Discretionary Accruals and Auditor Behaviour in Code-Law Contexts: An Application to Failing Spanish Firms

This study examines the relationship between earnings management and auditor behaviour in the pre-bankrupt client segment of the Spanish audit market. As proxies for auditor behaviour, we use type of audit firm (Big N/non-Big N) and type of audit report. In contrast to the USA, audit reports in Spain often include modifications other than a going-concern opinion. This allows us to study the relationship in more detail than is possible with US data. The results of our study show that discretionary accruals are negatively related to going-concern opinions but are positively related to reports modified for reasons other than going-concern problems. However, unlike Butler et al. (Journal of Accounting and Economics, 37, pp. 139–165, 2004) the negative relationship is explained not by liquidity survival tactics but by auditor conservatism. We find this conservatism not only in the value of discretionary accruals but also in the qualifications that accompany a going concern. In these cases GAAP violations have a much greater income effect and a stronger relationship with the reversal of manipulation accumulated over the years than with the manipulation introduced during the last year. Finally, our results suggest that Big N differentiation in a code-law country is context-specific and depends on the business risk parameter of the ‘audit risk model’. In particular, for high-risk firms, Big N auditors show a significantly lower level of discretionary accruals and a greater propensity to issue a going-concern opinion.     

Recognizing the Best: The Productive and Counterproductive Effects of Relative Performance Recognition

I use a laboratory experiment to examine the productive and counterproductive effects of providing employees nonpecuniary recognition based on measures of relative performance. I find that, on average, recognition programs increase both productive efforts (those intended to increase one's own performance) and counterproductive efforts (those intended to decrease peer performance) in a setting where it is salient to employees that they can exert both productive and counterproductive efforts. Interestingly, I also find that these effects are moderated by the Dark Triad of personalities, a group of three personality traits. My study reveals that recognition programs mainly lead individuals who score lower on the Dark Triad to increase counterproductive efforts and those who score higher on the Dark Triad to increase productive efforts. These results contribute to the literature on relative performance information by demonstrating that recognition programs can have both productive and counterproductive effects. However, whether these programs produce mainly a productive or counterproductive effect depends on important personality characteristics of the employees.     

Sustainability Development and the Quality of Assurance Reports: Empirical Evidence

There is a rising trend among companies to publish their sustainability or corporate social responsibility (CSR) reports. Assurance of these reports is a valuable voluntary tool to provide them with higher credibility. Nonetheless, the quality of assurance reports differs in practice and the objective of this paper is to provide evidence in this new area of research. Indeed, we are pioneers in developing an index to measure the quality of assurance reports. We choose the Spanish setting because it is the worldwide leading country as regards CSR reporting (KPMG, 2011; Sierra et al., 2012). We have found evidence on the determinants for CSR reporting posited by existing literature that have an impact on (a) the decision of companies to publish their CSR reports, (b) the decision to assure the CSR report or not and (c) the decision to hire the assurance services from an auditor or a consultant and the subsequent quality of the assurance report. Last but not least, our results from a sample of 161 CSR assurance reports evidence that assurance reports are of fairly acceptable quality, according to the index proposed. Furthermore, the value of the quality index is significantly higher if the assurance services are provided by an auditor (as opposed to a consultant) and if the CSR reporting company is larger. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Operational planning and competitive strategies of male and female retailers

Interest in the managerial practices of females in business has increased over the past decade due to women's increased representation in business. Anecdotal evidence has suggested that women approach decision making differently from men. The purpose of this study is to determine if gender differences regarding managerial strategies exist in the retail setting. Targeted managerial strategies focused on short-term planning processes (personnel, financial, inventory and market planning) and competitive strategies in operation (differentiation, cost leadership and focus). In a sample of 459 retailers from a twelve-state region, MANOVA was used to determine if significant differences in managerial strategies existed between genders. The data on retail competitive strategies suggest that men and women more likely than male business owners to recognize in the importance of differentiation and focus as retail competitive strategies in their business operations. Gender differences were also found in the operational planning areas of market and inventory planning.     

Will India Be the Next China? Challenges,Prospects and Implications for Australia

India's recent growth performance has been impressive and it appears set to again become a major global economic power. But, sustaining this growth poses formidable challenges. Australia stands to gain much from India's growth. In this article, we review recent developments in the Indian economy, identify policy challenges and discuss short‐to‐medium term prospects, noting some of the main similarities and differences between China and India. Then, we look at opportunities for significant growth in Australian–Indian economic links and policy implications including the possible role of a free trade agreement.     

The impact of economic geography on wages: Disentangling the channels of influence

This paper evaluates the role of economic geography in explaining regional wages in China. It investigates the extent to which market proximity can explain the evolution of wages, and through which channels. We construct a complete indicator of market access at the provincial level from data on domestic and international trade flows; this is introduced in a simultaneous-equations system to identify the direct and indirect effect of market access on wages. The estimation results for 29 Chinese provinces over 1995–2002 suggest that access to sources of demand is indeed an important factor shaping regional wage dynamics in China. We investigate three channels through which market access might influence wages beside direct transport-cost savings: export performance, and human and physical capital accumulation. A fair share of benefits seems to come from enhanced export performance and greater accumulation of physical capital. The main source of influence of market access remains direct transport costs.     

Urban Political Ecologies and Children's Geographies: Queering Urban Ecologies of Childhood

This article focuses on the material and discursive constructions of nature and children in the city. While dominant representations and idealizations of nature and childhood depend on the binary logic of the nature/culture and rural/urban divide, there is also a simplification and romanticization of nature in children's geographies and a lack of children and their spaces in urban political ecology. We argue that children and nature in cities need to be removed from a binary model of being and attended to in more nuanced ways in urban political ecology and children's geographies. In this regard, we suggest that both nature and children in cities need to be queered. We need to ask how the production of urban spaces (re)creates particular romantic and idealized relations with natures that reify the binaries between nature/culture, and male/female through a heteronormative framework. The purpose of this article is to bring the critical nature–society theories of urban political ecology into conversation with work in children's geographies that explores the ‘nature' of childhood, and in doing so queer the relationship between children and nature. Drawing on research on queer ecologies, and queered childhoods, we aim to provide a framework to rethink and queer both nature and children in cities.