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    Testing accruals based earnings management models in an international context : a thesis presented in partial fulfilment of the requirements for the degree of Master of Business Studies in Accountancy at Massey University, Albany, New Zealand
    (Massey University, 2014) Kashmiri, Hawazin
    The main purpose of this thesis is to extend the study by Dechow, Hutton, Kim and Sloan (2012) in two ways: firstly by comparing the specification and power of the McNichols (2002) model with a newer model, Dunmore (2013). Secondly, the Dechow et al. (2012) study is extended into an international context using data from China, Japan and the United Kingdom to examine the specification and power of the models as a result of institutional factors. Data was collected for the years 1993 to 2012 and comprises a total of 13,238 firm years from China, 44,005 firm years from Japan and 7,782 firm years from the United Kingdom. The study finds that both the McNichols (2002) and the Dunmore (2013) models are well specified and the test power is improved by the incorporation of reversals. However, the study also finds that the McNichols (2002) model outperforms the Dunmore (2013) model. Finally, the results are quite different for each country, but not in the way that is predicted by the institutional factors.
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    Crisis in accounting : the emerging ideology, practice and structures within the profession : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Accountancy
    (Massey University, 1996) Velayutham, Sivakumar
    In recent years, the accounting profession has come in for considerable criticism mainly on the grounds that it has not been successful in adapting to the changing environment, and in regulating the activities of its members. The extent and seriousness of these criticisms suggest that the accounting profession is facing a crisis. This thesis investigates the nature of the crisis, the profession's response to the crisis and the consequent fundamental changes that are taking place in terms of its ideology, practice and structure. A review of the crisis and the changes that are taking place within the accounting profession shows the crisis and changes to be multi-dimensional. The literature on the sociology of professions indicates that the distinguishing feature of a profession is its ability to maintain occupational control and to resist the general trend of organisational control affecting most occupations. Occupational control is found to be based on a public interest ideology, leading to a technical/rational approach to practice and supported by appropriate organisational and regulatory structures. The multi-dimensional nature of the research question led to the use of an interpretive approach to carry out the study. Accordingly, the study focuses on the interactions between the profession and other individuals and institutions in society with the objective of fitting them into a purposeful set of institutional aims, structures and practices. This investigation highlights inadequacies in the foundations of the concept of occupational control. For example, a historical analysis of the professional ideology shows it to be lacking in meaning in the current environment, and the technical/rational approach to practice is found to be incapable of coping with the multiplicity of values and beliefs in accounting practice. It is also shown that the self-regulatory structures in place are inadequate to meet the demands of changing organisational structures. It is argued that these inadequacies have arisen mainly due to the exclusion of private interest from professional ideology; values and beliefs from professional practice; and external regulation and organisational control from professional structure. The thesis then provides suggestions for addressing the issues related to such inadequacies. For example, with respect to practice, an alternative model based on the concept of 'reflective practitioner' is suggested. Furthermore, an inquiry into the recent changes in the New Zealand Accounting profession is carried out as a case study with a view to identifying one professional body's attempt to address the inadequacies affecting professional ideology and structures. The thesis concludes by suggesting that the traditional concept of occupational control has lost its relevance to such an extent that an alternative concept, i.e., 'occupational franchise', would be a more appropriate description of the accounting profession in the context in which it operates at the present time.
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    A study of early and late adopters of International Financial Reporting Standards in New Zealand : a thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy in Accounting at Massey University, Albany, New Zealand
    (Massey University, 2011) Stent, Warwick
    This study investigates accounting choice relating to the timing of adoption of International Financial Reporting Standards (IFRS) in New Zealand i.e., the choice to voluntarily early adopt IFRS or to defer adoption of IFRS until it became mandatory. Results for 40 early adopters are measured against those of a control group of 40 late adopters. The study includes an examination of the impact of IFRS on financial information (IFRS differences), as well as analyses of qualitative information obtained from discretionary narratives in annual reports, questionnaires and interviews. Significant IFRS differences are found for most financial statement elements and ratios for both early and late adopters. However, when IFRS differences for early adopters are compared to those for late adopters, the difference-in-differences are not found to be significant. Hence, IFRS differences result in incentives which may influence adoption timing, but these incentives are not significantly different for early and late adopters. Content analysis of discretionary narratives in annual reports reveals significant differences for all four of the measures used to assess the extent of disclosures, with early adopters providing typically twice as much disclosure as late adopters. Further analysis relating to the nature of disclosures reveals three major themes: ‘informing of importance’, ‘potency’ and ‘evaluative’. For the first two of these themes, significant differences are found and early adoption persists as a significant explanatory variable, after controlling for other incentives for voluntary disclosure, such as firm size, auditor and industry. ‘Evaluative’ disclosures are made by relatively few firms; are predominantly negative regarding IFRS adoption and no significant differences between early and late adopters are found for this theme. Disclosure findings reflect that early adopters attach a higher level of importance to IFRS adoption than late adopters. Survey data reveals significant differences for one of six measures of costs of IFRS as well as for a constructed ‘overall benefits’ score and three of nine individual benefits assessed. Also, three further themes emerge from content analysis of responses regarding motivations for adoption timing, namely ‘activity’, ‘manageability’ and ‘accounting choice’. Overall, the findings triangulate to suggest that ‘accounting choice’ has less explanatory power, with regard to adoption timing decisions, than ‘other factors’ which are unrelated to the impact of IFRS on accounting information. Examples of such ‘other factors’ include the level of importance which firms attach to IFRS adoption; evaluations of the consequences of IFRS (predominantly neutral or negative) and perceptions as to the manageability of IFRS adoption (unexpected factors influence deferral). Adoption timing decisions of both early and late adopters are found to be predominantly ‘dynamic’ (proactive) rather than ‘static’ (passive) activity.
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    The materiality and volatility of comprehensive income : a thesis presented partial fulfilment of the requirements for the degree of Master of Business Studies in Accountancy at Massey University, Auckland, New Zealand
    (Massey University, 2009) Schröder, Laura Babett
    The objective of this research is to investigate the materiality and volatility of comprehensive income for non financial firms in a non US environment. As the FASB and IASB are planning to require the reporting of comprehensive income in a single performance statement, it is important to resolve the issues surrounding the materiality and the volatility of comprehensive income. This study investigates the materiality of comprehensive income and its components in relation to total comprehensive income and closing equity for 37 non financial companies listed on the NZX from 2003 to 2008. Moreover, the cumulative impact of comprehensive income on equity over time is investigated. Further the volatility of comprehensive income is compared to the volatility of net income. This study also investigates the impact of the change to NZ IFRS on comprehensive income The results show that other comprehensive income is material in relation to total comprehensive income, but not in relation to closing equity. Moreover, some components of comprehensive income have a cumulative effect over time on closing equity. Comprehensive income is more volatile than net income. However, these findings are due to asset revaluations, which is the most dominant component of other comprehensive income. Though, all components of comprehensive income are significant for some firm year observations. Further, the move to NZ IFRS affects the materiality of some components of other comprehensive income and reduces the volatility of comprehensive income compared to net income. This study provides evidence that other comprehensive income is material for non financial firms in a non US environment. This suggests that it should be displayed clearly in the financial statement in order to be taken into consideration by financial statement users. Further, this study provides evidence that the difference in volatility between comprehensive income and net income in New Zealand can be avoided by choosing the cost method when measuring assets after recognition.