This study investigates whether all expected costs over the life cycle of metallurgical research projects are included in initial, normal and final cost estimates, and whether these costs are managed throughout a project’s life cycle since there is not enough emphasis on the accurate estimation of costs and their management over the life cycle of metallurgical research projects. The study also determines during which phase of the life cycle of metallurgical research projects’ costs are normally determined, during which phase most of the costs are incurred, and during which phase costs are managed. Project life cycles, techniques of cost estimation and cost management are examined. 10A survey was used to gather information by means of face-to-face and telephonic interviews, as well as an electronic questionnaire. The total population of entities in South Africa that conduct metallurgical research projects is small, numbering only 12 in all. The ten entities that conducted the largest metallurgical research projects in terms of average size were selected for this study. 11The conclusion drawn from the survey was that all costs over the life cycle of metallurgical research projects are not taken into account in the initial cost estimate of a project. Costs are mainly managed during the growth phase of a project and not during the introduction phase, when 80% of the costs are normally committed. The implication of this is that cost estimates for metallurgical research projects may not be accurate and costs are not necessarily managed properly throughout the life cycle of such projects. This may lead to cost overruns of project budgets, project budgets being depleted before the delivery stage and research sections running at a loss.
{"title":"Cost estimation and management over the life cycle of metallurgical research projects","authors":"M. M. Odendaal, F. Vermaak, E. D. Toit","doi":"10.25159/1998-8125/5811","DOIUrl":"https://doi.org/10.25159/1998-8125/5811","url":null,"abstract":"This study investigates whether all expected costs over the life cycle of metallurgical research projects are included in initial, normal and final cost estimates, and whether these costs are managed throughout a project’s life cycle since there is not enough emphasis on the accurate estimation of costs and their management over the life cycle of metallurgical research projects. The study also determines during which phase of the life cycle of metallurgical research projects’ costs are normally determined, during which phase most of the costs are incurred, and during which phase costs are managed. Project life cycles, techniques of cost estimation and cost management are examined. 10A survey was used to gather information by means of face-to-face and telephonic interviews, as well as an electronic questionnaire. The total population of entities in South Africa that conduct metallurgical research projects is small, numbering only 12 in all. The ten entities that conducted the largest metallurgical research projects in terms of average size were selected for this study. 11The conclusion drawn from the survey was that all costs over the life cycle of metallurgical research projects are not taken into account in the initial cost estimate of a project. Costs are mainly managed during the growth phase of a project and not during the introduction phase, when 80% of the costs are normally committed. The implication of this is that cost estimates for metallurgical research projects may not be accurate and costs are not necessarily managed properly throughout the life cycle of such projects. This may lead to cost overruns of project budgets, project budgets being depleted before the delivery stage and research sections running at a loss.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"107 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84762643","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper reports the results of a multinomial analysis of inflation perceptions and inflation expectations in South Africa. Inflation perceptions surveys among South African individuals have been undertaken since 2006. The introduction of these surveys followed on domestic inflation expectation surveys conducted in 2000, and the use of inflation perceptions surveys internationally. Domestic inflation perceptions surveys among individuals are a private initiative undertaken biennially, while domestic inflation expectation surveys among individuals are funded by the South African Reserve Bank and are undertaken quarterly. By comparing the results of domestic inflation perceptions surveys and inflation expectation surveys undertaken since 2006, this paper establishes common characteristics that impact on the formulation of inflation perceptions and inflation expectations. It supplements earlier research that focused only on the results of the 2006 and 2008 perceptions survey results. With the completion of the third biennial inflation perceptions survey in 2010, more data sets are available for the purposes of comparison. Furthermore, the questions on inflation perceptions were expanded in the third survey. Although this provides for a broader basis of analysis between inflation perceptions surveys and inflation expectation surveys, further periodic inflation perceptions survey data will be required to test whether current inflation figures determine and anchor inflation expectations.
{"title":"Inflation perceptions and inflation expectation in South Africa: trends, determinants and comparisons (2006–2010)","authors":"A. Bosch, J. Rossouw, V. Padayachee","doi":"10.25159/1998-8125/5831","DOIUrl":"https://doi.org/10.25159/1998-8125/5831","url":null,"abstract":"This paper reports the results of a multinomial analysis of inflation perceptions and inflation expectations in South Africa. Inflation perceptions surveys among South African individuals have been undertaken since 2006. The introduction of these surveys followed on domestic inflation expectation surveys conducted in 2000, and the use of inflation perceptions surveys internationally. Domestic inflation perceptions surveys among individuals are a private initiative undertaken biennially, while domestic inflation expectation surveys among individuals are funded by the South African Reserve Bank and are undertaken quarterly. By comparing the results of domestic inflation perceptions surveys and inflation expectation surveys undertaken since 2006, this paper establishes common characteristics that impact on the formulation of inflation perceptions and inflation expectations. It supplements earlier research that focused only on the results of the 2006 and 2008 perceptions survey results. With the completion of the third biennial inflation perceptions survey in 2010, more data sets are available for the purposes of comparison. Furthermore, the questions on inflation perceptions were expanded in the third survey. Although this provides for a broader basis of analysis between inflation perceptions surveys and inflation expectation surveys, further periodic inflation perceptions survey data will be required to test whether current inflation figures determine and anchor inflation expectations.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"53 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80392318","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The objective of this study was to explore the relationship between job insecurity, organisational commitment and work engagement among staff in an open distance learning institution. The research was conducted through computer-aided telephone interviews and self-completion techniques. A cross-sectional survey design was conducted among 260 employees in an open distance learning institution. The measuring instruments included the job insecurity scale, organisational commitment questionnaire and Utrecht Work Engagement Scale. The results demonstrated statistically significant relationships between job insecurity and organisational commitment, and between job insecurity and work engagement. A practically significant relationship between variables was also determined; however, the effect was too small to yield a practically significant relationship between the variables. The results revealed that a component of job insecurity (likelihood of loss of job features), together with a component of work engagement (vigour), explains 25% of the total variation of organisational commitment and that the remaining 75% was attributed to factors beyond the scope of this study. This study demonstrated that employees would not always reduce their commitment and work effort when confronted with uncertainty as suggested by several studies. Nevertheless, it could be assumed that the survey participants fear being unemployed and feel trapped because of a lack of alternative employment opportunities.
{"title":"Job insecurity, organisational commitment and work engagement among staff in an open distance learning institution","authors":"A. N. Moshoeu, D. Geldenhuys","doi":"10.25159/1998-8125/5832","DOIUrl":"https://doi.org/10.25159/1998-8125/5832","url":null,"abstract":"The objective of this study was to explore the relationship between job insecurity, organisational commitment and work engagement among staff in an open distance learning institution. The research was conducted through computer-aided telephone interviews and self-completion techniques. A cross-sectional survey design was conducted among 260 employees in an open distance learning institution. The measuring instruments included the job insecurity scale, organisational commitment questionnaire and Utrecht Work Engagement Scale. The results demonstrated statistically significant relationships between job insecurity and organisational commitment, and between job insecurity and work engagement. A practically significant relationship between variables was also determined; however, the effect was too small to yield a practically significant relationship between the variables. The results revealed that a component of job insecurity (likelihood of loss of job features), together with a component of work engagement (vigour), explains 25% of the total variation of organisational commitment and that the remaining 75% was attributed to factors beyond the scope of this study. This study demonstrated that employees would not always reduce their commitment and work effort when confronted with uncertainty as suggested by several studies. Nevertheless, it could be assumed that the survey participants fear being unemployed and feel trapped because of a lack of alternative employment opportunities.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"40 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77552676","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
5Most researchers who investigate the interplay between fair value accounting (FVA) and the financial crisis look at the time period during the crisis. This paper investigates a potential role for FVA prior to the crisis: If FVA led to increased accounting profits with the recognition of transitory gains through profit and loss during the boom, and if those increased profits provided the rationale for increased dividends, then bank capital became riskier prior to the crisis, and this would have made the system more prone to failure. A study by Goncharov and Van Triest (2011) found no empirical support for an increase in dividends in response to unrealised positive fair value adjustments to income. In contrast, when the setting is limited to only South African banks, this paper finds that South African banks did pay dividends from unrealised transitory gains. This finding is based on a combination of three strands of evidence: a panel regression of the annual dividends declared by the large South African universal banks that showed that those banks probably ignored the unrealised nature of FVA profits when dividends were determined; monthly data from the total South African bank system in a co-integrated regression that showed that unrealised fair value profits from the banking book raised the average level of bank profits materially; and simple descriptive statistics on distributions that showed that South African banks distributed a greater proportion of profits during the critical period of 2004 to 2008 when unrealised fair value profits from the banking book raised the level of bank profits. The finding that South African banks did pay dividends from unrealised transitory gains was also confirmed by bank representatives and the post-financial crisis disclosure of one of the South African banks.
{"title":"For banks, fair value adjustments do influence dividend policy","authors":"P. Jager","doi":"10.25159/1998-8125/5812","DOIUrl":"https://doi.org/10.25159/1998-8125/5812","url":null,"abstract":"5Most researchers who investigate the interplay between fair value accounting (FVA) and the financial crisis look at the time period during the crisis. This paper investigates a potential role for FVA prior to the crisis: If FVA led to increased accounting profits with the recognition of transitory gains through profit and loss during the boom, and if those increased profits provided the rationale for increased dividends, then bank capital became riskier prior to the crisis, and this would have made the system more prone to failure. A study by Goncharov and Van Triest (2011) found no empirical support for an increase in dividends in response to unrealised positive fair value adjustments to income. In contrast, when the setting is limited to only South African banks, this paper finds that South African banks did pay dividends from unrealised transitory gains. This finding is based on a combination of three strands of evidence: a panel regression of the annual dividends declared by the large South African universal banks that showed that those banks probably ignored the unrealised nature of FVA profits when dividends were determined; monthly data from the total South African bank system in a co-integrated regression that showed that unrealised fair value profits from the banking book raised the average level of bank profits materially; and simple descriptive statistics on distributions that showed that South African banks distributed a greater proportion of profits during the critical period of 2004 to 2008 when unrealised fair value profits from the banking book raised the level of bank profits. The finding that South African banks did pay dividends from unrealised transitory gains was also confirmed by bank representatives and the post-financial crisis disclosure of one of the South African banks.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"4 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89665432","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the process of index construction as a means of measuring a hypothetical construct that can typically not be measured by a single question or item and applying it as a method of market segmentation. The availability of incidental secondary data provided a relevant quantitative basis to illustrate this process by constructing a commercial farming sophistication index for South Africa. It was evident that this approach offers an appropriate and useful means of segmenting a market. Several factors contribute to the appeal of this approach. Among others, it addresses important priorities in the area of future segmentation research. By offering classification rules based on characteristics that can easily be observed or elicited through asking a few key questions, new or potential buyers can be grouped by buying behaviour segment. Furthermore, the multi-step process that was employed provides a systematic and structured multivariate approach to segmentation. It also facilitates replication of the process when conducting future studies. Lastly, the outcome of this type of segmentation method offers researchers and marketing practitioners a procedure, in the form of an equation, to calculate index scores and provide rules to segment the market based on predefined intervals. Hence, the challenge to replicate segment formation across independent future studies is addressed.
{"title":"Constructing a sophistication index as a method of market segmentation of commercial farming businesses in South Africa","authors":"H. V. Zyl, G. Puth","doi":"10.25159/1998-8125/5908","DOIUrl":"https://doi.org/10.25159/1998-8125/5908","url":null,"abstract":"This study investigates the process of index construction as a means of measuring a hypothetical construct that can typically not be measured by a single question or item and applying it as a method of market segmentation. The availability of incidental secondary data provided a relevant quantitative basis to illustrate this process by constructing a commercial farming sophistication index for South Africa. It was evident that this approach offers an appropriate and useful means of segmenting a market. Several factors contribute to the appeal of this approach. Among others, it addresses important priorities in the area of future segmentation research. By offering classification rules based on characteristics that can easily be observed or elicited through asking a few key questions, new or potential buyers can be grouped by buying behaviour segment. Furthermore, the multi-step process that was employed provides a systematic and structured multivariate approach to segmentation. It also facilitates replication of the process when conducting future studies. Lastly, the outcome of this type of segmentation method offers researchers and marketing practitioners a procedure, in the form of an equation, to calculate index scores and provide rules to segment the market based on predefined intervals. Hence, the challenge to replicate segment formation across independent future studies is addressed.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"40 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79407115","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Increased costs, competition and a dynamic environment have led to South African domestic airlines relying more on their own websites as outlets for airline tickets. Customers’ e-commerce uptake with respect to buying airline tickets online has been slow, attributed mostly to a lack of website trust. A well-designed online service scape has been identified as an important contributor to website trust by several authors, but not yet in this particular context or industry. This study investigates the extent to which three online service scape dimensions predict website trust in the South African domestic airline industry. A quantitative and descriptive research design was followed, and 300 responses were collected through self-administered questionnaires from domestic airline passengers who had purchased an airline e-ticket from a website. A multiple regression analysis indicates that online financial security is the best predictor of website trust, followed by layout and functionality and aesthetic appeal. Consequently, it is recommended that South African domestic airlines that wish to cultivate website trust should focus primarily on enhancing the online financial security of their websites, followed by customising the layout and functionality of their websites, and lastly improving aesthetic appeal by increasing the entertainment value of their websites.
{"title":"Online servicescape dimensions as predictors of website trust in the South African domestic airline industry","authors":"SW Kühn, H. Spies, D. Petzer","doi":"10.25159/1998-8125/5833","DOIUrl":"https://doi.org/10.25159/1998-8125/5833","url":null,"abstract":"Increased costs, competition and a dynamic environment have led to South African domestic airlines relying more on their own websites as outlets for airline tickets. Customers’ e-commerce uptake with respect to buying airline tickets online has been slow, attributed mostly to a lack of website trust. A well-designed online service scape has been identified as an important contributor to website trust by several authors, but not yet in this particular context or industry. This study investigates the extent to which three online service scape dimensions predict website trust in the South African domestic airline industry. A quantitative and descriptive research design was followed, and 300 responses were collected through self-administered questionnaires from domestic airline passengers who had purchased an airline e-ticket from a website. A multiple regression analysis indicates that online financial security is the best predictor of website trust, followed by layout and functionality and aesthetic appeal. Consequently, it is recommended that South African domestic airlines that wish to cultivate website trust should focus primarily on enhancing the online financial security of their websites, followed by customising the layout and functionality of their websites, and lastly improving aesthetic appeal by increasing the entertainment value of their websites.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"28 17 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78202265","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this research was to determine the motives of attendees to Cirque du Soleil’s Dralion production in a developing country. The results revealed five key motives, namely uniqueness, enchantment and aesthetics, fun and entertainment, socialisation and social status and act affiliation. Clustering based on these motives revealed three distinct clusters namely Enthusiasts, Novices and Observers. These clusters show that attendees are not homogeneous in terms of their socio-demographic and behavioural profiles. While the Enthusiasts and Observers displayed similar characteristics to other clusters found in previous research, this research made a clear contribution in identifying Novices as a new emerging segment and suggesting the implications of retaining and expanding this market. The findings of this research can greatly assist marketers of these types of production to expand interest in the arts and increase accessibility to a larger audience.
{"title":"Motives of circus attendees in South Africa: The case of Cirque du Soleil Dralion","authors":"M. Kruger, M. Saayman","doi":"10.25159/1998-8125/5905","DOIUrl":"https://doi.org/10.25159/1998-8125/5905","url":null,"abstract":"The purpose of this research was to determine the motives of attendees to Cirque du Soleil’s Dralion production in a developing country. The results revealed five key motives, namely uniqueness, enchantment and aesthetics, fun and entertainment, socialisation and social status and act affiliation. Clustering based on these motives revealed three distinct clusters namely Enthusiasts, Novices and Observers. These clusters show that attendees are not homogeneous in terms of their socio-demographic and behavioural profiles. While the Enthusiasts and Observers displayed similar characteristics to other clusters found in previous research, this research made a clear contribution in identifying Novices as a new emerging segment and suggesting the implications of retaining and expanding this market. The findings of this research can greatly assist marketers of these types of production to expand interest in the arts and increase accessibility to a larger audience.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"7 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82636623","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
It has been suggested in previous research that it might be worthwhile to include risk measures in the balanced scorecard (BSC) or to rework it in order to manage risk. The literature review in this study indicated that some conceptual and case study research has been done to investigate how an organisation could go about accomplishing this. A number of researchers noted that including risk measures on the face of the scorecard might lead to a problem of over-complexity. Using content analysis as the method of inquiry, this study explored how organisations are currently adding risk to their scorecards. The key fi nding of the study was that organisations that have reported adding risk measures to their BSCs are predominantly adding risk measures to the face of their scorecards. This fi nding is interesting because it would indicate that the previously reported and conceptualised problem of complexity does not seem to have such a great impact as previously thought.
{"title":"Including risk in the balanced scorecard: Adoption rate and implementation methods of Johannesburg Stock Exchange listed organisations","authors":"P. Kotzé, F. Vermaak, Elize Kirsten","doi":"10.25159/1998-8125/5808","DOIUrl":"https://doi.org/10.25159/1998-8125/5808","url":null,"abstract":"It has been suggested in previous research that it might be worthwhile to include risk measures in the balanced scorecard (BSC) or to rework it in order to manage risk. The literature review in this study indicated that some conceptual and case study research has been done to investigate how an organisation could go about accomplishing this. A number of researchers noted that including risk measures on the face of the scorecard might lead to a problem of over-complexity. Using content analysis as the method of inquiry, this study explored how organisations are currently adding risk to their scorecards. The key fi nding of the study was that organisations that have reported adding risk measures to their BSCs are predominantly adding risk measures to the face of their scorecards. This fi nding is interesting because it would indicate that the previously reported and conceptualised problem of complexity does not seem to have such a great impact as previously thought.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"51 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85463112","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Activity-based costing (ABC) success factors have been studied in past research, mostly by using commonly known success factors. In this qualitative study, a literature review and interviews were used to establish what factors are responsible for the successful implementation of ABC. The number of semi-structured interviews was limited to 13 ABC adopters in the Nelson Mandela Bay Metropole. The findings suggested that ABC can be enhanced with the use of activity-based budgeting (ABB) and activity-based management (ABM). In addition, the use of ABC in conjunction with capital investment decisions may ensure that correct decisions are made when critical long-term projects are considered. Extensive identification of cost drivers is beneficial to the extent where the product loses its relationship with the overhead cost. It is evident from this research that considering fixed indirect overheads in ABC is not always beneficial for a manufacturing organisation unless there is a clear link to the end-product.
{"title":"ABC implementation in the Nelson Mandela Bay Metropole: How far should manufacturing organisations go?","authors":"A. Reynolds, H. M. V. D. Poll","doi":"10.25159/1998-8125/5810","DOIUrl":"https://doi.org/10.25159/1998-8125/5810","url":null,"abstract":"Activity-based costing (ABC) success factors have been studied in past research, mostly by using commonly known success factors. In this qualitative study, a literature review and interviews were used to establish what factors are responsible for the successful implementation of ABC. The number of semi-structured interviews was limited to 13 ABC adopters in the Nelson Mandela Bay Metropole. The findings suggested that ABC can be enhanced with the use of activity-based budgeting (ABB) and activity-based management (ABM). In addition, the use of ABC in conjunction with capital investment decisions may ensure that correct decisions are made when critical long-term projects are considered. Extensive identification of cost drivers is beneficial to the extent where the product loses its relationship with the overhead cost. It is evident from this research that considering fixed indirect overheads in ABC is not always beneficial for a manufacturing organisation unless there is a clear link to the end-product.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"47 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86825711","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this paper is to investigate whether corporate governance initiatives in South Africa that relate to the monitoring ability of the non-executive directors on the board of small and medium companies have improved earnings quality by adopting conservative accounting practices. The sample construct includes the 2008 – 2011 reporting periods of South African companies listed on the Alternative Exchange (AltX). A reverse regression of earnings on returns was used to examine the market-based attributes of earnings quality, i.e. conservatism and the timeliness of earnings. No evidence was found that the boards of small and medium-sized companies are inclined to adopt conservative accounting practices that will result in the asymmetric timeliness of earnings. There is also no evidence that the quality of reported earnings improved as a result of the monitoring ability of the board with reference to the representation of non-executive directors on the board. The findings can be of interest to investors, managers and regulators as the efficiency of corporate boards and the transparency of financial reporting have implications for all of them.
{"title":"The quality of reported earnings and the monitoring role of the board: Evidence from small and medium companies","authors":"A. Smit","doi":"10.25159/1998-8125/5804","DOIUrl":"https://doi.org/10.25159/1998-8125/5804","url":null,"abstract":"The purpose of this paper is to investigate whether corporate governance initiatives in South Africa that relate to the monitoring ability of the non-executive directors on the board of small and medium companies have improved earnings quality by adopting conservative accounting practices. The sample construct includes the 2008 – 2011 reporting periods of South African companies listed on the Alternative Exchange (AltX). A reverse regression of earnings on returns was used to examine the market-based attributes of earnings quality, i.e. conservatism and the timeliness of earnings. No evidence was found that the boards of small and medium-sized companies are inclined to adopt conservative accounting practices that will result in the asymmetric timeliness of earnings. There is also no evidence that the quality of reported earnings improved as a result of the monitoring ability of the board with reference to the representation of non-executive directors on the board. The findings can be of interest to investors, managers and regulators as the efficiency of corporate boards and the transparency of financial reporting have implications for all of them.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"1 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2019-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89565706","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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