Accounting - Theses
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ItemDiscriminating accounting signals from noise : an information aggregation perspective(University of Melbourne, 2007)
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ItemThe effects of decision aid structural restrictiveness on decision-making outcomes( 2008)This study examines the effects of structural restrictiveness embedded within a decision aid on users’ decision-making outcomes. Structural restrictiveness is determined by the rules embedded within computerized decision aids that restrict how users interact with the decision aid. For example, a structurally-restrictive decision aids might force users to consider information and answer specific questions in a prescribed sequence. In contrast, a less structurally-restrictive decision aid would be designed so that users are free to consider information in whatever sequence they desire. The more structurally-restrictive design imposes more limits on users’ decision-making process because they are forced to adapt their decision-making process to match the decision aid. However, it is unclear whether restricting how users interact with decision aids affects their decision-making outcomes. The results indicate that the more structurally-restrictive decision aid did not assist participants to identify more prompted items compared with the less structurally-restrictive decision aid. However, it increased the decision-making bias in recalling non-prompted items. The results contribute to the decision aid literature by highlighting the cost of increasing the degree of structural restrictiveness embedded within decision aids.
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ItemChoosing an auditor : corporate governance, interpersonal associations and investor confidence( 2000-06)This thesis provides evidence enabling an analysis of systemic director-auditor links, their nature, their determinants, their association with audit quality as an important component of corporate governance, and investor confidence in companies displaying these links. The motivation for examining interpersonal associations between directors and auditors comes from several sources. First is the observation that auditing is a knowledge-based service the quality of which is difficult to evaluate even after the product has been experienced, adding to the complexity of the purchasing decision (Murray 1991). The use of personal contacts to scan the business environment, disseminate information and reduce uncertainty is likely to assist that evaluation and so aid in auditor selection. One manifestation of these personal contacts is directors who hold directorships on more than one board, creating networks of ties between companies known as interlocking directorates. It tends to be non-executive or external directors who create these ties because they have more time to devote to multiple directorships. Interlocking directorates are a long-standing phenomenon that has been examined in the economics, organisational behaviour and sociology literatures and are argued to engender trust, and mediate transactions. Some countries restrict such directorate ties between industry competitors because of their potential to encourage collusion and competitive disadvantage but Australia has no such restrictions. In order to promote practice growth and firm survival, public accounting firms are known to tap into these networks, which often include former employees, encouraging personal contacts with, amongst others, directors of clients and potential clients. In this way, it is argued, companies interlocked through common directors tend to be audited by a common audit firm with the links extending to even audit partners. Extensive analysis of these interlocking directorates supports these arguments and finds that the association between interlocking directorates and director-auditor links becomes stronger as intra-industry and within confined geographical region data partitioning occurs and varies across audit firms. This variation across firms is subsequently used to model with some success auditor choice - even within the Big 6. Systematic ties between directors and audit firms and/or audit partners potentially threaten at least the appearance of auditor independence, if not the fact. On the other hand, following the DeAngelo (1981)auditor size argument, the potential loss of a ‘family’ of clients associated with a single director if audit quality is degraded may actually enhance audit quality. This thesis argues that directors value personal contact in auditor-client relationships but are aware of the potentially damaging connotations arising from such interpersonal associations and the potential for investor disquiet about them. Implicit in this argument is an assumption that investors are both interested and active in matters of corporate governance, including the audit as a component of corporate governance. As such, the formation of director-auditor links is argued to be contingent on the balance of power between directors and shareholders and the strength of other aspects of corporate governance beside the audit function. Empirical results support this hypothesis only for interlocking created between two or more directors of companies in the same industry. Evidence of director-auditor link association with audit quality is then sought by analysing qualifications and discretionary accruals in the presence of these links. Although alternative explanations are possible, some evidence is found of reduced audit quality. However, using the frequency with which an investor chooses to invest across companies audited by the same auditor as a measure of investor confidence in that auditor, results show that audit quality attributes are valued by investors and that director-auditor links are not associated negatively with investor confidence. Additional tests that examine the association between director-auditor links and various measures of organisational performance find little evidence of negative connotations. Public policy implications flow from the findings and these are discussed together with limitations and ideas for future research.
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ItemThe antecedents of appropriate audit support system use( 2006-08)This study investigates the factors that influence appropriate use of audit support systems. Appropriate use is use of an audit support system in a manner consistent with how the audit firm expects the system to be used. Investigating appropriate use of audit support systems is important because the extent to which these systems can assist auditors achieve efficient and high quality audits depends on how auditors use them. Adaptive Structuration Theory (AST) (DeSanctis and Poole, 1994) and the Theory of Planned Behaviour (TPB) (Ajzen, 1991) are combined to model the relationship between constructs hypothesised to increase the probability that audit support systems are used appropriately. The theoretical model decomposes two TPB antecedents, perceived normative pressure (or subjective norms) and perceived behavioural control, into the exogenous constructs hypothesised to influence whether audit support systems are used appropriately. Perceived normative pressure is decomposed into two socio-ideological control mechanisms, team and firm consensus on appropriation. Perceived behavioural control is decomposed into self-efficacy and two technocratic control mechanisms, perceived system restrictiveness and perceived audit review effectiveness. (For complete abstract open document)
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ItemAccounting conservatism: evidence from the oil and gas industry( 2004)Prior evidence in the oil and gas industry suggests that investors, when assessing firm value, seem to distinguish between different degrees of accounting conservatism that result from the application of the successful efforts (SE) method versus the full cost (FC) method. However, research addressing the valuation implications of accounting choice in the oil and gas industry primarily investigated periods prior to the issuance of SFAS 121. The effect of SFAS 121 on accounting conservatism in the oil and gas industry and hence on the usefulness of the SE method, relative to the FC method, remains untested. This study extends the existing literature by re-examining the effect of accounting conservatism on the usefulness of accounting numbers produced by SE and FC methods during the period 1995-2001, a period in which both SFAS 121 and the ceiling test rules were applied. Empirical results show that in an environment of both SFAS 121 and the ceiling test, there is no difference between SE and FC firms with respect to conservatism associated with the application of accounting rules. Moreover, the results show that the usefulness of accounting numbers to investors does not differ across SE and FC methods. That is, investors attach no valuation premium of one method over the other in the oil and gas industry. This examination provides updated evidence that should be of interest to regulators and standards setters.
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ItemThe value relevance of earnings and earnings components: the case of Saudi Arabia( 2002)The extant literature on the value relevance of accounting information focuses on common-law or code-law countries. There is no credible evidence on the value relevance of accounting information in Islamic-code countries. This thesis provides the first empirical evidence on this issue in Saudi, which is recognised as the centre of the Islamic faith. The focus of the thesis is on the examination of the Saudi market reaction to the release of accounting reports and the association between reported earnings and earnings components with security returns of Saudi firms. Using a sample from the 1995-1999 period, the empirical evidence suggests that inconsistencies between Islamic principles and adopted accounting principles in Saudi do not affect the value relevance of accounting information in Saudi. Most of the empirical tests provide evidence consistent with and highly comparable to those reported in common -law and code-law countries, in general, and those in the United States, in particular.
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ItemThe institutional and technical antecedents of organisational design: a case study in the Victorian metropolitan hospital system( 2002)This dissertation examines organisational structures and management control systems in the health care sector. The influence of two antecedent variables, the institutional environment and the technical environment, on organisational design choice is examined through the use of institutional theory and transaction cost economics. These theories are used to interpret the structural and management control system responses of hospitals under pressure to form inter-organisational networks. The implications of these design responses for organisational outcomes are examined in order to assess the relative importance of efficiency and/or effectiveness versus legitimacy as the principle logic of organisational action. A case-based investigation into three large public hospital networks in Victoria Australia is undertaken. Semi-structured interviews are the primary source of empirical evidence used to address the research questions of interest. Systematic data collection and analysis protocols are employed to ensure the reliability and validity of the qualitative research method employed. The results of this study indicate that both the technical and institutional environments in which an organisation operates jointly influence organisational design. Hospital networks are found to exhibit a range of structures, which are described according to the extent of horizontal integration observed. Both the type and use of control systems employed in these networks differs according to the extent of integration. Significant integration of core services across constituent hospitals of a network is found to be associated with an increase in the prevalence of integrative liaison devices. Such networks also realign other management control systems, such as the performance measurement system and standard operating procedures, to reflect the network-wide nature of activities. It is found that where a 'fit' is achieved between the antecedent environment variables and organisational design, organisational outcomes are enhanced.
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ItemSpecialisation in the market for audit and related services: supply and demand side characteristics at industry and client levels( 2002)This PhD study considers both the supply of, and demand for, audit firm industry specialisation in the market for listed company audits within Australia. In order to investigate the concept of auditing industry specialisation, the concept needs to be both defined and operationalised. At present, there exists no generally accepted definition or unambiguous measure of auditor industry specialisation. This study seeks to gain a better understanding of the dynamics of and incentives within the market for industry specialist audit services, and secondly, investigate important related issues such as the appropriate unit of analysis when measuring audit industry specialisation. The researcher followed a structured interview process of the suppliers of industry specialist audit services, in this case all the Big Five and a sample of their large and small corporate auditees. Then a framework was developed that enabled archival data to be analysed, and the subsequent empirical results indicate the following. The results of the interview and archival research indicate the existence of two theorized dimensions, one being the existence of a dimension driven by industry wide factors, and the second being a dimension driven by company-specific factors. The interviews indicate that different industries require different levels of audit industry specialisation. The archival research conveys that the pricing of audit engagements depends on both the level of audit specialisation required due to industry wide factors (dimension one), or the level of audit industry specialisation demanded by particular clients, which is dependent more on company-specific factors (dimension two). What has been found in the statistical analysis for the total population (period 1990-95) using the claim audit specialisation model, is that, for the highly regulated and more technical industries (such as mining and financial services, etc) audit fee discounting tends to dominate. In sum, the current research study provides new evidence for the period 1990-1995, that in fact production economies tend to dominate positive returns on investment in audit specialisation, and in fact it is only for a small sample of specific companies, where in fact positive returns on investment in audit specialisation are observed.