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The purpose of this study is to investigate the relationship between the degree of stakeholder salience and the degree of emphasis placed on accountability dimensions for infrastructure assets (IFAs) as perceived by mayors and chief executive officers (CEOs) of local government authorities (LGAs). Comparisons are drawn between the salience accorded to two broad stakeholder groups at the public level and at the government level.

Perceptions of mayors and CEOs are examined through a mail questionnaire survey administered among LGAs in Australia.

Overall accountability for IFAs by the LGAs is influenced by the salience accorded to the demands and needs of public stakeholders (PSs) but not the salience accorded to government stakeholders (GS). It is evident that public and managerial accountabilities are impacted by PS salience, whereas political accountability is impacted by the salience of GS. Thus, it emphasises that the establishment and implementation of policies, processes and systems that render transparency and responsiveness to the public, as well as service quality and the disclosure of performance measures, are positively affected by the salience accorded to PS groups.

The results of the study may be affected by the inherent weaknesses associated with mail surveys.

Accountability of LGAs for IFAs to GS needs enhancement, specifically stronger policy incentives.

This paper contributes to the literature, providing evidence on how mayors and CEOs of LGAs perceive the salience of different stakeholders of IFAs and its impact on the perceived accountability.

The purpose of this study is to develop a new measure for discriminatory related party transactions (DRPTs). There are currently measures for such discriminatory transactions but the new measure has a strong theoretical basis and is less susceptible to measurement error.

This paper develops and tests a new measure for these discriminatory transactions. Type I and Type II error rates and the power of the new measure are compared with an existing measure using computer-simulated and real data.

The capital market sensitivity of the new measure is also tested and compared with the existing measure. The new measure is found to be superior.

The new measure of DRPTs has the potential to contribute to both further research on the impact of related party transactions and policy-making in relation to DRPTs.

This paper has developed and tested a new measure for DRPTs.

This paper is one of seven in this volume that aims to elaborate different approaches to quality improvement in education. It delineates a methodology called Lean for Education.

The paper presents the origins, theoretical foundations, core concepts and a case study demonstrating an application in US education, specifically dealing with the problem of improving technology supports and services for instructional purposes in a school district system.

An approach borrowed from manufacturing, Lean is aimed at creating and delivering the greatest value to the clients or “customers” in education systems while consuming the fewest resources and eliminating waste. Simultaneously, the method engages the organization in continuous problem solving, learning and making quality improvements with Plan-Do-Check-Act cycles. The core concepts that organize the Lean for Education approach are: continuous improvement and respect for people (Emiliani, 2005).

Few theoretical treatments and demonstration cases are currently available on commonly used models of quality improvement in other fields that might have potential value in improving education systems internationally, such as large grade kindergarten-to-12 education systems in the USA. This paper fills this gap by elucidating one promising approach. The paper also derives value as it permits a comparison of the Lean for Education method with other quality improvement approaches treated in this volume.

Behavioural consequences of emphasis on budget‐related performance evaluation measures have been extensively researched in single countries, but not in cross‐cultural organizational settings. Contingency theory is invoked in this study to model the “fit” for international joint venture companies (IJVs) between two contingency factors — environmental uncertainty (EU) and organizational objectives conflict (OOC)—and the organizational control sub‐system variable of budgetary emphasis (BE). The impact of this “fit” on the effectiveness of managers from Chinese and Western sides of an IJV partnership is tested in respect of the effectiveness outcomes of self‐rated managerial performance (MP) and the creation of budgetary slack (BS). These two effectiveness constructs are chosen for this study because they provide a complementary picture of effectiveness in a budget‐related behavioural settings. To test the various “fit” hypotheses, this study provides results from a survey of Sino‐foreign JVs. Specifically, middle and senior managers representing the foreign partner to a Sino‐foreign JV were chosen in two groupings, Hong Kong Chinese managers and Western managers. Multiple regression was performed for the independent variables (EU, OOC and BE) in relation to the respective dependent variables (MP and BS) and the respective sample groups (HK Chinese and Western). Both main and interaction effects are reported in this study. Implications of the findings for the use of budgetary emphasis in management performance evaluation in IJVs are discussed.

This study examines the impact of privatisation upon the accounting system of a large government trading enterprise, with particular emphasis on the capital budgeting system. A case study of a major Malaysian enterprise before and after its privatisation revealed substantial improvement of the accounting system, particularly the component of budgeting. However, several difficulties continued to be faced by the accounting department of this enterprise. For example, although accounting emerged as “visible” in the organisation, its function was confined to narrow procedural aspects of budgeting, accountability and performance appraisal. The accounting department was also seen unable to penetrate into the “values” of non‐accountant managers and professionals, such as the engineers. The discussion of the findings in this paper are extended to a consideration of the potential for Malaysian companies undergoing organisational change to emulate Japanese management accounting systems approaches.

This paper examines the association between audit committee (AC) governance characteristics and their role effectiveness. Its objective is to contribute a more comprehensive model and new evidence from Australia that complements and extends recent studies from different country settings on characteristics, roles and effectiveness of ACs.

The sampling frame is Australian listed companies, over the years 2004 to 2009, consisting of 180 observations. The study applies multiple regressions to validate the hypotheses and models.

Results reveal that stronger AC independence and competence, but not diligence, is significantly related to a lower incidence and severity of financial restatements (i.e. to a higher integrity of financial statements). However, greater AC diligence, but not independence or competence, is significantly related to lower non‐audit fee ratio (i.e. to higher external auditor independence).

The paper highlights salient links between an AC's governance characteristics and its effectiveness in fulfilling certain governance roles. Also it expands current literature by presenting a comprehensive empirical model along with statistical measures for AC governance characteristics.

Previous studies have not drawn AC governance characteristics together in a comprehensive model or provided evidence beyond the North American and European setting. A further original feature is the measurement of AC competence in terms of collective members' combined financial sophistication and industry knowledge.

The purpose of this paper is to provide Australian evidence on both the extent and key determinants of discretionary disclosure in company annual reports of information about top executives' share rights, options and termination entitlement. Such information has value‐relevance to shareholders and the public, but prior evidence is lacking about the factors that influence top managements' decisions to voluntarily disclose or withhold personally sensitive details about their own remuneration.

The extent and nature of executive remuneration disclosure are obtained from the content analysis of annual reports of 191 Australian listed companies for the years 2003 and 2004, prior to a more detailed prescriptive regulatory environment occurring in this area when international financial reporting standards became effective in 2005. To explain the factors that could influence managements' decisions about the extent of discretionary disclosure details concerning their own remuneration, the perspectives of legitimacy theory and corporate governance structures are invoked. Relationships are hypothesized and tested between the extent of remuneration disclosure and the following variables: shareholder activism, media attention, company size, board composition and existence of a remuneration committee.

Regression results reveal significant relationships between these determinants and the extent of disclosures of rights, options and termination benefits of executives. These results suggested that, under a relatively unregulated environment, corporate management will react to community and shareholders' expectations by revealing personally sensitive information when their company is placed in a situation of higher shareholder and public scrutiny and when it is structured to meet expectations of good corporate governance.

This study advances knowledge of the influence that companies' legitimation circumstances and corporate governance structures can have on public disclosure decisions by management about the level of detail of their remuneration – information that is of high interest to shareholders and personally sensitive to management.

Taking a cognitive perspective of internal auditor independence, the purpose of this study is to develop measures for the concepts of commitment to independence, role conflict and role ambiguity in the context of the internal auditor's work environment, in order to provide evidence of the effects of role conflict and ambiguity, and their sub‐dimensions, on the internal auditor's commitment to independence.

To measure these concepts, scales are developed for a questionnaire by drawing on measures established in the organizational behavior literature and adapting these to the internal auditor's context. The questionnaire is sent to a sample of internal auditors drawn from the database of the Institute of Internal Auditors Malaysia in which listed companies with an in‐house internal audit function are extracted. There are 101 useable responses.

The results reveal that both role ambiguity and role conflict are significantly negatively related to commitment to independence. The underlying dimensions found to have the greatest impact on commitment to independence are: first, ambiguity in both the exercise of authority by the internal auditor and time pressure faced by the internal auditor; and second, conflict between the internal auditor's personal values and both management's and their profession's expectations and requirements.

The results extend the literature on internal auditor independence and provide insights for auditing standards setters and corporate governance designers.

The purpose of this paper is to investigate the phenomenon in China of listed companies propping up their reported earnings through the use of abnormal related‐party sales. It is hypothesised that two factors associated with securities regulation of listed companies in China will distort the market for ownership control and consequently impact on the practice of propping. The first factor is the firm's risk of being classified as a “special treatment” firm and potentially being delisted. The second factor is the proportion of non‐tradable shares retained by a State‐based controlling shareholder from a government allocation.

The hypotheses are modelled and tested using secondary data from 2010 annual reports and a financial database for companies sampled from the top 100 on the Shanghai and Shenzen Stock Exchanges.

Both hypotheses are supported. Abnormal sales (a proxy for propping) are found to be higher for firms whose ROE had fallen to a level that potentially put them under “special treatment” scrutiny, and also are higher for firms whose proportion of non‐tradeable shares had declined.

Prior studies on propping have focused on companies faced with moderate financial shock being propped up by controlling shareholders so as to preserve their future opportunities to tunnel funds away from minority shareholders. Not previously investigated are the potential side effects of securities regulations on controlling shareholders' incentive for propping, namely, the identification that propping relates to the level of ROE needed to avoid “special treatment” status and the proportion of non‐tradable shares needed as a buffer in the market for corporate control.

This study aims to examine whether or not listed companies' disclosure of intellectual capital is value‐relevant in share markets and to assess its moderating role in the value‐relevance of reported earnings and equity following the adoption of international financial reporting standards (IFRS).

A measure of intellectual capital disclosure (ICD), based on a content analysis of the text in annual reports sampled from listed companies in Britain, Australia, Hong Kong and Singapore, is incorporated in the models to examine the direct and moderating roles of ICD in a firm's valuation.

The results reveal that ICD is positively associated with market price (i.e. has value relevance) in companies in two of the four countries and in non‐traditional industries. Further, the incremental value relevance of earnings and net assets is mostly non‐significant; however, interaction of these variables with ICD considerably increases the basic coefficients and the explanatory power of the models.

Prior research on the value relevance of reported accounting numbers has not considered the incremental effect of textual ICD in annual reports. This study extends value relevance models by combining textual ICD with accounting numbers in an attempt to assess investors' valuation of firms.

From the findings, a case is made for corporate management (particularly in certain countries and industries) to integrate its accounting policy choices regarding good will and intangibles with its strategies for disclosure of broad intellectual capital information.

First‐time evidence is provided that text‐based ICD is value‐relevant in capital markets and on its moderating effect for the value‐relevance of reported accounting numbers.