This thesis contributes to our understanding of CEO succession decisions in family firms with an incumbent family CEO. The successor choice may be a manifestation of conflicts of interests between the controlling family and the minority shareholders. Previous research has focused on the consequences of the CEO succession on firm performance; it has not studied the factors that determine the choice of the successor, the shareholder reaction to this choice, nor methodological concerns particularly relating to adjusting board independence for links the directors have to the controlling family, thin trading and confounding events. Thus, our objectives are: (i) to highlight key methodological concerns and propose ways of addressing these, (ii) to identify the determinants of the CEO successor choice between a family and a nonfamily CEO and (iii) to examine the stock market reaction to the succession announcement. Our sample comprises 283 succession announcements in listed family firms from France, Germany and the UK during 2001-2010. We find that reported board independence is overstated compared to our proposed measure of adjusted board independence. Two factors are found to influence the CEO successor choice. First, while reported board independence has no impact on the successor choice, our adjusted measure of de facto independence reduces the likelihood of a family successor, implying that the former is a biased measure. Second, cross-listed French firms are less likely to appoint another family CEO, confirming the bonding hypothesis of Coffee (1999). Our event study presents new evidence on the drivers of the stock market reaction to the succession announcement in family firms. Investors only react to the announcement of a nonfamily CEO successor, which is met by positive cumulative abnormal returns (CARs). Poor past performance elicits more positive CARs to the announcement of a nonfamily CEO. Two other factors, on interaction with past performance, drive the stock market reaction to the latter announcement. Accordingly, in poorly performing firms, the greater the adjusted board independence, the less positive are the CARs when a nonfamily CEO is announced, whereas, more positive CARs are observed for firms that offer greater shareholder protection. The key policy implication of these results is that definitions for board independence in the codes of best practice must account for directors’ links to the controlling shareholders.

This study examines the extent of and motivations behind corporate social reporting (CSR) by large corporations in general and subsidiaries of multinational corporations in particular in Bangladesh. It particularly addresses the research question: Why, in Bangladesh, do corporations in general and subsidiaries of MNCs in particular produce or not produce social and environmental data in their annual reports? At the first step, the study explores the general trend of CSR in the UK and Bangladesh, and then examines in more detail: (a) CSR of subsidiaries of MNCs in Bangladesh in general; and (b) CSR of UK MNCs and their subsidiaries in particular. Content analysis has been used to capture the nature and quantity of CSR issues provided in the annual reports by the companies. At the second step, the study explores reasons for accepting social responsibility and practising CSR by subsidiaries through in depth interviews. The study argues that CSR in Bangladesh mainly means employee disclosure. More importantly, subsidiaries disclose social and environmental issues more in line with Bangladeshi national companies than they do with their MNC parents. Managerial perspectives on social responsibility are found to be limited to local traditions of philanthropy similar to the South Asian trend. The main reason for practicing CSR by corporations in Bangladesh is found to be to manage certain stakeholders’ perceptions for corporations’ own interests. It appears that a single theory (i.e. stakeholder, legitimacy or political economy) cannot explain the whole social and environmental reporting phenomenon observed in Bangladesh. Rather, each theory provides a slightly different and useful insight into CSR practices. The absence of CSR is not only socio-cultural; rather it is found to be political which hints that corporations are in control of choosing the channel for producing CSR and the choice not to make information available to the public.

This thesis explores attitudes and perceptions of the Libyan managerial class to the internal audit function focusing on the oil and gas industries.

In 1973, leading professional accountancy bodies from Australia, Canada, France, Germany, Japan, Mexico, Netherlands, United Kingdom and the United States of America established the International Accounting Standards Committee (IASC) in a bid to confront the problems of international accounting diversities. In addition to the efforts of the IASC, various other bodies such as the United Nations, the European Community, the Organisation for Economic Co-operation and Development, have at various times also attempted to address this problem. Against this background, the first main objective of this study is to assess the extent to which the accounting measurement and associated disclosure practices of five leading countries, namely: France, Germany, Japan, the UK and the USA differ in spite of the major efforts made so far to reduce or eliminate diversities in the accounting practices of different countries. The second main objective of this study is to ascertain the extent to which the accounting measurement and associated disclosure practices of multi-listed and domestic listed companies from these five countries differ. This is interesting in view of the argument that globalisation and internationalisation of capital markets provide a justification for global accounting harmonisation. In order to accomplish the study objectives, the financial statements of 413 large listed companies from France, Germany, Japan, the UK and the USA for the 1990/91 financial year and 293 large listed companies for 1970/71 financial year were surveyed to ascertain the extent to which there were significant diversities between the accounting measurement and associated disclosure practices of companies from the five countries before (1970/71) and after (1990/91).

In this study, I empirically examine the valuation and value relevance characteristics of specific consolidation and segment-disaggregated corporate financial information. On the consolidation level, I investigate the relationships (in terms of value relevance and pricing) between the UK firms’ equity market values and the firm-level contemporaneous equity book values, earnings and dividends. The objective here is identify and explore factors and contexts that impact on the value relevance and pricing of consolidated financial statement information reported by UK publicly traded firms over the period from 1987 to 2002. On the segmental level, the study capitalises on the insights gained from the consolidated level findings and investigates (i) whether financial information, on specific geographic and line-of-business segments’ operations of a cross-section of UK multi-segment firms, is associated with the equity market value of the entire firm (i.e., value relevant); (ii) whether such operations are being differentially priced (by the stock market) into the equity market value of the firm; and (iii) how the factors/contexts affecting value relevance and pricing of the firm-level accounting fundamentals impact on the value relevance and pricing of the segment-level results. Additionally, this study provides further empirical evidence on the adequacy of the UK segment reporting accounting standard SSAP 25, and the quality of segment disclosures in the UK. The employed valuation model represents a fusion of valuation frameworks developed in earlier studies [e.g., Edwards and Bell (1961), Peasnell (1981, 1982), Ohlson (1989, 1995), Rees (1997), Garrod and Rees (1998), Wysocki (1998)]. On the consolidated-level, the model expresses the size-deflated equity market value of the firm as a linear function of size-deflated equity book value, earnings for ordinary, dividends for ordinary shareholders and additional control/dummy variables. In the segment-level analysis, the earnings variable is further disaggregated into its segment-level elements. With regard to the firm-level analysis, the study uncovers a range of contexts and factors that affect the value relevance and pricing of specific accounting value drivers. Among these are: the sign of reported earnings and book values; whether the firm trades at a premium/discount to its book value; the economic periods; the dividend status of the firm; diversification profile of the firm; and the industrial affiliation of the firm. In addition, the firm-level analysis indicates that the industrially diversified firms have lower valuation than the focused firms, while the geographically diversified firms have higher valuation than the domestic firms.

No description available.

Whistle-blowing has garnered widespread attention in many countries, including the U.K. Whistle-blowing has been seen as one of the most effective ways to cater with illegal and unethical practices in organisations. Whistle-blowing describes the action of a worker disclosing (internally or externally) questionable practices, from within an organisation, to the parties that can take remedial actions. Nevertheless, whistleblowing is a risky action where the worker might lose his/her job for making the disclosure. In the early years of whistle-blowing practice, not much whistle-blowing protection legislation has been introduced. In the U.K. whistle-blowing protection legislation, known as the Public Interest Disclosure Act, was only enacted in 1998. Since then, various amendments to the Act have been made to give better protection to whistle-blowers. Many other policies have been introduced by policy makers in an effort to encourage whistle-blowing practice. Nevertheless, it is still an action that an individual might be disinclined to undertake. The purpose of this study is to identify factors that influence internal auditors in the U.K. to blow the whistle. Seven individual-level, independent variables (attitude, injunctive norm, descriptive norm, perceived behavioural control, self-efficacy, organisational professional conflict and awareness of the whistle-blowing protection legislation) are examined for their relationship with the dependent variable (intention to blow the whistle). Moral intensity is examined for its moderating effect on the relationships that exist between the seven independent variables and the dependent variable. Multiple regression analysis found positive and significant relationships involving six independent variables and the dependent variable. The six independent variables are attitude, injunctive norm, perceived behavioural control, self-efficacy, organisational-professional conflict and awareness of whistle-blowing protection legislation. The moderated multiple regressions found significant moderating effects of moral intensity in a relationship between injunctive norm and whistle-blowing intention, and descriptive norm and whistle-blowing intention. Overall, the findings suggest that, individual-level variables also play significant role in determining internal auditors’ intention to blow the whistle. Relative to individuallevel variables, organizational-level and situational level variables have received much attention among researchers in the past. Therefore, the findings suggest that future researches should also put emphasis and consideration on individual-level variables along with organizational and situational level variables in their future work. Also, intention to whistle-blow among internal auditors in the U.K. is high especially in a scenario involving a wrongdoing that may harm public safety than in scenario involving falsified invoices and collusion and tiers of hierarchy. The spirit of whistle-blowing can be infused if more efforts were taken by government, media and many other parties. The efforts include promoting the encouragement for whistle-blowing and institutionalise effective whistle-blowing policies and procedures in organizations.

Over the last few decades the business environment throughout the world has seen several accounting and corporate scandals such as the collapse of Enron, Arthur Andersen, WorldCom, and Parmalat. As a result of these ‘scandals’, significant attention has been directed to the issue of ethics in business in general, and in accounting in particular. Several empirical studies have been conducted on the subject of ethical decision making and ethical issues within accounting. Interestingly, most of this research has been done in the USA and the remaining has been conducted mainly in developed countries. Although some of the ethical decision making research has been done in accounting, very little research has been conducted in the area of management accounting. This study addresses this gap by adding empirical evidence related to the association of numerous variables with management accountants’ ethical decision making in one of the developing countries, namely Libya. The purpose of this study is twofold; first, to investigate the impact of those variables (individual variables, organizational variables, and moral intensity dimensions) on the ethical decision making of management accountants and future accountants (i.e. accounting students) in Libya; and second, to determine what types of ethical issue are faced by Libyan management accountants at their workplace. The ethical decision making model adopted in this study hypothesizes that individual variables (e.g., age and gender), organizational variables (e.g., code of ethics and ethical climate), and moral intensity dimensions (e.g., magnitude of consequences) have relationships with the first three stages of ethical decision making (recognition, judgment, and intention) as constructed by Rest (1981). Adopting a cross-sectional methodology, a questionnaire that included four scenarios was used to gather data from a sample of Libyan management accountants and accounting students. Using several advanced statistical techniques (e.g., One-way ANOVA and Hierarchical Multiple Regression), data was analysed and the study hypotheses were tested. The results of this study reveal that, among all the variables examined, personal moral philosophy dimensions had the strongest significant relationship with the three stages of ethical decision making for both samples. Also, moral intensity dimensions explained a significant portion of the variance in management accountants’ ethical decision making stages, whereas only the ethical intention stage of accounting students was significantly associated with moral intensity dimensions, temporal immediacy in particular. Moreover, while no significant relationships were found in relation to the impact of all organizational variables examined, very few significant results were found related to the impact of age, gender, and educational level on ethical decision making stages. Also, Libyan management accountants recognized several issues that have been found in other countries, including the issues of injustice in distributing the company’s resources within companies, the misuse of the company’s equipments, and managers’ use of power to serve personal interest. Encouraging idealistic philosophy and giving more attention to ethics in accounting education are some of the implications of this study. Future research should apply other methods (e.g., interview) to investigate ethical issues in management accounting, including other dimensions of moral intensity and ethical climate components, and include samples from developing countries, especially Muslim countries.

In an attempt to provide a better understanding of the design and use of effective management control systems (MCS) in a developing country, this research study adopts a contingency theory approach to investigate the role of management accounting information (MAI) in facilitating MCS in large manufacturing companies. Drawing the relevant literature on contingency theory, a framework is developed and forms the basis for investigating the possible influence of several contingent variables, including centralisation, formalisation, environmental uncertainty, manufacturing complexity and competitive strategy, on the effectiveness of MCS as well as the potential mediating effect of the usefulness of MAI on these relationships. Based on the findings of a questionnaire-based survey of 54 large manufacturing companies from different industrial sectors in Libya, this study identifies the role of MAI in facilitating MCS in these companies in terms of the four dimensions of scope, timeliness, aggregation and integration. Descriptive and inferential statistical tools are used to analyse the collected data, including independent t-test, correlation, simple and multiple regression. The study also utilises the Preacher and Hayes’s (2004) macro through the SPSS package to investigate mediation regression effects in the MAI/MCS relationship. The results of the descriptive analysis show that more bureaucratic MCS types - characterised as formal, tight, and impersonal controls - have been adopted in large manufacturing companies in Libya to motivate, control and direct different activities. In terms of competitive strategy, no pure cost leaders or differentiators were found; rather the responding companies consider various aspects of cost leadership and product differentiation priorities when shaping their competitive strategy. Apart from manufacturing process complexity, all other contingent variables studied were found to have a significant positive influence on MCS effectiveness in these manufacturing companies. Although each of the four MAI dimensions (i.e. scope, timeliness, aggregation, and integration) explored in this study was perceived useful in relation to planning and problem solving activities, it is the aggregated information that was perceived the most important, available, and, thus, useful information. Very importantly this study found that MAI usefulness accounts for a full (i.e. complete) mediation effect only on the relationship between centralisation and MCS effectiveness, while it accounts for a partial mediating role on the relationship between MCS effectiveness and the other three contingent variables of formalisation, environmental uncertainty, and competitive strategy. On the other hand, the usefulness of MAI transmitted the influence of manufacturing process complexity on MCS effectiveness indicating an indirect effect instead of a mediated relationship. The latter is a significant distinction not usually made in previous studies that examined interaction factors. Thus, this study contributes to the knowledge in this important area by distinguishing between mediation and indirect effects, in particular, and between full and partial mediation effects, in general. Finally, the main limitations of this study are outlined and opportunities for future research are suggested, particularly in relation to considering the moderating effect of a fourth variable on the mediation relationship (i.e. moderated mediation) in the interplay between MAI and management control system design and use.

Agency theory predicts that ownership structure monitoring mechanisms can effectively align the interests of managers with those of the shareholders. In additions, it views external audit as a function that lends credibility to the information disclosed in financial reports. Prior research sustains these predictions in developed markets such as in the US. However, institutional settings such as ownership structure and regulatory oversight bodies differ around the world and accordingly, the sustainability of agency theory predictions might also differ. Further, little research differentiates between accruals and real activities earnings management in contexts such as the Jordanian where ownership is concentrated, investors’ protection is weak and capital market is still evolving. Therefore, this study addresses these issues and investigates the validity of agency theory predictions concerning the effectiveness of ownership structure and external audit monitoring mechanisms in mitigating both accruals and real activities earnings management in Jordan. In this study, four measures of earnings management are estimated through the models of Kothari et al. (2005) and Roychowdhury (2006). Magnitudes of abnormal accruals are obtained from the former model and magnitudes of abnormal cash flow from operating activities, abnormal production costs and abnormal discretionary expenses are obtained from the latter model. As a result, four empirical models are constructed in which the estimated earnings management measures represent the dependent variables. Independent variables in each empirical model are the same and are classified into three categories: first, ownership structure variables include ownership concentration, controlling shareholders, institutional ownership and foreign ownership. The second category includes external audit quality measured by auditor size. Third, a set of control variables include board size, leverage, growth and firm size. These models are tested using the population of all manufacturing firms listed on Amman Stock Exchange over the period 2005 – 2008. The results reveal that controlling shareholders appear effective in constraining accruals manipulations, sales manipulations and production costs manipulations. As for manipulations in discretionary expenses, the results show that only high levels of institutional ownership can effectively deter abnormal discretionary expenses. Moreover, contrary to the popular convention, the results suggest that non-big 5 auditors in Jordan who in fact mitigate abnormal accruals not big 5 auditors. Finally, no evidence is found supportive of the substitutive effect. That is, firms that are prevented from managing their earnings through accruals due to the enhanced scrutiny of non-big 5 auditors, do not resort to sales manipulations, production costs manipulations or discretionary expenses manipulations as substitutes to achieve desired levels of reported earnings. Given these findings, the present study provides understanding and extension for agency theory literature that focuses on earnings management in general and in emerging markets in particular. It highlights challenges to applicability of agency theory in emerging markets where corporate governance mechanisms are supposed to mitigate the practice of earnings management. As such, these findings could be helpful to investors and other stakeholders in making rational contractual decisions, especially when such decisions involve non-owner-controlled firms. Finally, Amman Stock Exchange could impose the corporate governance codes that actively promote internal corporate governance mechanisms to restrain accruals and real activities earnings management.