Public-Interest Arguments in Privatising Government Audit

The privatisation of the state audit office of Victoria in 1996-97 engendered a widespread debate that was joined by the two main accounting bodies in Australia. Although the accounting bodies adopted divergent positions, both rationalised their arguments in terms of public interest. An analysis of this paradox shows that the accountants pursued their commercial interests through intra-professional conflict and cooperation behind the cloak of public-interest arguments, showing little concern for the public accountability function of public-sector audits and reporting requirements.     

Environmental policies,national culture,and stock price crash risk: Evidence from renewable energy firms

This study investigates the impact of country‐level environmental performance and national culture on the stock price crash risk of renewable energy firms. Employing a large sample of 626 renewable energy firms across 31 countries, we find a significant nonlinear relationship between country‐level environmental performance and crash risk. National culture dimensions are found to strongly predict the crash risk of renewable energy firms, particularly after the global financial crisis. On the contrary, national culture dimensions and environmental policies are observed to not exert any significance in explaining the crash risk of fossil fuel firms. Our results are robust with respect to alternative measures of stock price crash risk and the endogeneity of national culture dimensions. Overall, the findings of this paper contribute to the environmental economics literature by providing new evidence regarding the role of societal and environmental factors in explaining the stock price crash risk of energy firms.     

Performance implications of knowledge and competitive arousal in times of employee mobility: “The immutable law of the ex”

This article elaborates on extant literature on employee mobility by focusing on how the movement of personnel between competitors affects their competitive positions. Our mixed‐methods study of 402 head‐to‐head encounters from the English Premier League (2000–2005) reveals that transferred players improve the performance of the recipient team in head‐to‐head encounters against the donor. We also provide evidence that competitive arousal, as triggered by anger and pressures for proving loyalty to the recipient organization, as well as knowledge of the donor team's routines, explain the superior performance of transferred players. These results question the traditional view that organizational routines are not transferable through employee mobility. They also move beyond a prior emphasis on the negative effects of emotional states such as anger and competitive arousal, highlighting how these can occasionally be beneficial. © 2012 Wiley Periodicals, Inc.     

The Incidence of Public Spending on Healthcare: Comparative Evidence from Asia

The article compares the incidence of public healthcare across11 Asian countries and provinces, testing the dominance of healthcareconcentration curves against an equal distribution and Lorenzcurves and across countries. The analysis reveals that the distributionof public healthcare is prorich in most developing countries.That distribution is avoidable, but a propoor incidence is easierto realize at higher national incomes. The experiences of Malaysia,Sri Lanka, and Thailand suggest that increasing the incidenceof propoor healthcare requires limiting the use of user fees,or protecting the poor effectively from them, and building awide network of health facilities. Economic growth may not onlyrelax the government budget constraint on propoor policies butalso increase propoor incidence indirectly by raising richerindividuals' demand for private sector alternatives.     

Takeover risk and the correlation between stocks and bonds

Existing research suggests that, for a given firm, stock returns and bond prices are positively related, and this implies a negative relation between stock returns and bond spreads. In this paper, we show how takeover risk influences this relation. Bondholders of high-rated firms can suffer losses in a takeover, particularly if the takeover is largely funded with debt, resulting in a more positive (or less negative) correlation between stock returns and bond spread changes. Consistent with this notion and based on a large sample of data covering the period from 1980 to 2000, we find that high-rated firms which are likely to be taken over have a more positive correlation between stock returns and bond spread changes, while target firms with a poison put or an indebtedness covenant have a more negative correlation. Overall, our findings have implications for the pricing and hedging of bonds and default risk based financial products such as credit default swaps.     

Gender disparities: a medical detoxification program

Significant gaps exist in health care regarding gender in the United States. Health status, social roles, culturally patterned behavior and access to health care can be influenced by gender. Women have been the primary users of health care and minority women usually have received poorer quality care than Non-Hispanic White (NHW) females. The objectives of this study were to identify gender, racial and ethnic disparities in access to substance abuse treatment in a Texas hospital. Secondary data collected on 1,309 subjects who underwent detoxification were studied. Gender, race/ethnicity, drug of abuse, relapse and financial classification were included in the analysis. Results indicate Hispanic females and Non-Hispanic Black (NHB) females were about 5 and 3.5 more likely than NHW females to use Medicaid services respectively (p < .05). NHW and NHB males were more likely to use Medicare than females (p < .05). NHB and Hispanic females were 5.8 and 2.1 times more likely to receive care for abuse of cocaine when compared to NHW females respectively (p < .05). Hispanic females were 2.3 times more likely to relapse than Non-Hispanic females, and uninsured NHB females were 7.1 times at a higher risk to abuse multiple drugs compare to NHW females (p < .05). Socio-economic factors, lower labor force participation rates, and less financial independence can explain females utilizing more often Medicaid regardless of their race/ethnicity. These results can be also explained by aggressive case management utilization, socio cultural barriers and/or discriminatory practices, both intentional and unintentional.     

The Paradox and Constraints of Legitimacy

This article contributes to the literature on legitimacy by highlighting its paradox and constraints. While an optimal level of legitimacy-seeking behaviours may be necessary for organizational effectiveness, an excessive focus on legitimacy may lead to stakeholder mismanagement and have the opposite effect. These insights emerged from a longitudinal qualitative study of large-scale changes in public-sector health care in a Canadian province (1994–2002). In 1994, subordinate health care organizations underwent government-driven reforms to promote market-based logics of efficiency and cost reduction. Initial years post reforms were characterized by a singular focus on government-driven priorities and inattention to other stakeholders. However, instead of giving benefits of legitimacy, these behaviours led to anger and activism from non-institutional stakeholders such as staff and community due to a decline in quality and patient satisfaction. Eventually, greater attention to stakeholder concerns ended the stand-off. These findings also elaborate Suchman’s (Academy of Management Review 20(3), 571–610, 1995) framework on legitimacy and explain that legitimacy may occur for reasons other than institutionalization of values and be temporary in nature.     

Is conservative reporting attractive to foreign institutional investors? Evidence from an emerging market

This study investigates the relation between conservative reporting and foreign institutional ownership using a unique dataset of firms in Turkey. In doing so, we distinguish between foreign funds and corporations. Contrary to prior findings, our analysis shows that conservative reporting is not necessarily a desirable accounting feature for foreign institutional investors. We also find that the interplay between conservative reporting and ownership is significantly different between foreign funds and corporations. The estimated negative relation holds only for foreign funds. Further analysis reveals that foreign funds do not find conservative reporting desirable in low-asymmetric information firms and reduce ownership with greater accounting conservatism in such firms. The analysis sheds significant lights on the relevance of conservative reporting in alleviating the negative consequences of asymmetric information.     

Unpacking the effect of exploration during environmental uncertainty: Evidence from the information technology sector

Environmental uncertainty can render managerial decision‐making about resource deployment particularly difficult. Integrating the knowledge‐based view of the firm and the organizational learning literature, we make a case for deploying specific knowledge‐based resources to cope with specific types of environmental uncertainty. We unbundle knowledge‐based resources into technology‐based and social‐network‐based resources and, using Milliken's (1987) typology of environmental uncertainty, we hypothesize that (a) technological exploration will be more effective during state uncertainty and (b) while being generally beneficial, social exploration will prove more effective during response uncertainty. An analysis of the financial performance of information technology (IT) firms in the United States over the period 1995–2004 generally supports our hypotheses. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

APX: An Integrated Knowledge-Based System to Support Audit Planning

Auditors who must express an opinion on the financial statements of publicly held enterprises must perform a series of risk assessments as the basis for selecting appropriate audit procedures to be performed. Although many auditing expert systems have been developed for individual components of the audit risk assessment process such as inherent and control risk assessment, none integrate these assessments to arrive at the ultimate objective of assessing the allowable level of detection risk which drives audit procedure selection. This paper discusses critical design concerns for audit planning expert systems in light of the integrated nature of the steps involved in the audit planning process. The design and development of an integrated audit planning expert system called APX (Audit Planning eXpert) is also discussed. A distinguishing feature of APX is that it not only performs the individual types of risk assessments but it also integrates the resulting assessments to arrive at allowable detection risk. The knowledge acquisition and system development process are described to illustrate some of the mechanics of developing such a system.