How important are semi-annual earnings announcements? An information event perspective

Using a method that avoids the need to specify earnings expectations, we demonstrate that the period surrounding the semi-annual announcement of Australian firms' earnings is, on average, an important source of information. Although there is substantial year-to-year variation, we observe no evidence of any significant time trend, and also conclude that a shift from Australian domestic generally accepted accounting principle to International Financial Reporting Standards did not impact the association between earnings announcement windows and stock returns. We also find no evidence that the informativeness of earnings announcements varies systematically with firm size, analyst following or economic news (i.e., positive vs. negative stock returns, profits vs. losses), although we do observe significant variation across industries. Our conclusion is further supported by contrasting the earnings release date with the days immediately prior to release, or high information days other than earnings announcement windows. Using a more precise event window relative to prior studies (i.e., 3 h vs. 3 days), we confirm that earnings announcements contain significant new information about fundamentals.     

Examining the success of women of color-owned small and medium-sized enterprises in the United States: A system dynamics perspective

The objective of this study was to unravel the challenges confronting women of color (WoC)-owned small and medium-sized enterprises (SMEs) in the United States. This is based on findings that most WoC-owned SMEs fail within the first few years of establishment. The impact of the global financial crisis resulting from the COVID-19 pandemic on WoC-owned SMEs was also explored. System Dynamics (SD) is a computational modeling approach useful for understanding changes in a system over time and is applied in this study to illustrate WoC entrepreneurs' navigation through the startup and maturation of SMEs. The authors calibrated and validated the model with publicly available data. Findings revealed that more emphasis should be placed on failure reduction in the early years of establishment of these businesses. Also, there is the need for early intervention rather than focusing on the improvement of the successful business exit from the system. Results indicated that the creation of new businesses by WoC after the failure of existing businesses produced an increase in the number of failed enterprises. The authors assert that attention must be paid at the individual level through support to the entrepreneur. This study contributes to the extant literature by providing the first known SD model useful in depicting the SME system for WoC entrepreneurs in the US. The model serves as a potentially useful tool for informing effective policy making, education, and programmatic approaches to support the success of WoC entrepreneurs in the US.

     

A comparative analysis of the Australian and New Zealand liquidation schemes

On September 28, 2022, Australia announced an inquiry into the effectiveness of its corporate insolvency laws. The Australia and New Zealand corporate insolvency frameworks have similar objectives and operate in a similar context where, as is the case the world over, most companies are small to medium enterprises. Despite liquidation being just one of several collective and formal corporate insolvency procedures, it is the most frequently occurring procedure in both countries by a large margin. The Australian and New Zealand liquidation schemes have many similarities but also some key differences. Differences include the structure of the respective schemes; the levers prompting liquidation of companies in appropriate circumstances; the role of creditors, the court and the regulator; and the management of low-value and assetless liquidations. These differences are analysed to determine what, if anything, the New Zealand scheme might contribute to development and/or reform of Australian corporate insolvency law. As consistency and coordination with Australian insolvency law is a New Zealand policy aim, the lessons the Australian scheme might have for New Zealand are also considered. Many of the points on which the Australian and New Zealand liquidation schemes differ are of universal concern (such as the management of low-value liquidations), meaning that the nature and success (or otherwise) of the Australian and New Zealand responses are of wider, comparative interest.     

Ted's Teas: A Two-Part Accounting and Audit “Crossover Case”*

This fictional case is based on a real specialty tea company in Nova Scotia. Ted's Teas is a two-part crossover case that illustrates the integration of financial accounting and audit learning outcomes applied to real-world scenarios. In Part 1, students assume the role of an internal accountant and apply knowledge of the Chartered Professional Accountants (CPA) of Canada's CPA Way to identify how to treat leases, changes in policy, and estimates as part of accounting knowledge under both Accounting Standards for Private Enterprises and IFRS frameworks. In Part 2, students “cross over” and change roles, so they are now external auditors for Ted's Teas, tasked to provide an analysis of risk of material misstatement, recommend an audit approach, and develop substantive procedures. This two-part case presents opportunities for students to demonstrate technical competence in multiple areas, either separately in two different courses or combined in one “capstone” or case course. The case and teaching notes, including the marking rubrics, were adapted from principles used to train and evaluate CPA Professional Education Program candidates, tailored to an appropriate level for undergraduate and graduate learners.     

Economic freedom at metropolitan statistical area borders

This paper applies a variation on differences-in-differences to the effects of economic freedom in matched bordering metropolitan statistical areas using the Metropolitan Economic Freedom Index. While a great deal of research has explored the relationship between economic freedom and economic performance, less has been done at the local level. We find that economic freedom has a positive effect on several measures of economic performance, but no effect on population.     

Goode Food Trucks Inc.*

This fictional case centers around a young Dutch couple who emigrated to Canmore, Alberta. Upon arriving, Saul and Rens opened two successful food trucks and are now looking to promote each truck's main chef to truck manager. They plan to offer a performance bonus based on the net income of each truck and have requested a local accounting student to advise them on the new bonus structure. Goode Food Trucks Inc. presents an opportunity for students to demonstrate technical competence in managerial accounting (rate methods, period cost allocation, and data visualization); strategy and governance (employee performance incentives); and financial reporting (reporting needs) while incorporating enabling competencies (communicating and adding value). The case and teaching notes were adapted from principles used to train and evaluate Chartered Professional Accountant (CPA) candidates and tailored to an appropriate level for undergraduate learners. MBA instructors may also use this case to apply multiple concepts in a defined context, thus enhancing a course's “real-life” applicability.     

Ebb and flow: Structural and spatial change in Victoria's brewing industry, 1870–1900

The brewing industry has undergone profound structural and spatial change over the last 150 years. We examine how consolidation began in Victoria's brewing industry using a historical GIS approach. We argue that industry restructuring was shaped by four interlocking dynamics between 1870 and 1900: (1) structural economic change; (2) railway development; (3) technological innovation; and (4) regulatory reform. We show that the ebb and flow of these interacting dynamics generated a non-linear process of change. Similar to North America and Europe, the industry became highly concentrated. However, this process was complicated by local factors such as climate, economy, and distance.     

Are corruption and corporate tax avoidance in the United States related?

Review of Accounting Studies - We examine whether state-level corruption and corporate tax avoidance in the United States (U.S) are related. Using a sample of 36,078 U.S. firm-year...     

Automation and the future of work: A social shaping of technology approach

Recent years have seen enormous attention paid to automation and its potential implications for the future of work. This study rejects unhelpful speculation and, instead, poses the question ‘what is shaping automation and its predicted effects?’ In contrast to the technological determinism framing much of the current debate, this study utilises the social shaping of technology (SST) approach, a theoretically informed body of research largely overlooked by sociology of work scholars. Compared with mainstream commentary, which treats technology as separate from the social world, SST facilitates examination of how the development and use of technology are shaped by broader socioeconomic concerns and politics. The analysis presented is based on an understanding of how technology is shaped by existing technology, economics, social relations, gender and the state.