Neal Arthur

Agency Theory and “Management Research†A Comment

The application of agency theory to management research issues such as organisational design, strategic management and corporate policy is becoming increasingly common (Lyles 1990). Within this broad suite of topics, corporate governance issues have become the focus of increasing concern. Relevant issues include “appropriate” board structures (i.e., independent versus executive directors) as well as the separation of the chief executive officer (CEO) and chairperson’s (chair) rôles (i.e., the “duality” question).1 Donaldson and Davis (1991) address the latter issue, comparing the relative merits of what they call the agency perspective to one they term “stewardship theory”. In addition to serious problems with their methodology (Whittred 1993), their analysis is based on a misunderstanding of agency theory. Donaldson and Davis characterise the agency perspective in a relatively simplistic and misleading fashion, such that natural conflicts of interest between widely dispersed owners (i.e., shareholders) and professional managers preclude managers acting in shareholders’ best interests. Modern agency theory argues to the contrary: that firms create long-term wealth for their owners because those owners are relatively diverse and cannot intervene, while managers motivated by (among other things) debt and capital structure are put in charge. In contrast, Donaldson and Davis present stewardship theory as a stark alternative which gives due recognition to managers’ “desires” to perform satisfactorily. We contend that

Gender and Performance in Accounting Examinations: Exploring the Impact of Examination Format

This paper addresses the question of whether the increasing use of multiple-choice questions will favour particular student groups, i.e. male or female students. Using data from Belgium, this paper empirically examines the existence of a gender effect by comparing the relative performance of male and female students in both multiple-choice and constructed-response questions in financial accounting examinations. The study is motivated by the increasing number of students in accounting classes, changes in the gender mix in accounting classes, and debates over appropriate means of assessment. We find that female students outperform male students in answering questions in both formats, but their superiority in multiple-choice questions is diminished in comparison with constructed-response questions. This might suggest that multiple choice questions favour male students more than female students. The results hold even if we restrict the comparison to multiple-choice and constructed-response questions having the same general content (e.g. exercise type). Furthermore, the diminishing result was found both for undergraduate and postgraduate students. These results should prompt those involved in assessment to be cautious in planning the type of assessment used in evaluating students.

Financial Reporting to the Industries Assistance Commission: A Study in the Rôle of Accounting Information in Regulatory Decision Making

This paper investigates the relative rôle of accounting numbers in influencing decisions regarding the level of Australian government assistance to import competing firms. An analysis of a variety of documents which relate to both the infor Mation requirements and a description of the decision making process indicates that accounting measures are influential in determining outcomes of the regulatory process. It is also concluded that regulators appear to have recognised the influence of choice of accounting policy on the measurement and reporting of certain “economic variables” and to some extent specify the measurement rules/accounting policies to be employed however, much accounting discretion remains with management.