Accounting Problems in Infrastructure Asset Valuation and Depreciation in New South Wales Local Government

The aim of this paper is twofold: (i) to investigate whether New South Wales (NSW) local government councils comply with Australian Accounting Standards in accounting for revaluation of their infrastructure assets and (ii) to assess any consequences for the reliability of financial reporting in NSW local government. Using road assets as an example, we analyse the results of revaluations of road assets undertaken by 89 NSW councils as reported in their financial statements during the period 2013 to 2016. In this analysis we focus on the effect of a change in accumulated depreciation and impairment loss component of fair value as a percentage of the gross replacement cost of the revalued assets. The analysis reveals that in most cases this effect is significant. However, the accounting and reporting of this effect is strikingly inconsistent between the councils. Based on a critical analysis of the accounting framework and disclosure of the revaluation effects, we conclude that the main reason for the change in the fair value of assets is altered estimates of remaining useful life. Furthermore, we argue that councils did not comply with the requirements of AASB 116 in determining the useful life of the assets.     

A Factor Analytic Assessment of Financial Sustainability: The Case of New South Wales Local Government

Financial sustainability in local government remains a pressing problem which has seen a host of public policy interventions, including compulsory consolidation and performance monitoring through financial sustainability ratios. In September 2014, the New South Wales (NSW) Government announced a reform program centred on increasing scale in local government to make councils ‘fit for the future’. We apply factor analysis to the financial ratios informing the NSW Government's reform initiative to identify the underlying factors for observed financial performance data. We find evidence indicating that three independent underlying factors account for the adopted measures of financial sustainability. The public policy implication arising from this study suggests that the reforms imposed by the NSW Government on NSW municipalities may only meet with limited successa.     

The ERA: A Brave New World of Accountability for Australian University Accounting Schools

This study examines the potential impact of Excellence in Research for Australia (ERA) on Australian university accounting schools through a series of in-depth interviews with Heads of Schools. Using an institutional theory framework we find that the pending introduction of the ERA has brought about changes in school structures, processes and systems. A creeping isomorphism is apparent as evidenced by a sector-wide movement towards targeting publications in highly ranked North American journals. While participants were generally positive about the overall aims of the ERA many felt that it would marginalise non-mainstream research. Furthermore, they were of the opinion that the ERA would lead to a reduction in the standing of accounting schools within Australian universities relative to other disciplines.     

Inconsistent Depreciation Practice and Public Policymaking: Local Government Reform in New South Wales

Public policy based on numerical indicators – a form of ‘public management by numbers’ – has become commonplace across the world. Whereas a good deal is known about the deleterious effects of this type of policymaking – including ratcheting, output distortion and ‘gaming’ – unfortunately little attention has focused on the adverse local government policy consequences of inconsistent depreciation accruals by local authorities. This paper seeks to address this gap in the empirical literature on local government performance. After examining the use of accounting data by local government policymakers, the paper reviews available empirical evidence of inconsistent depreciation practice both in Australia and abroad. We then consider the recent New South Wales (NSW) Independent Local Government Review Panel's use of accounting ratios as supporting evidence for boundary change in local government as a case study of the adverse impact of inconsistent depreciation practice. The NSW experience clearly demonstrates the distortionary effects of empirical evidence resulting from significant variation in depreciation accruals by individual local councils. The paper concludes with an assessment of the options available to local government policymakers wishing to obtain more accurate accounting accrual data for policy formulation purposes.     

University Accounting Curricula: The Perceptions of an Alumni Group

Abstract

Many of the problems associated with accounting education could be due to at least two reasons: inadequate attention given to the design of accounting programmes, and the narrow view of stakeholder approach adopted in examining education issues. The existing literature mainly focuses on students' perception about issues such as teaching quality, alumni experience in major accounting firms, and so on. This paper deals with the design of accounting programmes, and proposes to ascertain the views of an important stakeholder group (i.e. alumni) on this issue. The findings of this study give credence to some of the generally held views, e.g. that it is no longer appropriate for tertiary education providers to adopt a one-size-fits-all approach. However, in some other areas, the findings represent a stark contrast to the views on certain issues promulgated by the professional bodies in New Zealand and overseas including the USA, (for example, the issue of appropriate proportions of accounting, business and liberal studies in an accounting programme). Notably, the respondents in general placed a low importance on auditing as part of an education programme. Further, in terms of the emphases that should be placed in an accounting programme, contrary to the endorsement in the literature, ‘work experience’ was not considered as important as other areas of emphasis, (e.g. global perspective, local perspective, professionalism and social and environmental perspective).     

Hired Guns: Local Government Mergers in New South Wales and the KPMG Modelling Report

Across the developed world, including Australia, public policymaking now rests heavily on commissioned reports generated by for‐profit consultants, contrasting starkly with the earlier customary reliance on the civil service to provide informed policy advice to political decision makers. Dependence on commercial consultants is problematic, especially given the moral hazards involved in ‘hired guns’ providing support for policy ‘solutions’ desired by their political paymasters. This paper provides a vivid illustration of some of the dangers flowing from the use of consultants by examining the methodology employed by KPMG in its empirical analysis of the pecuniary consequences of proposed municipal mergers as part of the New South Wales’ (NSW) Government's Fit for the Future local government reform program. We show that the KPMG (2016) modelling methodology is awash with errors which render its conclusions on the financial viability of the NSW merger proposals fatally flawed.     

Home Fire Safety Checks in New South Wales: an economic evaluation of the pilot program

Traumatic events such as fire can result in fatality, injury, and loss of property; even a minor fire can interrupt the normal flow of people’s lives. During the years 2009–2013, urban and regional New South Wales (NSW) experienced an annual average of 4329 residential structural fires with 593 injuries and 22 fatalities at an annual cost of $656 million dollars. In 2014, Fire and Rescue NSW piloted a program called Home Fire Safety Checks (HFSC), aimed at high-risk households. In total, 228 homes in 8 suburbs received safety checks, including having smoke alarms installed, having batteries changed in smoke alarms, and being provided with fire blankets and fire safety information. The pilot study design enabled detailed economic evaluation of the program, including both development costs and ongoing costs for a full roll-out. Analysis of the cost of fire within NSW, combined with measurements of the success of similar programs internationally, demonstrates the program’s cost effectiveness. Savings per dollar spent exceed $12 if the program includes 1% of high-risk homes and obtains a 0.75% reduction in number of fires. These results demonstrate that a full roll-out of the HFSC program warrants ongoing funding. External factors affecting program delivery include community acceptance and willingness to participate in the program, particularly very high-risk individuals, and ongoing behavioral change. In addition, HFSC faces the same ongoing funding challenges other preventative community programs face in a period of tightening state budgets.     

Adoption of Environmental Reporting and Management Practices: An Analysis of New South Wales Public Sector Entities

This paper analyses the level of environmental disclosure and the corresponding adoption of environmental management practices by New South Wales public sector entities in 1996. From the analysis of 35 entities, it was found that the development of environmental management practices and the level of environmental disclosure were significantly associated. The results suggest that entities were responding to increased political visibility through higher levels of environmental disclosure, however they were also responding through the development of environmental management practices.     

Practical bioregionalism: A philosophy for a sustainable future and a hypothetical transition strategy for Armidale, New South Wales, Australia

To reorientate society towards sustainability, a clear vision based on a coherent philosophy is needed to act as a compass point. This research describes one possible ‘eco-utopian’ approach, and uses it to develop a hypothetical set of transition strategies aimed at the transformation of an Australian regional community. The vision combines bioregional principles with ecological modernisation theory to present a model of a small-scale society that is socially and ecologically responsive. In this model, communities are organised primarily around naturally defined regions, but are outward looking and globally engaged. Political decision-making is democratic, participatory and collaborative. An ethos rooted in the notion of a global civil society provides vision and desirable levels of accountability. Production and consumption are local, cooperative and use natural resources efficiently. Existing social and political trends suggest that the bioregional model developed in this paper is both pragmatic and possible. A hypothetical case-study approach is used to illustrate how such ‘practical bioregionalism’ may be successfully adopted. An initial 25-year plan, with five desired outcomes, is outlined for the Armidale Plateau region of New South Wales, Australia. Key strategies include use of Local Agenda 21 processes, the development of a bioregional strategic plan and partial economic localisation. Implementation requires active participation of the community, including government and business actors. It is argued that the proposed transition strategy is also of direct relevance to achieving sustainability goals in larger urban areas and the global South.     

马骏:绿色投资新领域

从经济学角度来看,环境污染和碳排放的根源主要在于经济所面临的三大结构问题:污染型的产业结构、污染型的能源结构、污染型的交通结构。如果仅仅运用传统的技术,往往不能让绿色产品和绿色服务成本有充足的下降幅度,从而不能使这些产品和服务获得长期的竞争力。为了让绿色金融的发展有自我可持续性,我们必须要推动绿色科技的发展,通过科技的发展让更多绿色产品和服务的成本变得更低,让它们更加有竞争力。而绿色科技的发展需要通过投资,尤其是PE/VC领域的投资来推动。     

郎咸平教授清华演讲节选

我们常说这个领域、那个领域的改革进入了攻坚阶段,但是一个个结果却令不少国人、尤其是低收入者感到失望。人们可以在教育、医疗、养老保险诸方面看到这种情况。对一个历史传统沉重的大国来说,中国的事情不易为常人所看清。香港中文大学教授郎咸平于2005年12月21日在清华大学的演讲以其独特犀利的语言阐述了他对中国社会制度改革的一些看法,这或许也可以给读者以有益的启示。     

A-Level Subject Choice,Systematic Bias and University Performance in the UK: The Case of Accounting

British students from lower socio-economic backgrounds are more likely to attend non-selective state schools and are therefore more likely to take a wider variety of A-level subjects including applied disciplines such as Accounting. This is attributed to the performative pressure subjected by school league tables that incentivise schools to encourage students to select subjects that will yield the highest grades. However, many leading universities have restricted the chances of applicants holding particular combinations of A-level subjects that, in some cases, include Accounting. Interviews held within a large English university reveal that few students are aware of such restrictions, whilst corresponding quantitative data indicates that students who enter university with two or more restricted A-level subjects perform no differently on average than other students. Those entering university with an Accounting A-level, however, perform, better in their first year but exhibit lower degree performance, on average, by the end of their studies.