Accounting - Theses
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ItemDiscriminating accounting signals from noise : an information aggregation perspective(University of Melbourne, 2007)
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ItemAn investigation into the nature and quality of information utilized by the advisers in the stock-broking industry in Victoria( 1973)In our economy stockbrokers and investment advisers are in a position to exert considerable influence on the financial decisions made by investors. However, there has been little effort in Australia to discover, by direct inquiry, the nature and quality of information utilized by them. Therefore, the main thrust of this study was to discover the nature and sources of information used by investment advisers and to discover the quality of that information with particular reference to quality as perceived by investment advisers. The investigation has yielded data relating to these questions, to the competence of advisers to use the sources of information currently available and to the extent to which those sources are actually used. The discussion contains suggestions and formal recommendations directed towards those responsible for the sources of information which could lead to improvements in the quality of information available. There are also suggestions which could lead to more effective use by investment advisers of the information already available. Implementation of either or both of these groups of suggestions would result in better information in the capital market and hence lead to its more efficient operation. In order to reduce it to manageable proportions the study was restricted to the Victorian stock-broking industry. However, for several reasons it is thought that this study is strongly indicative of Australian, as well as Victorian, practice. For example, the institutional investors – the life assurance companies, etc. – tend to take a national view and , within the rules of the Australian Associated Stock Exchanges, brokers compete for business on a national basis. However, it may be that similar research in other states would prove fruitful. As far as can be established from published sources this study is unique in the sense that no section of the Australian stock-broking industry has previously been investigated in this manner. Although the Report of the Senate Select Committee on Securities and Exchange is not yet available it is understood that that investigation related to the operation of the Stock Exchanges rather than to the nature and quality of information. Overseas, several organizations and numerous independent researchers have considered the problem of information in their own capital markets. Few of these studies were directed towards the information-gathering activities of investment advisers; the majority of them examined the informational content of various statements or variables. (From Preface)
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ItemThe demand determinants of non-audit services: an empirical analysis with implications for auditor independence( 2001)Auditor independence is being increasingly questioned in a public debate about the joint provision of audit and non-audit services (NAS) by auditors to their corporate clients. Regulators are concerned that auditor firms which provide material consultancy services to their audit clients are likely to have their independence impaired either through conflicts of interest or fee dependence or both. Public accounting firms (the auditors) deny these risks. Positive accounting theories, such as agency theory and costly contracting theory, have supported the regulators' concerns by arguing that economic bonding between auditor and client is likely to be increased by the provision of NAS by the incumbent auditor, and hence lead to an impairment (real or perceived) of auditor independence. However, academic research into the nature of the association between auditor independence and the provision of non-audit services has been inconclusive and has failed to provide a definitive resolution to the debate. A reliable, comprehensive NAS fee model is a necessary prequel to greater insights into this debate. Guided by Firth (1997) and Craswell, Guz and Francis (2000), this study hypothesises a model reflecting three demand determinants for NAS: (i) the company's ex ante need for NAS, (ii) the auditor's NAS industry expertise and (iii) the company's willingness to appoint the auditor (given a portfolio of endogenous corporate governance practices and given a set of exogenous agency cost and political cost circumstances). The data set of 432 companies is selected from the "Top 500" Australian companies listed on the ASX in 1997. OLS regression analysis strongly confirms the model's first two demand determinants. First, a company's complexity, the extent of its restructuring activities, its appointment of a new CEO and its poor performance are all shown to be significant dimensions of its "need for NAS". Secondly, the important role of a NAS industry expert is a significant new finding in the NAS fee literature. The third determinant, the "willingness to appoint" is not comprehensively tested. Nevertheless some auditor independence issues associated with the "willingness to appoint" are explored. Auditor independence appears to be of concern to companies exposed to high political costs while it does not seem to be of concern to companies facing high agency costs. However, this study argues that auditor independence needs to be considered as part of a portfolio of other corporate governance practices/positions, which taken together, influence a company's willingness to appoint an incumbent auditor to the NAS consultancy. The demand determinants for NAS are also found to be robust across various partitionings of the data and in a novel re-specification of the model focussing on periodic increases in the level of NAS fees. Some limitations are acknowledged but exciting prospects for further fruitful research are recommended.
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ItemUser information satisfaction: the effect of a strategy - MIS scope alignment and the role of information system management( 1998)This thesis develops a theoretical model to improve our understanding of how the management information systems/information technology (IS/IT) resources influences user information satisfaction. Understanding this relationship is important not only because of the significant proportion of the total resources now devoted to IS/IT but also because organisations are increasingly recognising that the effective management of these resources is critical to achieving and maintaining competitive advantage. The study focuses on the possible causes of user information satisfaction. The core proposition developed is that the type of information provided by management information systems will be related to, or matched with, an organisational unit's strategy. It is then argued that, when this match exists, user information satisfaction is higher than it would otherwise be. Further, it is argued that the capacity of the information system function to manage the IS/IT resources throughout the organisation is a possible cause of this match. This organisational role of IS/IT resource management also affects the level of user satisfaction both directly, and indirectly through its effect on the alignment of strategy and type of information. The research model was developed by drawing together separate but related strands of the literature in the information systems, management and accounting disciplines and from the results of previous studies. To that extent, the model is exploratory, but each of the individual propositions identified in the model, and subsequently tested, are theoretically based. To test the model and the research hypotheses, a survey was undertaken in manufacturing organisations. Data were collected from 192 production managers and 117 information system managers in 153 different manufacturing firms. The research model was evaluated both at the firm level of analysis and at the departmental level. Bivariate correlations, path analyses and structural equation modelling techniques were used to test the hypotheses and to establish the goodness-of-fit of the research model. The results from the statistical analysis strongly support the model. Users were found to be more satisfied with the information provided to them when the IS/IT resources were well managed and when organisational unit strategy was aligned with the scope of the information. Moreover, alignments between strategy and information scope were more likely in firms where the IS/IT resources were well-managed. These results are both encouraging and exciting as they support the theoretical propositions developed here. The study, therefore, has the potential not only to contribute to the research literature but also has some important practical implications for the effective management of IS/IT resources. It contributes to the literature by developing a theoretical framework that integrates a number of different strands of previous research in the related areas of accounting, management and information systems. It also adds to the literature in each of these three disciplines. It contributes to organisational understanding of the role of IS/IT resource management, of user satisfaction, and of the alignment between organisational unit strategy and management information system design. In so doing, it provides insights for more effective management of IS/IT resources and suggests reasons why some users are more satisfied with the information available in their organisations than others. While there are limitations of this research, it has the potential to make important contributions to theory and practice, and it provides several opportunities for future research.
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ItemA philosophy of accounting( 1938)This thesis is an exposition of the fundamental principles of Accounting and their relation to the technical form in which financial transactions are expressed. The need for a clear statement of the scope and method of Accounting is painfully expressed in the difficulties which students experience in grasping its basic principles and in translating financial transactions into accounting form through their application. The fundamental relations in Accounting are not adequately dealt with in any text book suitable for Australian conditions; this handicap is severely felt in this country, as examination results constantly bear witness. Accounting, even under the best conditions, is not an easy study; it demands a clear and logical mind and a keen appreciation of relationships. With an understanding of the basic principles, however, it is a study which undoubtedly yields great results for patient and earnest effort. The purpose of this thesis is to help towards this understanding of essentials and to promote the appreciation of the underlying unity of Accounting procedure. To achieve this purpose, the first requirement is an examination of the concept - Accounting - itself. Accordingly, Part 1 deals with the scope and nature of Accounting, and tests its claim to be regarded as a science. Part 2 sets out the basic principles upon which the whole of accounting procedure is founded, while Part 3 deals with the method by which these principles are applied to the practical exigencies of everyday financial transactions.
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ItemAn investigation into transfer price policies used by firms in industry( 1981)This study is divided into two areas: (i) a survey of economic and accounting literature in regard to the theory of transfer pricing and associated problems. (ii) a study of the rationale and methods of selected firms in the light of the theoretical analysis. The decentralization of corporate entities into smaller, more manageable units (divisions) brought with it the problem that goods and services would be transferred between divisions and records would need to be kept. The variety of pricing methods used in the recording of these transfers was to create varying opinions as to the correct method of “transfer pricing”.
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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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ItemThe corporate treasury function: risk management and performance measurement( 1997-05)The Australian financial system has changed dramatically in recent years, creating both threats and opportunities for value adding activities. Many large corporations have set up a separate treasury division or department to handle their financing requirements. This thesis derives the rationale for a separate treasury function from theory of the firm. A framework has been developed by drawing upon both the old theory of the firm (transaction cost economics) and the new theory of the firm (agency theory) to determine the appropriate governance structure to manage financial arrangements. Formal analysis of corporate treasury functions and performance measurement research has not kept pace with the growth of treasury activities. Appropriate benchmarks provide management with information to manage financial risk and to more accurately assess treasury performance. A benchmark is required for core treasury tasks, including debt portfolio management. Optimal treasury benchmarks are difficult to determine, due to the complexity involved in measuring financial exposures for firms which derive income from physical, rather than financial assets. The inter-relationships between financial risks, including maturity, interest rate and currency risk, further compounds the problem. Decomposition of financial risk into these respective elements allows identification of the firm specific factors that influence financial exposure. Appropriate benchmarks for managing repricing, refunding and foreign exchange risk depend upon the trade-off between transaction costs, agency costs and information signalling costs. Theory suggests growth options in real assets within the firm's investment opportunity set provide opportunities for natural hedges that offset financial risk. However, empirical analysis of share price sensitivity to interest rates and an analysis of debt maturity structure indicates growth options and agency factors are less important than firm specific characteristics when setting up benchmark portfolios to manage financial risk. Treasuries are often classified as either active or passive managers, but a continuum of strategies is possible when managing financial risk, rather than points at either end of a spectrum. Tolerance levels around the benchmark constrain activity within a relevant range - the more active the treasury, the broader the range. Constraints allow the degree of activity to be fine-tuned. The decision to actively manage risk depends upon whether value can be added in risk-adjusted terms. This is a function not only of whether opportunities exist, but also whether value can be added consistently, compared with a passive approach. The majority of practising treasurers describe themselves as 'active hedgers'. Subject to caveats outlined in the thesis, field experiments conducted over a three year period indicate the ability of corporate treasurers to add value to the firm through outperforming a passive benchmark portfolio of debt is limited. Respondents to an international survey on corporate treasury control and performance standards cited difficulty in setting benchmarks, particularly risk-adjusted benchmarks, as the major reason for not measuring treasury performance. Empirical determinants of benchmark structures for repricing risk, refunding risk and currency risk have been identified. A better understanding of the factors that determine financial risk will assist management when they are designing or refining benchmarks to manage financial risk and measure treasury performance.
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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)