Accounting Foundation

• Researchers: Dr Demetris Christodoulou
• Funding: A$19,731

The steadily deteriorating return to work (RTW) rates translate to growing work injury damage expenses, yet regulators point to underfunding of employers’ estimates for insurance allowances. The longer an injured worker stays out of work the less likely is to RTW, develop depression and give up. Some workers seem more prone to taking more risks. Some workers resume their duties by seamlessly and others seem to never feel in place again. There are resilient personalities who can bounce back from injury by exerting normal effort, and then there are vulnerable personalities who find it hard to rehabilitate or RTW at all. Personality is an inherent worker-specific barrier to RTW. This project will build a predictive model on disability outcomes from work-related injuries conditional on personality, thus helping work compensation insurance companies estimate allowances more accurately and help injured workers RTW on time with more targeted treatment.

• Researchers: Dr Angela Hecimovic, Janine Coupe, Corina Raduescu, Sandra Dwyer
• Funding: A$13,611

This project examines the impacts of online teaching and learning as a direct response to COVID-19 restrictions, gathering insights from The University of Sydney Business School educators, students, the Business School Dean and leading practitioners from the Big 4 professional service firms. The overall aim is to provide practical advice for adapting to exclusive remote online teaching and learning and create a portfolio of experiences and challenges from both student and teacher perspectives. We will examine how educators developed online course content, assessments and how they developed teaching competencies for engaging students. We will also provide insights from surveys and focus groups into the student’s learning experience and outcomes at both undergraduate and postgraduate levels. This research will also initially engage with Partners from the Big 4, one of the biggest recruiters of our Business School graduates to understand the impact of the current remote online learning context on outcomes such as graduate qualities, and the future implications of online business education.

• Researchers: Dr Anna Young-Ferris, Dr Shan Zhou, Professor Mandy Cheng (UNSW)
• Funding: A$12,100

Aim: to understand the effect of the disclosure of financial impact of climate-related risk/opportunity on professional analyst valuation decisions. Method: a 2x2 controlled experimental design to study the effect of company disclosure of financial impact of climate-related risk/opportunity on professional analyst valuation decisions. Presence/absence of quantified financial impact and mandatory/voluntary disclosure are the two variables being investigated. Significance: a response to the emergence of the Task Force on Climate-related Financial Disclosures (TCFD) that seeks to develop recommendations for voluntary climate-related financial disclosures that are consistent, comparable, and reliable, and provide decision-useful information to investors. Although public climate-related disclosures by large listed companies are increasing, the actual or potential financial implications in quantitative terms are rare. Further, whether climate-related financial disclosures should be mandated or remain voluntary is on the agenda of regulators around the globe. Expected outcomes: contribution to what constitutes decision useful climate-related disclosures as a stated financial impact for investment decision-making, as a business response to addressing the grand challenge of climate change.

• Researchers: Dr Chuan Yu, Professor Baljit Sidhu
• Funding: A$19,434

While the use of the direct method of accounting for operating cash flows (CFO) is unusual outside of Australia and New Zealand, a sizable number of U.S. firms voluntarily reported on a direct basis after the introduction of the Statement of Financial Accounting Standards (SFAS) No. 95 on the Statement of Cash Flows in 1987. Prior studies have studied firms’ decision to adopt the direct method and found such method to be useful for predicting future performance and explaining the capital market. However, many of those voluntary adopters have discontinued with the direct method after using such method for a period of time. The aim of this project is to investigate their decision to discontinue by employing empirical models using archival data. Our study will contribute to both the academic literature and the standard setting debate on the presentation of primary financial statements (e.g., the IASB’s Primary Financial Statement project).

Researchers: Dr Ava Wu, Dr Louise Lu (ANU)

In the past century, many countries including U.S. and Australia have experienced rapid growth in ethnic diversity. In the financial services industry, top executives from Wall Street espouse that diversity as a key driver of success in serving its clients. However, latest media news revealed that women and minorities remain underrepresented in financial firms and ethnic biases are significant in the financial services industry. The availability of data on individual analysts in the financial industry provides a unique setting to assess the impact of diversity on individual outputs in the workplace. This proposed research aims to shed light on how ethnic diversity of brokerage house affects the quality of sell-side analysts’ information production. The results of the project may provide supports for policy makers and firms to implement policies to promote diversity and equal opportunities.

• Researchers: Professor Wai Fong Chua; Dr Shan Zhou; Professor Roger Simnett (UNSW)
• Period: 10 July 2019 to 10 January 2021
• Funding: A$20,000

Using large sample archival method, this protect studies the economic consequences associated with EER and the use of credibility-enhancing mechanisms on EER. EER encapsulates many different forms of reporting, including, but not limited to, integrated reporting, sustainability reporting and other reporting by entities about environmental, social and governance (ESG) matters. With EER on the agendas of standard setters from around the world as a vehicle for corporations to build trust, this project helps to inform debates on how to make corporate reports more transparent and relevant to the users of information. 

• Researchers: Dr Matthew Egan; Dr Barbara Voss (University of Canberra)
• Funding: A$10,233

This research engages with management and staff within all of the 'big 4' accounting firms in Australia, to provide insight into the developing focus on LGBTI diversity and inclusion. Access is secured, and we are progressing with semi-structured interviewing. Our interviews are uncovering the nature of related initiatives, perceptions of values, challenges, and opportunities. Research within this under-explored field will have value for both academia and practice. While several papers provide insight into diversity focused on gender and culture, exploration of diversity focused on sexuality, particularly within the accounting profession, is limited. A number of unique challenges impact in both accounting, and for that 'pillar' of diversity, including ongoing significant attrition rates among younger staff, and leadership domination by 'white' males. All of our contacts have told us that benchmarking is important, and so they are keen to receive a report from us, that overviews developments across all 4 firms.  

• Researchers: Dr Tanya Fiedler; Professor Wai Fong Chua
• Funding: $A13,012

Aim: This research aims to understand how climate science and the measurement of financial risk interact.

Method: The research will address this aim through a qualitative study, in which the researchers observe representatives from the banking, insurance, accounting, regulatory and climate science communities, as they develop a technical standard for the measurement of climate physical risk.

Significance: Climate risks are increasingly understood as financially significant. A recent study (Kompas, Pham, & Che, 2018), for example, valued global long term losses of 4 degrees warming (our current trajectory) in 2100, at $US23+ trillion/year. This research seeks to generate the knowledge needed to measure such losses at the entity-level. It is accordingly of significance to industry, regulators and academics. 

Expected outcomes: This research will, at a minimum, lead to publication of:

1. An executive summary for The Accounting Foundation website; and

2. An article in an internationally respected (Tier 3 or 4) accounting journal. 

• Researchers: Professor Baljit Sidhu; Dr Shawn Ho
• Funding: A$17,839

The post-IFRS accounting standard on Intangible Assets (AASB138) is considerably more restrictive than pre-IFRS Australian GAAP. AASB138 only permits revaluations of intangibles when fair value can be measured with reference to an active market, while the pre-IFRS standard only required the best available market evidence of value that could be exchanged at arms-length. This requirement is also more restrictive than that for tangible assets. The AASB Staff is of the view that revaluations of intangibles were likely more commonplace pre- compared to post-IFRS. Given revaluations are argued to be in the interest of informing the market, then the question arises as to how entities now manage the value communication challenge. This project will investigate whether entities which revalued intangibles pre-IFRS, voluntarily provide fair value information in other ways post-IFRS. And if they do, how credible this disclosure is viewed by the market.