Rob Dixon

Microfinance: accountability from the grassroots

Purpose – The purpose of this research is to use an accountability framework to explain the emerging tensions in accountability and how an intended bottom-up approach became progressively supplanted. This paper is set within an emerging Zambian microfinance organisation moving into crisis. Design/methodology/approach – A series of semi-structured interviews were conducted with key local microfinance specialists, managers and accountants, clients and past and current loan officers. Live observation of the client-loan officer interface and internal meetings provided triangulation on accountability relationships in the midst of crisis. Data were analysed using NVIVO, a qualitative computer software package. Findings – The findings show that tensions between vertical and horizontal accountability in practice can be directly translated into heightened pressure and stresses on both the non-governmental organisation (NGO) and its loan officers, which constrain overall accountabilities to other stakeholders and disguise other potential dysfunctions. Research limitations/implications – This study focussed on accountability at the grassroots in microfinance NGOs with a social mission. It reveals potential for further personal, community and socially constituted accounting research within microfinance in particular. Originality/value – The paper adds to the literature on NGO accountability. It will be of value to researchers and practitioners seeking to gain a better understanding of not-for-profit organisations whose goals are not primarily wealth creation. It also gives details on under-researched areas in accounting, namely NGOs and poverty reduction, and practices in Sub-Saharan Africa.

Corporate social and environmental reporting: a survey of disclosure practices in Egypt

– The purpose of this study is to survey the corporate social and environmental reporting (CSR) practices of Egyptian corporate entities. It aims at contributing to the body of knowledge on the CSR disclosure phenomenon in developing/transitional economies., – A 34‐item disclosure index covering environmental, energy, human resources, customer and community involvement issues was used to rank corporations., – A review of a random sample of 60 annual reports for the 2002 financial year revealed significant differences in reporting practices among the members of the nine industry segments surveyed. Findings of this research also lend support to the significance of ownership structure on the reporting decision., – The study is based on the annual report disclosures of corporations in the industrial sector. Hence, the conclusions arrived at should not be generalised to the non‐industrial sector. A longitudinal study based on a reasonably large sample, which includes the non‐industrial sector, is needed to highlight trends in CSR reporting practices in Egypt. In‐depth case study‐type research would also facilitate understanding of not only what, but also why and how companies are making social and environmental disclosures in Egypt., – Reviews of disclosure practices in different parts of the world are always welcome and are arguably somewhat limited in developing countries.

An investigation of the expectation gap in Egypt

Purpose – Investors and financial statement users may have differing beliefs about the responsibility of an independent accounting firm performing an audit of a clients financial statements. This study aims to investigate the existence of an audit expectation gap between auditors and financial statement users in Egypt.Design/methodology/approach – The research method adopted in this study is identical to that used by Schelluch, Best et al. and Fadzly and Ahmed.Findings – The results found evidence of a wide audit expectation gap in Egypt in the areas of auditor responsibilities for fraud prevention, maintenance of accounting records, and auditor judgment in the selection of audit procedures. To a lesser extent, an expectation gap was found concerning the reliability of audit and audited financial statements, and the usefulness of audit.Research limitations/implications – The different economic and cultural conditions in Egypt may restrict the generalisability of this study.Practical implications – In ord...

Environmental risk and management strategy: the implications for financial institutions

The pressures to include specific environmental considerations within corporate strategy are increasing. While clear evidence exists of “green” issues entering the financial agenda, the full consequences have yet to filter through into an impact on strategy. Examines both the legislative pressure and pressure from financial markets for companies to adopt an environmental risk strategy. Categorizes the pressures from financial markets into two groups: lenders and equity investors, and uses case evidence to illustrate current management issues. A guide to establishing an environmental management system is defined as a tool to complement the development of an environmental risk strategy.

Loan officers and loan ‘delinquency’ in Microfinance: A Zambian case

Abstract The paper seeks to promote greater understanding of the importance of loan officers in group-based microfinance by explaining their actual roles, dilemmas and tensions when working with poor clients. Few existing studies have used data outside Bangladesh and most focus upon relatively well-performing institutions. Using data from Zambia this study focuses on the recent crisis of Christian Enterprise Trust of Zambia (CETZAM) and the effects of its practices for accounting for and dealing with defaulters. The findings firstly show that loan officers faced powerful hierarchical accountability pressures and pursued inappropriate methods to compel further repayments to resolve this crisis. Its approach to borrower default was found to be stressful for loan officers and potentially detrimental for CETZAM’s own short and long-term survival by reducing client loyalty and trust.

Strategic management accounting

Abstract In increasingly dynamic environments the provision of strategically relevant information is of paramount importance to the formulation and execution of business strategies. This article outlines a new method of providing this information, known as strategic management accounting. The process of key activities, with reference being made to the work of relevant authors at each stage, in particular the work of Porter and Simmonds. By examining the key concepts of the strategic management accounting process, this article highlights the way forward for practitioners and academics who wish to take advantage of its potential to improve information flows into the strategy evaluation process.

The necessary characteristics of environmental auditors : a review of the contribution of the financial auditing profession.

Abstract The business community faces many pressures from the green consumer, environmental groups, employees and investors to accept its environmental accountabilities and to provide information about its environmental performance. This information is becoming increasingly important to a broad range of corporate stakeholders because it is a key resource in managing a business’s response to the issue of environmental accountability. Businesses need to ascertain whether potential responsibilities for environmental implications on business are considered within their companies. A number of arguments have emerged concerning the relevance of the financial auditing profession in contributing to this area of environmental concerns. The paper is principally concerned with (1) reviewing the literature in an attempt to answer the questions: (i) can the financial audit profession make a contribution in the area of environmental audits? (ii) are financial auditors in a position to assess environmental implications for business and take part in environmental auditing? (2) The paper goes on to suggest a general framework of the necessary characteristics of environmental auditors.

The evaluation and audit of management information systems

Explores recent developments in MIS, discusses the literature relating to evaluation of MIS, and produces a list of possible objectives and key questions to assist in the evaluation and audit of MIS. Focuses on audit objectives relevant to assessing an MIS. Aims to stimulate debate among internal audit professionals on the audit of MIS, in the hope that the involvement of internal auditors in this area will lead to the bridging of the gap between what users want from systems and what information systems designers think are user requirements.

Do venture capitalists reduce underpricing and underperformance of IPOs

The purpose of this article is to assess the effect of venture capitalists at Initial Public Offerings (IPOs). In so doing, a sample of Venture Capital (VC)-backed firms was compared with a sample of non-VC-backed firms. Consistent with the prevailing belief that venture capitalists reduce uncertainty at the offering, VC-backed IPOs are found to be less underpriced than non-VC-backed IPOs. Moreover, in multivariate analyses, venture capitalists affect negatively the degree of underpricing. Unlike previous studies, we control for the new listing and rebalancing biases in the analysis of the long term performance by comparing the IPO returns to carefully constructed size matched portfolios. Based on the calendar time and the event time approaches, the results show that both samples are underperforming the carefully constructed reference portfolios in the long term. The analysis also shows that the VC-backed IPOs do not outperform the non-VC-backed IPOs. The overall difference between both sets of IPOs is also not statistically significant.

An empirical survey of the motivation for share repurchases in the UK

Purpose - Most research on share repurchases is based on the USA. Recently, the rate of share repurchases by UK companies has increased significantly; such a marked increase in activity would suggest a change in strategic factors generating this activity. This paper aims to focus on UK practice, the motivations of UK companies to repurchase shares and compares similar research in the USA. Design/methodology/approach - Strategic motives for share repurchase activity are examined by a questionnaire survey of the finance directors of the top UK 200 companies. The outcome is compared to equivalent US research. The theoretical underpinning of the survey is based on six prominent hypotheses from the academic literature. Findings - The results indicate that a primary motive of share repurchases in the UK is to achieve an optimal capital structure, and that the requirement to cancel shares is fundamental to buy-back decisions in the UK. Research limitations/implications - USA/UK comparison has limitations, nevertheless it highlights differences and possible reasons. A follow-up study in the current market conditions may give further clarity. Also, a survey of smaller quoted companies may further enhance our understanding of the motives. Practical implications - The likelihood is of this trend being maintained, especially in view of legal development. Originality/value - Individual respondents indicated that finance directors have a genuine interest in this topic and that further research would be beneficial in both practical and academic use. Share buy-backs can be an effective part of the overall strategy of a company, however the effects of a repurchase are ultimately short term.