Lorne Cummings

The Financial Performance of Ethical Investment Trusts: An Australian Perspective

This study examines whether differences in financial performance exist for investment trusts which base their portfolio selection primarily on an ethical screen, compared to indexes which incorporate a broader spectrum of investments. Results indicate that on a risk-adjusted basis there is an insignificant difference in the financial performance of these trusts against three common market benchmarks. However as to the extent of the directional effect, there does exist slightly superior financial performance by ethical trusts against their respective industry average indexes, but an underperformance against a smaller companys index and the market as a whole. The lack of a distinct advantage in the short to medium term for applying an ethical screen, may in part be due to the recent development of ethical investments in Australia. Stronger performances by older ethical investment trusts may indicate superior returns are more likely to occur over a longer term.

The Effect of Accounting Education and National Culture on Accounting Judgments: A Comparative Study of Anglo-Celtic and Chinese Culture

Countries adopting International Financial Reporting Standards (IFRS) need to educate and train their professional accountants so that they are able to interpret and apply IFRS in a consistent manner. This study examines the effect of national culture and education on the judgments of Australian (Anglo-Celtic) and Chinese final year undergraduate accounting students in Australia. It seeks to understand whether culture influences student interpretation and application of uncertainty expressions, which are used as recognition and disclosure thresholds in IFRS. Results obtained on the cultural dimensions of Uncertainty Avoidance, Individualism, Power Distance, Masculinity and Long-Term Orientation provide evidence that Chinese students exhibit greater conservatism and secrecy compared to Australian students. The results of the study indicate that national culture has a significant effect on the judgments of accounting students when interpreting and applying selected IFRS containing uncertainty expressions. The results also imply that educational similarity does not moderate the effect of culture in influencing the judgments of accounting students. An important implication of the study is that regulators and standard-setters involved in the international convergence of accounting standards need to pay greater attention to cultural factors that may result in a difference in the interpretation and application of IFRS.

Exploring integrated thinking in integrated reporting – an exploratory study in Australia

Purpose Integrated thinking is central to the International Integrated Reporting Council’s (IIRC’s) integrated reporting (IR) framework, which is in turn is related to a potential resurgence of intellectual capital (IC) reporting. However, it remains unclear how key IR stakeholders understand this concept in theory or practice. The purpose of this paper is to explore how key stakeholders interpret integrated thinking; and how pilot organizations are applying integrated thinking in practice. Design/methodology/approach The study involved in-depth semi-structured interviews with key IR stakeholders in Australia, including two IR pilot organizations, one professional association, an accounting professional body, an accounting firm and two IIRC officials. Findings First, the IIRC has not fully defined and articulated the concept of integrated thinking, and there is no shared consensus among practitioners. Second, there is evidence of an evolving understanding of integrated thinking within practice. What remains unclear is how this understanding will develop over time. Research limitations/implications Since interviews were conducted with a relatively small sample of participants in Australia, the results may not be generalizable across different contexts. The study emphasizes the need to interpret carefully IR’s potential contribution to organizational practice through either reporting in general, or IC reporting in particular. Originality/value Despite the centrality of integrated thinking to IR, there has been limited research to date on the concept. Clarifying what integrated thinking means in practice can improve our understanding of a key IR concept, and can advance our understanding of IR’s potential to improve IC reporting and research.

Adoption of the Concept of a Balanced Scorecard within Nsw Health: An Exploration of Staff Attitudes

This paper reports on staff attitudes towards the adoption of a Balanced Scorecard (BSC) concept in the New South Wales Department of Health in Australia. Survey results reveal that staffs perceived usefulness (at the individual level) and perceived ease of use (PEU) have a significant influence on general attitudes, and intention to use the BSC. Participation also had a significantly positive relationship with PEU, and directors, managers and non‐clinicians have a more positive perception of BSC usefulness. The implications of these findings and areas for further research are then discussed.

Juggling the books: the use of accounting information in circus in Australia

This article outlines the role of accounting information in circus in Australia in the approximate period 1847—1963. Responding to the call for an increased historical narrative in accounting, we have studied the literature, documentation and personal memoirs concerning circus in Australia. From our examination, we have abstracted and analysed material that expresses, or implies, the use of accounting information. Themes identified include the magnitude and nature of capital investments; ticket pricing and revenues; the nature and composition of operational costs; standards of internal control; insolvencies and liquidations. We have established that, despite elementary levels of education, many circus people exhibited an intuitive grasp of fundamental accounting principles, albeit in a rudimentary form. Nevertheless, since financial and management reporting practises were typically unsystematic, and even non-existent, in all but the largest circus enterprises, Australian circus management may not have been optimized.

Chapter 3 Research methodology

The aim of this chapter is to outline the research methodology for the study. Section 3.2 will discuss how a positive stakeholder theory can be formulated against the contrasting philosophies of moral universals and moral relativism. The aim of this section is to explain how stakeholder claims such as employee health and safety and environmental protection represent moral universals (fundamental ethical norms) and how differences in their perceived importance have less to do with claims of moral relativism and more to do with economic and social advancement, which can thwart the fulfilment of stakeholder objectives. The conflicting philosophies can hinder a normative approach to stakeholder theory in an international context and highlight the importance of a positive theory of the firm that can explain and predict stakeholder development in different contexts.

Managerial attitudes toward stakeholder salience within selected Western Pacific-Rim economies

ABSTRACT This study empirically examines the attitudes of managers and managerial students in Australia, China and Indonesia, toward the perceived prominence of selected organisational stakeholders. A development model is used to argue that Australian respondents will perceive greater equality in prominence between the selected organisational stakeholders than their Chinese and Indonesian counterparts. Results indicated that Chinese respondents attributed greater prominence toward Government as an organisational stakeholder, and contrary to expectations, perceived greater equality (less variance) in prominence between stakeholders. The study provides a basis on which further work on the perceptions of stakeholder prominence can be undertaken in different contexts.

Potential users’ perceptions of general purpose water accounting reports

Purpose - – The purpose of this paper is to explore the perceptions of potential users about water accounting reports prepared under Australian general purpose water accounting (GPWA), which applies financial accounting techniques to water and could be extended to other areas of natural resource management. In particular, the paper examines the extent to which users believe GPWA reports are useful and facilitate the discharge of accountability by water managers. Design/methodology/approach - – As a theoretical lens the authors apply an extended version of Gray Findings - – Overall, users perceive the introduction of GPWA as useful and believe that the benefits will outweigh the costs. The adoption of a financial accounting approach in terms of accounting standards and prescribed methods for booking and disclosing water “transactions” was broadly supported. In terms of the main users of reports, there was some ambiguity but findings suggested that government agencies were likely to be the main users of GPWA. Users were also concerned about the degree of judgement required to determine the identity and boundaries of a “water report entity”. Perhaps the most controversial aspect related to accountability; while the Accountability Statement was broadly supported there was little consensus that GPWA collectively discharged the accountability of water managers. Taken collectively, these results suggest that GPWA may be more useful for improving management performance than accountability. Practical implications - – The findings suggest that future iterations of the standard need to reconsider how accountability might be discharged through the production of GPWA. The broad support for GPWA suggests, however, that the financial accounting approach – and hence the accounting community – may also make a valuable contribution to other areas of natural resource accounting. Originality/value - – This study contributes to the emerging but still limited literature on GPWA and the fundamentally different approach to natural resource accounting it represents. While some previous studies have examined potential users of GPWA none have done so after the standard has been fully developed, and no previous studies have adopted the mixed research design utilised in this study.

How to “cook your books” — a recipe for disaster

Purpose - The purpose of this paper is to stimulate thought on creative accounting through a unique prose. Design/methodology/approach - The paper is a fictional poem. Findings - The paper finds that, like baking a recipe, creative accounting involves essential ingredients and a method. Identifies how the language and process of creative accounting, however precise it may be, can mirror that of the creative art of cooking. Research limitations/implications - The paper encourages a broader artistic and narrative expression in the field of accounting by drawing on alternate textual formats. Originality/value - The paper shows that, as far as the author is aware, no other work in accounting has been expressed this way as a recipe. Consequently, it is a unique contribution to the discipline.

Attitudes Towards Environmental Responsibility within Australia and India: A Comparative Study

Efforts to promote corporate environmental responsibility (CER) require an understanding of stakeholder attitudes towards enhanced accountability. However, little is known about current attitudes on this subject. This study presents a survey of the attitudes of corporate managers across Australia and India towards 16 key contemporary environmental responsibility issues. The study sought to explore whether respondents from these countries, characterised by differing levels of development, differ in their attitudes towards environmental responsibility (ER). The findings indicate that Indian respondents were stronger in their support, and identified a select few issues to be more important over other environmental factors. Although Australian respondents moderately supported most of the environmental issues, they were not prominent in supporting most environmental issues under question. Results indicated overall positive attitudes towards ER by both the groups of respondents. Significant differences did exist between the 318 respondents on 8 of the 16 questions. Confirmatory factor analysis (CFA) confirmed three distinct environmental factors for Australian respondents and four environmental factors for Indian respondents.