NOT REPORTING A PROFIT: CONSTRUCTING A NON‐PROFIT ORGANISATION

Public sector reformers advocate contracting‐out as a means of improving cost‐effectiveness. In the health sector, market‐based contracts with for‐profit organisations can reduce equity of access and divert public funds to private gain. Such issues have prompted policy makers to seek alternative contracting strategies. This paper examines a primary health care policy whereby government contracts with private non‐profit organisations to increase efficiency and meet World Health Organisation ideals. The study found that the policy's implementation has not achieved these aims when for‐profit providers masquerade as non‐profit organisations. The implication is that governments may find it more effective to manage for structural diversity than mandate homogenisation.     

Ownership concentration, voluntary disclosures and information asymmetry in New Zealand

This paper investigates the impact of different classes of ownership concentration on information asymmetry conditional upon corporate voluntary disclosures in New Zealand. The current paper attempts to extend this stream of research by incorporating three mutually exclusive ownership structures and considering the interactive relationship between such ownership structures and corporate voluntary disclosures. Results reveal that ownership concentration in general is significantly positively associated with bid-ask spreads (proxy for information asymmetry) observed around annual report release dates. This finding supports the adverse selection hypothesis and importantly this effect is found to be most pronounced for financial institutions and management-controlled ownership categories. When voluntary disclosure is taken into account, the findings demonstrate that disclosures significantly attenuate information asymmetry risk associated with ownership concentration. This effect is particularly pronounced for firms with management-controlled ownership structures. The findings highlight the importance of corporate disclosures under concentrated ownership structures especially management-controlled ownership structures in reducing information asymmetry and enhancing market efficiency in New Zealand.     

The effect of voluntary disclosure,ownership structure and proprietary cost on the return–future earnings relation

This study examines the effect of voluntary disclosure on the relation between current annual return, contemporaneous annual earnings and future earnings, and the influence of both ownership structure and proprietary cost on this relation. Regression analyses reveal that firms with higher voluntary disclosure levels contain more information about future performance in their current stock return. This positive association is weaker if (1) management holds a higher proportion of share ownership in the company, (2) proprietary cost is present and (3) government ownership exists. However, the existence of outside block ownership significantly decreases managers' ability to limit voluntary disclosure. Our findings remain significant after controlling for the usual factors (size, growth, etc.) in the return–earnings regression, and a series of sensitivity and robustness checks.     

An empirical study of voluntary transfer pricing disclosures in China

This paper empirically investigates the factors that affect the management’s voluntary disclosures of the transfer pricing details of related-party transactions. Using Chinese data from 2004 and 2005, we hypothesize and find that firms that make voluntary disclosures of the pricing methods of related-party transactions are negatively associated with (i) a higher level of earnings management (as captured by abnormal related-party transactions) and (ii) its underlying incentives (as captured by the management’s performance-linked bonuses and the firm’s incentives to achieve earnings targets); further, they are positively associated with (i) a higher percentage of independent directors and (ii) a higher percentage of government ownership. Overall, our findings suggest that earnings management and its incentives, board composition, and ownership structure significantly influence the voluntary disclosure decisions of managers.     

Perceived international environmental factors and corporate voluntary disclosure practices: An empirical study

Drawing upon the contingency theory of organisations, we identify a set of perceived international environmental factors and examine how these factors influence a company's voluntary disclosure levels. The perceived international environmental factors identified are (a) intensity of global competition, (b) international socio-political institutions, (c) international accounting standards, and (d) international financial institutions. Based on data collected from 100 Egyptian non-financial listed companies, the results of multiple regression analysis indicate that the level of a company's voluntary disclosure is positively and significantly associated with its perceived influence of (a) international socio-political institutions (such as the United Nations, the European Union, the Association of South East Asian Nations, the World Trade Organization, and the Organization for Economic Co-operation and Development), (b) international accounting standards, and (c) international financial institutions (such as the World Bank and the International Monetary Fund). Contrary to our expectations, our findings reveal no significant association between voluntary disclosure level and perceived intensity of global competition. Our study contributes to the international accounting disclosure field by providing evidence from Egypt that perceived international environmental factors may influence the type and level of accounting disclosures by organisations. These findings are also applicable to other emerging countries.     

Regulatory impact on voluntary climate change–related reporting by Australian government‐owned corporations

This paper concerns voluntary climate change–related reporting of government‐owned corporations (GOCs). We investigate whether the Australian National Gresenhouse and Energy Reporting Scheme (NGERS), a regulation stipulating the disclosure of greenhouse gas emissions to government, subsequently made publicly available on a Website, has a positive impact on the voluntary disclosure of climate change–related information not required by the regulation. We find that implementation of NGERS has a positive effect on voluntary climate change‐related disclosures by GOCs. Hence, mandating disclosure of organisations’ negative environmental performance, such as greenhouse gas emissions, can influence voluntary disclosures of a broad range of related information particularly in organisations that are not subject to capital markets incentives. However, upon later but concurrent implementation of a Carbon Tax after a highly partisan and divisive political debate, climate change–related disclosures by GOCs reduce, consistent with the de Villiers and van Staden (2006) argument that when disclosures might increase awareness of sensitive issues, avoidance of attention to the issue might be the best strategy to retain legitimacy.     

Capital Structure Determinants for Tax‐Exempt Organisations: Evidence from the UK

Abstract: This study looks into the determinants of capital structure in the absence of tax incentives. I find that attributes normally associated with debt use for taxable corporations are likewise correlated with debt use in the tax‐exempt sector. These include the organisation's age, asset tangibility, governance structure, industry grouping, liquidity, profitability, and size. Tax‐exempt sector‐specific findings indicate that debt use is also related to the size of the organisation's endowment and the amount of voluntary income. This study also demonstrates the portability of the theory of capital structure by extending the findings in Smith (2010) beyond the United States.     

Public sector reforms and public private partnerships: Overview and research agenda

The purpose of this editorial paper is to introduce the special issue and outline its majorthemes. This special issue of Accounting Forum aims to stimulate interdisciplinary and critical research on public sector reforms, particularly in the context of Public Private Partnerships and other public sector organisations. The editorial also seeks to provide a research agenda and new directions for more research in the field, considering the ambiguities of this hybrid organisational forms and the complexity of accounting and accountability reforms.     

Challenges and enablers to engaging voluntary organizations in public service delivery

Public and voluntary sector managers delivering state-funded services in the UK were found to have common challenges and enablers. This article presents recommendations for joint working between the two sectors.     

Governance and control of sharing economy platforms: Hosting on Airbnb

Sharing economy platforms have recently surged as popular venues of business enabling people around the world to digitally interact and temporarily exchange their under-utilised assets. Beyond a very small number of exploratory studies of accounting practices underpinning these digital platform organisations, little is known about their governance and management control. This paper examines the governance and management control exercised by a digital platform owner over global users exhibited by Airbnb, a successful and pervasive sharing economy platform in the holiday accommodation sector. Through netnographic method, this study investigates the platform owner governance and control issues with respect to hosts. The analysis reveals the platform owner using predominantly formal bureaucratic control systems as mechanisms to govern and control its users. Through users’ compliance, they and their activities are made visible to the platform owner, which in turn maintains control over the value creation process. This study provides insights into how accounting systems are mobilised in digital platforms to facilitate their governance through mechanisms of surveillance, monitoring control over digital users worldwide, and how innovative and disruptive phenomena nonetheless rely on traditional technologies of governance to maintain power and control.     

Determinants and consequences of voluntary disclosure in an emerging market: Evidence from China

In this paper we examine empirically the determinants of voluntary disclosure in the annual reports of Chinese listed firms that issue both domestic and foreign shares and determine if the cost of debt capital is related to the extent of voluntary disclosure. We find the level of voluntary disclosure is positively related to the proportion of state ownership, foreign ownership, firm performance measured by return on equity, and reputation of the engaged auditor. There is no evidence, however, that companies benefit from extensive voluntary disclosure by having a lower cost of debt capital.     

Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore

Drawing on prior empirical research based on disclosure behavior in developed western markets, this study examines the association of ownership structure with the voluntary disclosures of listed companies in the Asian settings of Hong Kong and Singapore. An analysis of annual reporting practices shows that the extent of outside ownership is positively associated with voluntary disclosures. In particular, the results also indicate that the level of information disclosure is likely to be less in “insider” or family-controlled companies, a significant feature of the Hong Kong and Singapore stock markets.     

Between a rock and a hard place: New evidence on the relationship between ownership and voluntary disclosure

Combining two Swedish databases with unique strengths I show that stray firms, i.e. those lacking a controlling owner, have lower voluntary disclosure in financial reports (that is, information provided beyond what is formally required). This suggests managers prefer to withhold information to maximize their discretion over corporate policies. I also show that disclosure initially increases with block ownership, reflecting increased incentives to monitor and stronger governance. However, when block ownership exceeds a certain threshold level (> 50%), disclosure starts to decrease, reflecting another conflict of interest, namely between minority and controlling owners. Evidence of this non-linear relationship is novel in the literature and may account for the mixed evidence in previous research. Moreover, I report findings on the impact of institutional, foreign, under-diversified, and controlling minority-owners, concluding that ownership structure has major implications for voluntary disclosure.     

On Being a Financial Manager in a Church Organisation: Understanding the Experience

Accountants and financial managers, as individuals and as occupational groups, are largely invisible in the growing body of financial management literature. In particular, limited privilege has been given to the experiences of financial managers in organisations dominated by social or value‐based goals, rather than financial motives. To begin to address this lacunae, this paper presents a micro study of financial managers 'in motion'( Hopwood, 1987 ) in the state division of a large Australian church. By explicating the financial managers' own perspectives of their experiences, the study provides a unique perspective of understanding of what it is to 'be' a financial manager in a non‐profit entity.     

Determinants and features of voluntary disclosure in the Chinese stock market

This paper offers in-depth analysis of the determinants and features of voluntary disclosure based on information in the annual reports of 1066 Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges. This extensive sample represents about 80% of all public companies in China. Our findings suggest that voluntary disclosure in China is positively related to firm size, leverage, assets-in-place, and return on equity and is negatively related to auditor type and the level of maturity or sophistication of the intermediary and legal environments. We also find some evidence to suggest a quadratic convex association between state ownership and voluntary disclosure. However, our analysis provides no evidence that extensive disclosure benefits public companies in China in the form of a lower cost of equity.     

The extent of corporate governance disclosure and its determinants in a developing market: The case of Egypt

This paper assesses the extent of corporate governance voluntary disclosure and the impact of a comprehensive set of corporate governance (CG) attributes (board composition, board size, CEO duality, director ownership, blockholder ownership and the existence of audit committee) on the extent of corporate governance voluntary disclosure in Egypt. The measurement of disclosure is based on published data created from a checklist developed by the United Nations, which was gathered from a manual review of financial statements and websites of a sample of Egyptian companies listed on Egyptian Stock Exchange (EGX). Although the levels of CG disclosure are found to be minimal, disclosure is high for items that are mandatory under the Egyptian Accounting Standards (EASs). The failure of companies to disclose such information clearly shows some ineffectiveness and inadequacy in the regulatory framework in Egypt. Moreover, the phenomenon of non-compliance may also be attributed to socio-economic factors in Egypt. Therefore, it is expected that Egyptian firms will take a long time to appraise the payback of increased CG disclosure. The findings indicate that that—ceteris paribus—the extent of CG disclosure is (1) lower for companies with duality in position and higher ownership concentration as measured by blockholder ownership; and (2) increases with the proportion of independent directors on the board and firm size. The results of the study support theoretical arguments that companies disclose corporate governance information in order to reduce information asymmetry and agency costs and to improve investor confidence in the reported accounting information. The empirical evidence from this study enhances the understanding of the corporate governance disclosure environment in Egypt as one of the emerging markets in the Middle East.     

Corporate voluntary disclosure and the separation of cash flow rights from control rights

We find that corporate voluntary disclosure is negatively associated with the separation of cash flow rights from control rights. This result is consistent with the notion that as the separation of cash flow rights from control rights increases, controlling owners have larger incentives to expropriate the wealth of minority shareholders and low corporate disclosure constitutes a mechanism to facilitate controlling owners in masking their private benefits of control. The negative association between voluntary disclosure and the separation of cash flow rights from control rights is less pronounced for firms with greater external financing needs. This result suggests that for firms with high separation of cash flow rights from control rights, those with greater external financing needs undertake higher firm-level voluntary disclosure to reduce information asymmetry. We also find that the negative association between voluntary disclosure and the separation of cash flow rights from control rights is less pronounced for firms that have a large non-management shareholder. Our result supports the role of large non-management shareholder in mitigating agency problems associated with the separation of ownership and control.

Determinants of voluntary disclosure of segment information: A re-examination of the role of diversification strategy

This paper explores the determinants of management's decision to voluntarily disclose segment information. It is an extension of McKinnon and Dalimunthe (1993) who investigate the role of six hypothesised determinants. Their results indicate that firm size, industry membership, ownership diffusion, and the level of minority interest are related to the voluntary disclosure of segment information. However, they find that leverage and diversification into related versus unrelated industries are not related to this disclosure. It is the diversification finding that motivates our work. This paper explores the effect of differences in data, differences in samples, and differences in the measurement of diversification on the McKinnon and Dalimunthe (1993) results. Using an alternative definition of diversification, we find diversification strategy, firm size, and the level of minority interest to be related to segment disclosure while the results for ownership diffusion and industry are mixed. We find no support for a leverage effect.     

The association between voluntary disclosure and corporate governance in the presence of severe agency conflicts

Agency conflicts between different types of investors are particularly severe in the presence of high family and block-holder ownership. By focusing on a setting characterised by high ownership concentration, we study the role of independent directors in promoting transparency through increased disclosure. In our tests, we use a sample of Spanish firms and, consistent with prior work, show that the presence of these directors is strongly associated with increased voluntary disclosure. Additionally, we find that when an executive director takes on Chair responsibilities the level of voluntary information is reduced, creating potential conflicts with the role of independent directors. Our results suggest that a strong legal framework holds firm-level clashes of interest in check. We conclude that this regulatory environment can create sufficient incentives to bring together the interests of minority and majority shareholders and guarantee an efficient monitoring role of independent directors. However, results suggest that other mechanisms should be reinforced in order to improve the role of governance control on agency relationships, particularly in the case of the concentration of Chair and executive responsibilities.     

A comparison of voluntary and mandated climate change-related disclosure

This study draws on legitimacy theory to investigate the relationship between mandatory disclosure of greenhouse gas emissions by companies that are subject to specific environmental legislation (the Australian National Greenhouse Energy Reporting Act 2007) and the level of voluntary environmental disclosures. Using a sample of 535 observations, we find that i) Overall, legislation-affected companies increase their disclosures compared with non-affected companies, ii) As many companies reduce their disclosures as increase them, iii) there is an increase in the level of emissions volume disclosures in legislation-affected companies compared with the same company pre-implementation, iv) legislation-affected higher emitters have higher levels of voluntary disclosures. These findings are consistent with legitimacy theory, which predicts differential disclosures in circumstances to avoid scrutiny.