Information content, audit reports and going-concern: an Australian study

Research conducted on the information content of going concern ‘modified’ reports in the USA and UK indicates that a modified audit report does not appear to have information content to users if the going concern contingency is disclosed in the notes to the financial statements. In the present study, we provide evidence from Australia. We examine whether modification/qualification by an auditor in Australia (an ‘Emphasis of Matter’ and an ‘Except for’ report, respectively) has information content to a user. The results indicate that for a company in a state of financial distress, the modification, in either form, does not appear to significantly enhance either perceptions of risk or decision-making.     

Value-Based Management in Biosciences Research and Development

In industries such as biosciences, the range of uncertainty and managerial flexibility make traditional financial analysis such as discounted cash flow and decision tree analysis largely irrelevant for strategic decision-making. In place of such traditional methods, this article proposes the use of decision options analysis, a real-options-based methodology that holds out the promise of better investment and portfolio decisions with fewer data requirements. Moreover, decision options analysis can be implemented with software tools that allow systematic application of these techniques. This article presents case studies that outline the actual application of real options analysis in licensing transactions and portfolio management in biosciences companies.     

Change,Change or Be Exchanged: The Discourse of Participation and the Manufacture of Identity*

abstract Promoting participation is an accepted and expected component of managerial activity, reflecting current management ideology and practice. This paper explores how one particular group of supervisors, within the same UK manufacturing organization, experience and make sense of participation practices and the role of identity in that process. Our findings show that whilst supervisors may utilize the managerial discourse in formal settings they also draw upon three alternative responses. Thus contrary to much of the literature they do not represent a homogenous or univocal grouping. Our study highlights the importance of the competing bases of identity formation that supervisors draw from, and the complexity and contradiction inherent in both the managerial discourse and in supervisors' responses to it.     

Exploring the effect of geographic convenience on repeat visitation and tourist spending: the moderating role of novelty seeking

This article investigates the relationships among geographic convenience, tourists' visit frequency and travel spending as well as the moderating effect of novelty seeking. A curvilinear relationship between geographic convenience and visit frequency is first identified. The mediating role of visit frequency is then tested through path analysis, followed by an invariant model test that examines the moderating effect of novelty seeking. The findings reveal that frequency of visit fully mediates the relationship between geographic convenience and travel spending. The moderating effect of novelty seeking is also warranted in that the effect of geographic convenience is only significant for low-novelty seekers while the frequency-of-visit effect is more salient for high-novelty seekers.     

Ranking sectors using fuzzy output multipliers

Using input–output analysis to model the effects of changes in industry final demands is fraught with problems, many of which relate to the fundamental limitations of the concomitant linear framework. A further issue concerns the accuracy of the results, a consequence of the uncertainty surrounding the values of multipliers. Such uncertainty can create problems where the values of output multipliers are used to inform resource directions. This paper utilizes (and develops) a fuzzy input–output model and investigates the ranking of industries based on fuzzy output multipliers. The non-triviality of the fuzzy model is exposited in a general problem, where imprecision is defined by a proportional level of imprecision (fuzziness) in the technical coefficients. Through a nascent method for ranking fuzzy numbers, comparisons are made between the fuzzy and more traditional (non-fuzzy) analysis.     

The effects of a financial literacy intervention on the financial and economic knowledge of high school students

The authors taught financial concepts to students in 12th-grade economics classes, where one treatment was intensive in money management (MM) topics and the other was intensive in financial investment (FI) topics. Two control groups, consisting of 11th-grade students with no exposure to economics and 12th-grade economics students, received no treatment. Both treatment groups showed a 13 percentage point increase in test scores from pretest to posttest, while neither control group showed gains. Neither treatment group outperformed the other in the financial literacy test.     

Delusive perception—antecedents and consequences of salespeople’s misperception of customer commitment

Although salespeople’s perception of their customers is often systematically biased, research on the antecedents and consequences of perceptual inaccuracy in customer–salesperson relationships is still scarce and limited in scope. Drawing on findings from personality research and social psychology, we therefore empirically examine potential antecedents and consequences of salespeople’s misperception of customer commitment in 233 customer–salesperson dyads. Results provide evidence of the effects of customer-related factors, relationship-related factors, and salesperson-related factors on the extent of salespeople’s misperception of customer commitment. Moreover, we show that salespeople with an upwardly biased perception of customer commitment engage in less relationship-building effort, which in turn negatively affects customer behavior.     

Frameworks for coping with post-normal times: A response to Ziauddin Sardar

This paper is a response to Ziauddin Sardar's “Welcome to postnormal times”. It agrees that times are indeed post normal, and discusses the reasons why this will continue. The paper then suggests three frameworks for helping people (and managers) recognise and deal with these times: a four level complexity hierarchy, scenarios, and the purposeful self-renewing organisation architecture.     

Recovery rates,default probabilities,and the credit cycle

In recessions, the number of defaulting firms rises. On top of this, the average amount recovered on the bonds of defaulting firms tends to decrease. This paper proposes an econometric model in which this joint time-variation in default rates and recovery rate distributions is driven by an unobserved Markov chain, which we interpret as the “credit cycle”. This model is shown to fit better than models in which this joint time-variation is driven by observed macroeconomic variables. We use the model to quantitatively assess the importance of allowing for systematic time-variation in recovery rates, which is often ignored in risk management and pricing models.