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Full-Text Articles in Finance and Financial Management
Insolvency Administration As A Strategic Response To Financial Distress, James Routledge, David Morrison
Insolvency Administration As A Strategic Response To Financial Distress, James Routledge, David Morrison
James Routledge
This study considers whether the strategic decision to enter voluntary administration (VA) rather than to trade the company’s business for a protracted period of declining performance is systematically related to the effective monitoring of management decision-making. Analysis that tests the association between strategic entry into VA and the likelihood that a company will reorganize in VA is also presented. We find about half of the companies in our sample entered VA as a strategic choice. The likelihood of strategic entry to VA increased with the proportion of independent board directors, the existence of an audit committee and a dual CEO/chair …
Does Adopting Good Corporate Governance Enhance Accruals Quality During The Global Financial Crisis?, Husam Aldamen, Keith Duncan
Does Adopting Good Corporate Governance Enhance Accruals Quality During The Global Financial Crisis?, Husam Aldamen, Keith Duncan
Keith Duncan
This paper examines the impact of corporate governance practices on accruals quality during the global financial crisis (GFC). Prior research establishes linkages between good governance and accruals quality during periods of financial stability (Strydom 2008; Kent et al. 2010; Dhaliwal et al. 2010). We extend this analysis to the 2008-2009 GFC period to assess whether the monitoring and informational benefits of corporate governance mitigate the negative effects of the exogenous shock, thereby increasing accruals quality. Our findings show that good corporate governance practices increases accruals quality during the GFC. Furthermore, governance is shown to positively impact innate accruals quality and, …
The Decision To Outsource Risk Management Activities, Jacqueline Christensen, Pamela Kent
The Decision To Outsource Risk Management Activities, Jacqueline Christensen, Pamela Kent
Pamela Kent
This study uses transaction cost economics (TCE) to identify factors influencing Australian Securities Exchange (ASX) companies’ decision to internally generate or outsource activities required to manage risk. Limited research has been conducted applying TCE in a risk management context with most in the accounting discipline concentrating on internal audit. Increasing our understanding of risk management practices benefits organisations, accounting professionals and regulators concerned with governance practice. Using a unique data set obtained from a survey sample of 271 listed ASX companies in 2009 combined with archival data hypotheses are operationalised and analysed using multivariate and logistic regression. Broadly in line …
The Impact Of Macroeconomic Uncertainty On Firms Changes In Financial Leverage, Atreya Chakraborty
The Impact Of Macroeconomic Uncertainty On Firms Changes In Financial Leverage, Atreya Chakraborty
Atreya Chakraborty
We investigate the relationship between a firm’s measures of corporate gov- ernance, macroeconomic uncertainty and changes in leverage. Recent research highlights the role of governance in financing decisions. Previous research also indicates that macroeconomic uncertainty affects a firm’s ability to borrow. In this paper we investigate how both these channels of influence affects firms’ financing decisions. Our findings show that macroeconomic uncertainty has an important role to play, both by itself and in interaction with a measure of corporate governance.
The Company Dividend Restriction: Does It Promote Good Corporate Governance?, James Routledge, Peter Slade
The Company Dividend Restriction: Does It Promote Good Corporate Governance?, James Routledge, Peter Slade
James Routledge
This article considers aspects of the development of the law associated with the dividend payment restriction. The motivation for the article is to assess whether the existing substantive law is effective in promoting sound decision-making by corporate officers who are required to determine the timing and quantum of dividend payments. Our analysis suggests that the existing provision in s 254T of the Corporations Act 2001 is unlikely to have a significant positive effect on dividend decisions. This is due to its failure to provide meaningful guidance to decision-makers; its divergence from contemporary accounting practice; and its imposition of unnecessary complexity …
What Drives Tbl Reporting: Good Governance Or Threat To Legitimacy?, Pamela Kent, Reza Monem
What Drives Tbl Reporting: Good Governance Or Threat To Legitimacy?, Pamela Kent, Reza Monem
Pamela Kent
This paper provides two complementary explanations for the adoption of triple bottom line (TBL) reporting by Australian companies. The first explanation is that companies adopt TBL reporting to legitimise their relationship with society because of adverse publicity from the media. The second explanation is that TBL reporting is adopted because of the company’s desire to achieve high-quality reporting and transparency inferred by strong corporate governance. Companies with TBL reporting had significantly more adverse media coverage before implementing TBL reporting than non-TBL companies. TBL reporting is also significantly and positively related to the existence of an environmental or sustainable development committee …
Corporate Governance And Disclosures On The Transition To International Financial Reporting Standards, Pamela Kent, Jenny Stewart
Corporate Governance And Disclosures On The Transition To International Financial Reporting Standards, Pamela Kent, Jenny Stewart
Pamela Kent
For reporting periods ending on or after 30 June 2004, Australian companies were required to disclose the expected impact of applying Australian equivalents of International Financial Reporting Standards effective from 1 January 2005. The objective of this paper is to examine the association between the level of disclosure and corporate governance quality. Using a sample of listed companies with 30 June balance dates, we find that the quantity of disclosure was positively related to some aspects of superior corporate governance, such as the frequency of board and audit committee meetings and the choice of auditor.