, while this behaviour suggests opinion shopping, auditor switching for the ST companies is not associated with losses becoming profits nor with improved audit opinions.Research limitations/implicationsThe results reported in this paper must be considered in light of the limitations inherent in empirical analyses. That is, the relationships identified in this paper are indicative of potential earnings management or audit opinion shopping; however, the study cannot provide the actual reasons for these empirical results.Practical implicationsThe results suggest the S...
Rawlings‐Way, OMF 2009, 'Being Benevolence: The Social Ethics of Engaged Buddhism ‐ by Sallie B. King', Journal of Religious History, vol. 33, no. 1, pp. 117-118.
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Richardson, G & Lanis, R 2009, 'The impact of the Ralph Review Tax Reform on corporate capital investment in Australia', Australian Tax Forum: a journal of taxation policy, law and reform, vol. 24, no. 3, pp. 261-279.
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This study analyzes the impact of tax reform on corporate capital investment in Australia stemming from the Ralph Review of Business Taxation reform. Based on panel data spanning the Ralph Review tax reform, our regression results indicate that corporate capital investment decreased in Australia because of the tax reform. We find that that the negative effects of the removal of accelerated depreciation exceeded the positive effects of the reduction in the corporate tax rate, so there was a decline in corporate capital investment. Our findings are robust to several robustness checks
Sivabalan, P, Booth, P, Malmi, T & Brown, DA 2009, 'An exploratory study of operational reasons to budget', ACCOUNTING AND FINANCE, vol. 49, no. 4, pp. 849-871.
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Budgets are used widely but criticized, mainly for performance evaluation reasons. We find that organizations regard budgets as more important for planning and control than evaluation, thus proposing a rationale for their continued use irrespective of evaluation-based criticisms. This finding is also important, because most extant budget research focuses on evaluation, suggesting a potential disconnect between budget research and practice. We also find that rolling forecasts are used in tandem with the annual budget in most organizations, and for the same reasons. This was unexpected, as coexistence suggests their adoption for different reasons. © 2009 AFAANZ.
Sundin, H, Brown, D, Wakefield, J & Ranganathan, J 2009, 'Management Control Systems in a Non-Enterprise Network: The Greenhouse Gas Protocol Initiative', AUSTRALIAN ACCOUNTING REVIEW, vol. 19, no. 2, pp. 93-102.
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A study explores the use of management control systems in a unique multi-stakeholder collaborative network, the Greenhouse Gas Protocol Initiative (GHGPI). The primary objective of the GHGPI was to harmonise greenhouse gas accounting practices through the development of one international standard. The central problems in the collaboration were the multiple differing stakeholder ideologies and the practical challenges of a geographically dispersed network being able to work together. To overcome these problems, MCS were designed around socio-ideological, planning and administrative controls. The GHGPI faced the problems of the collaboration not having a financial or profit objective, high levels of uncertainty about outcomes, conflicting stakeholder ideologies, and the practical issue of enabling a geographically dispersed network to work together. Collaborations are becoming popular forms of organising people and resources because they enable multiple stakeholders to be involved in projects. Despite the benefits, however, the issue of conflicting stakeholders' views may arise (Cleland 1986; Jugdev and Müller 2005) and put the achievement of project outcomes at risk. The case of the GHGPI provides insights into the management of such challenges, because it was such a large and ultimately successful multistakeholder collaboration. The insight from the analysis of the GHGPI can be applied not only to accounting standard developments, but more broadly to various other forms of collaboration
Taylor, S 2009, 'Capital Markets Regulation: How Can Accounting Research Contribute?', Australian Accounting Review, vol. 19, no. 4, pp. 319-325.
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In examining the possible contribution that accounting research can play in ensuring effective and efficient regulation of securities markets, two principal opportunities stand out. First, the role of research in informing debate about proposed regulatory intervention (ex ante contribution to regulatory debate). Second, the ability of research to inform analysis as to the effectiveness of previously implemented regulatory changes (ex post contribution to regulatory debate). In the ex ante case, there is a natural tension between the way in which regulatory initiatives often arise quickly and the inevitable passage of time required to fully appreciate the degree to which underlying problems have been correctly characterised and can be framed in a manner suitable for addressing via rigorous analytical and empirical research. It is also impossible to empirically assess the effect of regulatory intervention that has not yet occurred. Finally, if data are simply not available, then research is limited to analytical analysis and prediction. In the ex post case, there is often a natural reluctance to subject regulatory intervention to mandatory analysis, and even when a statutory requirement exists for such analysis and review, the time horizon is often far too short for meaningful analysis. In both the ex ante and ex post cases, what is unavoidable is that regulation can only be legitimately informed by research that is sufficiently rigorous so as to have robust conclusions. Assessing research on these dimensions means that transparency is required so as to allow researchers to engage in meaningful debate about the validity of the conclusions. This inevitably means that research needs to be a partnership between regulatory agencies and academia, and that when research is used to justify regulatory interventions it must be publicly available and subject to robust debate.
Waller, DS & Lanis, R 2009, 'CORPORATE SOCIAL RESPONSIBILITY (CSR) DISCLOSURE OF ADVERTISING AGENCIES An Exploratory Analysis of Six Holding Companies' Annual Reports', JOURNAL OF ADVERTISING, vol. 38, no. 1, pp. 109-121.
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The corporate annual report has become more than a mandatory financial report for public companies, with many companies also using it as an important marketing tool. As corporate social responsibility (CSR) is an issue of growing interest in the business world, many publicly listed companies, including advertising agencies, are voluntarily disclosing information regarding their CSR activities in their annual reports. While there is criticism of the ethical values of advertising, some advertising agencies can use CSR to promote a positive side of the agency's business. This descriptive study analyzes the annual reports of the top six holding companies in the global advertising industry to promote discourse and theory development in the area. This will be done by observing which advertising companies disclose their CSR activities and what activities they undertake, as well as the development of a CSR disclosure index for advertising agencies. The results indicate that some advertising companies do engage in CSR activities and disclose them in their annual reports, but the level of these CSR disclosures is different between the organizations. © 2009 American Academy of Advertising.
Arthur, N, Czernkowski, RM & Huynh, T 1970, 'The impact of cash flows and accruals on belief asymmetry', 2009 AFAANZ Conference, Accounting and Finance Association of Australia and New Zealand Conference, AFAANZ, Adelaide, Australia, pp. 1-38.
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We examine the market-relevance of disaggregating earnings into cash flow and accrual components. Unlike the majority of capital markets accounting research to-date, which has restricted analysis to price effects (returns), we focus on belief asymmetry as our measure of market-relevance. Specifically we examine the effect, which the earnings component disclosure has on the level of belief asymmetry in the market. Our measure of belief asymmetry is based on the model developed by Kim and Verrecchia (1991). Cross-sectional ordinary least square regression models are used to analyse the market response to measures of cash flow and accrual surprise.
Arthur, N, Czernkowski, RM & Huynh, T 1970, 'The impact of cash flows and accruals on belief asymmetry', BAA Annual Conference 2009, British Accounting Association Annual Conference 2009, British Accounting Association (BAA), Dundee.
Bedford, DS & Malmi, T 1970, 'Configurations of Control: An Exploratory Analysis', Performance Measurement and Management Control, Nice, France.
Bedford, DS & Malmi, T 1970, 'Configurations of Control: An Exploratory Analysis', Global Management Accounting Research Symposium (GMARS), Copenhagen, Denmark.
Bedford, DS & Malmi, T 1970, 'Configurations of Control: An Exploratory Analysis', 32nd European Accounting Association Annual Congress, Tampere, Finland.
Booth, PJ, Giacobbe, F & Wakefield, JA 1970, 'Controlling newly established foreign subsidiaries in transition economies', 2009 AFAANZ Conference Website, Accounting and Finance Association of Australia and New Zealand Conference, AFAANZ, Adelaide, Australia, pp. 1-29.
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This paper invest igates the management control system choices exercised by a multinational corporation headquarters to control a newly established wholly owned foreign subsidiary located in a t ransition economy. Specifically t his paper aims to identif y what the core ch allenges of establishing and operating subsidiaries in transition economies are and how these are addressed t hrough the mult inational headquarters' management control systems. A case study is conducted of an Eastern European based subsidiary owned and controlled by a multinational corporation origi nating from South-East Asia. The challenges of operating the subsidiary in the transition economy are reported, which primarily ent ail cultu ral differences, lack of experience, lack of external integration and recruitment issues. Preliminary f indings indicate that the management control system primarily util ises personnel and results controls, which appear to address operational and management challenges.
Bugeja, M 1970, 'Takeover Premiums and the Perception of Auditor Independence and Reputation', 2009 AFAANZ Conference, Accounting and Finance Association of Australia and New Zealand Conference, AFAANZ, Adelaide, Australia, pp. 1-41.
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This study investigates if there is a positive association between takeover premiums and the bidders perception of target firm auditor reputation and independence. Using auditor size as a proxy for auditor reputation, the results indicate that target shareholders receive a higher takeover premium when a Big 4 auditor audits the target firm in the year prior to the takeover announcement. This result is only significant however in the period prior to the highly publicised audit failures. The impact of perceived auditor independence on takeover premiums is studied using the levels and size of non-audit service (NAS) fees provided by the target firm auditor. Using three proxies for auditor independence, the results do not show an association between perceived auditor independence and takeover premiums. This finding is robust to partitioning the sample by auditor size, takeover hostility and splitting the sample into takeovers pre- and post- the corporate scandals that occurred in 2002.
Bugeja, M, da Silva Rosa, R, Duong, L & Izan, HY 1970, 'CEO Compensation from M&As in Australia', American Accounting Association Conference on Teaching and Learning in Accounting, American Accounting Association (AAA), American Accounting Association, San Francisco, California.
Shan, Y, Taylor, SL & Walter, TS 1970, 'Errors in estimating unexpected accruals in the presence of large changes in net external financing', 2009 AFAANZ Conference, Accounting and Finance Association of Australia and New Zealand Conference, AFAANZ, Adelaide, Australia, pp. 1-54.
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We demonstrate that the articulation among accruals, cash flows and revenues which is typically assumed in tests of earnings management does not hold when large (positive or negative) external financing activities are present. Our study provides evidence that managers normal operating decisions associated with net external financing activities are likely to lead to economically and statistically significant measurement errors in unexpected accruals. This is a serious concern given the frequency with which the partitioning variable used to identify instances of alleged earnings management is correlated with significant movements in net external financing. Simulation tests show that even at modest levels of net external financing changes, rejection frequencies for the null hypothesis of no earnings management rise dramatically
Waller, DS & Lanis, R 1970, 'CSR disclosure: An exploratory study of the leading media organizations', 2009 AMA Educator's Proceedings: Enhancing Knowledge Development in Marketing, American Marketing Association Summer, American Marketing Association, Chicago, USA, pp. 1-8.
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Corporate social responsibility (CSR) is an issue of growing interest in the business world, and many large, multinational companies, including media organizations, are voluntarily disclosing information regarding their CSR activities. While there is criticism of the ethical values of the media, some media organizations are using CSR to promote a positive side of their business. This exploratory study observes what the leading media organizations are doing in terms of CSR activities to propose a CSR disclosure index for the media industry, and discusses some implications for other organizations.
White, A & Harding, N 1970, 'Identifying auditor stopping rules in decision making under uncertainty', Program American Accounting Association Annual Meeting, American Accounting Association Annual Meeting, American Accounting Association (AAA), New York.
