Australian Accounting Review最新文献

We examine the association between audit committee (AC) busyness and financial restatement and determine whether AC share ownership moderates this relationship. Using logit regression analysis, we test our hypotheses on a sample of 6408 firm-year observations from 2004 to 2015 for companies listed on the Australian Securities Exchange. The study reveals that firms with busy ACs engage more in financial restatements. We also find that AC share ownership reduces financial restatements and attenuates the association between AC busyness and financial restatement. Our results are robust to endogeneity concerns emanating from firms’ deliberate decisions to grant shares to AC members. The findings of this research have several important policy implications. For instance, shareholders can benefit from AC members’ monitoring ability by allowing for share ownership. Further, our findings suggest that principles-based corporate governance guidelines have a beneficial effect on financial reporting quality. While prior studies offer mixed evidence, our research contributes to the auditing literature by providing evidence that AC share ownership moderates the association between AC busyness and financial restatement.

Concerns remain about how companies will reconcile environmental, social and governance (ESG) issues with their core mandates. This is one reason why many organisations did not initially subscribe to sustainable investing, reporting and accounting, especially where it is not mandatory, despite growing stakeholder pressure to do so. This paper examines how state-owned enterprises (SOEs) with social and commercial mandates in South Africa, where sustainability reporting is mandatory, balance ESG practices and financial sustainability to fulfil their mandates. This article proposes and evaluates propositions about SOEs adopting and reporting ESG components using a survey questionnaire and semi-structured interviews with important SOE stakeholders to show that its sustainability accounting approach benefits policy and non-policy observers. More than half of the studied SOEs have embraced and disclosed their ESG practices, yet there appears to be no systematic way in which they balance ESG practices and financial sustainability, resulting in conflict. This paper appears to be the first SOE study on this topic. In this regard, this study offers novel insights into how sustainability practices may be incorporated into the social and commercial objectives of SOEs, which in most cases are conflicting, while still allowing SOEs to be financially sustainable and depend less on state bailouts, which is often the case, especially in Africa and in countries that face a high level of corruption. Considering the characteristics and mandates of SOEs, part of being socially responsible is utilising public resources in the form of taxpayers’ money in an efficient, effective and accountable manner. The discussion in this paper indicates that paying attention to ESG issues is part of a broader accountability mechanism expected from SOEs. Also, the choice of South Africa and of SOEs in South Africa has implications for theory and practice since SOEs in South Africa have social and commercial objectives such that they are expected to be agents of social responsibility.

In the final issue of Australian Accounting Review for 2023, we present four articles that focus on the future of accounting, and the critical role that accountants play in shaping the reporting of business transactions.

We are proud that our leading article is an update to a well-cited and influential article published in Australian Accounting Review 20 years ago. The article by Burritt et al. (2023) includes two of the authors of the original 2002 framework for environmental management accounting (Burritt et al., 2002). It reflects on ‘developments from the perspective of the framework and looks forward to how environmental management accounting could be further developed in the future’. We know that the Burritt et al. (2002) framework will continue to be relevant in the future, as our society faces more environmental challenges.

Our next two articles show how important it is that accountants consider more than just the numbers when reporting on both past and future business transactions. Almutairi et al. (2023) explore the use of tax havens by Australian companies, identifying how they are used in combination with related party transactions, highly concentrated ownership and earnings management practices. Because such practices and transactions may be regulated more heavily in the future to prevent abusive tax practices, this article alerts both firms and their investors to the potential risks involved.

The importance of reporting without bias is further emphasised in Qi et al. (2023), who study the tone of language used in forward-looking initial public offering (IPO) prospectuses. They find that tone is associated with underpricing in the market at the time of issuance and also with poor future performance. Investors should be aware of this risk.

Our final focus on the future turns to your career, that of the accountant, and how young accountants align their expectations and experiences in the early days of their careers. The takeaways for the reader from Jackson et al. (2023) are that early career accountants are seeking sustainable careers, and, in light of this observation, how each organisation can better attract and retain them in the workforce.

The theme of this issue, Focus on the Future, demonstrates through each of the different articles how accounting is about the future. It enables us to address societal challenges, identify risks and measure future performance.

We examine whether classification shifting is associated with stock price crash risk. Unlike prior studies, our study is focused on bad news hoarding through classification shifting. Prior studies document evidence of the greater weight market participants place on core earnings and stock price crash resulting from delayed bad news releases. Building upon these findings, we predict that crash risk is positively associated with shifters’ reversal of core earnings. Consistent with our conjecture, we find that classification shifting is positively associated with future stock price crash risk even if the bottom-line net income is unchanged. This finding is robust after controlling for endogeneity and other determinants of classification shifting. We also find that the observed positive association between classification shifting and future stock price crash risk is pronounced for likely opportunistic classification shifters. Our research contributes to forming an enhanced understanding of crash risk by documenting differential negative market reactions to the change in core earnings driven by classification shifting.

Related-party transactions (RPTs) and transfer pricing techniques are typically used by multinational enterprises to reduce their tax obligations by shifting the income to zero or to low-tax countries. These techniques have thrived and have emerged as a significant concern for tax authorities. This study investigates the effect of tax haven utilisation on related-party sales pricing in a sample of Australian listed firms. We find that tax haven use is positively and significantly associated with related-party sales pricing. Moreover, we identify a positive and significant interaction between tax havens and earnings management with related-party sales pricing. Ownership concentration and its interaction effect with tax havens are significant predictors of the increased use of related-party sales pricing. Overall, the empirical findings demonstrate that earnings management, a high level of ownership concentration and the use of tax havens are substantial factors that enable firms to obtain tax benefits via the use of RPTs.

A prospectus is an essential disclosure document requested by stock market regulators and used by potential investors to acquire necessary information about the fair value estimate of an initial public offering (IPO) and subsequent investment decisions. Using IPO firms in China during the period 2007 to 2017, this study provides novel evidence for the impact of the tone of a prospectus on IPO underpricing. The results show that the tone of a prospectus is positively associated with underpricing. Supplementary analyses show that the positive effect of prospectus tone on IPO underpricing is more pronounced for IPO firms having CEO duality and large board size, lower managerial shareholding and institutional shareholding, and big audit firms and prestigious underwriters. Finally, the results indicate that the positive tone of a prospectus is able to predict negative operating performance in future.

Our lead article comes from Australian Accounting Standards Board (AASB) staff (Li and Lee 2023). It documents how top Australian Securities Exchange listed firms reported climate-related risk disclosures in 2022. This is useful for comparing the disclosures of other companies of interest to you. While the disclosures have improved, it is not clear that users’ needs are being met. The authors suggest ideas for future research and call for evidence that will assist standard setters, regulators and educators.

One of the most difficult tasks undertaken by any accountant is forecasting. Our next two articles (Choi et al. 2023; Platikanova 2023) provide advice on what is needed to enhance forecast accuracy. They underscore the importance of superior internal information (Choi et al. 2023), and advocate for heightened competition among analysts that elicits better information (Platikanova 2023). The benefits include greater employment efficiency and better investment decisions.

Over the years, researchers have addressed the issue of audit quality in numerous articles. Howard et al. (2023) offer a fresh perspective by examining shareholder ratifications of newly appointed auditors. They show that Big N auditors are perceived favourably, even when their appointment is at the end of the year, whereas non-Big N auditors are not perceived favourably at any time, and even less so as the end of the year approaches.

One of the most challenging contemporary issues in accounting is how to deal with emerging financial assets and liabilities. Cryptocurrencies are certainly such an issue (no pun intended), and Jackson and Luu (2023) answer the following questions. How do companies report digital assets? What options for reporting are provided by current accounting standards? How can these standards be adjusted to provide more relevant and useful information to users?

In the final article of this issue, Ali and Mustafa (2023) present a comprehensive analysis of over 50 previous articles on accounting firms that specialise in SMEs. This is of particular interest to accountants working in this field, as well as researchers who are interested in contributing to this important and under-researched area.

Amid a global war for accounting talent, this paper extends our understanding of early career accountants’ (ECAs) career values and the alignment between their career expectations and experiences when entering the profession. Drawing on survey data from 305 ECAs and 165 managers/recruiters of ECAs in Australia, the paper uses social cognitive career theory and person–organisation fit theory to explore the dynamic interplay between individual and contextual factors and career values, career choices and subsequent career satisfaction. The findings emphasise the importance of both intrinsic, and to a lesser extent extrinsic, career values for ECAs, with variations by gender and organisation setting. ECAs and managers identified different perceptions of attractors to diverse organisational settings. While ECAs were generally satisfied with their careers, satisfaction varied by organisation type. Intrinsic career values were positively associated with ECAs’ career satisfaction, along with age and closer alignment between career expectations and experiences. Our analyses suggest implications for the recruitment and retention of new accounting talent and calls to engage with individual and contextual influences on career values, experiences and satisfaction. Specifically, the paper highlights how different organisations can tailor their strategies to better attract and retain early career accountants to support more sustainable careers.

The most cited framework for environmental management accounting to date was published in the Australian Accounting Review 20 years ago. This framework has until today considerably influenced the development of the environmental management accounting field. Set against new sustainability challenges it is now time to question if the framework remains relevant or if it needs to change, and in what ways, to address the contemporary challenges now facing society. Taking stock of environmental management accounting research and practice over the last two decades, a conceptual discussion is developed which is based on extant literature and the authors’ extensive experience of the topic. Thus, the paper looks back to reflect on the developments from the perspective of the framework and looks towards how environmental management accounting could be further developed in the future. It considers the current and future potential of environmental management accounting and managers to contribute towards sustainable development. This can be through: the development of new areas of application and thematic scopes targeting aspirational sustainability goals such as those represented by the United Nations Sustainable Development Goals and planetary boundaries; extending spatial scope beyond the organisation into supply chains and circular systems; development of new social and environmental measures of performance to complement economic measures; providing information specific to the needs and roles of new personnel using environmental and sustainability information; and building awareness and implementing new drivers for environmental and sustainability management accounting such as AI and chatbots.

This paper aims to provide background information about the International Accounting Standards Board's Climate-Related Risks in the Financial Statements project. Further, we provide some observations of related disclosures in the notes to the 2022 financial statements of the top 75 Australian Securities Exchange-listed entities. Overall, we find that there has been improvement in the disclosures and considerations of climate-related risks in the financial statements in recent years. However, the disclosures appear to be generic, which may not meet the needs of financial statement users. We suggest that further research is needed to provide evidence about how such risks are considered and disclosed in the financial statements and whether such information meets user needs. Evidence will help standard setters to consider appropriate action, such as providing educational material or amending the Accounting Standards, to enhance the quality of financial reporting.