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Article
Publication date: 15 January 2020

Kim Mear, Michael Bradbury and Jill Hooks

This study aims to compare the value relevance of the recognised deferred tax elements under International Accounting Standard 12 (IAS 12): Income Taxes (balance sheet…

Abstract

Purpose

This study aims to compare the value relevance of the recognised deferred tax elements under International Accounting Standard 12 (IAS 12): Income Taxes (balance sheet method) relative to the taxes payable (flow through) method. It also investigates the value relevance of the IAS 12 deferred tax disclosures.

Design/methodology/approach

This study used standard valuation models to examine the association between share price and the recognised amounts and footnote disclosures of IAS 12. The Vuong (1989) test is then used to assess which information set is more value relevant. The sample includes 440 firm years over the period 2008-2012.

Findings

The results show that deferred tax amounts recognised under the balance sheet method provide no more information to investors than the taxes payable method (TPM). Deferred tax footnote disclosures, however, are more relevant than the amounts recognised under the balance sheet method. This study investigates potential reasons for the relevance of footnote disclosures.

Research limitations/implications

This study has not addressed whether the deferral method of deferred tax is relevant. In addition, while footnote disclosures look promising, further research is necessary.

Practical implications

The results suggest, given the complexity and cost of compliance with IAS 12, that the International Accounting Standards Board (IASB) should undertake a comprehensive re-think on the relevance of the balance sheet method in IAS 12 and revert to the TPM.

Originality/value

The IASB and the European Financial Reporting Advisory Group have expressed concerns over the balance sheet method under IAS 12. The IASB and the Financial Accounting Standards Board also have concerns over the cost and complexity of the deferred tax disclosures. The study’s results offer a perspective by examining whether the balance sheet method is value relevant. Prior research has addressed this issue using local data (i.e. pre-International Financial Reporting Standards). This study also provides suggestions for future research into deferred tax footnote disclosures.

Details

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

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Article
Publication date: 3 May 2016

Md. Borhan Uddin Bhuiyan and Jill Hooks

The way in which a firm’s actions are perceived by others is driven by the individual values and ethics of directors (Ntim and Soobaroyen, 2013). The purpose of this paper…

Abstract

Purpose

The way in which a firm’s actions are perceived by others is driven by the individual values and ethics of directors (Ntim and Soobaroyen, 2013). The purpose of this paper is to examine the effects of “problem” directors on the environmental performance of firms. The authors argue that if a board member has a tainted reputation, then environmental performance will be higher as the problem director seeks to rebuild his/her reputation.

Design/methodology/approach

The authors use a sample of the top 500 US companies for 2010 and 2011 and an ordinary least square (OLS) model to capture the impact of “problem” directors on environmental performance. The authors use an independent measure of environmental performance which includes three categories: environmental impact, environmental management (green policies) and environmental reputation (which is affected by disclosure).

Findings

The findings of this paper show that the average environmental impact score is 53.32 per cent, the environmental management green policy score is 35.39 per cent and environmental reputation is 49.86 per cent. A firm which is operated by a problem director has a higher score for environmental management and environmental reputation than non-problem director-affiliated firms. Firms which are managed by a problem director(s) have lower scores for environmental impact than non-problem director-affiliated firms in the USA, indicating a higher level of emissions, water use, waste disposal, etc.

Practical implications

The authors posit that problem directors promote environmental performance as a means to enhance their reputation and divert attention from allegations of previous poor professional behaviour. Regulators and investors should interpret the environmental performance of a firm with caution when a problem director is on the board.

Originality/value

Prior research on the relationship between environmental performance and corporate governance has been based on board composition and characteristics. However, board decision-making reflects the professional experience and personal values of the directors. These factors have not been addressed in the literature to-date and, hence, form this paper’s contribution.

Details

Sustainability Accounting, Management and Policy Journal, vol. 7 no. 2
Type: Research Article
ISSN: 2040-8021

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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…

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

Keywords

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Article
Publication date: 18 November 2013

Glenn Boyle, Michael Bradbury, Jill Hooks and Asheq Rahman

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Abstract

Details

Pacific Accounting Review, vol. 25 no. 3
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 1 February 2001

Jill Hooks, David Coy and Howard Davey

Corporatisation of the New Zealand electricity industry during the 1990s increased the need for improved accountability. The publication of annual reports is one of the…

Abstract

Corporatisation of the New Zealand electricity industry during the 1990s increased the need for improved accountability. The publication of annual reports is one of the prime ways in which organisations meet their accountability obligations. This paper describes the development of a disclosure index from a public accountability perspective and reports the results of its application to the 1999 annual reports of the 33 electricity retail and distribution companies. The index was developed with the support of a panel representing 15 stakeholder groups. It is designed to assess the comprehensiveness (both in extent and quality) of annual report disclosures and incorporates a best‐practice model of annual reporting. Key areas of inadequate disclosure relate to performance measures (financial and non‐financial), segmental information, asset valuation details, and the cost of electricity purchased / generated. Improved disclosure to meet best‐practice guidelines would contribute to improved communication between companies and stakeholders.

Details

Pacific Accounting Review, vol. 13 no. 2
Type: Research Article
ISSN: 0114-0582

Content available
Article
Publication date: 13 September 2011

Glenn Boyle, Michael Bradbury, Jill Hooks and Asheq Rahman

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400

Abstract

Details

Pacific Accounting Review, vol. 23 no. 2
Type: Research Article
ISSN: 0114-0582

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Book part
Publication date: 30 December 2004

Jill Hooks, David Coy and Howard Davey

At any time, there will be differing views on what needs to be done to be properly accountable, because accountees are likely to be in favour of more accountability, and…

Abstract

At any time, there will be differing views on what needs to be done to be properly accountable, because accountees are likely to be in favour of more accountability, and accountors, of less (Perks, 1993). This leads to a tension between these two groups (Ijiri, 1983).

Details

Re-Inventing Realities
Type: Book
ISBN: 978-1-84950-307-5

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Article
Publication date: 23 November 2012

Jill Hooks, Stuart Tooley and Norida Basnan

The purpose of this paper is to identify stakeholders’ expectations of information to be conveyed in local authorities’ annual reports and to develop an index of best…

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818

Abstract

Purpose

The purpose of this paper is to identify stakeholders’ expectations of information to be conveyed in local authorities’ annual reports and to develop an index of best practice performance reporting.

Design/methodology/approach

The paper describes the development of a disclosure index emphasizing the public interest aspect of reporting and the need to provide relevant and meaningful information to stakeholders. The index was crafted from a public accountability perspective and based on the expectations of stakeholders as reconciled and validated by a Delphi panel of experts.

Findings

The wide scope of information that was identified as being important for disclosure by local authorities is consistent with the public accountability paradigm which requires the reporting of comprehensive information (both financial and non financial), about the condition, performance, activities and progress of the entity.

Originality/value

The research posits a model of best practice performance reporting for Malaysian, and other, local authorities to meet the need for greater accountability by these entities.

Details

Journal of Applied Accounting Research, vol. 13 no. 3
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 1 January 2004

Jill Hooks and Chris van Staden

The objectives of financial reporting encompass a decision usefulness role for accounting information. Information is decision useful when it assists users to make…

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1742

Abstract

The objectives of financial reporting encompass a decision usefulness role for accounting information. Information is decision useful when it assists users to make decisions about investing in or doing business with an entity. Decision usefulness is therefore an essential part of the framework within which financial reporting standards are developed. The aim of this research is to assess the decision usefulness of the recently promulgated Financial Reporting Standard 15 (FRS15). To this purpose a random sample of 48 Chartered Accountants and Financial Controllers completed a self‐administered survey regarding various aspects of FRS15 and other factors related to the concept of decision usefulness. Statistical analysis of the responses indicates that respondents agree that overall FRS15 has a positive impact on providing decision useful information. There is strong support for the balance sheet approach on which the standard is based but respondents consider taht the matching approach also provides decision useful information, particularly in respect of allowing the recognition of provisions that do not meet the definition of a liability. The research also considers what respopndents intend to do with current provisions and future provisions following the implementation of FRS15. Although the respondents support consistency, they indicate that, in the case of contingencies, prudence should override consistency. The findings provide an important contribution to the knowledge pertaining to provisions and contingencies.

Details

Qualitative Research in Accounting & Management, vol. 1 no. 1
Type: Research Article
ISSN: 1176-6093

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Article
Publication date: 1 October 2002

Jill Hooks, David Coy and Howard Davey

Following radical restructuring of the electricity industry in New Zealand since 1987, the government adopted a “light‐handed” regulatory regime that used market‐based…

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7883

Abstract

Following radical restructuring of the electricity industry in New Zealand since 1987, the government adopted a “light‐handed” regulatory regime that used market‐based methods involving competition and transparent accountability. This accountability is in part discharged through the provision of information in the corporate annual report. To assess the quality of that communication, a disclosure index was developed and applied to the annual reports of the 33 electricity retail and distribution companies which comprise the entire industry in New Zealand. The index was developed using the ideas and opinions of 15 experts representing broad stakeholder groups. This paper compares the resulting scores for the extent and quality of each index item with the level of importance of those items as stated by the panel. Many items are not adequately disclosed, resulting in an information gap between stakeholders’ expectations and the disclosures provided by the electricity companies. This paper identifies the items and the detail about them needed to close that gap.

Details

Accounting, Auditing & Accountability Journal, vol. 15 no. 4
Type: Research Article
ISSN: 0951-3574

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