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– This study aims to explore how Australian Securities Exchange (ASX) listed companies manage their statutory continuous disclosure (CD) obligations.
Abstract
Purpose
This study aims to explore how Australian Securities Exchange (ASX) listed companies manage their statutory continuous disclosure (CD) obligations.
Design/methodology/approach
Employing aspects of Gibbins et al.'s corporate financial disclosure framework, this study conducts semi-structured interviews with 22 experienced senior managers from diverse companies to examine in depth the key antecedents, structures and issues influencing the CD process.
Findings
The findings indicate that companies' preference to deal with CD as a commercial or legal issue, managers' practical CD experience, who assumes responsibility for CD, owners' and market expectations, third parties, environmental uncertainties and media are important antecedents in the CD process. The importance of these is contingent on company characteristics. Large companies primarily use structured processes and responsive communication networks whereas small to medium companies rely on informal processes and interpersonal communications. Despite following best practice guidelines, companies face multiple issues in managing CD.
Research limitations/implications
Prior disclosure beliefs and personal biases may have a disproportionate impact on CD behaviour. Future research can examine more closely how these behavioural characteristics influence companies' disclosure policies.
Practical implications
This study offers insights for managers interested in managing CD more effectively. The findings suggest the importance of experience, behaving in a proactive manner and educating employees on companies' CD obligations. It offers insights for regulators on aspects of guidance that could be improved.
Originality/value
The study draws on Gibbins et al.'s theoretical framework to furnish a more complete and refined understanding of the CD process.
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David Mutua Mathuva and H. Gin Chong
This paper aims to utilize institutional theory to examine the impact of the 2008-2010 regulatory reforms on compliance with mandatory disclosures by savings and credit…
Abstract
Purpose
This paper aims to utilize institutional theory to examine the impact of the 2008-2010 regulatory reforms on compliance with mandatory disclosures by savings and credit co-operatives (SACCOs) in Kenya.
Design/methodology/approach
Two-stage least squares panel regression approach is utilized to analyse data covering 1,272 firm-year observations for 212 SACCOs over a six-year period, 2008-2013. An analysis of the pre- and post-regulation impacts on compliance with mandatory disclosure requirements is also performed.
Findings
The results, which are in support of the institutional theory, reveal that licensed SACCOs engage in higher compliance with mandatory disclosures, and this improves from the pre- to the post-regulation period. The results show that SACCOs under inquiry engage in lower compliance with mandatory disclosure requirements, especially in the post-regulation period. The findings also reveal a significant and positive association between SACCO size, co-operative governance and compliance with mandatory disclosure requirements.
Research limitations/implications
The study focuses on transition-level SACCOs in a single country. An extension into other jurisdictions with nascent, transitional and mature SACCOs would provide greater insights into the impact of disclosure regulation. Further, the study uses a self-constructed disclosure checklist which is subject to coding errors and biases.
Practical implications
The findings highlight the need for SACCO regulators and accounting professional body to devise incentives to improve the level of compliance with required disclosures.
Originality/value
The study contributes to the dearth of evidence on the efficacy of the introduction of mandatory disclosure requirements in a developing country where compliance is problematic because of difficulties with enforcement.
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Yosra Mnif and Hela Borgi
The purpose of this study is to examine the association between two corporate governance (CG) mechanisms, namely, the board of directors and the audit committee (AC) and the…
Abstract
Purpose
The purpose of this study is to examine the association between two corporate governance (CG) mechanisms, namely, the board of directors and the audit committee (AC) and the compliance level with International Financial Reporting Standards (IFRS) mandatory disclosure requirements across 12 African countries.
Design/methodology/approach
This paper uses a self-constructed checklist of 140 items to measure the compliance with IFRS mandatory disclosure requirements (here after, COMP) of 202 non-financial listed firms during the 2012–2016 period. This paper applies panel regressions.
Findings
The findings reveal that CG mechanisms play an important role in enhancing compliance with IFRS in the African context. The results show that board independence, AC independence and the number of meetings held by the AC are positively associated with COMP. Regarding expertize, this paper find that AC industry expertise along with accounting financial expertise is associated with a higher level of COMP than accounting financial expertize alone. These results show the importance of the CG mechanisms to enforce African companies to fully comply with IFRS required disclosures.
Practical implications
The findings should give a signal to supervisory authorities that more effort is necessary to enforce IFRS across African countries if the introduction of IFRS is to bring the expected benefits to investors and other users. Hence, the lack of full compliance should remain a concern for regulators, professional accounting bodies and policymakers.
Originality/value
This study contributes to the literature by providing further insights that, within the African region an understudied context, extend current understanding of the association between CG mechanisms and COMP.
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The study examined how nursing staff in a secure forensic unit make judgements about female patients' level of risk and whether a patient's lack of engagement in therapy was a…
Abstract
The study examined how nursing staff in a secure forensic unit make judgements about female patients' level of risk and whether a patient's lack of engagement in therapy was a salient factor. Results indicate that staff accounted for the following historical factors when making judgements: past aggression, substance misuse, symptoms of psychosis and personality disorder, and the following clinical factors: lack of insight, non‐compliance and lack of motivation. A positive therapeutic alliance between patient and key‐worker, high levels of self‐confidence in staff members, a supportive nursing team and an institution with good procedural security were perceived to be protective factors.
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This paper is about apparent failure in an aspect of financial regulation: non‐compliance with regard to taxation. An idealised compliance model of tax advice, from the Inland…
Abstract
This paper is about apparent failure in an aspect of financial regulation: non‐compliance with regard to taxation. An idealised compliance model of tax advice, from the Inland Revenue perspective, merely involves application of revenue law to the facts to determine fiscal liabilities. A less compliant approach involves, for example, creative accounting to amend figures and so reduce such liabilities. The focus here, however, is on legal creativity to reduce or even cancel tax bills: just how tax advisers match, mismatch or rematch their clients' facts interactively with malle‐able interpretations of both revenue and other laws. Following classification of various tax devices — with three examples for each of five categories — recurrent concepts, themes and techniques of avoidance are then further analysed. This analysis not only confirms that legal creativity makes compliance problematic but also offers a novel exposition of just how that paradoxical use of the law occurs.
Hela Borgi and Yosra Mnif
The purpose of this study is to investigate the effect of enforcement, and more particularly government quality and the stock market development, on compliance with International…
Abstract
Purpose
The purpose of this study is to investigate the effect of enforcement, and more particularly government quality and the stock market development, on compliance with International Financial Reporting Standards (IFRS) disclosure requirements in 12 African countries.
Design/methodology/approach
The authors use a self-constructed compliance index from content analysis and apply panel regressions for a sample of 606 firm-year observations during the period 2012 to 2014.
Findings
This analysis illustrates a high level of disparity of information provided by companies, possibly due to the complexity of the selected standards and the depth of information required. The findings reveal that government quality and stock market development have a positive and significant effect on compliance with IFRS disclosure requirements in Africa. This implies that enforcement plays a key role in improving the compliance level across African countries.
Practical implications
These findings should be of interest to government policymakers, professional bodies, regulators and standard setters who are concerned with compliance and financial reporting transparency at a country level. It should be a signal to call for more effort to strengthen the enforcement of accounting standards and capital market supervision by putting in place some disciplinary actions for non-compliance with IFRS. The authors also believe that the results may help African policymakers and regulators enhance the level of compliance with IFRS disclosure requirements by enforcing accounting standards.
Originality/value
This research contributes to the compliance literature by investigating the effect of enforcement on compliance with IFRS disclosure requirements in the African countries, an understudied context where enforcement is a challenge.
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Lukas Prorokowski and Hubert Prorokowski
BCBS 239 sets out a challenging standard for risk data processing and reporting. Any bank striving to comply with the principles will be keen to introspect how risk data is…
Abstract
Purpose
BCBS 239 sets out a challenging standard for risk data processing and reporting. Any bank striving to comply with the principles will be keen to introspect how risk data is organized and what execution capabilities are at their disposal. With this in mind, the current paper advises banks on the growing number of solutions, tools and techniques that can be used to support risk data management frameworks under BCBS 239.
Design/methodology/approach
This paper, based on a survey with 29 major financial institutions, including G-SIBs and D-SIBs from diversified geographical regions such as North America, Europe and APAC, aims to advise banks and other financial services firms on what is needed to become ready and compliant with BCBS 239. This paper discusses best practice solutions for master data management, data lineage and end user implementations.
Findings
The primary conclusion of this paper is that banks should not treat BCBS 239 as yet another compliance exercise. The BCBS 239 principles constitute a driving force to restore viability and improve risk governance. In light of the new standards, banks can benefit from making significant progress towards risk data management transformation. This report argues that banks need to invest in a solution that empowers those who use the data to manage risk data. Thus, operational complexities are lifted and no data operations team is needed for proprietary coding of the data. Only then banks will stay abreast of the competition, while becoming fully compliant with the BCBS 239 principles.
Practical implications
As noted by Prorokowski (2014), “Increasingly zero accountability, imposed, leveraged omnipresent vast endeavors, yielding ongoing understanding […] of the impact of the global financial crisis on the ways data should be treated” sparked off international debates addressing the need for an effective solution to risk data management and reporting.
Originality/value
This paper discusses the forthcoming regulatory change that will have a significant impact on the banking industry. The Basel Committee on Banking Supervision published its Principles for effective risk data aggregation and risk reporting (BCBS239) in January last year. The document contains 11 principles that Global Systemically Important Banks (G-SIBs) will need to comply with by January 2016. The BCBS 239 principles are regarded as the least known components of the new regulatory reforms. As it transpires, the principles require many banks to undertake a significant amount of technical work and investments in IT infrastructure. Furthermore, BCBS 239 urges financial services firms to review their definitions of the completeness of risk data.
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To provide the investment management industry with a summary of the expectations of the Securities and Exchange Commission (SEC)'s examination staff with regard to the development…
Abstract
Purpose
To provide the investment management industry with a summary of the expectations of the Securities and Exchange Commission (SEC)'s examination staff with regard to the development of a culture of compliance.
Design/methodology/approach
A review of certain elements identified by an SEC staffer that are necessary for a firm to have a strong and effective control environment and culture of compliance was carried out. The article explores a firm's strategic vision or “tone at the top,” risk identification, establishment of controls, documentation, accountability and self reporting, and cooperation.
Findings
Confirmation that a firm's success in establishing a culture of compliance is difficult to prove and harder to document. However, an understanding of the concept of developing a compliance culture can allow compliance officers to demonstrate a commitment to ethical and compliant practices.
Originality/value
The SEC's new inspection program evaluates each firm's commitment to compliance and moral and ethical practices. This article provides a basic understanding of the minimum expectations of the SEC's inspection staff.
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Dionysios S. Demetis and Ian O. Angell
This paper seeks to deconstruct the proposed risk‐based approach to anti‐money laundering (AML) and to relate it to the text of the European Union's 3rd Directive. The paper also…
Abstract
Purpose
This paper seeks to deconstruct the proposed risk‐based approach to anti‐money laundering (AML) and to relate it to the text of the European Union's 3rd Directive. The paper also aims to discuss a variety of risk‐related aspects and how they have come to be constructed on the sociological perspective of risk and subsequently to examine the relation of risk elements to AML.
Design/methodology/approach
The theoretical approach of the paper is based on the tradition of second‐order cybernetics and on many of the theoretical concepts discussed by Niklas Luhmann, as well as his work on the sociology of risk.
Findings
The implications for the risk‐based approach on AML are discussed on the basis of how risk can be represented and categorized, and the paradoxes behind various such risk‐classifications are analysed, thus offering a critique on the oversimplification with which risk has been appropriated within AML.
Practical implications
The practical implications of this paper relate to how risk should be considered within the domain of AML and how financial institutions and financial intelligence units should mostly focus on re‐constructing the aspects surrounding risk‐communication.
Originality/value
The originality of this paper lies in its unique treatment of risk within the context of AML, while clearly exposing the unavoidable observational paradoxes that the concept of risk induces, as well as examining the consequences on the risk‐based approach for dealing with AML.
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The paper provides a snapshot analysis on the state of service charge management at the point in which its regulatory framework by RICS changed from a voluntary code of practice…
Abstract
Purpose
The paper provides a snapshot analysis on the state of service charge management at the point in which its regulatory framework by RICS changed from a voluntary code of practice to a mandatory professional statement.
Design/methodology/approach
The data consist of a unique eight-year longitudinal study of service charge statements and practice (2010–2017). Because of the confidential nature of such business-sensitive information, this is a priceless study of real-world practice over such a long period and is able to illustrate both annual compliance and the year-on-year changes. Given this, it is recognised that data are skewed in favour of compliance because they are derived from an actively managed portfolio.
Findings
The results continue to illustrate long-running problems of non-compliance with “required” metrics. Given the inherent bias in the data, this is especially difficult to excuse. The paper also analyses the results in the light of the new RICS professional statement, which requires mandatory compliance. Whilst some of the metrics are advisory, there remain questions over how RICS might realistically enforce so many practitioners to change their existing performance and how willing the institution might be to actually prosecute failure. It also revisits the issue of institutionalised benchmarking of standards. Intriguingly, there are islands of almost perfect compliance, which offers an interesting contrast and raises further research questions on why some practitioners provide such exemplary work.
Research limitations/implications
The data are derived from the clients of a UK property management consultancy. This does preclude any randomness to the sampling. However, the richness of the data and the methodology adopted provide valid data.
Originality/value
This work offers both unique data and an eight-year longitudinal analysis, but also a timely comparison with the requirements within a new RICS professional statement. This shift in regulatory regime reinforces the value of the work.
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