Do Australian companies manage earnings to meet simple earnings benchmarks?

Measurement error in unexpected accruals is an important problem for empirical earnings management research. Several recent studies avoid this problem by examining the pooled, cross–sectional distribution of reported earnings. Discontinuities in the distribution of reported earnings around key earnings thresholds may indicate the exercise of management discretion (i.e. earnings management). We apply this approach to the detection of earnings management by Australian firms. Our results generally indicate significantly more small earnings increases and small profits than expected and conversely, considerably fewer small earnings decreases and small losses than expected. These results are much stronger for larger Australian firms. We undertake an exploratory analysis of alternative explanations for our results and find some evidence consistent with management signalling its inside knowledge about the firm's expected future profitability to smooth earnings, as opposed to 'management intent to deceive' as an explanation for our results.     

Graphic Geopolitics: An Interview with Comics Artist Joe Sacco

Joe Sacco is best known for works that blend journalism with the format and structure of comic books. Sacco’s prior work has considered themes of political conflict, legacies of violence, and marginalization across a range of geographic contexts, including Bosnia, the Middle East, and the United States. This interview, conducted by the authors with Joe Sacco on 16 November 2015, explores these and other themes in an attempt to situate the positionality and choices of the creator of geopolitical narratives in the broader literature on critical geopolitics. We consider the themes of subject, representation, audience response, and stylistic influences, among others, in our conversation.     

Surviving leisure time racism: the burden of racial harassment on Britain's black footballers

This paper explores the burden of racial harassment and abuse on Britain's black footballers and places this in the context of leisure time racism. It is based on research carried out between 1989 and 1994. It is suggested that the source of such racism has been a neglected issue and only gained significant recognition in 1993 when the Commission for Racial Equality launched its Let's Kick Racism Out of Football campaign. It is argued that the racial abuse and chanting aimed at black footballers are examples of racial harassment. The research gathered evidence from two locations - Leeds and Newcastle - to assess the extent to which players were being disproportionately affected by this harassment and introduces the concept of 'burden of abuse'. Some historical background is provided and football stadia are considered as key symbolic leisure sites where a basic white working class racism has found expression. The growth of black footballers since the 1970s is considered, as well as the way such players have survived the racial harassment, some of whom were interviewed as part of the research exercise.     

A Response to 'Ecotourism on Trial: The Case of Billfish Angling as Ecotourism'

This paper estimates the quantity of pollutant produced by the Hong Kong hotel industry through diesel oil consumption. A survey of 20 hotels was carried out to collect three years' energy consumption data. Regression analysis indicated that gross floor area was a major and statistically accepted factor in explaining diesel oil consumption. Diesel oil consumption had reduced from the early 1990s and stabilised by the late 1990s. The sulphur dioxide, nitrogen dioxide, carbon dioxide and particulate pollution created by the hotel industry's diesel oil usage from 1990 to 1999 is estimated. The findings indicate that existing green measures and devices are passive and depend on the assimilation of the atmosphere. Environmental costs have stabilised at about HK$54,000 per annum. More proactive approaches to reduce usage and environmental impacts are proposed.     

A Note on Affordability and the Optimal Share Price

Despite the increase in institutional ownership, decreased trading costs, and increased real personal savings, we find that the average stock price is lower today than it was in the 1920s. In the aggregate, the propensity to split is a function of recent market performance, personal savings, and the desirability of appearing to be a small firm. Our results indicate that, after decades of inflation and the average stock price falling, splitting stocks to return to an "affordable" trading range must be rejected as an explanation. This suggests that other economic forces are behind splits, whether traditional or behavioral in nature.     

Financial dollarization and systemic risks: New empirical evidence

This paper explores the persistence of financial dollarization in a group of 79 economies with different levels of development. Our main hypothesis is that a high level of domestic debt combined with default risk explains this persistence, even after a decline in inflation rates. Using the generalized method of moments (GMM) in a panel data analysis, our results show that inflation risks caused by increasing probability of default account for financial dollarization more than inflation rate itself. After the decrease in inflation rates, the foreign currency-denominated deposits remain large because of the high debt-to-GDP ratios, particularly in speculative-grade economies. High public indebtedness leads to expectations of default. Dollarization is a rational response to the future inflation associated with investors' expectations of default observed in highly indebted economies.     

Initial Public Offerings on the Unlisted Securities Market: The Impact of Professional Advisers

This paper tests two hypotheses developed in the context of information asymmetry between companies making initial public offerings (IPO) on the Unlisted Securities Market and potential investors. It is argued that the status of the sponsor and audit firm are interpreted by potential investors as signals of an IPO's quality. The results indicate that for IPOs made during 1986–87 the level of discount and the status of the associated auditing firm are significantly related. Higher quality auditing firms are associated with lower levels of discount. A similar relationship for IPOs made during the period 1988–89 is not detected. The paper suggests that there were significant changes in the IPO market between these two periods. No relationship in either period is detected between the level of discount and the status of the sponsor.