Voluntary Audit Committee Characteristics, Incentives, and Aggressive Earnings Management: Evidence from New Zealand

This study provides initial evidence on the association between voluntary audit committee characteristics, incentives and aggressive earnings management in New Zealand. Our results suggest audit committees comprising independent (non-executive) directors reduce (increase) the likelihood of aggressive earnings management. Financial expertise is associated with a lower likelihood of aggressive earnings management but only when the expertise is held by independent directors. Greater stock ownership by non-executive and executive directors serving on the audit committee increases the risk of aggressive earnings management. However, stock ownership by independent directors reduces this risk. Our results show that independent directors serving on other boards are associated with a lower likelihood of aggressive earnings management. Results relating to the New Zealand audit committee regulatory guidelines show that only majority independent directors on the audit committee are associated with the likelihood of aggressive earnings management. We raise potential implications for policy makers in New Zealand

Back to the future: The broadening accounting trajectory

Copyright © 2001 Academic PressContemporary accounting practice has shown signs of a broadening scope of activities being undertaken both from within and as a service provided to organizations. Based upon a historiographic linking of past and present, this paper examines the past 100 years of broadening professional practice in the discipline as a basis for offering a presentist examination and critique of contemporary accounting education and research opportunities. The scope of what constitutes accounting work is found to have been expanding for over 100 years, becoming increasingly at variance with accountants’ traditional beancounter image. Recent professional accounting association investigations reveal an array of contemporary environmental factors that have accelerated this broadening of the profession’s scope into financial planning, assurance services, strategic, risk, knowledge and change management, and management advisory services. This has called for an expanded accounting skills base which has gained momentum towards the end of the 20th century. The elements of some of these developing areas of professional work and their implications for contemporary and future education and research are examined.http://www.elsevier.com/wps/find/journaldescription.cws_home/622801/description#descriptio