This paper backgrounds the recent changes to international financial reporting standards and some possible impacts on current valuation practices. Specifically, it debates issues…
Abstract
This paper backgrounds the recent changes to international financial reporting standards and some possible impacts on current valuation practices. Specifically, it debates issues surrounding the existing use principle and its ability to provide the required information for financial reporting. Also discussed is the role that interaction and debate between international bodies, such as IVSC and IASC, has in the resolution of such issues.
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The need for independent audit goes back to the agency theory, the theory of delegation of power and the issue of trust. Stakeholders delegate power to management to manage the…
Abstract
The need for independent audit goes back to the agency theory, the theory of delegation of power and the issue of trust. Stakeholders delegate power to management to manage the business on their behalf, yet they face the risk of information asymmetry and management motivations to commit fraud. The main aim of having an independent auditor was therefore to reduce the risk of information asymmetry and fraudulent behaviour by management. Auditors are required by the International Auditing Standards to detect material fraud and error, and they are expected to have a duty of care for stakeholders. However, recently independent auditors, whether conducting private or public audit, have been scrutinised for failing to detect material fraud. There have been a lot of discussions in the literature about the role of private auditors in detecting fraud, but very little discussions about the role of public auditors in detecting fraud. This chapter will outline the difference between private audit and public audit; explain the legal liability of public auditors in relation to fraud detection; the role of public auditors in detecting fraud; and will critically review the root causes for auditors’ failure to detect fraud.
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Federica Casonato, Federica Farneti and John Dumay
To present the continuation of a case study by Beck et al. (2017) on an Australian bank (CBD) during the period 2004–2013 by examining whether integrated reporting affects…
Abstract
Purpose
To present the continuation of a case study by Beck et al. (2017) on an Australian bank (CBD) during the period 2004–2013 by examining whether integrated reporting affects relational capital and helps to repair an organisations’ reputation. Both studies examine how a bank rocked by a major scandal in 2004 has attempted to repair its legitimacy through integrated reporting (<IR>). The paper aims to discuss these issue.
Design/methodology/approach
This study is a post facto analysis based on the original research from Beck et al. (2017). The research process involved a case study approach with an analysis framed by impression management theory to investigate whether the information in CBD’s integrated reports is consistent with other information available to investors.
Findings
The authors find there is a gap between what CBD discloses in its integrated reports and what is publicly available in other media. CBD’s talk and actions are not aligned, and that asymmetry translates into a decline of trust in CBD. The bank’s integrated reports reveal how management discloses or withholds information to protect their own interests and at their own discretion. These conclusions indicate that the integrated reporting paradigm is being co-opted by IM strategies to improve legitimacy through trust, reputation and social capital.
Research limitations/implications
Future research needs to reach beyond the organisational boundaries and understand if <IR> adds value for society, or is just a new form of multicapitalism, being an ideology to help the rich become richer? The answers are important if we ever hope to see misconduct disappear from our corporations and for company reports to become documents bearing truth and not espouse rhetoric based on organisational hypocrisy.
Originality/value
The paper adds to the growing body of research investigating <IR> in practice to understand the impact of <IR> and whether it is a new and useful reporting tool or just another management fashion.
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John R. Mansfield and James A. Pinder
This paper has three principal aims: to briefly consider the term “depreciation” in the context of property values; to critically review the term “obsolescence” and two of its…
Abstract
Purpose
This paper has three principal aims: to briefly consider the term “depreciation” in the context of property values; to critically review the term “obsolescence” and two of its distinct forms; and to highlight the practical difficulties in pricing obsolescence using inflexible methodologies in a market place that is subject to evolving criteria.
Design/methodology/approach
The paper critically reviews existing literature and advice from international professional bodies.
Findings
The general conclusions are that despite the need to be more explicit in valuations, current methods are unable to address such detail. The guidance and advice offered by professional bodies need to be thoroughly revised. It is hoped that the progress being made in methodology will be incorporated in directed guidance to practitioners.
Originality/value
The paper offers an applied examination of an issue that has an impact on many aspects of contemporary real estate consultancy services.
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John R. Mansfield and David P. Lorenz
The continued globalisation of investment has led to revisions in various regulatory systems and to the development of internationally applicable standards and codes of practice…
Abstract
The continued globalisation of investment has led to revisions in various regulatory systems and to the development of internationally applicable standards and codes of practice. As a significant asset of many businesses, real estate values are a key element of the financial detail included in annual reports. Accordingly, valuation standards have evolved to align with the requirements of accounting and banking sectors. The international demand for standardised regulatory systems and processes has many benefits and it is of critical importance for valuers not only to be fully aware of the changes in the various influencing regulatory systems but to recognise their changed responsibilities, particularly if third parties are likely to rely upon their valuations.
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Ananya Bhattacharya, Ambika Zutshi and Ali Bavik
This paper aims to propose a “Four-F (finding facts, fostering alternates, fulfilling implementation and feasibility testing)” action plan to global food service businesses (FSB…
Abstract
Purpose
This paper aims to propose a “Four-F (finding facts, fostering alternates, fulfilling implementation and feasibility testing)” action plan to global food service businesses (FSB) such as restaurants (dine-in/take away) to build resilience during times of global crises. The 2019 Coronavirus disease and FSBs apply as working examples elaborating the proposed Four-F action plan with several managerial implications for the internal and external stakeholders of FSBs.
Design/methodology/approach
The method involves reviewing and coding 108 articles using the PRISMA approach, then applying findings to develop the Four-F action plan integrating multiple theoretical concepts (such as stakeholder, crisis management and dynamic capabilities).
Findings
There are two key findings. First, though all four crisis phases should be considered by decision-makers as part of their contingency planning process, the pre and post-crisis stages need higher attention. Second, the Four-F action plan provides specific recommendations to FSBs stakeholders (consumers, suppliers and government) for each crisis phase (pre-crisis, crisis emergence, crisis occurrence and post-crisis).
Originality/value
To the best of the authors’ knowledge, this is the first paper that has incorporated multiple theoretical frameworks (stakeholder theory, crisis management and dynamic capabilities) within the FSBs context and provided the Four-F action plan for decision-makers to understand and manage crisis phases.
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Sarah Sayce and Owen Connellan
This paper debates the key concepts of fair value, value in use and existing use, as they relate to the valuation of owner‐occupied property assets. Changes to the professional…
Abstract
This paper debates the key concepts of fair value, value in use and existing use, as they relate to the valuation of owner‐occupied property assets. Changes to the professional body regulatory and advisory frameworks (International Valuation Standards Committee (IVSC), the European Group of Valuers’ Association (TEGoVA) and the Royal Institution of Chartered Surveyors (RICS)) controlling the valuation of fixed assets for balance‐sheet have taken place. These, it argues, require valuers to re‐appraise the role of existing use value (EUV) as an acceptable valuation concept. The treatment of owner‐occupied property differs with the IVSC no longer recognising EUV, which it holds to be contrary to the principles of fair value, as enshrined within International Accounting Standards. Yet, the basis is still recognised by TEGoVA, which also espouses fair value, whereas the RICS prefer the value to the business model. The crux therefore lies in the interpretation of fair value. This paper argues for the abandonment of EUV in UK and European standards, to fall in line with International Standards. It is contended that, if market value or value in use is the only acceptable approach to accounting valuations, this will have implications for corporate entities and may give their advisers some practical problems. If EUV is abandoned, it also calls into question the appropriateness of DRC (depreciated replacement cost) as a valid surrogate of market value or EUV. The paper contends that fair value embraces both value in exchange and value in use. It argues that EUV fulfils little useful purpose and calls for its abandonment and for the development of an agreed methodology for establishing value in use. In the quest for this it suggests that there would be merit in re‐exploring the notion of going concern value, which was effectively written out of UK practice with the introduction of RICS guidance.
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This article aims to uncover the influence employment relations, and more specifically union avoidance has on the decision to outsource road transport. Employment Relations…
Abstract
Purpose
This article aims to uncover the influence employment relations, and more specifically union avoidance has on the decision to outsource road transport. Employment Relations literature often attributes outsourcing decision to decollectivist strategies, minimising the influence unions have in their workplaces or to labour cost reduction objectives. These explanations, however, fail to explain why some firms do not outsource when their sourcing structure incurs greater union involvement or industrial relation.
Design/methodology/approach
The author examines two case studies. Company A and Company B, while operating in a similar environment, selling similar products and offering a similar home delivery service have adopted different governance structures for their outbound transport function; Company A has integrated while Company B has outsourced. Was union avoidance or transaction cost reductions central to their respective decisions?
Findings
Company A did not integrate in an effort to circumvent union intervention or reduce costs. Company A’s integration, on the contrary, increased the firm’s dealings with unions, as well as regulatory compliance and transaction costs. Company B’s decision to outsource yielded similar results. While not experiencing an increase in union intervention, the firm failed to reduce the density of unionised labour and by maintaining ownership of delivery vehicles, saw a rise in costs.
Originality/value
Union avoidance is not an explanatory factor in the sourcing decision, nor is it possible to explain through transaction cost economics. Explication for outcomes lies in value enhancement. Companies are willing to incur higher employment relations and transport costs if the result is higher value capture.
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Sarah Dodds and Alexandra Claudia Hess
Coronavirus disease 2019 (COVID-19) has created a challenging, yet opportunistic, environment in which to conduct transformative service research (TSR) and assess research…
Abstract
Purpose
Coronavirus disease 2019 (COVID-19) has created a challenging, yet opportunistic, environment in which to conduct transformative service research (TSR) and assess research methodology. The purpose of this paper is to evaluate and gain important new insights of a group interviewing method with vulnerable people and their support group, adapted and transferred online during COVID-19.
Design/methodology/approach
This research examines the experiences of 35 participants (nine family groups composed of parents and young people), involved in a research project that explores a sensitive topic, youth alcohol consumption and family communication, that was moved online during lockdown. Researcher reflections on running group interviews face-to-face prior to COVID- 19 and online during lockdown are included in the data.
Findings
Thematic analysis of participant interviews and researcher reflections reveals four key benefits and three limitations of online group interviews with vulnerable people and their support group. The benefits include being comfortable, non-intrusive and safe; engaging and convenient; online communication ease and easy set-up. The limitations relate to lack of non-verbal communication, poor set-up, and privacy and access issues.
Practical implications
The global environment is uncertain and being able to implement effective qualitative research online is essential for TSR and service research in the future. This paper provides a step by step procedure for an innovative online group interviewing technique that can be used by TSR and qualitative service researchers.
Originality/value
Conducting research during a pandemic has provided unprecedented insights into qualitative research approaches and methodology. This paper contributes to literature on service and TSR methodology by providing a framework for researchers to investigate vulnerable groups online in an effective, safe and non-intrusive way. The framework also has the potential to be applied to other service contexts.