A cross-temporal analysis of the accounting and reporting strategies adopted by failed firms

Ng, Charles. (1994). A cross-temporal analysis of the accounting and reporting strategies adopted by failed firms Master's Thesis, School of Business, The University of Queensland.

       
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Author Ng, Charles.
Thesis Title A cross-temporal analysis of the accounting and reporting strategies adopted by failed firms
School, Centre or Institute School of Business
Institution The University of Queensland
Publication date 1994
Thesis type Master's Thesis
Total pages 151
Language eng
Subjects 14 Economics
Formatted abstract This study examines the reporting behaviour of failed listed Australian firms over a period of six years prior to their failure date. The six year period prior to a firm's failure date is divided into three phases. These three phases of the firm's life, or alternatively termed in this study as 'financial status (or stage) of the firm': financial stability, financial distress, and imminent failure are determined by reference to a firm's progression towards its failure date.

This study makes three propositions. The first is that the phase of a firm's life explains the firm's extent of disclosure of unregulated or, as termed in this study, 'voluntary information'. The second proposition is that the phase of a firm's life explains its accounting policy decisions; and the third proposition is that it affects auditors' monitoring behaviour.

In terms of the first proposition, the failed firms have been found to reduce the extent of their disclosure of information on 'activities and review of operations', and financial ratios at the imminent failure stage. In terms of the second proposition, the timing of non-cash provisions and write-offs have been found to be influenced by the firm's financial status, or stage. Proposition three is supported by evidence of auditors reluctance to issue 'going concern' audit opinion until the firms reach their imminent failure stage.


 
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Created: Wed, 27 Oct 2010, 15:13:59 EST by Ning Jing on behalf of Social Sciences and Humanities Library Service