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11 – 20 of over 65000Kym Boon, Jill McKinnon and Philip Ross
The paper aims to analyse audit service quality attributes that were perceived to be important in compulsory audit tendering (CAT) in local councils in New South Wales (NSW). It…
Abstract
Purpose
The paper aims to analyse audit service quality attributes that were perceived to be important in compulsory audit tendering (CAT) in local councils in New South Wales (NSW). It focuses principally on whether CAT leads to an impairment of auditor independence and audit quality.
Design/methodology/approach
A questionnaire survey was conducted of 235 NSW local council finance professionals and 35 local council internal auditors in May 2006.
Findings
The most important attributes in evaluating audit service quality were industry expertise, audit firm experience with a council, technical competence, independence, ethical standards and due care. The least important attributes were scepticism, freshness of perspective, audit firm size, and non‐audit services. There is considerable consistency in the findings with those in non‐CAT contexts.
Research limitations/implications
The paper is subject to the general limitations of the survey questionnaire method. A further limitation is that audit quality was assessed using perceptions of audit service quality by preparers of local council financial statements, rather than by users of those statements.
Practical implications
Audit firms will be better able to understand the audit service quality attributes valued by local council clients, to differentiate their promotional and service‐provision strategies, improve their audit quality, and better satisfy local council clients. Concerns that CAT may impair audit independence and audit quality do not appear to be founded.
Originality/value
Because the results are generally consistent with findings in non‐CAT contexts, there can be more confidence in CAT as a regulatory form of audit procurement.
Maryna Murdock, Nivine Richie, William Sackley and Heath White
The purpose of this paper is to determine if the failure of the Securities and Exchange Commission (SEC) to persecute Madoff is, in fact, an ethical failure. The authors turn to…
Abstract
Purpose
The purpose of this paper is to determine if the failure of the Securities and Exchange Commission (SEC) to persecute Madoff is, in fact, an ethical failure. The authors turn to the extension of Aristotelian theory of moral values, virtue epistemology, to identify specific failures. The authors generalize this study’s conclusions to an overall responsibility of regulatory agencies to exercise epistemic virtues in their decision-making process. The authors explore how behavioral biases confound the execution of epistemic duty, and how awareness of behavioral biases can alleviate epistemic failures. The authors conclude this study with recommendations to prevent future frauds of Madoff proportions.
Design/methodology/approach
The authors rely on recent advances in virtue epistemology and behavioral finance. The authors combine these two theoretical approaches to better understand the duty of competence inherent in being a finance professional, and even more so in being a regulator entrusted with overseeing financial industry, and psychological biases that may prevent finance professionals and regulators from performing this duty.
Findings
The paper concludes that the SEC employees failed to exercise epistemic virtues in their handling of the complaints implicating Madoff’s firm of fraud. This failure reveals a consistent pattern of behavioral biases in decision-making. The authors posit that knowledge of ethical theory, specifically virtue epistemology, as well as awareness of behavioral biases, which inhibit epistemically virtuous cognitive process, can improve the functioning of both finance industry and its overseers. The authors suggest that future finance professionals and regulators need to acquire this knowledge while pursuing their undergraduate education: it is the duty of business schools to facilitate this progress.
Originality/value
This paper combines the theory of virtue epistemology with the current knowledge of behavioral biases, which distort rational decision-making, to explain the failures of regulators to analyze fraud reports. The authors extend this finding to recommend the inclusion of the theory of virtue epistemology in business schools’ ethics curriculum.
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Susan Hoadley, Leigh N Wood, Leonie Tickle and Tim Kyng
– The purpose of this paper is to investigate and identify threshold concepts that are the essential conceptual content of finance programmes.
Abstract
Purpose
The purpose of this paper is to investigate and identify threshold concepts that are the essential conceptual content of finance programmes.
Design/methodology/approach
Conducted in three stages with finance academics and students, the study uses threshold concepts as both a theoretical framework and a research methodology.
Findings
The study identifies ten threshold concepts in finance that are clearly endorsed by finance academics. However, the extent to which students are explicitly aware of the threshold concepts in finance is limited.
Research limitations/implications
As well as informing further research into the design and delivery of finance programmes, the findings of the study inform the use of threshold concepts as a theoretical framework and a research methodology. The study does not explore the bounded, discursive, reconstitutive and liminal aspects of threshold concepts. Implications include the lack of recognition of more modern concepts in finance, and the need for input from industry and related disciplines.
Practical implications
The threshold concepts in finance provide the starting point for finance educators in the design and delivery of finance programmes. In particular, the threshold concepts in finance need to be made more explicit to students.
Social implications
Using the threshold concepts in finance as well as the other findings of this study to inform to finance curriculum design and delivery is likely to achieve better quality educational outcomes for finance students as well as better prepare them for professional finance roles.
Originality/value
The finance curriculum is under researched and for the first time this study identifies the threshold concepts in finance to inform the design of finance programmes.
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Therèse de Groot and Arco van de Ven
The purpose of this paper is to use qualitative research findings to describe and analyze the use of a new teaching approach for a better understanding of earnings management.
Abstract
Purpose
The purpose of this paper is to use qualitative research findings to describe and analyze the use of a new teaching approach for a better understanding of earnings management.
Design/methodology/approach
Three classroom workshop designs with finance professionals were performed as an experiment to discuss the underlying assumptions of mainstream earnings management research. The outcome of the experiment is analyzed and serves as a basis for reflection on the new teaching approach.
Findings
The teaching experiment revealed the value to participants in discussing the complexity of the accounting choice process. The workshops provided insights into the wide range of accounting choices that finance professionals are confronted with and into the differences in perception of the participants relating to the accounting choices to be made. These insights contradict the assumptions of a “neutral reporting process” and solely “purposeful interventions” used in mainstream earnings management research. Analyzing the elements of the different workshop settings in relation to the outcome of the discussion identified strengths and weaknesses of each setting and generated ideas for further development of the teaching approach.
Practical implications
This research note adds to the understanding on how qualitative research can be used in teaching and shows that it is also coherent with using teaching as a site for qualitative research.
Originality/value
The discussions relating to the limitations of mainstream accounting research are predominantly of a general nature. This research note takes these discussions into consideration by exploring the subject of earnings management, offering an alternative teaching approach.
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Russell D. Lansbury and Annabelle Quince
Various aspects of managerial and professional employees in Australia are examined in an attempt to establish if the Australian experience is similar to that reported in other…
Abstract
Various aspects of managerial and professional employees in Australia are examined in an attempt to establish if the Australian experience is similar to that reported in other countries where “management” appears to have emerged as a third force between the employers and organised labour. It is argued that the new style manager is a younger, more highly educated “professional” but that the managerial function is also changing. A survey, conducted in Australia during 1985 of senior executives and 14 large scale organisations from both the public and private sector, provides the basis for this report of the changing characteristics of managerial and professional employees in Australia. Areas explored include the proportion of managers and professionals as a percentage of the labour force; particular characteristics which are emerging; education levels and qualifications; the process governing the movement of managers within the labour market; the effect of recent legislation on remuneration systems; and the degree of union membership among managers.
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H. Kent Baker, Sujata Kapoor and Tanu Khare
Financial professionals are increasingly important in the Indian financial system. Our study examines the association between the Big Five personality traits and Indian financial…
Abstract
Purpose
Financial professionals are increasingly important in the Indian financial system. Our study examines the association between the Big Five personality traits and Indian financial professionals' behavioral biases when making investment decisions.
Design/methodology/approach
After testing our questionnaire's reliability and validity, we used it to obtain the sample responses. We used multiple regression analysis and other statistical tools to identify the relationships between the Big Five personality traits and behavioral biases.
Findings
Our findings reveal a high level of extraversion and conscientiousness, a moderate level of agreeableness and openness and a low neuroticism level among financial professionals. The results show a significant association between neuroticism, extraversion, openness and all behavioral biases except anchoring bias. The neuroticism trait has a statistically significant relationship with all behavioral biases examined, whereas agreeableness and conscientiousness traits lack a significant association with behavioral biases. The openness trait is associated with many emotional biases and cognitive heuristics, while the extraversion trait has a significantly positive relationship with availability bias.
Research limitations/implications
Future researchers could analyze primary (survey) and secondary investor data from brokerage houses. Using a larger sample could provide more generalizable findings. Researchers could also consider other aspects of investment decision-making using various asset classes. Understanding financial professionals' personality traits and behavioral biases could help them develop strategies to suit client needs.
Originality/value
This study provides the first comprehensive examination of the association between personality traits and behavioral biases of Indian financial professionals.
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This study aims to develop a Sharīʿah-compliance rating mechanism for the Islamic financial services industry (IFSI), with a special focus on banking. The banking sector is taken…
Abstract
Purpose
This study aims to develop a Sharīʿah-compliance rating mechanism for the Islamic financial services industry (IFSI), with a special focus on banking. The banking sector is taken as the area of focus due to its leadership role in the volume of global Sharīʿah-compliant assets.
Design/methodology/approach
The objectives of the Islamic financial system (IFS) are selected as the basis for ratings. A range of performance indicators (leading to achievement of the objectives) is grouped into four broader categories and used in the study to allocate scores with a sum total of 100. Special considerations – including the amount of resources required in performing an activity, suitability of prevailing business conditions, the degree of compulsion/discretion in performing a task and linkage with the essence of the IFS – were taken into account in the allocation of scores.
Findings
This study groups multiple performance measures into four categories, including portfolio construction (deposits mechanism, participatory and asset-based modes of financing), access to finance (service to the less-privileged and sector screening), reputation (disclosures and stakeholders’ survey) and Sharīʿah governance (Sharīʿah supervision and controls, charitable operations, human resources, product development and organization). The Portfolio, Audit, Reputation and System (PARS) rating system is then developed.
Practical implications
A Sharīʿah-compliance rating system is helpful in measuring the progress towards goal achievement of the IFS and in gaining stakeholders’ trust. It is also important for Sharīʿah boards and regulators in policy formulation, for management in addressing weaknesses and taking corrective measures and potentially for standard-setting bodies.
Originality/value
This study presents a comprehensive quantitative Sharīʿah-compliance rating mechanism, taking into consideration the objectives of the IFS – equitable distribution of wealth and financial stability, in addition to Sharīʿah-compliance in operations. Development of Sharīʿah-compliance quality ratings for Islamic banking is essential to gain customers’ trust; the suggested methodology is thus a contribution to the literature on Islamic finance.
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Nasim S. Shirazi, Laura A. Kuanova, Adilbek Ryskulov and Aziya G. Mukusheva
This paper aims to take stock of the Islamic finance experience and aims to identify an approach for further development in Kazakhstan, using qualitative and quantitative…
Abstract
Purpose
This paper aims to take stock of the Islamic finance experience and aims to identify an approach for further development in Kazakhstan, using qualitative and quantitative assessments.
Design/methodology/approach
The paper presents a conceptual framework based on literature review and content analysis. Furthermore, the study uses a survey-based methodology to collect data and determine the prospects, challenges and possible remedies. The quantitative parameters of the potential of Islamic finance in Kazakhstan are based on the assessment of funds on bank deposits, which can be considered potential resources for Islamic financial instruments.
Findings
The results suggest improving the legal framework and institutional environment to grow Islamic finance in the country. Raising trust levels in a Shariah-based system within the local population, reducing transaction costs and reducing information asymmetry allow raising public awareness of Islamic finance and integrating Islamic finance into the conventional financial system.
Research limitations/implications
This paper is not free from limitations and does not focus on implementing the suggested results.
Social implications
This work elaborates in what way the Islamic finance advancement affects the development of economics and focuses on co-financing of real asset-based projects, with the risk and loss sharing; charity; strict prohibitions on the financing of haram activities, pseudo-needs; and subordination of the individual’s interests to society.
Originality/value
The proposed study presents originalities and it identifies the significant challenges and barriers for further Islamic financial industry development in Kazakhstan by professionals survey. Furthermore, the study assesses potential Islamic finance assets and provides recommendations for successful Islamic finance advancement, considering the peculiarities of the national economy.
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