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    Essays on sustainability, corporate disclosure, and economic uncertainty : a thesis presented in fulfilment of the requirement for the degree of Doctor of Philosophy in Finance at Massey University, Manawatu Campus, New Zealand
    (Massey University, 2025-07-24) Huang, Kai
    This thesis consists of three essays. Essay one investigates the relationship between accounting conservatism, specifically bad news timeliness, and corporate environmental disclosure. This study identifies a significant negative relationship between the timeliness of bad news disclosure and corporate environmental disclosure. Further analysis indicates that socio-political pressures moderate this relationship. Specifically, while firms generally align with stakeholder preferences by promptly disclosing negative earnings news, those with executives in government-nominated positions tend to increase environmental disclosure due to stronger socio-political pressures. Additionally, the negative association between bad news timeliness and environmental disclosure is weaker among heavy polluters, who face stricter environmental regulations. This study underscores how top management strategically handles the disclosure environmental information. Essay two explores the impact of oil price uncertainty (OPU) on corporate green innovation disclosure behaviour. Drawing on textual analysis of annual and social responsibility reports from Chinese listed companies, the study constructs an innovative measure of green innovation disclosure intensity. It identifies a significantly positive relationship between oil price volatility and the level of green innovation disclosure, suggesting that firms respond to energy uncertainty by enhancing transparency about their environmental sustainability. Robustness checks and endogeneity analyses confirm these findings. Furthermore, the analysis reveals that firm-level characteristics, such as environmental performance, legitimacy demands, and political connections, moderate this relationship. The positive effect is amplified in firms exposed to higher regional environmental regulation intensity and market-based green initiatives. This essay contributes to the growing literature on corporate sustainability by demonstrating the role of energy uncertainty in shaping corporate transparency in green innovation. Essay three examines the interplay between firms oil price uncertainty sensitivity and corporate green innovation in the context of geopolitical tensions. Using a unique measure of firm-level geopolitical tensions derived from destination country-firm data in the China Customs Dataset, the study finds that firms more exposed to OPU are more likely to engage in green innovation. Geopolitical tensions significantly amplify this relationship, with tensions originating from supplier countries further amplifying the urgency for green innovation efforts. Additional analyses reveal that domestic supply chain alliances and improved supply chain efficiency reduce urgency of green innovation when facing heightened uncertainties. Moreover, we find that the interacted impacts of OPU exposure and geopolitical tensions on green innovation are more pronounced in firms with higher international exposure, lower government subsidies, and greater competitive pressures. This essay underscores the influence of external shocks, such as energy and geopolitical crises, in driving firms toward sustainable innovation strategies.
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    The extent of imagery in New Zealand company annual reports : a thesis presented in partial fulfilment of the requirements for the degree of Master of Business Studies in Accountancy at Massey University
    (Massey University, 1998) Simpson, Linda Louise
    Imagery, and in particular photography, has become a regular and sometimes spectacular feature of company annual reports. From a broad perspective, photography can be seen to have a multiplicity of functions in society including the presentation of a factual, documentary view of the world, providing an interpretative art form, being used as advertising, and even being seen as pure entertainment. Photography can be seen to reflect the nature of society, while simultaneously altering and constructing society values. As the New Zealand Government continues to advocate free-market policies, resulting in more and more decisions about the nature of New Zealand society being put into corporate hands, concerns are being voiced regarding the degree to which New Zealand citizens have a democratic vote on how their society is constructed. These concerns relate specifically to the nature of corporate values, and how they impact on New Zealand society. A logical place for a statement of corporate values to be found is the company annual report. This study explores and investigates the use of imagery in company annual reports by using the imperatives contained in the political economy of accounting: be normative, be descriptive and be critical. Two questions are specifically addressed. Firstly, an empirical investigation is made of the extent to which imagery has been present in some New Zealand company annual reports for the period 1970 - 1997. Secondly, these annual reports are examined to determine whether, from the perspective of the researcher, company values that inspire and underlie company activities are reported by the use of imagery. In this way, imagery in annual reports may highlight a direct link between company values and social values in general. This study is important in that if companies use imagery, and in particular photography, to report their company values it may contribute to further understanding of the constitutive nature of the company annual report from a broad societal perspective, rather than from that reflected only in the accounting and financial numbers. This also has consequences for the nature of the corporate social report, an area growing in importance in the accounting field. This study may also reveal previously unknown features regarding the role accounting plays when it attempts to represent some aspect of a company's activities. Key Words: Annual Reports, Imagery, Corporate Social Report.
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    Three essays on political connections, financial reporting, and auditing : evidence from Indonesian listed companies : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Accountancy at Massey University, Albany, New Zealand
    (Massey University, 2016) Muhammadi, Abdul Haris
    This research examines the association between political connections and related party transactions (RPTs). This study also investigates whether politically-connected firms use RPTs to tunnel resources and mask “true” operating performance by managing earnings. This study is motivated by conflicting views on whether political connections are beneficial or detrimental to stakeholder interests. In addition, this research investigates how political connections, in concert with RPTs, determine auditor choice in Indonesia. This auditor choice aspect of the study is motivated by the conflicting views and inconclusive findings on whether politically-connected firms will appoint reputable auditors, i.e., the Big 4 audit firms, or non-Big 4 auditors. Essay one examines the relationship between political connections and RPTs and investigates whether firms with political connections engage more or less in RPTs. It hypothesizes that politically connected firms conduct more value-destroying RPTs compared to non-politically connected firms, because they have more power and opportunities gained from their connections. The findings of essay one reveal that politically connected firms conduct more RPTs compared to non-politically connected firms. In terms of economic significance, the reported coefficient suggests that, compared to non-connected firms, politically connected firms carry out 43% more RPTs. However, the regression results show that the significant influence of political connections applies only to RPTLOAN (RPT loans and guarantees). In order to capture the richness in political dynamism in Indonesia, a finer classification of political connections is utilized where connected firms can be classified further into government, military, and Suharto connections. Using this approach, the study reveals that only the coefficient of GCON (government connection) is positive and significant, suggesting that listed firms having political connections with the Government will conduct more RPTLOANs. The insignificant influence of Suharto and military connections occurs because, after Suharto‟s resignation, firms associated with Suharto and military personnel had difficulties in establishing a connection with the new government, and experienced loss of government contracts, distributorships, and brokerage monopolies. Essay two investigates whether politically connected firms use RPTs to tunnel resources, and to mask “true” operating performance by managing earnings. This essay argues that politically connected firms have incentives to conduct more tunnelling compared to non-politically connected firms, due to the costs of establishment and maintenance of political connections, the opportunity to seize the benefits brought by political connections, and fewer disciplinary constraints from laws and regulations. Such tunnelling activities cause the economic performance of politically connected firms to deteriorate and, as a result, they need to be concealed by conducting income-increasing earnings management. Essay two provides empirical evidence that politically connected firms use RPTs to tunnel resources, and to engage in income-increasing earnings management designed to mask tunnelling activities. Essay three investigates how political connections determine auditor choice in Indonesia. This essay proposes that, because of tunnelling incentives, firms having political connections with the government might appoint non-big four auditors in order to allow them to have less transparent financial statements and to obfuscate their tunnelling activities. On the other hand, following the collapse of the Suharto regime, privileges and benefits enjoyed by firms having connections with Suharto and the military have gone, so that they have less incentive to engage in tunnelling and financial report manipulation in order to obfuscate such tunnelling. Therefore, essay three proposes that firms having connections with Suharto and the military are more likely to hire the Big 4 auditors. The results of essay three document that politically connected firms in Indonesia tend to choose non-Big 4 auditors. When a finer classification of political connections is used the regression results show that firms having connections with the government are more inclined to choose non-Big 4 auditors, whereas those with connections to Suharto have the option to appoint Big 4 auditors.Further, essay three also proposes that since RPTs involving loans allow politically connected firms to siphon resources, there is an incentive for those firms to manipulate financial reports in order to obfuscate “true” economic performance. Thus, politically connected firms with RPT loans are more likely to choose non-Big 4 auditors. Essay three documents that RPTs have a significant influence on the appointment of auditors of politically connected firms. The tendency to appoint non-Big 4 auditors increases when firms have political affiliations with the government and carry out RPTs. Key words: political connections, politically connected firms, related party transactions, tunnelling, earning management, auditor choice, Indonesia
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    Accounting for the elephant in the room : disclosure of intangible assets in New Zealand public companies : a thesis submitted to meet the requirements of Paper 152.800 (100 points) towards the degree of Master of Management, Department of Management, College of Business, Massey University
    (Massey University, 2006) Ambler, Ian
    Company market values often exceed the values that are published in company annual reports. One popular explanation for this discrepancy is that traditional company accounting and reporting practices ignore the potentially very large value creating impact of intangible assets, which are also often referred to as intellectual capital or knowledge resources. The theories for measuring intangible assets are reviewed, highlighting the many conceptual and definitional problems that have been encountered. These problems are traced to the resource-based static perspective of intangible assets, which sees them as balance sheet items analogous to tangible assets. A recent transition from this perspective is identified in the literature, towards recognising that the value of intangible assets arises more from their use than their possession. This is a dynamic or flow perspective of intangible assets, which views them as knowledge resources used strategically to create value. Adopting this perspective shifts the intangible asset issue away from being an accounting matter based on reporting historical transactions, to become a corporate governance and strategic management matter concerned with reporting future value creation performance and capability. The empirical research develops and tests a novel instrument for measuring intangible asset reporting in New Zealand public companies, building on recently introduced Danish intellectual capital reporting guidelines centred on this emerging dynamic perspective. Of a sample of 50 listed public companies, 84% are found to be voluntarily reporting their use of intellectual capital to create value, 16% extensively. The reporting differences between these companies are then explored. Nearly two thirds of the variation may be explained by a combination of differences in profitability, the capital market's perceptions of their future added value, industry differences of tangible asset intensity, company size and company expansion strategies. The empirical findings show a positive relationship between higher levels of disclosure and the future value placed on companies by the capital markets, which suggests capital markets reward companies that adopt a more open disclosure policy with a lower cost of capital and easier access to capital. These outcomes are compared with the inconclusive results found in a control survey of intellectual capital disclosure based on the earlier static perspective using a commonly used disclosure measurement methodology. This comparison reinforces the relevance of the emerging dynamic perspective of intangible assets, and the value to be gained from adapting disclosure research methodologies that reflect this approach. This research shows there is currently a very low level of performance outlook reporting by New Zealand companies, a finding consistent with international research. It may seem that the next logical step from disclosing how a company intends to use intangible assets to create value is for its management to report its view of forward-looking expected performance. However, the literature reports that companies with conflicting goals may undermine the confidence the capital markets are prepared to place on their projections. Capital markets prefer to make their own informed assessments of the future performance of companies based on their own external assessment of each company's business model. In the context of the principles-based reporting guidelines in New Zealand's corporate governance regulatory framework, the findings of this research indicate that a small group of exemplar companies are leading the way towards a more comprehensive voluntary disclosure of their future value creation strategies. This offers evidence that the principled-based regulatory approach is working to raise the average quality of annual report disclosures by New Zealand public companies, though the uniformity and instant results of a rules-based approach are missing.
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    The European phenomenon : European airline environmental reporting : a research report submitted in partial fulfillment of the requirements for the degree of Master of Philosophy (Management), from Massey University
    (Massey University, 1999) Day, Benjamin R
    It is generally accepted that the earth is facing some serious ecological issues as the world's population increases and as the environmental impacts of human endeavour take effect. Business, and the consumption that it promotes, is often blamed for the environmental dilemmas that the earth is facing (Hawken, 1994; Welford, 1995). However, as business becomes more responsible and accountable a new phenomenon has emerged in the process of environmental management and environmental accountability (Deloitte Touche Tohmatsu, 1993). A new catch phrase can now be heard echoing in the boardrooms all around the world, as companies begin a journey of environmental and social responsibility. Corporate Environmental Reporting or CER is a new tool in the arsenal for business and is often part of a broad environmental management process. Several commentators argue that environmental reporting is an extremely important tool in the journey towards business sustainability because CER is seen as a method of gaining trust and credibility. Honesty is an important part of the whole sustainability argument; environmental disclosure is a method for business to achieve this (UNEP, 1994; Sustain Ability, 1997).
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    Accounting regulation as an instrument of public accountability : a case study of New Zealand : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Accountancy at Massey University
    (Massey University, 1991) Tower, Gregory Dean
    This thesis highlights the importance and privileges of corporations with the obligation to provide information to society about their activities. The primary reporting vehicle is seen to be the annual report with accounting regulation viewed as a significant quality control device. It is postulated that New Zealand accounting self-regulation has failed in delivering the latter protection. By way of providing a background to the discussion the Anglo-American accounting regulatory systems are critiqued and found inadequate. Special concerns are noted with the accounting standard setting due process procedures and enforcement mechanisms. Linkage of the New Zealand accounting system to the Anglo-American cluster is shown through various international classification studies. Financial accounting paradigms are analysed with a view to determining the end-purpose of corporate reporting. It is concluded that the accountability paradigm is most closely aligned with a broad societal view of accounting. A Public Accountability Model of Accounting Regulation is evolved. The Model is based on efficiency and equity criteria, and emphasises the responsibility of preparers to communicate adequate financial and non-financial information to stakeholders. The New Zealand accounting regulatory structures are empirically examined as a case study, with the New Zealand Society of Accountants, domestic and overseas systems compared. It is shown that the NZSA, overseas bodies (especially the British and International Accounting Standards Committee), and preparers exert the most influence, with non-accountant stakeholders shown to have the least impact. The regulatory mechanism under the Model incorporates the profession's expertise, stakeholder representation, and the coercive power of the state. New Zealand corporate reports are found to be: difficult to read, lacking sufficient disclosure data, and imparting very little non-financial information. It is shown that these inadequacies are due mainly to the absence of a capital market overseer, critical lack of stakeholder input, lack of explicit objectives and ineffective enforcement mechanisms. External crises such as the 1987 sharemarket crash, company failures and publicised lack of compliance/enforcement have generated abundant public pressure leading to several governmental reviews. These reviews are deemed incomplete and unlikely to meet societal expectations. The research provides insights into accounting regulation and its relationship with corporate reporting in New Zealand. It is recommended that more effective regulation be introduced to ensure greater disclosure, recognition of stakeholder needs, and a higher level of non-financial data. It is argued that the proposed Model would help increase stakeholder confidence in corporate reports as it is designed to address the issues of the under-production of accounting information and information asymmetry.