Auditor Quality and Discretionary Accruals: Case of Australian Listed Companies

This study empirically examines the relation between two dimensions of auditor quality: auditor independence and auditor specialization, and the level of discretionary accruals, a proxy for earnings management. This study focuses on earnings management in response to mounting pressure amongst investors, policy makers and corporate governance reformists for mechanism to curb excessive opportunistic behaviour amongst corporate management. Auditor independence and auditor specialization are the epicentre of this analysis as these two factors are considered to be key determinants of earnings management. As earnings management, auditor independence and auditor specialization are unobservable, I use absolute discretionary accruals, the ratio of non-audit to total fees and auditor industry market share as respective proxies. Using 2004 data hand collected from 325 Australian publicly listed firms I find no sig-nificant association between the non-audit/total fee ratio and the magnitude of earnings man-agement. Thus, this result suggests the provision of non-audit services by the incumbent auditor does not compromise independence and, therefore, the auditor's ability to constrain earnings management. This study also fail to find a firm engaging an audit firm with industry specializa-tion skills has significantly lower levels of absolute discretionary accruals than a firm using the services of a non-specialist. The main findings of this study are robust to various sensitivity checks. Findings have implications for various stakeholders. For instance, there is currently ap-pears to be a preoccupation amongst corporate governance reformists and policy makers inter-nationally to curb the provision of non-audit services by the incumbent auditor to aid in such matters as the reduction in earnings management. These findings suggest this preoccupation may be misplaced and that constraining the ability of firms purchase non-audit services from the in-cumbent auditor could provide only limited benefits whilst increasing costs. In addition, policy makers and reformists need to consider more clearly the costs and benefits of any moves to limit industry concentrations within the audit market

Corporate governance and earnings management: the role of board of directors and audit committee in financially distressed firms / Emita W. Astami and Rusmin Rusmin

This study investigates the association between corporate governance and earnings management practices of Australian’s financially distressed firms. Based on a sample of 164 firm-year incorporating non-financial firms experiencing financial distress, the cross-sectional modified Jones (1991) model is used to measure discretionary accruals (the proxy for earnings management). Board of directors and audit committee characteristic variables are employed as the key predictor variables for measuring the effectiveness of corporate governance. This study finds that the companies are seeking to reduce their reported earnings to increase the likelihood of making a profit in the following year with the goal of avoiding bankruptcy; a larger number of directors on a board is less effective in detecting and constraining the practices of earnings management by managers of distressed firms; an active audit committee plays a positive role in detecting and reducing the probability of earnings management. The findings of this study have implications especially to regulators and corporate governance reformists that determine corporate governance rules. This is primarily in regard to the efforts made by listed companies in maintaining their sustainability through more emphases on the process for monitoring and selection of board of directors and audit committee members to reinforce effectiveness in managerial performance evaluation

Aplikasi Metode Demonstrasi dalam Meningkatkan hasil belajar siswa pada bidang Studi fiqih Kelas V (lima) di Madrasah Ibitidaiyah Darul Kamal Mandalle

Salah satu cara agar tercapainya tujuan pembelajaran adalah penggunaan metode yang tepat sehingga dapat memberikan pengaruh fositif terhadap proses kegiatan belajara mengajar. Selama ini banyak para pendidik yang menerapkan metode yang sifatnya monoton seperti ceramah dan hal tersebut kurang efektif dalam mengaktifkan siswa ketika mengikuti kegiatan belajar mengajar. Metode demontrasi merupakan salah satu metode mengajar yang tidak pernah lepas pada proses pembelajaran fikih Untuk dapat mengetahui pengaruh penerapan metode demonstrasi dalam meningjatkan pemahaman siswa pada bidang fikih kelas V di Madrasah Ibtidaiyyah Darul Kamal Mandalle penulis mengadakan penelitian. Penelitian ini menggunakan metode penelitian pendekatan kualitatif, desain yang di gunakan adalh penelitan tindak kelas. Dalam pengumpulan data, penulis menggunakan beberapa metode yaitu: metode observasi, metode dokumentasi dan metode wawancara. Adapun tahapan penelitian ini adalah: perencanaan, pelaksanaan, observasi, dan refleksi. Dari hasil penelitian dengan metode demonstrasi memperlihatkan adanya peningkatan hasil belajar siswa terhadap pelajaran fikih dari tahap I 60 % hingga 84 % pada tahap II. Berdasarkan hasil penelitian diatas maka sebaiknya para pendidik di lembagalembaga pendidikan Islam agar dapat menggunakan karya ini, khususnya pendidik yang membimbing mata pelajaran Fiqih, agar dapat menambah pengetahuan dalam strategi pembelajaran

Manajemen Strategi Marketing Rumah Sakit Islam

Fenomena sadar syariah dikalangan masyarakat Indonesia, menggerakkan perekonomian diberbagai aspek kehidupan masyarakat, tak terkecuali di sektor pelayanan kesehatan. Masyarakat mulai memilih produk yang tidak saja berkualitas dari sisi medis, tetapi juga mendapatkan pelayanan yang aman secara psikososial dibingkai dengan nilai-nilai Islam. Peluang pasar sangat terbuka menangkap gejala tersebut. Rumah Sakit Syariah mencoba menjawab tantangan tersebut dengan mengemas nilai-nilai syariah kedalam standar pelayanannya. Rumah Sakit Syariah dibentuk dalam upaya semangat mengintegrasikan nilai-nilai syariah kedalam seluruh aspek pelayanan kesehatan, administratif hingga standar pelayanan pasien yang tidak dimiliki Rumah Sakit nonsyariah. Hal ini sekaligus merupakan diferensiasi produk layanan Rumah Sakit dengan menyasar segmentasi yang jelas, walaupun layanan kesehatan pada hakikatnya bersifat universal bagi seluruh elemen masyarakat. Standar pemasaran tetap harus dilakukan yang meliputi aspek internal-eksternal dan tangible-intangible sebuah Rumah Sakit, termasuk yang terpenting adalah aspek mutu pelayanan Rumah Sakit. Sehingga Islam yang rahmatan lil alamin bisa menjadi syiar melalui Rumah Sakit Syariah yang profesional dan terpercaya. Rumah Sakit Syariah yang mempunyai visi misi dan mengusung nilainilai, tetap harus menggunakan strategi pemasaran untuk mengenalkan produknya, sekaligus sebagai syiar ajaran islam yang menjaga kehidupan manusia

Local government units in Indonesia: Demographic attributes and differences in financial condition

This study examines the outcome of decentralisation reforms in Indonesia, focusing on the association between demographic characteristics and differences in the financial condition of local governments units. It investigates cross-sectional data pertaining to demographic characteristics and financial statements audited by the Supreme Audit Body of 419 Indonesian local government units for the fiscal year 2007. It utilises demographic attributes including scope of entity, location, tenure (date of entry), gender, human development index (HDI) and size of local governments to explain differences in the financial condition of Indonesia’s local government. Local government financial condition is proxied by quick ratio, debt ratio, services ratio, and ratio of local to total revenues. Te results suggest that scope and location of local government units help explain all of the financial condition variables. Te findings further infer that local government units domiciled in Java tend to report beter financial conditions relative to those domiciled in other islands. Our results also show that local government units with greater female populations and higher HDI are more likely to have a local authority that (1) has beter ability to finance their general services from their unrestricted net assets, and (2) has greater ability to earn more revenues from local sources. Finally, this study documents that the larger the population of a local government unit, the higher its liquidity position, the stronger its ability to funding general services, and the greater its possibility earning revenues from its local sources. © 2014 Australasian Accounting, Business and Finance Journal and Authors

Risk disclosure during the global financial crisis

Purpose – The purpose of this paper is to examine voluntary risk disclosures within annual reports in four key South-East Asian countries’ (Indonesia, Malaysia, Singapore, and Australia) manufacturing listed companies over the Global Financial Crisis (GFC) 2007-2009 financial years. Design/methodology/approach – Longitudinal and cross-country analyses test the veracity of agency theory to predict the level of firms’ risk disclosures. A comprehensive risk disclosure index (RDI) checklist is created with key predictor variables (country, company size, managerial ownership and board independence) tested to explain the dissemination of CSR information over time. Findings – The findings show that the communication of risk data stays relatively consistent (26-29 per cent across the three GFC ‘‘crisis’’ years). This is arguably a low level of communication from a social responsibility corporate lens. Multiple regression analysis provides evidence that country, size and board independence are positively significantly associated and leverage is negatively significantly associated with the extent of voluntary risk disclosure. Interestingly, Indonesia, the least developed country with arguably the highest business risk factors, consistently has statistically lower levels of risk disclosure compared with their three neighbours. Research limitations/implications – The sample frame is selected from the stock exchange population of manufacturing companies in key South-East Asian countries. However, for complete generalization the findings should be tested in other countries and other industries. Practical implications – The study findings are useful for firm self-evaluation and benchmarking of risk communication by other corporations across countries. Social implications – The study shows relatively low levels of risk disclosure over the GFC crisis time period. Communication of these items are influenced by key firm characteristics and economic drivers. Arguably, higher risk disclosure leads to better understanding of a company’s social responsibility stance. Originality/value – This is a critically important time span to investigate risk disclosures as it encompasses those years most directly impacted by the global financial crisis (GFC)

Diversity in Risk Communication

This study analyses the communication of the five major categories of risk (business, strategy, market and credit risk disclosure) over the volatile 2007-2009 Global Financial Crisis (GFC) time period in key South East Asian countries’ manufacturing listed companies. This study is important as it contributes to the literature by providing insights into the voluntary risk disclosure practices using sample countries with different economic scenarios. Key findings are that business risk is the most disclosed category and strategy risk is the least disclosed. Business and credit risk disclosure consistently increase over the three year period, while operating, market and strategy risk disclosure increase in 2008, but then decrease slightly in 2009. Statistical analysis reveals that country of incorporation and size help predict risk disclosure levels. The overall low disclosure levels (26- 29%) highlight the potential for far higher communication of key risk factors