The aim of this thesis is to provide insights into processes associated with operation of audit committees (ACs) and their effects on aspects of corporate governance. The thesis provides a critique of extant studies of ACs, develops an alternative framework for researching ACs, analyses evidence of AC operation and their effects on internal control and risk management, financial reporting and external audit in three case companies. The thesis seeks to contribute to the literature on ACs in a number of ways. First, it provides a historical background to the development of ACs (chapter 2) and examines the available international evidence relating to corporate governance effects of ACs (chapter 3). It concludes that in many areas where ACs have been expected to bring governance benefits the findings thus far are either inconclusive or very limited. Chapter 3 of the thesis also concludes that the limited contribution of the extant literature on ACs may be attributable to (i) a narrow focus on the use of the agency theory perspective, (ii) the predominant reliance on quantitative methods and (iii) the development of research around theories of AC existence rather than theories of AC operation and effects. Second, the thesis seeks to make a contribution to the literature by developing an alternative framework for conceptualising the operation and effects of ACs. The theoretical framework developed in chapters 5 and 6 draw upon institutional and power perspectives and aims to reflect better the reality of the context in which ACs operate in practice. Considering the lack of attention given to the operational and institutional context of ACs in extant studies this framework is an important contribution. Third, the thesis provides empirical evidence on the operation and effects of ACs in three companies. The theoretical framework is used to analyse the three cases individually (chapters 7-9) and for cross-case analysis (chapter 10). The investigation into AC processes and effects concludes (chapter 11) that ACs are adopted for a variety of reasons and that AC related outcomes are determined by the nature of the AC process rather than their formal terms of reference and scheduled meetings. This process is influenced by power relationships in which alliances and networks between agencies (both individual and committees/functional units) and the utilisation of standing conditions by agencies are important factors.

This thesis is concerned with the role of the international accounting firms in the process of auditing harmonisation both through their activities as individual firms and as agents whose actions enhance the degree of compliance with the International Standards on Auditing (ISAs). A major motivation underlying this research is the aspiration to understand the real potential for successful realization of the objective of worldwide auditing standards. This objective may be facilitated by the internationalisation of supply of auditing services, which suggests that the major international accounting firms would have a vital role in the achievability of global standards. Therefore, understanding the role of these firms is another motivation for this study. In addition, within the academic arena, comparative international auditing has received significantly less attention than international accounting harmonisation. As such, the third motivation for this study is to attempt to contribute to the debate on whether the internationalisation of auditing practices is generally feasible, in particular in the context of Less Economically Developed Countries (LEDCs). The research focuses on examining the extent to which ISAs are complied with in the context of LEDCs, and the influence of environmental factors, as suggested by comparative accounting research, and the activities of international accounting firms on compliance. Thus, the original idea of harmonisation as moving towards worldwide auditing practices across countries may not be achieved as long as environmental and cultural differences exist and exert different influences on professional development across countries. These research issues are addressed through a comparative study of Jordan, Lebanon, and Syria, based on a questionnaire survey and interviews. The rationale for conducting this investigation is based on the fact these three states belong to what is generally perceived to be a relatively homogenous region in terms of the level of economic development, culture, and language. But they have been followed diverse routes while adapting to the process of internationalisation of auditing practice. Therefore, it is of relevance to examine the forces that have resulted in countries within a relatively homogenous region adopting diverse policies while dealing with the international process. The study adds to the few existing empirical studies and offers evidence relevant to the debate about the extent to which international auditing practice has been harmonised, and what is the role of the major accounting firms in promoting adoption of ISAs and decreasing international auditing differences. In particular it provides evidence which can contribute towards understanding the nature and forms of international pressures for change in LEDCs. Previous studies have focused on auditing harmonisation within developed countries. This study indicates the need to broaden the research agenda to consider contexts where the auditing profession may be at a different stage of development, and to challenge assumptions either that innovations in auditing practice and standards are easily transferred globally or that individual countries, even within a common region, have uniform auditing environments.

This thesis is concerned with exploring and assessing CSR and accountability practices that are regarded as part of the stakeholder engagement initiatives of five case organizations operating in the Malaysian unit trust industry. The case organizations consist of four unit trust management companies (UTMC) and one unit trust self-regulatory organization (SRO). The empirical content of the paper is derived from a series of semi-structured interviews, along with a comprehensive analysis of documentary sources and observation of organisational CSR and accountability practices. The empirical evidences were evaluated against an idealised model of stakeholder engagement. The model was developed in this study to differentiate between CSR and accountability practices undertaken due to authentic felt responsibilities, symbolic purposes, strategic advantage or the business case. The model was constructed from the interaction of two dimensions, with the first dimension from a typology of CSR and the second dimension from a typology of accountability practices, constructing four broad categories of stakeholder engagements. Firstly, the results reveal that the main CSR initiative of the case organizations is the voluntary financial education program for the public and the investors. Secondly, it is found that only one case organization provides accounts on social and environment through its CSR report. Thirdly, the empirical evidence suggests that the case organisations used the similar engagement practices for a range of different reasons, which included strategic and/or symbolic purposes. However, in some cases, the practices were associated with a mixture of concern for 'others' and their own business interest (Roberts, 2003, Shearer, 2002). The research is based on an analysis in a specific context which may limit its wider applicability. The analytical framework developed in this study is an attempt to understand the often complex relationship between CSR and accountability practices, particularly in the financial sector and in the Malaysian regulatory context.

This study investigates the process of implementation of International Financial Reporting Standards (IFRSs) in Vietnam during eleven years. Up to the end of 2012, twenty six of Vietnamese Accounting Standards (VASs) have been issued "based on" IFRSs. This study aims to obtain an understanding of theories and factors influencing the implementation, and explore benefits and challenges for the implementation. The main goal of this study is to find a suitable accounting theory of the implementation of IFRSs in Vietnamese accounting. An interpretivist paradigm, qualitative methodology and inductive reasoning are employed in this study. The methodology helps to obtain essential understanding of what happened, and explain why those incurred. Three methods used in this study consist of comparison, interview and case study. The findings of this study indicate that communist theories and Hochiminh's thoughts significantly influence the implementation. Vietnamese culture also participates to cause more challenges for the implementation. Many individual factors which are different from developing countries have been found in the implementation in Vietnam, particularly, the Vietnamese law system and values/behaviours of the Vietnamese people. The findings also indicate that benefits for the implementation in Vietnam outweigh challenges. This study enriches literature of implementation of IFRSs around the world and gives useful lessons for other countries in implementation of IFRSs. Particularly, the contributions of this study are essential to the countries which have accounting environments and attributes similar to Vietnam, such as an economy developed at a low level, and heavy intervention of government in the process of setting up accounting standards.

This thesis examines the shareholder wealth effects of divestiture transactions via an analysis of event study announcement returns. It examines the factors determine changes in the level of returns, with a specific focus on the following areas: What role does firm life cycle play in the observed abnormal returns to divesting UK firm shareholders? Motivated by a growing body of research utilising a cutting edge measure of firm life-cycle by De Angelo et al. (2006), chapter 4 examines the impact of firm life-cycle on the announcement returns to firms undertaking divestiture activity. Developing the early research by Pashley and Philippatos (1990, 1993) who try to examine divestiture activity and life-cycle for the first time, the chapter examines whether the stock market responds to divestiture announcement differently across a firm life-cycle stage and whether agency concerns or other factors influence the level of shareholder returns. The presence of agency costs have been shown by Kaiser and Stouraitis (2001) to have a significant impact on divestiture activity. The results show that the wealth impact of divestiture activity varies by different firm life-cycle stages, those firms at the later life-cycle stages experience higher abnormal returns than earlier stages. The results suggests support for the agency cost of managerial discretion hypothesis, firms are rewarded for reconfiguring their operations back to an optimal size and for reducing the agency costs of managerial discretion. There is limited evidence to suggest that agency cost concerns are associated with higher abnormal returns near the end of the firm life-cycle, however these results disappear when re-configuring life-cycle definitions. Separately, those firms with negative retained earnings outperformed those with positive retained earnings irrespective of life-cycle stage, suggesting financial distress plays an important role in the level of returns experienced by firms undertaking divestiture activity. What role does the financial condition of the divestor have on the abnormal returns of UK firms? Chapter 5 examines the impact the impact of firm financial distress across multiple measures of firm-level financial distress (Taffler z-score, interest coverage measure and a net income measure). The chapter examines the financing hypotheses to assess whether firm level financial distress is a factor that influences the shareholder wealth effect to divesting firm shareholders. The financing hypothesis posits that asset sales by financially distressed firms will result in positive share price response given a reduction in the expected costs of financial distress (Lang et al., 1995). The positive announcement returns are attributable to divestiture activity representing a lower cost source of financing periods when a firm is facing financial distress. The results show that divestiture activity by financially distressed firms result in significant wealth gains to divesting firms across all three separate measures of financial distress. The key findings support the financing theories of asset sales. The chapter contributes to the literature on firm financial distress by examining multiple measures of firm distress and extending these to examine distress is a multi-dimensional approach incorporating liquidity and leverage. Liquidity and leverage are found to be a significant factor in explaining abnormal returns experienced by divesting firms, it is observed that firms with a strong bargaining positions are able to extract better prices from the sale. What role does the business environment (firm's industry and the macroeconomic environment) have on the observed abnormal returns of divestitures by UK firms? Chapter 6 examines the impact of financial distress, across firm level, industry level and the overall macroeconomic level on the market reaction to divestiture announcement. The chapter examines the conflicting financing and fire sale hypotheses in order to bring together the themes of external market conditions , availability of buyers and the financial condition of the divesting firms to assess these factors on the shareholders of firms that announce divestiture activity. The results show that shareholders experience significant wealth losses when firms sell assets during periods of industry distress. Natural buyers of the asset during this period are also likely to be distressed and as such the firms divesting assets will receive a lower level of cash proceeds from the asset sale (Shleifer and Vishny, 1992). Some evidence is found to support the financing hypothesis for those firms divesting during periods of firm and economic-distress. The chapter contributes to the literature on divestiture by examining the interactions between the financial distress conditions and the distress conditions in isolation. Industry conditions are found to dominate the results. Overall, the results show that fire sale conditions prevail during periods of industry distress, but the financing benefitsat the firm level can offset the fire sale discount. The evidence presented in this thesis contributes to the growing body of research on corporate divestitures. Specifically that the growth opportunities, the financial state of the seller, the bargaining position and the market conditions at the time of the divestiture can adversely impact the level of abnormal returns experienced by firms undertaking divestiture activity.

The importance of performance measurement system (PMS) is unquestionably accepted by both academics and practitioners to help a business organization to achieve its desired objective of increasing overall effectiveness and performance. It has been studied extensively for decades in the literature, in order to find the appropriate and best features of a PMS that could adapt to vibrant and ever-changing business environments surrounding the organization, and thus eventually drive superior performance. However, there is a lack of studies in the PMS literature of a good and suitable framework designed specifically for small and medium sized enterprises (SMEs), as most previous frameworks adopted from large organizations fail to fit the smaller sized business unit. The importance and emergence of human or behavioural elements and the positive impact of extra-role behaviour (ERB) on business performance have motivated this study to explore and study the possibility of formally embracing ERB as a part of performance measures in a PMS for SMEs. This study also aims to make a significant contribution to the existing dominant European and Western literature by focusing on fieldwork in Asian businesses (Malaysian SMEs). Evidence from 26 semi-structured face-to-face interviews with employees and owner-managers in six SMEs provides a new set of empirical data in the PMS area, which was previously dominated by larger organizations. The findings of this study show that the criteria for the PMS in our respondents' SMEs are directly and closely related to human and behavioural factors. Both quantitative and qualitative evidence show that respondents perceived and admitted that their employees' behaviour is very important in their day-to-day working environment. Most of them also opted for the formal treatment of ERBs in their organization in the future, as they perceived positive effects from formally measuring ERBs. This study contributes to both academic literature and to practice. Several factors have been drawn from the fieldwork evidence in supporting ERB as an appropriate new measure for PMS. ERB as workplace spiritual element, innovative action, and its relationship with the PMS and working environment are all highlighted by this study in contributing to the overall effectiveness of an organization. At the same time, this study contributes to the recent discussion on the definition of ERB which advocates different levels of volunteering in ERB. As far as practice is concerned, managers could benefit from this study by getting valuable information on the effects and barriers of formally measuring ERB. Finally a new conceptual model for the design and development of PMS, incorporating the working environment, extra-role behaviour, and performance measurement system, is developed and discussed. It is anticipated that this model could be applied in practice by SMEs wishing to improve their PMS.

This thesis examines the impact of executive compensation on the quality of corporate acquisition decisions. A number of different issues are empirically investigated. The analysis begins with the examination of the relation between the incentives managers are provided with via their compensation contracts and the riskiness of mergers and acquisitions (M&As) investigating whether this relation is affected by the passage of the Sarbanes-Oxley Act (SOX) in 2002. The study then focuses on the performance of acquiring firms exploring how and whether managerial incentives can induce value-increasing acquisitions conditional on the intensity of M&A activity. The final part of the empirical analysis examines whether the legal status of the target firm has any implications for the effectiveness of incentive compensation to mitigate managerial risk-aversion and increase shareholder value. The thesis contributes both to academic literature and to practice by identifying areas of inefficiencies of equity-based compensation contracts to mitigate agency costs. More specifically, new evidence is provided on the effectiveness of incentive compensation to induce risk-taking activity under the impact of stricter regulation. While compensation-related incentives are positively associated with the riskiness of acquisition decisions before 2002, managers have become considerably less responsive to such incentives after the enactment of SOX. Moreover, although incentive compensation can improve deal performance and overcome adverse selection concerns by inducing managers to acquire when it is optimal to do, it is not related to value-increasing decisions when acquisitions are initiated during periods of merger waves. It is further found that equity-based compensation can be rendered ineffective to mitigate agency costs when a publicly listed firm is acquired. Given these inefficiencies, a number of recommendations are made for the improvement of the design of executive compensation contracts that could provide valuable guidelines to remuneration committees to reduce excessive compensation costs and benefit shareholders.

In recent years intangibles have taken a more prominent role in the economy. Within the technology sector, young companies may have very little in terms of tangible assets. With no assets to serve as collateral, these companies often find it difficult to obtain funding. Venture capital firms attempt to fill this funding gap by providing finance in exchange for equity. This research considers intangibles from the point of view of the venture capitalist. Specific emphasis is made on patenting, as a formal way of protecting intellectual property. In high technology firms patents not only prevent competitors from copying inventions, but may also preclude them from advancing in their technologies. The availability of patent statistics enables objective measurement of the level of IP protection. The role of the reporting of intangibles in the investment decision is considered. Then, the role of intangibles per se is examined. The link between patenting and the level of investment is expl ored further. In a move away from the previous studies which focused only on existing datasets, unstructured interviews were conducted amongst early stage investor associations. Thereafter, a series of interviews was carried out amongst venture capitalists in the United Kingdom. Finally, a new dataset was constructed which includes information on venture capital investments, financial accounting information, and data relating to patenting. This data was then analysed statistically using regression techniques. Policy making organisations have been promoting the need for increased reporting on intangibles. However, key findings suggest that venture capitalists consider the existing level of reporting of intangible assets by investee companies to be adequate. Increased complexity within the financial reports does not reduce the level of due diligence carried out. They are more concerned about the nature of the intangibles than the financial reporting aspect. Although this study identifies a link between patenting and the level of investment by venture capitalists, they consider the business proposition as a whole, and no specific value is ascribed to patents.

Within a global trend of managerialism, the adoption of performance measures in universities has drawn academic interest. Nevertheless, there has been scant discussion about their impact on academics. Inspired by a series of events which centre on the significance of performance measurement in Chinese society, this thesis explores the extent of the impact of performance measures on Chinese academics and the reason behind their influences. Drawing upon a series of Western theoretical perspectives - institutional (for example, Burns and Scapens, 2000; DiMaggio and Powell, 1983), psychoanalytical (for example, Lacan, 1977; Foucault, 1979; Roberts, 1991 and 2009) and Bourdieusian perspectives, this thesis analyses the emergence and the impact of academic performance measures in China. In doing so, in addition to broadening the theoretical applications of these theories, this thesis develops the theoretical contribution around a framework to guide the analysis of a particular accounting practice. This thesis adopts critical perspectives and discusses the social constructivism nature of performance measures. It reveals the socially constructed nature of performance measures through showing how academic performance measures in China are dominated by discourses and how discourses are ideologically shaped to facilitate a particular socio-political agenda. Within the boundary of a Chinese university, this thesis examines the nature of the impact of particular performance measures on academics. In doing so, this thesis makes an empirical contribution of adding visibility to Chinese academia - it finds that academic performance measures in China have been dominated by various discourses that rationalise the significance of research performance for Chinese economic development. In addition, the tenets of opportunism embedded in research and the poor attitudes towards teaching are identified by this thesis.

Both developed and emerging markets have liberalised their stock markets by removing investment restrictions on equity capital inflows and outflows. The aim is to attract foreign investors and also to allow domestic investors to diversify internationally. However, existing literature shows that local investors overweight the domestic market (home bias), whilst foreign investors under or overweight foreign markets (foreign bias). Current studies have mainly investigated factors that determine home and foreign bias. The study uses comprehensive macro and micro level data to examine the implications of home and foreign bias on three research questions. The first empirical study investigates the impact of home and foreign bias on cost of capital. We mainly use five measures to proxy for cost of capital. We find compelling evidence supporting the hypothesis, those countries that exhibit higher home bias, experience higher cost of capital. Similarly, consistent with theory, we find that countries that have higher foreign bias enjoy lower cost of capital. In the second empirical study, we examine the impact of home and foreign bias on stock market development. Economic reasoning suggests, that countries that have home bias should have lower level of stock market development, while the countries where foreign equity portfolio investors invest more, should be associated with higher development. Our findings, based on rigorous analysis, confirm that prevalence of higher degree of home bias impedes stock market development. Likewise, higher foreign bias in equity portfolio allocations has significant positive implications for the development level of domestic stock market. Finally, in our third empirical research, we examine whether varying degrees of home and foreign bias have any impact on country level investor protection standards. We report two findings. First, we find strong evidence that supports the hypothesis that home bias leads to weak investor protection. Second, consistent with theory, countries that experience higher foreign bias, tend to have better investor protection. The findings suggest that provision of encouraging optimal international portfolio allocations to increase risk sharing, could be a crucial policy measure for governments. Policy makers in emerging countries can improve macroeconomic fundamentals and good governance to attract and retain foreign investors.