Roger J. Willett

Islamic Corporate Reports

This article develops a theory about the form and the content of the financial information that should be contained in Islamic financial statements. The theory suggests that the presence of the Islamic religion as a cultural variable affects the way certain accounting measures are interpreted and the manner in which accounting information should be disclosed. Two important criteria for disclosure in Islamic accounting are identified: a form of social accountability and a rule of full disclosure. This leads to a modification of the form of the conventional Western set of financial statements, which are referred to in the paper as Islamic corporate reports (ICRs). The specific recommendations are that ICRs should contain a value-added statement as the focus of performance of the accounting entity and a current value balance sheet in addition to the historic cost balance sheet. It is argued that ICRs, extended in this way, would better serve the needs of users wishing to act in accordance with the Islamic code.

An Axiomatic Theory of Accounting Measurement

The article suggests a descriptive, axiomatic type of conceptual framework for conventional accounting measurement practice. The disclosure problem in financial accounting is caused by the need to decide what, of all the available numerical and nonnumerical information, to include in a set of financial reports. The measurement problem in financial accounting is chiefly concerned with explaining the nature of the specifically numerical information produced by accounting systems, whether or not it is disclosed in financial statements. The problems of measuring the accounting attribute remain constant even though the resulting numerical information may be disclosed to differing third parties such as management, investors and creditors. The common assumptions which are made by different user groups concerning the numerical information contained in financial statements are arithmetic in character. As soon as these arithmetic properties are questioned, however, it becomes clear that they are not self-evident. The problems raised in interpreting the arithmetic properties of accounting data appear to be due to the accountants lack of understanding of the attribute which is being measured in financial statements.

What Is Engineering Asset Management

Definitions of asset management tend to be broad in scope, covering a wide variety of areas including general management, operations and production arenas and, financial and human capital aspects. While the broader conceptualisation allows a multifaceted investigation of physical assets, the arenas constitute a multiplicity of spheres of activity. We define engineering asset management in this paper as the total management of physical, as opposed to financial, assets. However, engineering assets have a financial dimension that reflects their economic value and the management of this value is an important part of overall engineering asset management. We also define more specifically what we mean by an “engineering asset” and what the management of such an asset entails. Our approach takes as its starting point the conceptualisation of asset management that posits it as an interdisciplinary field of endeavour and we include notions from commerce and business as well as engineering. The framework is also broad, emphasising the life-cycle of the asset. The paper provides a basis for analysing the general problem of physical asset management, relating engineering capability to economic cost and value in a highly integrated way.

An Axiomatic Theory of Accounting Measurement—Part II

Abstract Willett (1987) described a transactions based theory of funds accounting. This paper extends the theory to explain asset and profit measurement. Eight axioms are listed which, when interpreted in the context of cost structures, are sufficient to justify the logic underlying the generation of accounting numbers in financial statements. Although the theory is expressed using deterministic concepts, one of its implications is that many derived accounting measurements used in practice (e.g. income calculations) are of an inherently probabilistic nature. The theory identifies the main stochastic variables which determine the statistical characteristics of such accounting numbers.

Corporate governance in five Arabian Gulf countries

Purpose - The purpose of this paper is to draw together available data as a means of comparing the state of corporate governance in five countries; Kuwait, Bahrain, the United Arab Emirates, Qatar and Oman. This comparison provides a basis for analyzing the efficacy of corporate governance and government regulation in the region. Design/methodology/approach - The authors construct a measure of corporate governance using the OECDs 2005 survey data, which includes these and many other countries in the sample. The authors analyze the resulting measures in the light of ongoing institutional developments in each country. Findings - Based on the corporate governance measurement scale, Oman is the clear leader among the five countries, followed by Kuwait and the United Arab Emirates. Bahrain and Qatar rank fourth and fifth, respectively. Originality/value - This paper adds value by transforming the data in the OECD survey, thus adding to the limited information available on corporate governance and related issues in the Arabian Gulf.

Challenges to Implementing Strategic Performance Measurement Systems in Multi-Objective Organizations: The Case of a Large Local Government Authority

A case study of the implementation of the balanced scorecard in a large local government authority is reported. Based on interview data, the factors that were perceived by senior managers to be important to the success or failure of the implementation are analysed. It is determined that scorecard measures were not effectively cascaded down to lower levels of the organization. Various inter-related problems of leadership, training, feedback, employee empowerment and weak incentive schemes combined to cause communication difficulties which prevented the cascading problem from being effectively addressed.

Building a knowledge‐based business school

This is a case study of Taylor’s Business School, Taylor’s College in Kuala Lumpur, Malaysia, which is a pioneer in developing a business school as a knowledge organisation following the principles of knowledge management in the context of a developing knowledge economy. Describes the management structure and processes adopted by the college to deliver a curriculum educating students in knowledge management for a knowledge economy. This reflects a policy initiative of the Malaysian government which has embraced a knowledge economy in which soft technology and knowledge replace capital and energy. The philosophy of Taylor’s Business School is to produce graduates with professional and industry relevant skills to meet the demands of the knowledge economy.

Depreciation Need Not Be Arbitrary

Following Thomas (1969, 1974) the depreciation adjustment charged against accounting earnings is nowadays commonly presumed to be entirely arbitrary when it is viewed from a measurement perspective. This paper develops a statistical interpretation of accounting measurement to show that the depreciation calculation need not necessarily be viewed as incorrigible in Thomass sense. A probability modelling approach is adopted to illustrate how the depreciation adjustment can be used to smooth accounting earnings over time. Depreciation is thus shown to have potentially useful estimation properties. The results have obvious policy implications regarding the objectives that depreciation and other accounting allocations might serve. They also have a bearing on fundamental questions regarding the nature of accounting measurement.

Definitions, concepts and scope of engineering asset management

Improving Asset Management Process Modelling and Integration.- Field-wide Integrated Planning In Complex and Remote Operational Environments: Reflections based on an industrial case study.- Utilising Reliability and Condition Monitoring Data for Asset Health Prognosis.- The Concept of the Distributed Diagnostic System for Structural Health Monitoring of Critical Elements of Infrastructure Objects.- Vibration Based Wear Assessment in Slurry Pumps.- Machine Prognostics Based on Health State Estimation Using SVM.- Information System Implementation for Asset Management: A theoretical perspective.- A Flexible Asset Maintenance Decision-Making Process Model.- Optimising Preventive Maintenance Strategy for Production Lines.- Approaches to Information Quality Management: State of the Practice of UK Asset Intensive Organizations.- Modelling Risk in Discrete Multi-State Risk in Discrete Multi-State Repairable Systems.- Managing the Risks of Adverse Operational Requirements in Power Generation: Case Study in Gas and Hydro Turbines.

Inherent risk and indicative factors: senior auditors’ perceptions

This paper examines the perceptions of senior auditors in large firms in Sydney, Kuala Lumpur and Auckland concerning the nature and assessment of the inherent risk in risk based auditing. The geographic dispersion of participants from internationally linked firms does not appear to result in any cultural and geographic effects. Assessment of inherent risk appears predominantly qualitative and is not necessarily linked to the comprehensive aggregation of risks typically presented in audit risk models. There is some blurring of control risk factors with inherent risk and one‐third of participants assess inherent and control risk jointly. Risk factors appear to be grouped in importance in a manner that suggests different attitudes to management, system‐oriented, environmental and oversight risks. The identification of four possible factors (internal risk, external risk, system risk and oversight threats) may provide a basis for further investigation of how auditors assess inherent risk. There is an apparent division between “internally” and “externally” sourced risk.