Fair Value Exposure,Changes in Fair Value and Audit Fees: Evidence from the Australian Real Estate Industry

This paper investigates the relationship between audit fees and both fair value exposure and changes in fair value of investment properties. The study is motivated by the limited and inconclusive evidence on the effect on audit fees of full fair value reporting for illiquid assets. Using hand‐collected data from the Australian real estate industry, we find a negative (positive) association between audit fees and fair value exposure (changes in fair value of investment properties). Our findings also indicate that the use of unobservable inputs in fair value estimates for investment properties does not significantly increase audit risk and audit fees. Further, we find that audit fees are higher for firms with fair values of investment – properties estimated by external and mixed valuers – compared to firms with fair values estimated by directors alone. This study enriches the audit fee literature by documenting auditors’ pricing decisions in an area that involves significant estimation and valuation risks.     

History of microfinance in Bangladesh: A life cycle theory approach

This study aims to conceptualise and document the historical evolution of microfinance in Bangladesh using the life cycle theory (LCT). Based on the LCT nomenclature, the microfinance sector in Bangladesh shows characteristics broadly consistent with the saturation phase (2006–2015) – which potentially has adverse impacts on both microfinance clients and institutions. The maturity phase (1996–2005) of microfinance has corresponded with competition and several innovations (financial and non-financial). However, the saturation phase sees increasing presence of uncoordinated microfinance institutions and expansion of multiple borrowing, as well as commercialisation and ‘mission drift’, which constitute important challenges for the regulatory authority and management of microfinance institutions.     

Gender discrimination in education,health, and labour market: a voice for equality

The objective of the study is to examine the impact of gender discrimination in education, health, and labour market on economic growth in a panel of 20 high-income OECD countries for the period of 1980–2015. In addition, the study proposed an index of pro-equality growth, which is flared with education, health, and labour market initiatives to promote economic growth. The results show that gender parity index for educational attainment significantly promotes economic growth while health and labour market required substantial policy reforms to reduce health and labour market inequalities to sustain long-term economic growth. The results classified three countries as highly equitable growth, one country for equitable growth, two countries are moderate growth, four countries are less equitable growth while remaining 10 countries fall in the category of inequitable growth, where greater inequality promotes economic growth on the cost of education, health, and labour market inequalities.     

Human Rights Performance Disclosure by Companies with Operations in High Risk Countries: Evidence from the Australian Minerals Sector

The aim of this study is to explore whether Australian mineral companies operating in high human rights risk countries provide more human rights disclosures than companies operating in low risk countries. A content analysis instrument containing 88 specific human rights performance items derived from a number of international human rights guidelines has been developed to investigate the annual reports, social responsibility reports and corporate websites of the top 50 Australian mineral companies (2010/2011). The findings show that human rights performance disclosures by companies with operations in high human rights risk countries are significantly higher than companies with operations in low risk countries. By disclosing extended human rights performance information, companies operating in high risk countries appear to ease community concerns about human rights violations. The finding is consistent with legitimacy theory, which posits that organisations respond to community concerns in relation to particular social issues.     

Causal relationship between apparel exports and macroeconomic factors

Apparel exports make a significant contribution to economic growth in major apparel exporting economies such as Bangladesh, Sri Lanka and Vietnam. This study aims to investigate the causal relationship between apparel export growth and its determinants such as GDP growth, infrastructure, financial development, foreign direct investment (FDI) and labour productivity using panel data from 11 major apparel exporting countries for the period 1996 to 2013. The results confirm a long-run equilibrium association among the variables and reveal that GDP growth, infrastructure, financial development, FDI, and labour productivity have a significant positive influence on apparel export growth. Furthermore, the heterogeneous panel non-causality test results suggest that GDP growth, infrastructure and labour productivity contribute to apparel export growth in the short-run. These findings have several policy implications for the governments of the countries under study.     

Impact of IFRS in New Zealand on Accounts and Earnings Quality

The impact of the adoption of International Financial Reporting Standards (IFRS) on the accounts and the quality of earnings of New Zealand firms is examined. Our analysis of IFRS adjustments for the last period under pre‐IFRS NZ Generally Accepted Accounting Principles (GAAP) reveals that total assets, total liabilities and net profit were significantly higher under IFRS than under pre‐IFRS GAAP. Profit and equity under IFRS were increased by adjustments for goodwill and other intangibles and investment property, and decreased by adjustments for employee benefits and share‐based payments. Using data for 2002–2009, we find that absolute discretionary accruals were significantly higher under IFRS than under pre‐IFRS NZ GAAP, suggesting lower earnings quality under IFRS than under pre‐IFRS NZ GAAP. However, we find no significant differences in signed discretionary accruals and the ability of earnings to predict one‐year‐ahead cash flows between pre‐IFRS NZ GAAP and IFRS. These results are consistent across alternative measures of accruals quality, sample selection and whether firms elected to adopt IFRS in 2005 rather than comply with them in 2007.     

Exploring the impact of R&D and climate change on agricultural productivity growth: the case of Western Australia*

This article empirically examines the impact of R&D and climate change on the Western Australian Agricultural sector using standard time series econometrics. Based on historical data for the period of 1977–2005, the empirical results show that both R&D and climate change matter for long‐run productivity growth. The long‐run elasticity of total factor productivity (TFP) with respect to R&D expenditure is 0.497, while that of climate change is 0.506. There is a unidirectional causality running from R&D expenditure to TFP growth in both the short run and long run. Further, the variance decomposition and impulse response function confirm that a significant portion of output and productivity growth beyond the sample period is explained by R&D expenditure. These results justify the increase in R&D investment in the deteriorating climatic condition in the agricultural sector to improve the long‐run prospects of productivity growth.     

Estimation of parameters of parallelism model with elliptically distributed errors

In this paper we consider some improved estimators of the intercept and slope parameters in a parallelism model with errors belonging to a sub-class of elliptically contoured distributions. We derive the exact bias, MSE matrices and quadratic risk expressions for these estimators. It is shown that the dominance properties of these estimators are the same as under normal theory. Further, it is shown that the shrinkage factor of the Stein estimators is robust with respect to the regression parameters and unknown mixing distributions.