Bedford, A, Bugeja, M & Ma, N 2022, 'The impact of IFRS 10 on consolidated financial reporting', Accounting & Finance, vol. 62, no. 1, pp. 101-141.
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AbstractThis study examines the impact of IFRS 10 adoption on consolidated financial reports. Our evidence suggests that the new standard is associated with firms consolidating fewer subsidiaries and consolidating fewer subsidiaries with non‐majority ownership. The results also indicate that the effects of IFRS 10 adoption are associated with financial reporting incentives. Finally, our results suggest that post‐IFRS 10, the value relevance of equity increased and the value relevance of profit decreased for firms reporting fewer subsidiaries. The findings are of particular interest to accounting standard setters who are currently undertaking their post‐implementation review of the impact of IFRS 10 adoption.
Bedford, A, Ma, L, Ma, N & Vojvoda, K 2022, 'Australian Innovation: Patent Database Construction and First Evidence', Pacific-Basin Finance Journal, vol. 73.
Bedford, D, Bisbe, J & Sweeney, B 2022, 'Enhancing external knowledge search: The influence of performance measurement system design on the absorptive capacity of top management teams', Technovation, vol. 118, pp. 102586-102586.
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External knowledge search is critical for innovation performance and centers on a firm's absorptive capacity. This study investigates whether and how two dimensions of absorptive capacity at the top management team (TMT) level, potential absorptive capacity and realized absorptive capacity, are influenced by two design choices of the performance measurement system (PMS), broad scope PMS and PMS integration, under different conditions of environmental dynamism. Based on cross-sectional survey data from firms in innovative industries, the results of our empirical study indicate that in more dynamic environments, a broader scope PyMS is associated with higher potential absorptive capacity whereas higher PMS integration is associated with lower potential absorptive capacity. These associations are not observable in more stable environments. Moreover, broad scope PMS and PMS integration are both positively associated with realized absorptive capacity, independently of environmental dynamism. These findings highlight the relevance of PMS design choices for absorptive capacity, showing on the one hand the differences between the implications of broad scope PMS and those of PMS integration and, on the other hand, that the implications of PMS design choices for potential absorptive capacity (i.e. acquisition and assimilation of external knowledge) follow different patterns than the implications for realized absorptive capacity (i.e. the transformation and exploitation of such knowledge).
Bedford, DS, Bisbe, J & Sweeney, B 2022, 'The joint effects of performance measurement system design and TMT cognitive conflict on innovation ambidexterity', Management Accounting Research, vol. 57, pp. 100805-100805.
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Bradbury, M, Fargher, N, Potter, B & Taylor, S 2022, 'Going Concern Uncertainty: What Do Firms Disclose?', Australian Accounting Review, vol. 32, no. 3, pp. 294-314.
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AbstractWe examine disclosure of going concern uncertainties by Australian companies. We begin by outlining the extant reporting framework applicable from accounting and auditing standards, and compare the approach to this issue taken across several different countries – Australia, New Zealand, the United Kingdom and the United States. We then examine reporting of going concern uncertainties for a selection of 127 Australian companies reporting at 30 June 2020 that also receive modified audit reports highlighting going concern issues. Our results indicate substantial variation in the specific requirements of audit and accounting standards impacting going concern disclosure across jurisdictions, with relevant disclosure guidance for Australian entities primarily contained in auditing, rather than accounting, standards. Not surprisingly then, we also observe significant variation in management reporting practices. These results inform our understanding of existing disclosure requirements and highlight how regulatory reliance on auditor discussion of going concern issues likely results in relatively limited management disclosure. We suggest that additional guidance may be required from accounting standard setters and also regulators with respect to management discussion of going concern uncertainty.
Bugeja, M, da Silva Rosa, R, Shan, Y, Walter, TS & Yermack, D 2022, 'Lower Defeat Thresholds for Minority Shareholders and Corporate Governance: Evidence from the Australian 'Two-strikes' Rule', CIFR Paper, no. 130, pp. 1-55.
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“Say on pay” legislation has been introduced in several countries but Australia’s version, namely the “two-strikes” rule, is unique in that it empowers shareholders to vote on a board spill if the compensation report of a public company receives 25% or more dissenting votes for two consecutive years. We test the proposition that the “two strikes” rule has increased directors’ accountability beyond executive pay because it has substantially lowered the cost to activists of organizing sufficient votes to threaten managers with a board spill. Consistent with this expectation, we find Australian firms respond to negative say-on-pay votes by curbing excessive CEO pay, reducing the growth rate of pay and changing the pay mix. In addition, the results suggest that the market regards negative SOP votes as a value-destroying signal since there is a negative market reaction, lower valuation and long-run underperformance. We also find an increase in CEO turnover but directors do not seem to bear reputational costs through the loss of outside directorships. The findings provide important insights to investors, company directors and regulators.
Cao, Y, Li, C, Liu, X, Lu, M & Shan, Y 2022, 'Economic policy uncertainty and debt allocation within business groups', Economic Modelling, vol. 116, pp. 106021-106021.
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Feng, Z, Francis, JR, Shan, Y & Taylor, SL 2022, 'Do High-Quality Auditors Improve Non-GAAP Reporting?', The Accounting Review.
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Prior research finds that clients of high-quality auditors report higher quality GAAP earnings. We extend this research to investigate whether auditor quality is associated with the quality of voluntarily disclosed non-GAAP earnings measures. Using a sample of Australian firms disclosing annual non-GAAP metrics, we find that clients of high-quality auditors are more likely to voluntarily disclose non-GAAP earnings numbers. However, clients of high-quality auditors make adjustments in calculating non-GAAP earnings (non-GAAP exclusions) that are less predictive of future earnings and less value relevant than those of other firms. These results indicate that their adjustments are of higher quality. We also find similar results for US firms using a sample of quarterly non-GAAP earnings disclosures. Overall, our evidence indicates that commonly used indicators of audit quality for GAAP reporting are positively associated with the quality of voluntarily disclosed non-GAAP earnings measures.
Ferguson, A, Hu, W & Lam, P 2022, 'Political uncertainty and deal structure: Evidence from Australian mining project acquisitions', Pacific-Basin Finance Journal, vol. 73, pp. 101756-101756.
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Goldsmith, R, Havery, C, Edwards, E, James, N, Murphy, A, Mort, P, Nixon, D, O'Donoghue, G, Yang, JS & Yeo, J 2022, 'A multi-faceted evaluation of the impact on students of an Australian university-wide academic language development program', Journal of English for Academic Purposes, vol. 60, pp. 101192-101192.
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Grosse, M & Scott, T 2022, 'Disclosure of Interim Review Reports: Do Interim Going Concern Conclusions Have Information Content?', AUDITING: A Journal of Practice & Theory, vol. 41, no. 3, pp. 121-147.
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SUMMARYThis paper examines the information content of interim review assurance in the Australian mandatory disclosure setting. First, we find a strong negative market reaction to interim going concern conclusions (IGCC) contained in the review of interim financial statements. Second, we find no significant difference between the market reaction to IGCCs and annual going concern opinions (AGCO) received at the annual report audit. Finally, we show IGCCs are significant predictors of subsequent AGCOs, and provide incremental information from the previous annual report audit opinion. Overall, these results contribute to the literature on the benefits of mandatory interim assurance by showing that going concern conclusions contained in interim financial statements provide investors with new and relevant information.JEL Classifications: G38; M42; M48.
Qin, W, jenny, J, Liang, Q, Lu, M & Shan, Y 2022, 'Social Trust and Dividend Payouts: Evidence from China', Pacific Basin Finance Journal, vol. 72, pp. 101726-101726.
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Social trust helps to reduce information asymmetry and agency conflicts between insiders and investors, and thus alleviates the pressure on firms to pay cash dividends. Consistent with this view, we find that Chinese firms in low-trust regions make higher dividend payouts than those in high-trust regions. The negative effect of trust is more pronounced in firms with lower information transparency and weaker corporate governance. We additionally find a lower market reaction to dividend announcements for firms in high-trust areas, and moreover that the role of social trust is more important for firms that are lacking in political connections and located in areas with weak institutions. Our results are robust to alternative measures of social trust and dividends and the use of the instrumental variable approach to alleviate endogeneity concerns. Overall, the findings highlight the important role of social trust in corporate governance and corporate dividend policy, along with its ability to substitute for formal institutions.
Shan, Y & Wright, S 2022, 'Editorial', Australian Accounting Review, vol. 32, no. 1, pp. 3-4.
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Taylor, S 2022, 'Standards for sustainability reporting: The role of research', Accountability in a Sustainable World Quarterly, vol. 1, no. 1.
Tyma, B, Dhillon, R, Sivabalan, P & Wieder, B 2022, 'Understanding Accountability in Blockchain Systems', Accounting Auditing and Accountability Journal, vol. 35, no. 7, pp. 1625-1655.
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PurposeThe purpose of this study is to examine how accountability is constructed for blockchain systems. With the aim of increasing knowledge on accountability across three different types of blockchains (public, private and consortium), the researchers ask: how do blockchain systems construct accountability?Design/methodology/approachThis study draws on theorising in the accountability literature to study how blockchains relate to our construction and understanding of accountability. A qualitative field study of the Australian blockchain technology landscape is conducted, with insights garnered from 18 blockchain experts.FindingsFindings reveal that different types of blockchains employ different forms and mechanisms of accountability and in novel ways previously less acknowledged in the literature. Importantly, this study finds that accountability does not require a principal–agent relation and can still manifest in less pure applications of blockchain technology across a wide range of stakeholders, contrary to that espoused in earlier exhortations of blockchain use in interdisciplinary literature. This study also finds that similar subtypes of accountability operate very differently across public, private and consortium blockchains and there exists an inverse relation between trust and consensus building through transparency as blockchains progress from public to private types. Overall, this study offers novel explanations for the relevance of greater accountability in blockchains, especially when the assumptions of public blockchains are softened and applied as private and consortium blockchains.Originality/valueThis study contributes to the accountability literature by addressing how different blockchain systems reshape the understanding of traditional accounting and accountability practices. This study questions the very need for a principal–agent relation to facilitate accountability and offers an additional perspective to how trust and...
Verhoeven, D, Musial, K, Hambusch, G, Ghannam, S & Shashnov, M 2022, 'Net effects: examining strategies for women’s inclusion and influence in ASX200 company boards', Applied Network Science, vol. 7, no. 1, pp. 1-26.
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AbstractConventional approaches to improving the representation of women on the boards of major companies typically focus on increasing the number of women appointed to these positions. We show that this strategy alone does not improve gender equity. Instead of relying on aggregate statistics (“headcounts”) to evaluate women’s inclusion, we use network analysis to identify and examine two types of influence in corporate board networks: local influence measured by degree centrality and global influence measured by betweenness centrality and k-core centrality. Comparing board membership data from Australia’s largest 200 listed companies in the ASX200 index in 2015 and 2018 respectively, we demonstrate that despite an increase in the number of women holding board seats during this time, their agency in terms of these network measures remains substantively unchanged. We argue that network analysis offers more nuanced approaches to measuring women’s inclusion in organizational networks and will facilitate more successful outcomes for gender diversity and equity.
Ma, L & Peng, Z 1970, 'Firm Ambidexterity', Early Career Researchers Support Network Research Seminar, Australian National University.
Malmi, T, Bedford, DS, Brühl, R, Dergard, J, Hoozée, S, Janscheck, O & Willert, J 1970, 'The Use of Management Controls in Different Cultural Regions: An Empirical Study of Anglo-Saxon, Germanic and Nordic Practices', Journal of Management Control, New Directions in Management Accounting, Springer Science and Business Media LLC, Brussels, pp. 273-334.
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AbstractMost cross-cultural studies on management control have compared Anglo-Saxon firms to Asian firms, leaving us with limited understanding of potential variations between developed Western societies. This study addresses differences and similarities in a wide variety of management control practices in Anglo-Saxon (Australia, English Canada), Germanic (Austria, non-Walloon Belgium, Germany) and Nordic firms (Denmark, Finland, Norway, Sweden). Unique data is collected through structured interviews from 584 strategic business units (SBUs). We find that management control structures in Anglo-Saxon SBUs, relative to those from Germanic and Nordic regions, are more decentralized and participative and place greater emphasis on performance-based pay. Comparing Germanic SBUs to Nordic ones, we find Germanic SBUs to rely more on individual behaviour in performance evaluation, whereas Nordic SBUs rely more on quantitative measures and value alignment in employee selection. We also observe numerous similarities in MC practices between the three cultural regions. The implications of these findings for theory development are outlined.
Tyma, B, Dhillon, R, Sivabalan, P & Wieder, B 1970, 'Understanding accountability in blockchain systems', Accounting, Auditing & Accountability Journal, Emerald, Melbourne (online), pp. 1625-1655.
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PurposeThe purpose of this study is to examine how accountability is constructed for blockchain systems. With the aim of increasing knowledge on accountability across three different types of blockchains (public, private and consortium), the researchers ask: how do blockchain systems construct accountability?Design/methodology/approachThis study draws on theorising in the accountability literature to study how blockchains relate to our construction and understanding of accountability. A qualitative field study of the Australian blockchain technology landscape is conducted, with insights garnered from 18 blockchain experts.FindingsFindings reveal that different types of blockchains employ different forms and mechanisms of accountability and in novel ways previously less acknowledged in the literature. Importantly, this study finds that accountability does not require a principal–agent relation and can still manifest in less pure applications of blockchain technology across a wide range of stakeholders, contrary to that espoused in earlier exhortations of blockchain use in interdisciplinary literature. This study also finds that similar subtypes of accountability operate very differently across public, private and consortium blockchains and there exists an inverse relation between trust and consensus building through transparency as blockchains progress from public to private types. Overall, this study offers novel explanations for the relevance of greater accountability in blockchains, especially when the assumptions of public blockchains are softened and applied as private and consortium blockchains.Originali...
Lewis, R, Woods, M, Brown, D, Parker, D, Sutton, N & McAllister, G University of Technology Sydney 2022, Support at Home: A Commentary on the design of the proposed unified program., pp. 1-42, Sydney.
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The following Commentary on the strengths and shortcomings of the currentproposals for a unified Support at Home program and the submission of specificproposals for consideration in the next round of consultations, is offered byresearchers at the UTS Ageing Research Collaborative (UARC).
Sutton, N, Ma, N, Yang, J, Lewis, R, McAllister, G, Brown, D & Woods, M University of Technology Sydney 2022, Australia’s Aged Care Sector: Mid-Year Report (2021-22), pp. 1-126, Sydney.
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The Editorial Board of Australia’s Aged Care Sector welcomes you, our readers, to this first edition of what is to become a biannual report on the delivery of subsidised aged care services to senior Australians in need. The focus of this f irst edition is the Mid-year Report (2021-22). The second edition will report on the full financial year 2021-22. This series has been established to provide an independent assessment of the sector by the UTS Ageing Research Collaborative (UARC) at the University of Technology Sydney. It will have a broad policy scope and will analyse the performance of the sector from accounting, health economics and labour market perspectives. It will offer commentary on the key policy and operational issues impacting the delivery of subsidised aged care. From the second edition, it will also include the publication of policy relevant research. At the core of this report’s financial analysis will be aggregated, deidentified survey data which StewartBrown is making available to UTS as part of a broader partnership between the two organisations. As many readers will be aware, StewartBrown has been publishing its Aged Care Financial Performance Survey since 1995. Over the last two decades, the report has grown in volume and depth of coverage and is the largest benchmark data source in the aged care sector. For many years the report has also been a key public information resource for providers, government, researchers and other stakeholders across the sector. StewartBrown has now decided to focus on its benchmarking reporting to aged care providers, and it is our challenge to respectfully build on the strong foundation constructed by Grant Corderoy and his team and to provide the wider audience with an objective, evidence-based analysis of the sector. We are conscious that as the Australian population ages, the demand for care for senior Australians will continue to grow, but that it will need to evolve to better reflect the needs and p...
Sutton, N, Ma, N, Yang, JS, Lewis, R, Brown, D, Woods, M, McEwen, C & Parker, D The University of Technology Sydney 2022, Australia’s Aged Care Sector: Full-Year Report (2021–22), Sydney, Australia.
Woods, M, Lewis, R, Brown, D, Parker, D, Sutton, N, Rawlings-Way, O & Sinclair, D University of Technology Sydney 2022, Support at Home: Response to the Department of Health and Aged Care discussion paper (October 2022), Sydney, Australia.
Woods, M, Sutton, N, McAllister, G, Brown, D & Parker, D University of Technology Sydney 2022, Sustainability of the Aged Care Sector: Discussion Paper, pp. 1-84, Sydney.
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This Discussion Paper aims to support and promote an informed national policydebate on the sustainability of publicly subsidised aged care services in Australia.A sustainable aged care system is crucial to current and future senior Australians and theirfamilies. Equally, it is of fundamental importance to taxpayers, providers and the sector’sworkforce. Sustainability has several dimensions. The four addressed in this Paper are: taxpayeraffordability; community satisfaction with the care provided; workforce availability; andprovider viability.The current aged care system has been under stress for some time and the situation is worsening.Demand-side pressures are arising from demographic and health changes in Australia’s ageingpopulation and from community expectations for safer and higher quality care.On the supply side, there are already significant constraints on the sustainable availability of anappropriately skilled aged care workforce, which will likely worsen as the working-age proportionof the population declines. In addition, sector viability is under threat, given that the financialperformance of most, though not all, providers who deliver the care is generally poor, especiallyin residential care.And yet, the costs of improving the quality and safety of services will need to increase toaddress community dissatisfaction with a number of aged care services. Staff wages andconditions must rise so that the sector can compete for skilled workers. Additional investmentfunding is also needed in the sector to respond to growing demand.Government spending on aged care will need to rise. However, budgetary concerns raisequestions about the fiscal sustainability of significant increases, particularly in the contextof higher national debt in response to the COVID-19 pandemic. At the same time, consumercontributions to the cost of aged care services are low, even among senior Australians whohave the financial capacity to pay more.
