Corporate Social Responsibility: The Link Between Sustainability Disclosure and Sustainability Performance

This paper explores the relation between sustainability performance and sustainability disclosure within the Australian extractive industries. The study utilizes Ullmann's (1985) stakeholder framework, which depicts sustainability disclosure and performance as two components of management strategy for dealing with stakeholder demands. Consistent with this framework, we predict a positive performance–disclosure relation. Extending prior research that has utilized problematic environmental performance indices such as CEP indices or toxic emissions levels, we develop a sustainability performance index based on the International Finance Corporation's Measuring Sustainability Framework (2001). Using data from 339 mining and energy firms listed on the Australian Securities Exchange in 2006, we find that corporate sustainability performance is strongly associated with disclosure as expected. Sustainability disclosure is also greater for firms with a proactive communication strategy as manifested through press release activity. Finally, asset age and firm size are both positively associated with sustainability, consistent with predictions from the stakeholder framework.     

The effect of childhood measles vaccination on school enrolment in Matlab,Bangladesh

There is increasing evidence that early childhood health interventions have long-term effects on cognitive development, educational achievement and adult productivity. We examine the effect of measles vaccination on the school enrolment of children in Matlab, Bangladesh. An intensive measles vaccination programme was introduced in one area in 1982, and extended to another in 1985, while a third area acted as a control. Using this staggered roll-out as an instrument, we find that age-appropriate vaccination raises the probability that a boy has enrolled in school by 7.4 percentage points but appears to have no effect on girls’ enrolment.     

Towards an understanding of profitability analysis within the residual income valuation framework

This paper argues that there is a mis-match between formal theoretical accounting valuation models, and practical approaches to profitability analysis and valuation. In particular, none of the linear information models published to date exhibit an obvious role for profitability analysis. For example, in the standard Ohlson model, earnings and book value apparently summarise all the value relevant information available from the firm's financial statements and there is no apparent need for any further investigation of the accounting numbers beyond these specific line items. The purpose of this paper is to attempt to investigate potential analytical links between formal valuation models and practical profitability analysis. Specifically, we attempt to show how key features of practical profitability analysis might be incorporated into formal valuation models. In this respect there are two particular aspects of valuation practice to which the formal models published to date have paid no attention. First, in practice we often see explicit reference made to the demand side (sales), and supply side (costs) of the business. Second, we often see attempts to benchmark the financial ratios of one firm against the corresponding ratios of firms in the same industry. The purpose of this paper is to attempt to explain why such practices make sense in the context of an attempt to model the principal determinants of firm value within a residual income valuation framework.     

Managerial Choices in the Valuation of Acquired Goodwill in the UK

During the 1980s the UK regulations affecting accounting for acquired goodwill allowed managers to make accounting choices affecting recorded goodwill that best served their particular interests. This paper develops and tests the hypothesis that the proportions of purchase price assigned to separable net assets and consequently to goodwill are affected by gearing (leverage) and other considerations.     

How far can we trust earnings numbers? What research tells us about earnings management

The article reviews the recent academic research literature on earnings management (EM) with a view to identifying research themes and results of interest to users and preparers of financial statements, accounting standard setters, and others with responsibility for ensuring that companies provide financial information to shareholders that can be relied upon. Hopefully students of accounting with an interest in exploring the EM literature will find that the article provides a useful framework. The literature on this topic is vast, and it is not possible to cover every article in detail. I provide an impressionistic survey that highlights examples of specific research themes and methods that regularly appear in the literature. Most of the examples are chosen from the literature published since 2000, although I do also highlight a few methodological contributions that appeared earlier. It is inevitable that the selection of articles reflects to some extent my personal interests and biases (intentional or otherwise). Thus, I wish to acknowledge that I owe a very substantial intellectual debt to the insights and contributions of the many uncited authors of a literature that spans over 40 years in over 20 accounting and finance journals.