M.J. Peel, R.E.V. Groves and M.W. Pendlebury
Research is currently being conducted at Cardiff Business School into the impact of wider share‐ownership/profit sharing and privatisation on various aspects of employee relations…
Abstract
Research is currently being conducted at Cardiff Business School into the impact of wider share‐ownership/profit sharing and privatisation on various aspects of employee relations (see e.g. Poole and Jenkins, 1988; Wilson and Peel, 1989; Groves, Peel and Pendlebury, 1989; Peel, Pendlebury and Groves, 1989; Matthews, 1988). The purpose of the current paper is to outline a specific aspect of this research which is investigating the impact of share‐ownership/privatisation on the ‘financial awareness’ of employees; and to outline some preliminary evidence based on detailed questionnaire returns from leading UK quoted companies.
Michael J. Peel and Helga Eckart
In response to recent evidence which indicates that UK companies are losing trading opportunities due to relatively poor linguistic skills, an increasing interest has been…
Abstract
In response to recent evidence which indicates that UK companies are losing trading opportunities due to relatively poor linguistic skills, an increasing interest has been expressed by government agencies, training bodies and the business and academic community in the foreign language requirements of UK firms. Currently, however, little research has examined the importance of language barriers relative to other factors which are perceived to inhibit export performance. In addition, previous research has not focused on how these factors differ in respect of SMEs and their larger counterparts. Based on a survey of 939 Welsh manufacturing firms, from which a 22% response rate was obtained, the purpose of this paper is to present some new empirical evidence relating to language barriers, and other perceived inhibitors, to improving the export performance of domestic manufacturing firms located in Wales. A comparative analysis of small, medium and large companies was undertaken and indicates that there are significant differences in perceived export and language barriers which are related to firm size. A further key finding of the study is that a number of export impediments are considered to be significantly more problematic than language barriers. However, 21% of respondents considered that communication barriers currently presented a problematic/very problematic factor inhibiting export performance; with a larger proportion (29%) of respondents indicating that they considered that their future trading performance would improve significantly if language skills were improved within their firms.
Since the seminal work of Altman (1968), a large number of researchers have developed statistical models, derived from accounting data, with the aim of predicting corporate…
Abstract
Since the seminal work of Altman (1968), a large number of researchers have developed statistical models, derived from accounting data, with the aim of predicting corporate failure as evidenced by the event of “bankruptcy”. Such models are now apparently widely and successfully used by credit/investment analysts as an aid to assessing corporate viability (see Altman 1983; Taffler, 1984). However, an area which has received little attention in the management literature, but one of much import to the analyst, is whether it is possible to discriminate between those financially distressed firms which fail, and those where a timely merger appears to serve as a viable alternative to corporate bankruptcy.
A. Bezuidenhout, C. Mlambo and W.D. Hamman
In financial analysis, forecasting often involves regressing one time series variable on another. However, to ensure that the models are correctly specified, one needs to first…
Abstract
In financial analysis, forecasting often involves regressing one time series variable on another. However, to ensure that the models are correctly specified, one needs to first test for stationarity, co‐integration and causality. In testing for causality, the variables should be stationary. If non‐stationary, one can estimate the model in difference form, unless the variables are co‐integrated. This article determines whether cash flow and earnings variables are stationary, and which variable causes the other, using econometric analysis. In most cases, cash flow variables are found to cause earnings variables. This is so when the models are estimated in levels. However, when estimated in first differences, the causal relationship tends to be reversed such that earnings cause cash flows. Further study is recommended, whereby panel data could be used to improve the power of the tests.
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Bruce Curry and Michael J Peel
Neural Network (NN) simulation models are being increasingly utilised in the business and management fields as forecasting, pattern recognition and classification tools. Their…
Abstract
Neural Network (NN) simulation models are being increasingly utilised in the business and management fields as forecasting, pattern recognition and classification tools. Their growing popularity appears to emanate from the ability of NNs to approximate complex non‐linear relationships, via their capacity to represent latent combinations of unobservable variables in hidden layers. Although there is a growing business literature on the ability of NNs to predict various corporate outcomes (e.g., corporate failure), and to forecast time series data (e.g., share prices), they have yet to be fully evaluated by business academics on cross‐sectional data. This paper provides an overview of the NN modelling approach and compares the performance of NNs, relative to conventional OLS regression analysis, in predicting the cross‐sectional variation in corporate audit fees. The empirical results suggest that the NN models exhibit superior forecasting accuracy to their OLS counterparts, but that this differential reduces when the models are tested out‐of‐sample.
Alessandro Hinna, Ernesto De Nito, Gianluigi Mangia, Danila Scarozza and Andrea Tomo
In recent years, increasing scholarly attention has been directed towards the field of governing bodies research. However, little attention has been paid to the behavioural…
Abstract
Purpose
In recent years, increasing scholarly attention has been directed towards the field of governing bodies research. However, little attention has been paid to the behavioural perspective on studying public boards. Aiming to fulfil this gap this paper offers a review of the international literature addressing boards behaviour within the unique organizational setting of public sector.
Design/methodology/approach
Considering as behavioural studies those publications focusing on actors, processes, decision-making, relationships and interaction inside and outside the boardroom, 91 papers were analysed. Adopting the framework provided by Huse (2007), the papers are classified following four behavioural dimensions/blocks which are crucial to understand board dynamics: board members, interactions, structures and leadership, decision-making culture.
Findings
The literature review shows the increasing production – in the last years – on the theoretical issues related to the behavioural perspective in public governance literature. The most relevant part of these contributions addresses the theoretical dimensions of the board member’s characteristics and of structural leadership.
Originality/value of the chapter
The manuscript reveals the need to adopt a more organizational approach for studying the behavioural categories and levels of analysis proposed by public governance literature. Moreover, the article evidences some possible directions for future research that might further contribute to enrich the ‘behavioural governance perspective’ in public organizations.
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Xiaoli (Charlie) Yuan, Dennis M. López and Dana A. Forgione
The purpose of this paper is to analyze the market for audit services for publicly traded companies operating in the US for-profit (FP) healthcare sector. Complex national and…
Abstract
The purpose of this paper is to analyze the market for audit services for publicly traded companies operating in the US for-profit (FP) healthcare sector. Complex national and local healthcare laws and regulations suggest the importance of assessing fee effects of joint nationallevel and city-specific expertise among auditors. Using cross-sectional OLS regression analysis, we find that joint expertise significantly affects audit pricing in the healthcare sector. We find a fee premium of 33.6 percent on engagements where auditors are both national and city-specific specialists. We also find that Big-4 auditor reputation is significantly priced over and above the effects of joint auditor expertise, and a significant positive association exists between audit and non-audit service fees-indicating the presence of knowledge spillover effects among healthcare company auditors.
Nuraddeen Abubakar Nuhu, Kevin Baird and Ranjith Appuhami
This study examines the association between the use of a package of contemporary and a package of traditional management accounting practices with organizational change and…
Abstract
Purpose
This study examines the association between the use of a package of contemporary and a package of traditional management accounting practices with organizational change and organizational performance.
Methodology/approach
Data were collected based on a mail survey distributed to a sample of 740 public sector organizations.
Findings
The findings indicate that while the prevalence of traditional practices is still dominant, such practices were not associated with organizational change or performance. Rather, those organizations that use contemporary management accounting practices to a greater extent experienced greater change and stronger performance.
Practical implications
The findings suggest that contemporary management accounting practices can assist public sector practitioners in improving performance and promoting organizational change.
Originality/value
The study provides an empirical insight into the use and effectiveness of management accounting practices in the public sector. The study provides the first empirical analysis of the effect of using a package of management accounting practices in the public sector.
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Juan L. Gandía and David Huguet
Despite the extensive research on the determinants of audit pricing in both public and private settings, there is a lack of research about the differences in audit fees between…
Abstract
Purpose
Despite the extensive research on the determinants of audit pricing in both public and private settings, there is a lack of research about the differences in audit fees between voluntary audits and mandatory audits. The purpose of this paper is to address this gap.
Design/methodology/approach
First, a theoretical framework is developed to justify differences in audit pricing between voluntary and mandatory audits. Next, using a sample of Spanish private small and medium enterprises (SMEs) running from 2009 to 2014, the authors empirically test whether the fees charged for voluntary audits differ from those charged for mandatory ones. The authors also examine whether the premium observed among large auditors is persistent in the SME setting, and whether this premium differs depending on whether the audits are voluntary or mandatory.
Findings
Although a preliminary analysis does not report significant differences in pricing between voluntary and mandatory audits, additional analyses using samples restricted by company size show that voluntary audits are charged with a premium. The authors observe a premium related to large auditors, and find no significant differences in the audit pricing of Big 4 auditors depending on the mandatory/voluntary nature of the audit, but the premium associated with Middle-Tier auditors disappears in the voluntary setting.
Originality/value
This paper contributes to the previous literature by introducing the examination of differences in audit pricing between voluntary and mandatory audits. As far as the authors know, this is the first study to examine the differences in audit pricing between voluntary and mandatory audits. It also elaborates on studies on audit pricing in SMEs.
Objetivo
A pesar de la extensa investigación sobre los determinantes de los honorarios de auditoría tanto en el entorno de las empresas cotizadas como de las no cotizadas, existe poca investigación sobre las diferencias en los honorarios entre las auditorías voluntarias y las obligatorias. El presente estudio aborda esta carencia.
Diseño/metodología/enfoque
En primer lugar, se desarrolla un marco teórico que trata de justificar diferencias en el precio de la auditoría entre auditorías voluntarias y obligatorias. Después, usando una muestra de pymes españolas no cotizadas para el período 2009–2014, testamos empíricamente si los honorarios cargados en las auditorías voluntarias difieren de los cargados en las auditorías obligatorias. Examinamos también si la prima observada entre los grandes auditores en el entorno de las pymes es persistente, y si esta prima difiere en función de si la auditoría es voluntaria u obligatoria.
Resultados
Aunque el análisis preliminar no reporta diferencias significativas en el precio de la auditoría entre auditorías voluntarias y obligatorias, análisis adicionales usando muestras restringidas por el tamaño de las compañías muestran que las auditorías voluntarias soportan una prima con respecto a las obligatorias. Observamos también una prima relacionada con los auditores grandes y medianos, y no encontramos diferencias significativas en el precio de la auditoría para las Big 4 en función de la naturaleza obligatoria/voluntaria de la auditoría, mientras que la prima asociada con los auditores medianos desaparece en el entorno voluntario.
Originalidad/Valor
El estudio contribuye a la literatura previa al introducir el análisis de las diferencias en el precio de la auditoría entre auditorías voluntarias y obligatorias. Hasta donde sabemos, éste es el primer estudio que examina las diferencias de precio entre ambos entornos. El estudio también extiende la literatura previa sobre los honorarios de auditoría en las pymes.