Accounting - Research Publications

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    Is Financial Reporting Still Useful? Australian Evidence
    Davern, M ; Gyles, N ; Hanlon, D ; Pinnuck, M (Wiley, 2019-03-01)
    There has been recent and growing criticism of the usefulness of financial reporting for investors, particularly the annual financial statements. In response, the IASB is pursuing several projects aimed at improving the relevance of financial information. To inform the IASB’s work, we investigate, using a mixed‐method approach, the extent and nature of the use of annual financial statements by equity investors. We examine the relevance of financial reporting for equity valuation in Australia across time. We find that financial reporting (specifically, reported net income, shareholders’ equity, and operating cash flows) remains relevant for investment decisions. We further support this finding with evidence from field interviews that provide insight into how and why financial statements are used by equity investors. The field evidence also demonstrates that no one financial statement dominates in investor decision making. Given the increasing availability of more timely, forward‐looking information from alternative sources, we examine the relevance of non‐GAAP financial information and other non‐financial information for investor decision making. We find that non‐GAAP financial information (as proxied by EBIT and EBITDA) is more value relevant than statutory measures. We further find a broad range of non‐financial information is utilized by investors in making investment decisions both as a ‘screen’ and for valuation purposes. Our findings inform regulators and other stakeholders as we provide evidence of the continuing relevance of financial statements and the complementary role of non‐GAAP financial and other information. Our evidence provides a rebuttal to the recent criticism.
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    Explanations as Discourse: Towards Ethical Big Data Analytics Services
    Afrashteh, S ; Someh, I ; Davern, M (Australasian Association for Information Systems and Australian Computer Society, 2020-01-01)
    Big data analytics uses algorithms for decision-making and targeting of customers. These algorithms process large-scale data sets and create efficiencies in the decision-making process for organizations but are often incomprehensible to customers and inherently opaque in nature. Recent European Union regulations require that organizations communicate meaningful information to customers on the use of algorithms and the reasons behind decisions made about them. In this paper, we explore the use of explanations in big data analytics services. We rely on discourse ethics to argue that explanations can facilitate a balanced communication between organizations and customers, leading to transparency and trust for customers as well as customer engagement and reduced reputation risks for organizations. We conclude the paper by proposing future empirical research directions.
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    Disclosing Unrecognized Intangibles: The Search for Exemplars
    Davern, M ; Tan, B ; Gu, J (University of Melbourne, 2021)
    The purpose of this report is to document the results of an investigation into disclosures of unrecognized intangibles by Tier 1 reporting entities in Australia.
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    Implementing AASB 16 Leases: Are Preparers Ready?
    Davern, M ; Gyles, N ; Hanlon, D ; Shah, F (The University of Melbourne, 2019)
    This is the first report of a project examining the introduction of AASB 16 Leases (AASB 16), the Australian equivalent of IFRS 16 Leases. It reports on a survey that provides a snapshot of the process of implementation of AASB 16 Leases by preparers. A subsequent report, to be released in 2020, will report on an interview-based study of users of financial reports prepared under AASB 16. The results indicate that entities have made relatively good progress in implementing the standard, focusing their project structure on existing internal resources. Preparers have faced challenges in implementation, including the need for additional data collection and systems implementation. However, the results suggest that preparers are expecting to see the benefits of adopting the new standard highlighted by the standard-setters, including enhanced comparability and transparency. Importantly, the need for recognition of (almost) all leases on the balance sheet is an improvement to the quality of the underlying lease data, and thus the quality of the reported information to users of financial statements. This report aims to assist preparers in benchmarking their progress against peers, and for policy makers, including Australian and international standard-setters, to receive feedback as input to the post-implementation review process of AASB 16 and its international equivalent, IFRS 16.
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    A Framework for Relationships in Outsourcing: Contract Management Archetypes
    CULLEN, S ; Shanks, G ; Davern, M ; Wilcocks, L ; Bui, TX ; Sprague, R (HICSS, 2017)
    Outsourcing engagements are defined by contracts, but personal relationships drive success. In this paper, we propose a set of behavior archetypes and use them within four action-research cases that altered behavior to achieve positive outcomes. The results suggest that a successful outsourcing engagement can be derived through adaptation of well-considered behavioral approaches rather than contracting techniques.
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    Enablers and Mechanisms: Practices for Achieving Synergy with Business Analytics
    ASADI SOMEH, I ; Wixom, B ; Davern, MICHAEL ; Shanks, GRAEME ; Bui, TX ; Sprague, R (HICSS, 2017)
    Business Analytics (BA) systems use advanced statistical and computational techniques to analyze organizational data and enable informed and insightful decision-making. BA systems interact with other organizational systems and if their relationship is synergistic, together they create higher-order BA-enabled organizational systems, which have the potential to create value and gain competitive advantage. In this paper, we focus on the enablers and mechanisms of synergy between BA and other organizational systems and identify a set of organizational practices that underlie the emergence of BA-enabled organizational systems. We use a case study involving a large IT firm to identify the organizational practices associated with synergistic relationships that lead to the emergence of higher-order BA-enabled organizational systems.
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    Towards an integrated view of IT value measurement
    Davern, MJ ; Wilkin, CL (Elsevier BV, 2010-03-01)
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    Why did they do that? Variability in routine transactions
    Davern, MJ ; Wilkin, CL ; Shoib, G (EMERALD GROUP PUBLISHING LIMITED, 2009-01-01)
    Purpose The purpose of this paper is to provide a frank reflection on the authors' journey in applying social theory to understand the routine use of a transaction‐processing system in a rich field context. Design/methodology/approach Inspired by a perplexing initial observation, the program of research moved quickly from one of more traditional positivist methods (experiments and surveys) to case study research. The case study involved observation and comparative analysis of the routine use of a reservation system across a large franchised accommodation chain. Findings As a reflective essay, the key findings relate to the research process itself. The essence of the findings is that applying social theory is itself a social process. Originality/value The paper finds that insight can come from understanding the routine use of IT as a social artefact, not just from studying crises or latest innovations.
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