Volume 4 No 1 2005
FRRaG : The electronic journal of the Accounting Standards Interest Group of AFAANZ
ISSN 1449-2318
Index
Refereed articles
J-L.W. Mitchell Van der Zahn, "Factors Affecting Information Technology Problem Disclosures in Asia-Pacific Commercial Banks"
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Audra Ong, "Country-specific Barriers to International Convergence of Accounting Standards"
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Ku Nor Izah Ku Ismail and Roy Chandler, "Disclosure in the Quarterly Reports of Malaysian Companies"
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Bernadette Smith, "Characteristics of Firms that Issue Concise Financial Reports in Australia"
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Professional comments
Roger Hussey and Audra Ong, "The Lord of Global Standards: The Twin Towers"
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Michael Bradbury, "IFRIC Interpretations: An Update"
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Isabel Gordon, "Accrual Accounting Catches Up with Employers Sponsoring Defined Benefit Plans"
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Refereed articles
J-L. W. Mitchell Van der Zahn, "Factors Affecting Information Technology Problem Disclosures in Asia-Pacific Commercial Banks"
Abstract:
The objective of this study is to investigate the association between three organisational (firm size, economic performance and listing status) and five national (legal system, equity market size, economic development, cultural values and the political and civil system) and the amount of disclosure on a key information technology (IT) problem (Y2K). Disclosure practices in the annual reports of commercial banks in the Asia-Pacific region form the underlying data sample for the study. Findings indicated that the amount of Y2K disclosure amongst the sample population varied across national boundaries. Multiple regression results suggested a statistically significant association between several firm- (organisational size and listing status) and national-level (legal system, size of the equity market, level of economic development, cultural dimension of power distance and the political and civil system) factors. It is argued, based on these empirical results, that greater action needs to be taken to facilitate greater harmonization of the disclosure and communication of details related to IT problems with the significant technical, economic, political and social implications. The ability to achieve such harmonization, however, may be hampered by firm- and national-level factors that influence such disclosure practices in this region.
Audra Ong, "Country-specific Barriers to International Convergence of Accounting Standards"
Abstract:
The current arguments for international accounting harmonization accepts that for some countries convergence will be a monumental task. Little analysis has been made of the nature and size of the task. The present study adopts and refines the generic barriers to international accounting harmonization and further examines the experiences of one country i.e. Taiwan, R.O.C. In-depth interviews were conducted with twenty-one participants consisting of professional accountants, senior financial executives and accounting regulators involved with the standard-setting process in Taiwan. The study not only identifies varying perceptions between different groups but also explains the nature of the country-specific barriers. The experience of Taiwan is probably not unique amongst the financially sophisticated, smaller countries in the Far East that have particular issues which are overlooked by the broader accounting community. The study provides valuable lessons for policy-makers and corporate management in their pursuit of accounting harmonization.
Ku Nor Izah Ku Ismail and Roy Chandler, "Disclosure in the Quarterly Reports of Malaysian Companies"
Abstract:
This study examined the extent of disclosure in the quarterly reports of Malaysian listed companies. The quarterly reports of 117 companies ended on 30 September 2001 were the subjects of the study. First, this study observed companies’ overall disclosure with respect to the Listing Requirements of the KLSE. Second, it observed the extent of narrative disclosure with respect to comments on material changes, review of performance and comment on current year prospects. Finally, the extent of disclosure was tested for association with profitability, growth and leverage of a company. Generally, companies disclose all the mandatory financial statements and relevant notes to the accounts. However, the extent of mandatory narrative disclosures varies. Generally, companies appear to provide a minimum level of disclosure. This study reveals that the extent of disclosure is positively associated with the leverage of a company. No significant association was evidenced between the extent of disclosure and profitability and growth of a company. Plausible explanations of the findings are provided in this paper. The findings provide some useful insights to users, preparers and policy makers into the current practice of reporting selected narrative disclosure in the quarterly reports.
Bernadette Smith, "Characteristics of Firms that Issue Concise Financial Reports in Australia"
Abstract:
This study represents quantitative replication research in the area of summarised annual reporting in Australia. It investigates the characteristics of 176 publicly listed Australian firms and through both univariate and multivariate analyses finds that firm size and shareholder dispersion are significant determinants of firms that voluntarily choose to issue Concise Financial Reports (CFRs). Given the nature of summarised reporting the implications of these findings are important for preparers, users, professional and regulatory bodies and academics. If the CFR is the only formal communication between large complex companies (Whittred, 1987) and large numbers of individual shareholders it is essential that relevant information is not merely summarised but represents complete, comparable and effectively communicated financial information.
Professional comments
Roger Hussey and Audra Ong, "The Lord of Global Standards: The Twin Towers"
Abstract:
The article is a satire on Tolkien’s Lord of the Rings. It provides, in a humorous style, an analysis of the rules vs. principles approach debate to international accounting harmonization. Although the debate is often referred to in the literature, explanations of the actual nature and dimensions of the controversy are weak. By placing the debate in a mythical but familiar setting, the authors are able to explain in simple terms the nature of the controversy, its political dimensions and the potential relevance for developing countries. By representing countries and their roles with individual characteristics from the Lord of the Rings, the article offers a fresh perspective in a highly readable style.
Michael Bradbury, "IFRIC Interpretations: An Update"
Introduction:
In April 2005 the International Accounting Standards Committee (IASC) Foundation issued a Consultative Documents “IFRIC – Review of Operations”. This report is part of the review of the constitution undertaken by the Trustees of the IASC Foundation. This topic was added to the review in response to concerns that the International Financial Reporting Interpretations Committee (IFRIC) was, and would continue to be, unable to cope with the demand for timely interpretations of International Financial Reporting Standards (IFRS).
Isabel Gordon, "Accrual Accounting Catches Up with Employers Sponsoring Defined Benefit Plans"
Abstract:
As part of Australia’s convergence to international accounting standards, from 1 January 2005, AASB 119 Employee Benefits requires sponsor companies to use accrual accounting for post employment benefits including interests in defined benefit plans (DBP). For most sponsors of defined benefit plans in Australia, this represents a major change from current practice. Prior to 2005, most Australian sponsors of defined benefit plans used the cash basis to account for interests in DBP and disclosed details of the DBP they sponsored in accordance with AASB 1028 Employee Benefits (issued March 1994, revised June 2001). This paper will review the requirements of AASB 119 and assess the impact on accounting practices of Australian sponsors. In particular, the treatment of actuarial gains and losses and the recognition of the net pension position in the sponsor’s balance sheet will be discussed. The treatment of actuarial gains and losses by the Australian Accounting Standards Board (AASB) changed during 2004. The Australian standard-setters moved away from immediate recognition required by AASB 119 (issued in July 2004) to permit other options (including the “corridor” method and the third option) present in the international accounting standards. This resulted in the re-issue of AASB 119 in December 2004. The International Accounting Standards Board’s Exposure Draft Proposed Amendments to IAS 19 Employee Benefits: Actuarial Gains and Losses, Group Plans and Disclosures (issued in April 2004) introduced the third option for accounting for actuarial gains and losses. Submissions to ED 115 Request for Comment on IAS 19 Retirement Benefits (June 2003) with particular emphasis on the treatment of actuarial gains and losses will also be discussed.
FRRaG: The electronic journal of the Accounting Standards Interest Group of AFAANZ, hosted by the School of Accounting, Curtin Business School