Search results

1 – 10 of 143
Article
Publication date: 7 November 2016

Pamela Kent, Richard Anthony Kent, James Routledge and Jenny Stewart

The purpose of this paper is to examine the effectiveness of voluntary governance mechanisms in Australia.

3203

Abstract

Purpose

The purpose of this paper is to examine the effectiveness of voluntary governance mechanisms in Australia.

Design/methodology/approach

This study identifies similar choices of corporate governance by Australian firms and tests the effectiveness of the choices made based on the earnings quality of reported firms. Cluster analysis is conducted using governance best practice variables, firm size and an earnings quality variable.

Findings

This paper’s results support the voluntary governance approach for smaller firms, but suggest that mandatory governance requirements could be beneficial for larger firms. Evidence suggests that a benefit accrues for larger firms with the adoption of governance best practice. Cluster analysis indicates that larger firms tend to exhibit higher levels of adoption of governance best practice than smaller firms.

Originality/value

This paper adds to the literature by providing important information regarding the suitability of adoption of voluntary governance mechanisms in Australia.

Details

Accounting Research Journal, vol. 29 no. 4
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 19 October 2022

John Goodwin, Pamela Fae Kent, Richard Kent and James Routledge

The purpose of this study is to examine if partner cross-contagion in audit offices is associated with client reporting quality. To this end, the authors test if the presence in…

Abstract

Purpose

The purpose of this study is to examine if partner cross-contagion in audit offices is associated with client reporting quality. To this end, the authors test if the presence in an audit office of a partner with a highly aggressive style is associated with the reporting quality of other partners’ clients. Partners with a highly aggressive style are identified by their tendency to approve favorable client reporting. The authors add to the existing literature that provides limited and equivocal evidence on audit office cross-contagion.

Design/methodology/approach

Partner style is determined in an estimation period from 2010 to 2014. Aggressive style is identified when partners tend to approve favorable client reporting, which is shown by a positive value for their clients’ median discretionary accruals. Partners are considered to exhibit a highly aggressive style if they have positive median client discretionary accruals within the 90th percentile. Cross-contagion analysis is then conducted in a test period from 2015 to 2019 by determining if the presence in an office of a partner with a highly aggressive style is associated with the reporting quality of other partners’ clients. Two measures of client reporting quality used. These are the accuracy of current-period accruals in predicting period-ahead cash flows and earnings management related to benchmark beating.

Findings

This study finds partner cross-contagion of highly aggressive style in Big 4 offices that is associated with lower client reporting quality for non-Metals and Mining industry clients. This cross-contagion only occurs when the contagious partner has a very high level of aggressive style. This study finds Big 4 partners are susceptible to aggressive style cross-contagion regardless of their own idiosyncratic style. The results of this study show more cross-contagion in small Big 4 offices and mitigation of cross-contagion for economically important clients. Cross-contagion in non-Big 4 offices is observed for Metals and Mining industry clients.

Originality/value

By determining style from partners’ past clients’ discretionary accruals, this study extends prior cross-contagion research that relies on restatements to identify style. This study examines several other cross-contagion issues not addressed in prior studies. These include differences in cross-contagion for Big 4 and non-Big 4 offices and for large and small Big 4 offices, partners’ susceptibility to cross-contagion and the influence of client importance.

Details

Managerial Auditing Journal, vol. 38 no. 1
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 20 March 2023

Grant Richardson, Ivan Obaydin and Pamela Fae Kent

Considering the importance of environmental lawsuits in the capital market specifically and society more generally, the authors examine whether environmental lawsuits are related…

Abstract

Purpose

Considering the importance of environmental lawsuits in the capital market specifically and society more generally, the authors examine whether environmental lawsuits are related to the cost of bank loans for the first time.

Design/methodology/approach

This study uses a US sample of 7,684 loans from 1,409 individual borrowing firms over the 1995–2015 period. The hypothesis is tested using lagged data from the year before the start of a bank loan, and firm fixed effects panel regression analysis is applied to control for correlated omitted variable bias. To further address endogeneity concerns, the authors use a difference in differences analysis that exploits the Deepwater Horizon oil spill on April 20, 2010, to establish causality. Finally, the authors use the entropy balancing method as an additional endogeneity check.

Findings

The authors find a positive relationship between environmental lawsuits and firms' bank loan costs. The results are economically significant. In particular, a one standard deviation increase in environmental lawsuits is related to a 2.07 basis point increase in bank loan costs. The results are robust to various endogeneity checks. Cross-sectional analyses indicate that a poor information environment, weak corporate governance, and low corporate social responsibility (CSR) levels strengthen the positive relationship between environmental lawsuits and bank loan costs. Finally, additional analyses show that environmental lawsuits are significantly negatively related to the loan amount and maturity contract provisions.

Originality/value

The authors provide new empirical evidence that increasing understanding of the economic consequences of environmental lawsuits on bank loan costs.

Details

Journal of Accounting Literature, vol. 45 no. 3
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 23 August 2011

Jagdish Agrawal, Pamela Grimm, Shyam Kamath and Thomas Foscht

This study seeks to examine differences in the signals of brand quality that consumers utilize in and across different countries. The approach is driven by the practical goal of…

2214

Abstract

Purpose

This study seeks to examine differences in the signals of brand quality that consumers utilize in and across different countries. The approach is driven by the practical goal of helping international firms understand how they could tailor their marketing mix to target consumers based on the particular signals of brand quality that they use in different countries.

Design/methodology/approach

Survey data are collected from Austria, Belgium, Hong Kong, Indonesia, Russia, Singapore, Thailand and the USA and analyzed using factor analysis to identify the signals that are used as extrinsic and intrinsic cues of brand quality in different clusters of countries. Two major dimensions of signals of quality are identified and used to generate four clusters of countries representing different beliefs in signals of brand quality.

Findings

Two major dimensions of signals of quality are identified and used to generate four clusters of countries representing different beliefs in signals of brand quality. These dimensions broadly fall in to those that can be characterized as external signals (brand popularity, retailer's name and volume of advertising) and internal signals (brand name, price and country of origin) with the eight countries clustering in terms of these signals. Thus, Austria, Belgium, Hong Kong and the USA form one cluster with Thailand and Russia forming another cluster while Indonesia and Singapore show differences in their signal preferences.

Practical implications

Practical implications in terms of standardization versus differentiation of marketing mix strategies are discussed. The most important implication is that differentiation of marketing strategies would seem to be advantageous contrary to the commonly held view that international firms need to standardize their marketing strategies in the face of increasing globalization and alleged consumer convergence.

Originality/value

This study seeks to examine differences in the signals of brand quality that consumers utilize in and across different countries.

Details

Journal of Product & Brand Management, vol. 20 no. 5
Type: Research Article
ISSN: 1061-0421

Keywords

Content available
Article
Publication date: 7 November 2016

Reza Monem

1557

Abstract

Details

Accounting Research Journal, vol. 29 no. 4
Type: Research Article
ISSN: 1030-9616

Article
Publication date: 18 August 2014

Ben Lowe, Fanny Chan Fong Yee and Pamela Yeow

The purpose of this study is to resolve inconsistencies in the literature about how one-time price promotions affect reference prices. Specifically, this study suggests that the…

5182

Abstract

Purpose

The purpose of this study is to resolve inconsistencies in the literature about how one-time price promotions affect reference prices. Specifically, this study suggests that the measure of reference price used within a study (e.g. expected price or fair price) can affect the outcomes of that study.

Design/methodology/approach

This research uses three separate experiments, replicating and extending existing work, to simulate purchasing decisions for products in the context of a price promotion. Experiments allow careful control of the confounds presumed to cause the inconsistencies between studies.

Findings

Study 1 shows that measurement of different reference prices within the same experiment leads to carryover effects, which inflate the correlation between measures. Expected price and fair price appear to be conceptually and empirically distinct and should be measured separately to reduce design artifacts. Study 2 shows that one-time price promotions affect fair price, but not expected price, and Study 3 shows expected price and fair price converge after multiple promotions.

Research limitations/implications

Independent measurement of reference price concepts allows robust claims about their distinctiveness. These findings have implications for how reference price should be measured in survey research and for pricing and promotional strategy.

Originality/value

This research contributes by showing how the measure of reference price used affects the outcomes of price promotion studies. It does this through the replication and extension of past research. Replication allows greater confidence in the findings of past research, and testing the same findings under different conditions allows for the boundaries of existing research to be delimited and generalizations to be made.

Details

Journal of Product & Brand Management, vol. 23 no. 4/5
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 24 August 2010

Xin Liu, Michael Y. Hu and Pamela E. Grimm

The goal of the paper is to examine the affect transfer process of the brand extension by developing a conceptual framework that integrates two factors important to this process…

2670

Abstract

Purpose

The goal of the paper is to examine the affect transfer process of the brand extension by developing a conceptual framework that integrates two factors important to this process: the expectancy and relevancy of brand extensions.

Design/methodology/approach

Two experimental studies with a sample of 250 respondents provide empirical support that both expectancy and relevancy positively influence the affect transfer process.

Findings

The study first tests both factors at the product level as well as at the product attribute level. The two factors enhance the affect transfer process in different manners. Expectancy facilitates the transfer from the parent product category to the extension, whereas relevancy enhances the transfer from the brand associations to the extension product. The greatest affect transfer occurs when both factors are present.

Originality/value

The study proposes a theoretical framework that for the first time integrates the two main streams of literature in brand extensions. The proposed framework explains the affect transfer process in brand extensions, and helps understand consumers' attitude towards brand extension products.

Details

Journal of Product & Brand Management, vol. 19 no. 5
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 16 September 2013

Pamela Kent and Tamara Zunker

The purpose of this study is to provide evidence on the category, quantity and quality of voluntary employee-related information Australian listed companies disclose in their…

2852

Abstract

Purpose

The purpose of this study is to provide evidence on the category, quantity and quality of voluntary employee-related information Australian listed companies disclose in their annual report. An explanation is also sought to determine whether companies adopt employee-related disclosures to legitimise their relationship with society. Voluntary adoption of corporate governance best practice recommendations is used as a measure of companies' attempts to attain ex ante legitimacy. Media agenda setting theory is used as a measure of an attempt to gain legitimacy ex post following adverse publicity from the media.

Design/methodology/approach

The annual reports of all companies with at least one employee listed on the Australian Stock Exchange with a 30th June balance date of 2004 are examined to identify employee-related disclosures. This employee-related information is categorised and identified as positive, negative or a combination of positive and negative information by three independent coders. Ordinary least squares regression is used to explain the quantity of disclosure with a corporate governance score and number of adverse newspaper articles included as experimental variables.

Findings

Adopting voluntary corporate governance mechanisms is associated with the quantity of voluntary annual report employee-related disclosures. Higher levels of adverse publicity are also significantly associated with higher quantities of employee-related disclosures. The quality of these disclosures is questioned because 124 companies had adverse publicity relating to employees and only two of these companies reported any negative employee-related disclosures. Few companies from the whole sample reported any negative information relating to their employees in their annual report, with 98 per cent of companies reporting positive news or no news.

Originality/value

Most previous social responsibility research has focused on environmental disclosures. This study is original because it focuses on employee-related disclosures. Honest, transparent employee disclosures are an international corporate governance recommendation by the Organisation for Economic Co-operation and Development and studies have not previously tested the relation between reporting recommended corporate governance mechanisms and employee-related disclosures in annual reports.

Details

Accounting, Auditing & Accountability Journal, vol. 26 no. 7
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 1 August 2006

Puan Yatim, Pamela Kent and Peter Clarkson

The purpose of this study is to examine the association between external audit fees, and board and audit committee characteristics of 736 Malaysian listed firms. It is…

7883

Abstract

Purpose

The purpose of this study is to examine the association between external audit fees, and board and audit committee characteristics of 736 Malaysian listed firms. It is hypothesised that good corporate governance practices reduce auditors' risk assessments, resulting in lower audit fees. Drawing on the existence of a clearly identifiable ethnic domination of board membership and ownership of Malaysian listed firms, the study also posits that Bumiputera‐controlled firms pay higher audit fees because of their weaker governance practices.

Design/methodology/approach

This study employs a cross‐sectional analysis of 736 firms listed on the Bursa Malaysia for the financial year ending in 2003. Multiple regression analysis is used to estimate the relationships proposed in the hypotheses.

Findings

Overall, the results of this study reveal that external audit fees are positively and significantly related to board independence, audit committee expertise, and the frequency of audit committee meetings. The study also finds a strong negative association between external audit fees and Bumiputera‐owned firms. An additional analysis into the internal governance structures of firms in the sample show that Bumiputera firms practice more favourable corporate governance practices compared to their non‐Bumiputera counterparts.

Originality/value

This study is a unique contribution in that it provides data on corporate governance practices in Malaysia for a large sample in the period after the corporate governance reforms taken by Malaysian capital market regulators and participants. Previous studies have shown that Bumiputera‐controlled firms pay higher audit fees than non‐Bumiputera‐controlled firms. These studies have not tested theoretical explanations for this fee differential. A theoretical explanation provided in the current study is that Bumiputera‐controlled firms pay higher audit fees than non‐Bumiputera‐controlled firms partially because of differences in corporate governance practices. The study finds conflicting results with previous research suggesting that corporate governance practices have changed in Malaysia since the amendments of Bursa Malaysia Listing Requirements, 2001.

Details

Managerial Auditing Journal, vol. 21 no. 7
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 6 September 2011

Pamela Kent

The purpose of this paper, using transaction cost economics as a theoretical framework, is to seek an understanding of a company's decision to purchase Management Advisory…

1785

Abstract

Purpose

The purpose of this paper, using transaction cost economics as a theoretical framework, is to seek an understanding of a company's decision to purchase Management Advisory Services (MAS) from their external auditors and other consultants as opposed to assembling MAS internally within the company.

Design/methodology/approach

Data from annual reports for a pooled sample of 3,154 company years were collected for listed Australian companies to determine MAS from auditors. Data for a second sample were collected by undertaking a survey of listed companies to provide a figure for total management advisory services paid to auditors and other consultants. Ordinary least squares regression was used to analyse the data and predict companies' decision to outsource or internally generate MAS.

Findings

It is found that purchases of MAS from external auditors and other consultants are associated with, restructuring, number of controlled entities (subsidiaries), number of geographical segments, management change and frequency of contracting. Other company characteristics, including company's industry membership, short‐term growth, leverage, return on assets, use of a “big 5” auditor, type of audit report, and audit fees also explain the quantity of MAS purchased by a company from their external auditors and other consultants.

Originality/value

Transaction cost economics has not previously been applied to explain the decision to generate MAS internally by assembling knowledge within the company versus outsourcing from auditors and other consultants. The study makes use of unique data sets because it covers the period when regulations were not foreshowed restricting accounting firms supplying their audit clients with MAS.

Details

Managerial Auditing Journal, vol. 26 no. 8
Type: Research Article
ISSN: 0268-6902

Keywords

1 – 10 of 143