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    Investigating the quality and drivers of sustainability reporting in the electricity industry : a global context : a thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Accounting at Massey University, Albany, New Zealand
    (Massey University, 2024-11-07) Marasigan, Alva
    This research investigates the quality and determinants of sustainability reporting in the electricity industry, in particular the electricity generation sector. Electricity is a major driver of economic development and a major influence on climate change, hence an interesting setting for this study. Understanding the trends and determinants relating to the quality of sustainability reporting (QSR) may contribute to improved QSR and consequential improvements in transparency, accountability, and value creation. Part 1 of this study is qualitative and investigates the QSR of 100 electricity generators included in the S&P Platts Top 250 Global Energy Companies Rankings for 2021. The assessment of QSR is based on the qualitative characteristics of reporting, namely relevance (including materiality) and reliability. Content analysis of sustainability disclosures during 2018-2020 suggests the QSR of sample companies is relatively high and improving over time. Companies in countries with mandatory sustainability reporting regimes generally tend to achieve higher QSR. Part 2 of this study is quantitative and concerns testing selected determinants of QSR through regression analyses. Findings suggest that sustainability performance, use of the Global Reporting Initiative framework, and institutional shareholding have significant positive impacts on all QSR measures, while foreign shareholding has the same effect on relevance and overall QSR (contemporaneous as well as one-year lagged effects). Rule of law and carbon pricing policy have significant negative effects on relevance (contemporaneous as well as one-year lagged effects) while gender diversity shows the same effect on reliability (one-year lagged effect only). Rule of law also has a significant negative influence on overall QSR but only when testing for one-year lagged effects. Robustness and additional tests support these results. This study extends the existing literature on sustainability reporting by providing a holistic longitudinal, global, as well as an environmental, social, and economic perspective on QSR in the electricity industry. It also covers a wider range of QSR determinants than most others and improves on the precision of QSR measurement. This study may be useful to regulators and standard setters in their efforts to harmonise sustainability reporting and provides useful insights to decision makers and practitioners on the need to link sustainability disclosures to sustainability performance, as well as stakeholder activities, assurance considerations, and materiality.
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    Essays on financial accounting information, return predictability, and default risk : a thesis presented in fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University, Albany, New Zealand
    (Massey University, 2021) Thakerngkiat, Narongdech
    There is a growing realization of the importance of financial and accounting information on financial markets, and this is thus very much an area of focus for academics, practitioners, and regulators. This thesis consists of three essays on financial accounting information, return predictability, and default risk. The first essay considers the impact of inconsistent financial accounting information on the cross-section of stock returns. This essay uses earnings quality and firm characteristics to capture information signals about the firm value and measure information inconsistency as the variation across the information of the same company. The findings show that returns of information-consistent firms predict the returns of information-inconsistent firms in both equal- and value-weighted portfolios. However, such predictability varies over time due to liquidity funding and investor attention. This first essay thus contributes to the growing literature documenting the cross-section of stock return predictability as a result of the varying speed of information incorporation across stocks. The second essay examines whether the differences in accounting information between the pairs of stocks affect cross-asset return predictability. This essay uses a comprehensive set of accounting variables and market environments to capture the degree of information reflection. The results show that accounting variables such as abnormal accruals, earnings smoothness, book-to-market, firm age, leverage, abnormal capital investment, and investment growth, among others, explain the variation in predictability across pairing stocks. The cross-asset predictability varies over time and is associated with liquidity funding and market sentiment. A simple trading strategy based on our findings yields a higher mean return, lower standard deviation, and higher Sharpe ratio compared to the buy-and-hold strategy. The final essay investigates the impact of risk aversion on default risk. While a large body of research documents various firm characteristics and market conditions that drive corporate default, whether risk aversion matters for default risk remains under-investigated. This could be attributed to endogeneity concerns, such as that the investor risk aversion is not an exogenous variable or the presence of omitted variables that drive the default risk and the simultaneity bias between the default risk and the risk aversion. To address the endogeneity challenge, we use the largest mega-terrorist event, the 9/11 terrorist attacks, as an exogenous shock to investor’s risk aversion; the empirical evidence shows a significant increase in default risks at both market and firm levels following the 9/11 attacks. Terrorism causes an increase in market-wide default risk for firms located in the attacked states, as well as for those located in the non-affected states. The findings are consistent with the strand of literature suggesting that, following terrorist attacks, investors become more risk-averse and demand a higher premium for their investment, leading to increased default risk.
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    How do accountants remain relevant? : the future of public practice : a thesis presented in partial fulfilment of the requirements for the degree of Master of Business Studies in Management at Massey University, Manawatū, New Zealand
    (Massey University, 2019) Ogilvie, Angus Stuart
    Small accounting practices in New Zealand are slated to come under increasing stress as computerisation impacts their relevance. Artificial intelligence threatens to undermine any monopoly they possess in terms of specialist knowledge. Whilst firms of all sizes will be impacted, smaller practitioners are likely to be especially vulnerable as they tend to have a singular focus on ensuring their clients are compliant with Inland Revenue. Indeed, they commonly refer to this work as ‘compliance’. This involves bookkeeping, annual accounts production and tax returns, all processes that look set to be automated. Professional bodies within the accountancy discipline are stressing the need to move from providing compliance services to offering business advice. The research question asks how accountants remain relevant during a period of unprecedented technological change to the profession. This thesis uses a mixed-method research methodology to understand the current context that the profession operates in and how accountants in practice perceive their future relevance. Institutional Theory, and the concept of scripting, has been employed in the analysis of the research data to analyse how practitioners are actively considering their future in light of technological change. Accountants in practice perceive a positive future for themselves. The way they organise their practices is likely to change substantially with an increased use of technology and the rise of contractors at the expense of the traditional workforce. One thing is likely: we will need fewer accountants in the future.
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    Essays on the information-usefulness of changes in fair values to investors and debtholders, and its effect on audit fees : evidence from Australian real estate industry : a thesis presented in partial fulfilment of the requirements for the Degree of Doctor of Philosophy in Accountancy at Massey University, Auckland, New Zealand
    (Massey University, 2019) Sangchan, Pinprapa
    This research investigates the decision usefulness of changes in fair value (hereafter, CFV) of investment property reported under IAS 40 and IFRS 13 to capital providers (i.e., equity investors and debtholders), using Australian Real Estate Industry data.¹ The motivation for this study stems from the ongoing debate on the beneficial effects of fair value reporting and their associated reliability trade-off (Barth, 2018; Power, 2010). This research further investigates the effect of change in fair value (CFV) of investment property on the monitoring cost proxied by audit fees in order to picture the pros and cons of the subjectivity involved in the fair value accounting-model. The alert issued by the International Auditing and Assurance Standards Board (IAASB) to discuss challenges in auditing fair value accounting estimates, and inconsistent evidence on the effect of the fair value application on audit fees motivate me to study the association between fair value application and monitoring cost. The decision usefulness of CFV study and the effect of fair value reporting on audit fees are organised into three different research essays: (i) value relevance of CFV and measurement-related fair value disclosure to equity investors; (ii) the decision usefulness of CFV and cost of debt; and (iii) fair value exposure, CFV, and audit fees. Essay One investigates the value-relevance of changes in fair values of investment property recorded under IAS 40 and IFRS 13. Using hand-collected data from the Australian Real Estate Industry, I find that changes in fair values of investment property are value-relevant for equity investors. I further find that the use of unobservable inputs in an active market (Level 3 inputs) does not diminish the fair value information content. I document that properties valued exclusively by directors have a significantly reduced value-relevance for their value changes, whereas property valuations made collectively by both directors and independent valuers have superior value relevance, possibly owing to the combination of inside knowledge and externally imposed monitoring. Collectively, the findings suggest that, in the real estate industry, where unobservable inputs are commonly used to determine fair values of properties, the fair values determined subjectively are perceived to be sufficiently informative and relevant. My findings have important implications for accounting standard-setters in considering whether an external valuation should be required and whether the extensive measurement-related fair value disclosure requirements are useful. Essay Two examines the decision usefulness of CFV of investment property reported under IAS 40 and IFRS 13 to debtholders. Using hand-collected data, the findings suggest that CFV of investment property lowers the cost of debt, implying that the fair value information is decision-useful to debtholders. The effect is more pronounced when the CFV is recognised as a gain. The results further suggest that unobservable inputs used for fair value measurement in an active market (Level 3 inputs) do not necessarily damage fair value information content. I also document that using the stand-alone director valuation in fair value estimates for investment properties diminish the information content of such fair value changes, even though director valuation is insightful in terms of asset-specific knowledge. In addition, I report that an extensive fair value measurement-related disclosure does not enhance the information content of fair value changes. Collectively, the findings suggest that in the real estate industry, where unobservable inputs are predominantly used to measure fair values of properties, debtholders view fair values sufficiently faithful and decision useful. Essay Three investigates the relationship between audit fees and both fair value exposure (the proportion of investment property to total assets), and changes in fair value, of investment properties. This 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, I find a negative (positive) association between audit fees and fair value exposure (changes in fair values of investment properties). 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, I find that audit fees are higher for firms having fair values of investment properties estimated by external and mixed valuers, compared to firms having 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. ¹ Decision-usefulness versus information usefulness are used interchangeably in this thesis.
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    Generic skills in accounting education in Saudi Arabia : a thesis presented in fulfilment of the requirements for the degree of Doctor of Philosophy in Accountancy at Massey University, Palmerston North, New Zealand
    (Massey University, 2018) AL Mallak, Mohammed Ali
    This study examines the development of generic skills in the Saudi Arabian accounting education. The lack of generic skills among accounting graduates is an issue of ongoing concern as the gaps between the needs of employers and the skills of graduates hinders the economic development in Saudi Arabia. This concern over the development of generic skills in accounting education in Saudi Arabia provided the motivation for this study. Based on International Education Standards (IES) 3 and 4, this study examined five categories of generic skills: intellectual, personal, organizational and business management, interpersonal and communication, and ethics. Further, using Bui and Porter’s (2010) theoretical framework, the study assessed within-group constraints gap of three stakeholder groups (final year students, accounting graduates and educators), and the factors hindering the development of generic skills (i.e. constraining factors). The within-group expectation-performance gap of employers and between-group comparisons of the expectation gap and performance gap (educators vs. employers) were also explored. Finally, this study compared the expectation gap and performance gap between groups (students, graduates, employers, educators). Interviews and survey questionnaires were used to collect the data for the perceptions of the four stakeholder groups in Saudi Arabia. The results show that all stakeholders considered all generic skills as important for accounting graduates to be successful in employment with ethical skills being rated as most important. In addition, they perceived that graduates should acquire a reasonably high level of competence in all five skills categories. The stakeholder groups believed the level of competence that have been acquired by graduates is lower than the level of competence that should be acquired suggesting that there were constraints gap and expectation-performance gap. This finding indicates that accounting education in Saudi Arabia is not producing graduates with the competencies needed in the workplaces. A number of constraints were found to have hindered the development of generic skills in accounting education and they were mostly institutional related (e.g., content oriented curriculum; large class sizes and insufficient time), and student related (e.g., students’ own motivation and lack of ability). This study contributes to the literature on generic skills in non-western nations, where not much of the current literature is focused on. The results provided evidence of skills gaps, highlighted areas of concern in the Saudi graduates’ skill development in accounting education and had implications for the human capital of the nation. Some suggestions for improving graduates’ skills development were provided.
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    Epistemology in accounting : a paper ... for the degree of M.B.A. in Accounting and Finance at Massey University
    (Massey University, 1981) Davey, Howard Baxter
    The aim of the study was to investigate different epistemological approaches to accounting in order to distill the most appropriate methods for the future. All methods of analysis available in either the social or the traditional sciences have been evidenced in accounting, thus there was no need to examine techniques outside the discipline. This study examined and compared five approaches to theory construction and knowledge gathering in accounting as representative of the primary methods of epistemology in accounting. These were:- rules and standard setting, convention derivation, induction and scientific analysis, normative-deductive, and weltanschauung. Having defined the limits of the discipline, the study reviewed each approach analysing their strengths and weaknesses. Conclusions and future methodological prescriptions follow logically from the first sections but are normative in nature. The results indicated that no one method could meet all of the requirements of the discipline, yet empirical research held the most promise for the future. Two further conclusions were made. Firstly, other methods of inquiry may be quite legitimate in certain cases and should be judged on what they offer. Secondly, accounting should now be viewed as a social institution, involving political and social factors in its developmental and theory construction processes as well as in accounting questions per se.
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    Negotiating the networks : a study of telework within chartered accountancy firms in Aotearoa New Zealand : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy at Massey University, Manawatu Campus, New Zealand
    (Massey University, 2017) Jones, Leslie David
    Is telework an acceptable work practice among chartered accountancy firms here in Aotearoa New Zealand? Probably not, according to the research by Rasmusson and Corbett (2008), although their research was not specific to chartered accountancy firms. In fact, there have been no specific studies of the acceptance or otherwise of telework by chartered accountancy firms in the New Zealand context. In the international context, North American research suggests that telework is supported by chartered accountancy firms as a way of retaining skilled staff, especially women accountants, because of the feminisation of the profession (Kranz, 2008). On the other hand, Lightbody (2008), in the Australian context disagrees, citing the accountancy culture of work hard, desire for promotion and the need to put the firm first as marginalising accountants who wished to work at home. This thesis, addresses this question in the New Zealand context. Studying only those few chartered accountancy firms that accept telework as a work practice, this thesis asks: What is it about how these firms are organised that allows accounting actors to be located productively in their homes? In answering this question, the directors and managers of the participating firms were interviewed and their resulting stories analysed using a form of analysis drawn from Actor Network Theory, a research framework not previously used by telework researchers. The results of this study show how the traditional networks of the chartered accountancy firm grounded in the office predominate. As a result, the networks of the home have been only marginally successful in intruding into the networks of such firms.
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    Granular approach to adaptivity in problem-based learning
    (Massey University, 2002) Hong, Sally
    Constructivist approach to learning has been around for quite some time. The constructivist theory has resulted in the development of a wide variety of learning environments, however the problem-based learning (PBL) environment is one of the most ideal and most popular area that implements the constructivism theory. PBL is an attractive approach to foster learner's critical problem solving and self-directed learning skills. However, it is difficult to implement effective PBL environments. A majority of existing PBL environments suffers from the fact that the students easily get inundated by the fine granularity of the problems and loose focus of overall aims of the learning process. This project has introduced student adaptivity technology into PBL environments to improve the effectiveness and efficiency of the learning process. To demonstrate the idea of PBL with student adaptivity, a web-based prototype is implemented in Process Costing, within the field of Accounting. Based on the architecture of the web-based intelligent educational systems, the problem base module is introduced. The basic architecture of the system is a typical three-tier, client-server structure. The client tier has the presentation interfaces that are implemented as HTML frames and run in a web browser. The application programs for performing adaptation, which were developed using PHP, reside in the middle layer, and communicate directly with the backend database: problem base, knowledge base that is the third tier. The web server as the communication channel also resides in the middle tier. With the system, students work on the real world costing calculation problems, and the system evaluates students' performance results on the problems to provide adaptation to the students. In summary, this project has successfully introduced the student adaptivity into the PBL environment. The strategies used in this thesis can be applied into the pure PBL educational systems to improve their adaptation capability.
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    Accounting standards complexity, audit fees and financial analyst forecasts in Australia : 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, 2017) Miah, Muhammad Shahin
    While the beneficial effects of International Financial Reporting Standards (IFRS) on financial reporting quality, cost of capital, cross-country investment, corporate decision making and governance are well studied in the literature, there is relatively little research on the cost side of IFRS adoption and its impact on users. This thesis contributes by investigating the impact of IFRS complexity on two important groups of users of financial reports namely auditors and financial analysts. The hypotheses are built on the premise that principles-based standards are more complex than rules-based standards. This study examines the relationships between IFRS complexity, audit fees, and analyst forecast properties. IFRS is likely to require more of auditors in terms of professional expertise, time and effort, hence resulting in higher audit fees. Financial analysts may be similarly affected by the complexity of IFRS resulting in less accurate forecasts on key financial components. This thesis measures IFRS complexity based on individual IFRS standards specifically identified as having higher levels of complexity. Scores are then calculated to indicate the difference between these IFRS standards and their equivalent previous domestic accounting standards. The degree of complexity is also measured at aggregate level to indicate an overall complexity impact based on the combined score for all identified 'complex' IFRS standards. Findings indicate that aggregate IFRS complexity is positively and significantly associated with audit fees but that specific IFRS standards are identifiable as being paiticularly complex, hence explaining much of the positive relationship with audit fees. The results also reveal that the incremental effect of IFRS complexity on audit fees is more pronounced when finns are audited by city-level industly specialists as opposed to those audited by non­industly specialists. Furthermore, IFRS complexity is found to have a positive and significant association with analyst forecast properties (forecast errors, forecast dispersion, and forecast revision). Surprisingly some of the standards identified as being more complex for auditors (i.e., driving higher audit fees) do not appear similarly complex in relation to financial analyst forecast properties. Finally, this thesis investigates the moderating role of high quality audits (proxied by industry specialist auditors) on complexity and analyst forecast properties and finds that forecast errors decrease for firms which are exposed to higher levels of IFRS complexity if they are audited by city-level industly specialists. This study provides important insights for regulator regarding the complexity of specific IFRS standards. Findings may also be of benefit to countries which are in the process of adopting IFRS or planning to do so.
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    Determinants of carbon financial accounting and carbon disclosure practices : an exploratory study on firms affected under emission trading schemes : a thesis presented in fulfilment of the requirements for the degree of Doctor of Philosophy in Accountancy at Massey University, (Albany), New Zealand
    (Massey University, 2016) Kashyap, Varsha Nirmal
    Purpose: The purpose of this study is to investigate how and why the Emission Trading Scheme (ETS) affected firms are disclosing and financially accounting for carbon within a voluntary disclosure setting. Methodology and Data Sources Used: The study is framed within institutional theory and examines inconsistencies and a lack of transparency in the carbon financial accounting and carbon disclosure practices of ETS affected firms. Findings are presented as empirical evidence to support the demand for uniform mandatory carbon financial accounting and disclosure guidance. The relation between various institutional pressures is also identified - coercive (i.e. regulations), mimetic (i.e. size, leverage, listing status and industry), and normative (i.e. auditors). Firms’ carbon related disclosure practices and the way carbon financial accounting is being conducted by the firms affected under the EU ETS, Australian Carbon Tax and NZ ETS are examined to identify the incentives that may be motivating these firms’ adoption of carbon financial accounting policy and the extent of their disclosures. The 2013 Annual reports of the UK, Australian and New Zealand companies affected under the European Union Emission trading scheme, Australian Carbon Tax and New Zealand ETS are analysed. The affected companies are selected from Carbonmarketdata Database (for UK companies), Liable Entities Public Information Database (LEPID) (for Australian companies) and New Zealand Emission Unit Registry Database (for New Zealand companies). Content analysis is implemented for the purpose of data collection from the annual reports. The IFRIC 3 template is used to identify the recognition, measurement and reporting practices of the affected companies for carbon emission allowances by five stages of the carbon emission allowances transactions namely when these carbon emission allowances are (1) received for free, (2) purchased, (3) used, (4) sold, and, (5) surrendered. Findings: Inconsistencies in the carbon financial accounting practices and diversity in the carbon disclosure of ETS affected firms are observed. Whilst they treat carbon emission allowances as intangible assets, most ETS firms are providing incomplete information on their carbon financial accounting practices. Some firms did not specify how they are ‘recognising’ carbon emission allowances and in some cases, others did not specify how they are ‘measuring’ carbon emission allowances. The extent of carbon disclosure was also low for most ETS firms. The findings also provide some empirical evidence of the institutional pressures, especially coercive (regulation) and mimetic pressures (size and listing status) which are the main determinants of the ETS affected firms’ carbon financial accounting practice and the extent of carbon disclosure. Research Contribution & Implications of Research Impact: The findings of this study will assist accounting policy makers in understanding how and why the affected companies financially account and disclose their carbon allowances in certain ways. This can assist the development of a uniform carbon financial accounting and disclosure guidance, especially when the IASB is yet to issue any draft guidance on the financial accounting of carbon. Additionally, the findings presented by this study will be useful for establishing guidelines for auditors to help affected companies financially account and disclose carbon allowances and other carbon emission related information. Lastly, given the scant amount of studies in the field of financial accounting for carbon emissions under ETS, this research will also give meaningful insights to academics and researchers.