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Article
Publication date: 8 January 2020

Muhammad Shahin Miah, Haiyan Jiang, Asheq Rahman and Warwick Stent

This paper aims to investigate the association between International Financial Reporting Standards (IFRS) effort due to higher levels of material adjustments and audit fees. In…

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Abstract

Purpose

This paper aims to investigate the association between International Financial Reporting Standards (IFRS) effort due to higher levels of material adjustments and audit fees. In addition, this paper tests whether these associations differ between industry specialist auditors and non-specialist auditors.

Design/methodology/approach

The authors measure IFRS effort by using differences between local GAAP and IFRS. More specifically, they measure the differences in the balances of accounts that are prepared under IFRS as opposed to the previously used Australian Accounting Standards Board (AASB) standards. They posit that higher material adjustments and more risk to fair presentation of financial statements require additional accounting and auditing effort (“IFRS effort”).

Findings

The authors find that audit fees are higher when accounting standards are more material and complex at an aggregate level. Nevertheless, not all standards are equally complex and/or material and not all individual standards contribute to higher audit fees. In addition, the results show that the positive association between IFRS effort and audit fees is more pronounced when firms are audited by city-level industry specialists than by non-industry specialists.

Originality/value

Overall, the results are consistent with the prediction of increasing audit fees for firms requiring higher levels of IFRS effort compared to firms requiring lower levels of IFRS effort. The results contribute to the understanding that not all IFRS are equally complex and, thereby, the standards require different levels of auditor effort. Isolating specific standards based on materiality/risk levels is informative to standard setters for standard setting, standard implementation and post-implementation review of standards.

Details

Accounting Research Journal, vol. 33 no. 1
Type: Research Article
ISSN: 1030-9616

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Article
Publication date: 7 November 2019

Jill Hooks and Warwick Stent

The purpose of this paper is to obtain insights from preparers on the new Performance Report requirements for New Zealand registered Tiers 3 and 4 charities, in particular the…

455

Abstract

Purpose

The purpose of this paper is to obtain insights from preparers on the new Performance Report requirements for New Zealand registered Tiers 3 and 4 charities, in particular the non-financial information included in the ‘Entity Information’ section and the ‘Statement of Service Performance’.

Design/methodology/approach

Semi-structured interviews were conducted with 11 interviewees, each involved with governance and reporting of one or more Tiers 3- or 4-registered charities. These interviews were analysed in terms of accountability and legitimacy objectives, which motivated the regulators to introduce the new reporting regime.

Findings

Key findings are summarised under three themes. Manageability relates to perceptions and suggestions regarding implementation of the new requirements. Scepticism concerns some doubts raised by interviewees regarding the motivations for performance reports and the extent to which they will be used. Effects include concerns about potentially losing good charities and volunteers because of new requirements making their work ‘too hard’, although an increased focus on outcomes creates the potential for continuous improvement.

Research limitations/implications

The subjectivity that is inherent in thematic analysis is acknowledged and also that multiple themes may sometimes be present in the sentences and paragraphs analysed. The authors acknowledge too that early viewpoints may change over time.

Practical implications

Themes identified may assist regulators, professional bodies and support groups to respond to the views of preparers. Findings will also be of interest to parties in other jurisdictions who are considering the implementation of similar initiatives.

Originality/value

This paper provides early insights on new reporting requirements entailing significant changes for New Zealand registered charities for financial periods beginning on or after April 2015. The focus is on small registered charities (97 per cent of all New Zealand registered charities) and key aspects of the Performance Report: Entity Information and the Statement of Service Performance.

Details

Pacific Accounting Review, vol. 32 no. 1
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 21 February 2022

Nives Botica Redmayne, Fawzi Laswad, Dimu Ehalaiye and Warwick Stent

New Zealand (NZ) has no reporting standard or guidance for management commentary (MC) that accompanies financial reports. This is unusual, considering MC is provided by many…

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Abstract

Purpose

New Zealand (NZ) has no reporting standard or guidance for management commentary (MC) that accompanies financial reports. This is unusual, considering MC is provided by many entities and valued by users. Further, the guidance on MC provided by the International Accounting Standards Board (IASB) in their Management Commentary Practice Statement 1 (MCPS1), which was issued in 2010, is currently under review. Thus, the purpose of this paper is to examine the views of NZ’s financial reporting stakeholders, particularly users, preparers and auditors of financial reports for insights regarding the usefulness of MC.

Design/methodology/approach

To gain insights into the views of NZ’s financial reporting stakeholders on MC, this paper surveyed users, preparers and auditors of financial statements. This paper includes an analysis of their views on the objectives, content and principles that should underlie MC in financial reporting, based on the IASB’s MCPS1 with consideration of recent work by the IASB on the revision of MCPS1. In addition, the analysis provides insights as to whether the reporting of MC should be made mandatory, and whether assuring MC would increase its usefulness.

Findings

This study found that auditors generally view MC as less useful and more in need of assurance than do preparers and users. Respondents’ ratings indicate that the most important objective for MC is “to enable the assessment of the quality of management’s stewardship”. “Assessing the entity’s future prospects”, and “assessing future cash flows” are also highly rated objectives. The most important principle in preparing MC is identified as “focus on the most important and relevant information”, while the most important content element identified is “the entity's financial performance and position, and cash flows”.

Originality/value

This paper highlights the views of various stakeholders regarding MC reporting, particularly preparers and auditors whose views have not been noted previously in the literature. Also, this study should be of interest to both international and national financial reporting standard setters and regulators. It is particularly timely in view of the current IASB work towards revision and updating of MCPS1, as it provides current insights into what users, preparers and auditors perceive as the most important considerations for MC. This study also has implications for the XRB in NZ, where there is no prior research on stakeholders’ views on MC.

Details

Meditari Accountancy Research, vol. 31 no. 4
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 14 September 2010

Warwick Stent, Michael Bradbury and Jill Hooks

The purpose of this paper is to examine the financial statement impacts of adopting NZ IFRS during 2005 through 2008.

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Abstract

Purpose

The purpose of this paper is to examine the financial statement impacts of adopting NZ IFRS during 2005 through 2008.

Design/methodology/approach

The effects of NZ IFRS on the financial statements and ratios of first‐time adopters of NZ IFRS for a stratified random sample of 56 listed companies is analysed. In total, 16 of these were early adopters and 40 of which waited until adoption of NZ IFRS became mandatory. The analysis of the financial statement impact of NZ IFRS is conducted in the context of the accounting choice literature.

Findings

The results show that 87 per cent of firms are affected by NZ IFRS. The median and inter‐quartile ranges indicate that for most firms the impact of NZ IFRS is small. However, the maximum and minimum values indicate the impact can be large for some entities. The impact has considerable effects on common financial ratios.

Research limitations/implications

The usual limitations applicable to small samples apply.

Practical implications

The findings may be useful to regulators and policy makers reviewing financial reporting requirements.

Originality/value

This study is the first to offer a comprehensive empirical analysis of the effect of adopting IFRS on financial statements in New Zealand, as well as on selected key ratios of interest to financial analysts. The data used are more recent than most IAS or IFRS studies around the world and are stratified to allow for comparison between voluntary/early adopters and mandatory/late adopters.

Details

Pacific Accounting Review, vol. 22 no. 2
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 13 April 2015

Warwick Stent and Tuyana Dowler

The purpose of this paper is to provide early assessments of the changes for corporate reporting processes, which an emerging initiative like integrated reporting (IR) will…

4048

Abstract

Purpose

The purpose of this paper is to provide early assessments of the changes for corporate reporting processes, which an emerging initiative like integrated reporting (IR) will require. The authors also consider the potential for these changes to contribute towards resolving major problems such as financial and environmental crises. IR is gaining momentum globally, and the implementation of some form of future mandatory requirement in this regard appears likely.

Design/methodology/approach

The authors begin by developing a reporting checklist based on the requirements for IR, which they use to assess the gap between current “best practice” reporting processes and IR. They then propose systems thinking, a widely accepted approach to problem-solving, as a theoretical basis for assessing the IR Framework and for deeper consideration of the gap analysis. They demonstrate, at a paradigm level, how systems thinking can be used to assess IR and find that IR has the potential to offer specific and implementable strategies for operationalising systems thinking principles.

Findings

The authors assess 2011 annual reports and related online reporting practices for four New Zealand “best practice reporting entities”, using their reporting checklist. Although none of their sample entities published a full integrated report for 2011, reporting scores range from 70 to 87 per cent. The findings suggest that current reporting processes lack the integration, oversight and due attention to future uncertainties required by IR. While this appears to be a relatively small gap, systems thinking principles indicate that these deficiencies may be critical to sustainability and financial stability, the stated aims of IR.

Research limitations/implications

The normal limitations which apply to small sample studies.

Practical implications

The IR reporting checklist and systems thinking proposal could be used by policymakers, standard setters and firms to assist in assessing IR’s potential and the additional requirements it will impose for corporate reporting.

Originality/value

This study answers calls in the literature for a reactivation of the normative research agenda by assessing IR against systems thinking, a widely accepted approach to problem-solving. It contributes further to an understanding of IR through the development of a unique reporting checklist and by offering empirical evidence derived from application of this checklist.

Details

Meditari Accountancy Research, vol. 23 no. 1
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 14 September 2010

David Lont and Norman Wong

The purpose of this paper is to provide editorial insight into recent developments in financial accounting issues in the Pacific Rim area. The paper aims to focus on the impact of…

2971

Abstract

Purpose

The purpose of this paper is to provide editorial insight into recent developments in financial accounting issues in the Pacific Rim area. The paper aims to focus on the impact of international financial reporting standards (IFRS) and provide a commentary, as well as context, for the papers that appear in this special issue.

Design/methodology/approach

The paper reviews and comments on several relevant academic papers and regulatory releases.

Findings

This paper outlines several key developments in the Pacific Rim region since the decision by Australia and New Zealand to adopt IFRS. The proposed adoption of IFRS in other countries is examined, and noted are the successes and tensions that one set of global accounting standards creates. The contributions of four papers are outlined in this special issue to this debate, and provide suggestions for future research.

Practical implications

This review should be of relevance to academics, the profession, and regulators, by providing academic insights into the current debate about the costs and benefits of IFRS.

Originality/value

This paper offers a contemporary analysis of the success and challenges of IFRS adoption in the Pacific Rim area.

Details

Pacific Accounting Review, vol. 22 no. 2
Type: Research Article
ISSN: 0114-0582

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Book part
Publication date: 29 May 2023

Inakshi Kapur, Pallavi Tyagi and Neha Zaidi

Purpose: This chapter aims to identify and evaluate the various components of business model disclosures in an Integrated Report and ascertain how the notion of business model is…

Abstract

Purpose: This chapter aims to identify and evaluate the various components of business model disclosures in an Integrated Report and ascertain how the notion of business model is perceived among practitioners.

Need for the Study: According to previous research, the International Integrated Reporting Council’s (IIRC) objective of improving corporate reporting by encouraging organisations to disclose their business model has not found the desired recognition. Therefore, the study elaborates on the various components of business model reporting and their implications on corporate reporting in general.

Methodology: A review of literature was conducted to identify and analyse research based on business models and their disclosures in integrated reporting. A narrative review was undertaken for selected literature.

Findings: The findings suggest that most large-sized organisations use integrated reporting for impression management and are not inclined to disclose too much about their business models for fear of competition. There is still a lack of clear understanding of what a business model should entail.

Practical Implication: This study adds to the research on business model disclosures in integrated reporting. Voluntary disclosure and a better understanding of such disclosures will prepare organisations of all sizes and industries for an event when Integrated Reporting becomes statutory.

Details

Smart Analytics, Artificial Intelligence and Sustainable Performance Management in a Global Digitalised Economy
Type: Book
ISBN: 978-1-80382-555-7

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Article
Publication date: 1 May 1980

Clive Bingley, Edwin Fleming and Allan Bunch

I AM INFORMED, reliably (I judge), that the severity of the expenditure cuts recently inflicted on the London Borough of Kingston‐upon‐Thames library services—an authority bereft…

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Abstract

I AM INFORMED, reliably (I judge), that the severity of the expenditure cuts recently inflicted on the London Borough of Kingston‐upon‐Thames library services—an authority bereft of either chief librarian or deputy these several months past—has stimulated action beyond the mere expression of professional consternation from the Library Association.

Details

New Library World, vol. 81 no. 5
Type: Research Article
ISSN: 0307-4803

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Article
Publication date: 3 August 2015

Tek Lama and Warwick Wyndham Anderson

This study aims to examine whether company characteristics determine the structure and composition of a company’s board. In particular, it investigates the three board-design…

2170

Abstract

Purpose

This study aims to examine whether company characteristics determine the structure and composition of a company’s board. In particular, it investigates the three board-design choices that Australian-listed companies make in the context of Australian Stock Exchange (ASX) corporate governance principles (published in 2003) where they are allowed to depart from the recommended best-practice board structure if the departure better serves their unique board and governance requirements.

Design/methodology/approach

A logistic regression is performed on a cross-section of data for 258 ASX-listed companies averaged over the years 2004 to 2007, using the company variables size, age, leverage, ownership concentration, profitability, liquidity, price-earnings ratio, market-to-book ratio and cross-listing.

Findings

The study finds that size has a strong, statistically significant impact on all three principles. Ownership concentration, price-earnings ratio and age have statistically significant impacts on the likelihood of compliance with at least one principle but have no consistent influence over all. This finding supports the underlying philosophy of the ASX corporate governance principles that flexible guidelines serve companies better than inflexible rules.

Originality/value

This study breaks new ground in empirically investigating the effect of company variables on compliance with the ASX’s Principles of 2003, which are new for Australia in requiring an “if not, why not” response from companies.

Details

Pacific Accounting Review, vol. 27 no. 3
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 3 July 2020

Sonia Quarchioni, Pasquale Ruggiero and Rodolfo Damiano

Integrated reporting (IR) is increasingly becoming a practice useful not only for accountability but also for managerial purposes because of its potential role as a signifying…

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Abstract

Purpose

Integrated reporting (IR) is increasingly becoming a practice useful not only for accountability but also for managerial purposes because of its potential role as a signifying practice for integrated thinking (IT). In this perspective, this paper aims to explore which of the objects that are represented in integrated reports provide materiality and common understanding to the concept of IT for its effective implementation within organizations.

Design/methodology/approach

This paper is based on a vocabulary approach for interpreting the texts of integrated reports as systems of words that are able to provide meaning for a common understanding of the concept of IT. In particular, by focusing on words and their relationships, the authors combine textual analysis and network text analysis to examine the structure of meaning embedded in the texts of integrated reports of five organizations, which serve as empirical cases for analysis during the period 2012-2018.

Findings

The concept of IT is dynamic in its meaning since in integrated reports it is represented by referring to different objects, in the case different types of capital (i.e. financial, human, social-relational, process, organizational and commercial), which are related to each other while following different paths over time. The dynamic nature of the meaning of IT affects the semantic orientation of the reports in a mutual relationship between IT (which conveys flows of information within the reports) and integrated reports (through which flows of meaning are made visible).

Originality/value

This paper opens the way to a linguistic approach for analyzing the different concepts related to IT to make them meaningful in creating (at least temporarily) a common understanding, as well as facilitating coordination within organizations and between organizations and their environment.

Details

Meditari Accountancy Research, vol. 29 no. 4
Type: Research Article
ISSN: 2049-372X

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