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Managers generally have discretion in determining how components of earnings are presented in financial statements in distinguishing between “normal” earnings and items classified as unusual, special, significant, exceptional or abnormal. Prior research has found that such intra‐period classificatory choice is used as a form of earnings management. Prior to 2001, Australian accounting standards mandated that unusually large items of revenue and expense be classified as “abnormal items” for financial reporting, but this classification was removed from accounting standards from 2001. This move by the regulators was partly in response to concerns that the abnormal classification was being used opportunistically to manage reported pre‐abnormal earnings. The purpose of this paper is to extend the earnings management literature by examining the reporting of abnormal items for evidence of intra‐period classificatory earnings management in the unique Australian setting.

This study investigates associations between reporting of abnormal items and incentives in the form of analyst following and the earnings benchmarks of analysts' forecasts, earnings levels, and earnings changes, for a sample of Australian, top‐500 firms, for the seven‐year period from 1994 to 2000.

The findings suggest there are systematic differences between firms reporting abnormal items and those with no abnormal items. Results show evidence that, on average, firms shifted expense items from pre‐abnormal earnings to bottom line net income through reclassification as abnormal losses.

The paper's findings suggest that the standard setters were justified in removing the “abnormal” classification from the accounting standard. However, it cannot be assumed that all firms acted opportunistically in the classification of items as abnormal. With the removal of the standardised classification of items outside normal operations as “abnormal”, firms lost the opportunity to use such disclosures as a signalling device, with the consequential effect of limiting the scope of effectively communicating information about the nature of items presented in financial reports.

The purpose of this paper is to present and analyze the current literature related to developing and improving the Mahalanobis-Taguchi system (MTS) and to present the shortcomings related to this method for future research.

In this paper, articles in the literature are classified to give an overview on the MT strategy. For this purpose, 46 articles are considered for classification from 2000 to 2013 on the basis of: MTS contribution area, description of the issue, and results.

In this paper a review on the concepts and operations of the MTS was provided as a new method in the field of pattern recognition, multivariable diagnosis, and forecasting. A large number of studies were performed in recent years consisting of developing MTS and MTS case studies. The analysis of the articles showed the fields of MTS which had more potential for future studies and developing. The comparison of the MTS to other methods and the selection of the normal group for constructing the Mahalanobis space have received the most attention by researchers. In addition, several studies concentrated on the use of other methods instead of design of experiments, finding applications for multiclass MTS and finding an alternative for the SN ratio.

This paper contains the publications in the field of MTS chronologically and shows different areas for developing and case studies. It will be useful to researchers and professionals who are interested in pattern recognition, multivariate analysis, and forecasting.

The absence of clear guidelines as to how materiality should be judged has created problems for accountants and auditors, and resulted in risks to users of financial statements. Results of past research indicate a great lack of consensus within a judgement group (e.g. auditors) and a large degree of diversity between groups (e.g. auditors v. statement preparers), with respect to the appropriate materiality threshold. Based on past research concludes that industry, an important contextual variable in materiality judgements, may be responsible for the inconsistencies in judgements in the past. The close relationship between materiality and audit risk suggests that the type of industry may have a similar impact on risk assessments. Proposes that industry effects on materiality judgements and risk assessments be further investigated. Also suggests the need for industry‐specific guidelines for materiality and audit risk.

This study aims to determine the current state of implementation and effectiveness of education for sustainable development (ESD) in Pakistani higher education institutions (HEIs) using students’ and teachers’ perceptions of sustainability.

A survey on teachers and students was conducted in public and private universities in Punjab, Pakistan. Data from 1,915 students and 120 teachers were collected through semi-structured questionnaires implemented during face-to-face interviews. Students were asked to rank social, environmental and economic indicators of sustainability consciousness (SC) on a five-point Likert scale. Structural equation model and regression model are used to analyze the data. The perceptions of students and teachers were assessed from their knowledge of sustainability.

The occurrence of ESD in Pakistani HEIs is low and teachers have inadequate knowledge of sustainability. The holistic approach to ESD has a more pronounced effect on students’ SC as compared to the pluralistic approach to ESD. Also, there is a correlation between the students’ grades/class and the effectiveness of ESD. There is a need to pay more attention to implement ESD for undergraduate students in Pakistani HEIs.

The study stands out for using cross-sectional data from public and private universities of Pakistan. Furthermore, to the best of the authors’ knowledge, this is the first study in Pakistan which attempts to investigate the effectiveness of ESD in terms of students’ SC.

The purpose of this paper is to examine whether Australian agricultural firms display big bath behaviour during droughts by recognising extraordinary and abnormal losses. It is hypothesised that Australian agricultural firms are more likely to report big bath losses in drought years than in non‐drought years and, in a given drought year, agricultural firms are more likely to report big bath losses than firms in other industries.

The authors analyse 405 firm‐years data for agricultural firms over 1980‐1995. For comparison, they also analyse matched‐pair samples of 17 and 30 non‐agricultural firms for the drought years of 1983 and 1995, and matched‐pair samples of 19 non‐agricultural firms for the non‐drought years of 1986 and 1990, respectively. Both univariate and multivariate analyses are used to test the hypotheses.

It is found that agricultural firms are more likely to take big baths in drought years than in non‐drought years. Further, in a given drought year, agricultural firms are more likely to take big baths than non‐agricultural firms. Further analyses of sales, profitability, and extraordinary and abnormal items support the idea that big baths reflect managerial opportunism rather than the economic consequences of droughts.

Previous studies have not investigated the impact of natural calamities like flood and drought on accounting choices. This paper makes an original contribution to the accounting literature by documenting evidence on the extent to which an act of nature, over which management has little or no control, can influence accounting choices.

The purpose of this paper is to examine the possibility of South African companies listed on the Johannesburg Stock Exchange (JSE) using adjusted earnings as a part of an impression expectation management strategy focused on demonstrating how reported earnings measures meeting or beating analysts’ earnings forecasts.

A multiple response analysis approach is used. Earnings adjustments are coded according to a defined typology and assessed for their status as either valid or invalid. The number of occurrences of adjusted earnings measures over a five year period (2010-2014) meeting or beating analyst forecasts is calculated.

The use of adjusted earnings by JSE listed companies is a common occurrence. There is evidence to suggest that this is used part of an impression expectation management strategy. Most of the adjustments are invalid. When otherwise valid adjustments are used in a particular year, these are frequently repeated, and when adjusted earnings are reported, these normally exceed analysts’ forecasts.

The paper is based on a relatively small sample from a single jurisdiction and limited time period. Nevertheless, the findings point to the need to revisit how financial performance is measured and reported, evaluate additional regulation to protect investors and understand in more detail exactly how and why companies use adjusted earnings as an impression expectation management tool.

The paper adds to the limited body of research on performance reporting outside of the USA and Europe. It also examines the use of adjusted earnings in a unique setting where, in addition to IFRS numbers, companies are required to report a mandatory adjusted earnings figure (headline earnings).

The paper aims to examine the relation between fees paid to auditors and audit quality during the period of 2000‐2003.

The paper constructs a measure of auditor profitability that is used as a proxy for auditor independence. The methodology is grounded in the notion that auditor independence is influenced by effort and risk‐adjusted fees, rather than the level of fees received from clients. Since, risk and effort are unobservable, the paper uses proxies based on client size, complexity and risk to estimate abnormal fees. Abnormal fees are derived using a fee estimation model drawn from prior literature. The paper employs two metrics to assess audit quality – the standard deviation of residuals from regressions relating current accruals to cash flows and the absolute value of performance‐adjusted discretionary accruals.

The paper documents a statistically significant negative association between total fees and both audit quality proxies over all years. These findings are robust to a variety of additional tests and several alternative design specifications. The results (pre‐ and post‐SOX) are consistent with economic bonding being a determinant of auditor behavior rather than auditor reputational concerns.

The possibility that the empirical tests do not completely capture the impact of unobserved risk cannot be ruled out, though the paper attempts to do so by employing alternative specifications and sensitivity tests.

Policy makers should note that current restrictions on the provision of non‐audit services may not sufficiently resolve the issue of economic bonding and its impact on auditor independence.

In contrast to previous studies whose results are ambiguous, the paper finds a statistically significant positive association between several measures of total fees (it uses size‐adjusted and abnormal fees) and two metrics of accruals quality in all years (2000‐2003), consistent with economic bonding being a determinant of auditor behavior rather then auditor reputation concerns.

Facing the competition pressure of internationalization and diversification, the semiconductor industry of Taiwan has to increase the activation/utilization rate of machines, enhance flow speed and values, cut down delivery and reduce costs in an efficient way in reaction to a shortening product life cycle and the global market requirements. As a result, introduction of ERP has become a critical factor of enhancing competitiveness. The purpose of this study is establish a systematic evaluation and improvement mechanism to locate the risk priority number (RPN) of implementation items via failure mode and effects analysis (FMEA) for semiconductor related industries in Taiwan while introducing ERP.

A standardized system introduced performance matrix based on the performance evaluation matrix (PEM) will be established in accordance with the locations of severity (S), occurrence (O) and detection (D) and the three RPN indices, in the PEM. Performance levels will be assessed and the performance improvement strategy introduced by the system will be formulated. Finally, items falling within the non‐appropriate performance zone will be specified through the quality function development (QFD) method.

From the results of the case study, the proposed systematic evaluation and improvement on the performance of introducing ERP for the semiconductor industry in Taiwan can be conducted in an efficient way.

All that the management needs to do is to correspond to the positions of these RPN indices of implementation items on the performance matrix. Performance levels will be assessed and the performance improvement strategy introduced by the system will be formulated.

The PEM is demonstrated to be suitable to define the best countermeasure can be sought to serve as a reference for the semiconductor related industries in Taiwan to introduce ERP.

Aims to assess the effect of European Union performance directives related to CE marking on the machinery industry of Taiwan.

This paper adopts a questionnaire to collect information. By means of a statistical scheme, performance indices of importance and difficulty, which meet the directives requirement, are designated. The performance evaluation matrix presented by Lambert and Sharma is modified using an introduced standardized system.

Management in the industry needs simply to locate the difficulty and importance of the directive on a performance matrix. Performance levels can be assessed and the strategy for improving the performance of CE marking established.

Provides information on the best countermeasure that can be obtained to serve as a reference for the industry to introduce CE marking.

Although there are many quality measurement theories and models, all are imperfect; that is, each has its own advantages and disadvantages. Particularly, some models cannot indicate accurate improvement priorities. The purpose of this study is to develop an integrated performance model that improves service quality and acquires accurate improvement priorities that promote customer satisfaction and eliminate resource wastage.

This study applied a performance matrix and quality loss function (QLF) theory to determine priority items needing improvement. A questionnaire was designed to determine the priority of improvement objectives derived from certain questionnaire items that do not fall into the appropriate performance zone (APZ) of the performance matrix. Finally, the QLF was adopted to rank the improvement objectives in terms of priority. A large QLF area indicates customer satisfaction needs improvement.

This study utilized an employee satisfaction survey to demonstrate this matrix, and found that it reflects the improvement priorities of different items and avoids the shortcomings of other models. In this case study, 11 items must be improved; furthermore, five items with the greatest QLF areas became the priority items for improvement.

This performance matrix also considers the items of surplus resource investment, which can be included in improvements, thereby avoiding resource wastage.