Pacific Accounting Review

Alastair Marsden; Russell Poskitt; Cherry Wang

doi: 10.1108/01140580810872825pmid: N/A

Purpose – The purpose of this paper is to examine the proposition that unexplained price and volume movements detected by the New Zealand Exchange's (“NZX”) surveillance staff reflect speculative trading. Design/methodology/approach – The paper examines a sample of 98 price queries issued by the NZX between 1996 and 2004 where the company responded with a “no news” announcement to the NZX query. The sample is partitioned between queries of price increases and queries of price decreases. A market model is employed to estimate abnormal returns over the event window period (−30, 30) where day 0 is the date the price query is issued. Findings – The paper finds evidence of large abnormal returns in the immediate pre‐query period but only a partial reversal in the post‐query period following the “no news” announcements. Research limitations/implications – The absence of a full reversal of the pre‐query abnormal return is interpreted as evidence that prices are being set by informed traders rather than by uninformed or speculative traders. Further research is required to determine whether this reflects breaches of either the continuous disclosure regime or insider trading regulations. Originality/value – The paper presents the first systematic analysis of the NZX's price query system. The empirical results show that price movements that generate price queries and subsequent “no news” announcements should not be dismissed as mere speculation.

Belinda Luke

doi: 10.1108/01140580810872834pmid: N/A

Purpose – The purpose of this study is to consider the potential for profit under new public management, through a study of New Zealand's state‐owned enterprises (SOEs). Design/methodology/approach – “Examination from the outside” involved analysis of financial data from 2001 to 2005 for the SOE sector. “Inquiry from the inside” involved interviews with senior executives from 12 of the 17 SOEs operating in New Zealand. Findings – Findings indicate the potential for SOEs as profitable government investments, with clear support for financial returns under NPM. Research limitations/implications – While this study is limited to SOEs in New Zealand, it provides valuable insight into one country's SOE sector, and offers a platform for similar studies in other countries. Strong financial returns from several SOEs highlight the potential for SOEs as valuable investments, and an important alternative to traditional sources of government funding. However, variations noted in the financial returns of individual SOEs also indicate that profitable and commercial operations may not be possible in all cases. Originality/value – The value of this paper lies in the combination of quantitative and qualitative data, to provide insight not only into SOEs' financial performance, but also into the operational and strategic issues underlying that performance.

M. Kend

doi: 10.1108/01140580810872843pmid: N/A

Purpose – The purpose of this paper is to consider the supply of audit firm industry specialisation in the market for statutory audits of publicly traded companies in Australia. The purpose of this study is to seek to gain a better understanding of the dynamics within the market for industry specialist audit services. Design/methodology/approach – A structured interview process is used to investigate certain issues with the suppliers of industry specialist audit services (in this case all the then Big 5). Findings – This paper found that industry specialisation involves the Big 5 audit firms developing a specialised knowledge of what clients do within any given industry and the issues and audit risks they face. The Big 5 have industry “focus” groups that are responsible for providing “leading edge” practices to their clients. According to many of the auditor interview respondents, the large number of Australian Stock Exchange (ASX) classifications has meant that audit firms have sought a more manageable means of partitioning their practices into different industry focus groups. The ASX classifications were described by some of those interviewed as being irrelevant. This raises questions regarding prior auditor industry specialisation research that has relied on these classifications. Research limitations/implications – The study does suffer from two limitations. First, the research only questioned the Big 5 firms, despite evidence that non‐Big 5 firms can create specialisations. Second, the study's data is relatively dated being collected in the late 1990s, so there is a possibility the findings may now be out of date, particularly given as indicated before, specialisation premiums are not generalisable across time. Originality/value – The paper demonstrates the criticality of the relationship between audit market participants in developing an underlying framework that can universally explain the interactions that occur in the market for specialised audits.

Lin Mei Tan; Fawzi Laswad

doi: 10.1108/01140580810872852pmid: N/A

Purpose – The purpose of this study is to examine the impact of five factors, reflecting students' diversity in prior content and metacognitive knowledge, on students' academic performance in the introductory accounting course. Design/methodology/approach – Based on a conceptual framework of prior knowledge, five factors are hypothesised to have an impact on students' performance. They are: prior accounting knowledge, age, gender, intended academic major, and first language. A self‐administered questionnaire is completed by students enrolled in the compulsory introductory accounting course at a large multi‐campus NZ university. Multivariate analysis is carried out to test the research hypotheses and the predictive ability of the five independent variables on students' performance. Findings – Consistent with the educational psychology literature, prior content knowledge has a significant impact. Students' metacognitive knowledge, which differs according to their language and gender, also has a significant effect on students' performance. Research limitations/implications – The low R 2 in the regression model suggests that, although some of the study variables are significant, a high proportion of variation in academic performance remains unexplained by the model. The results may also not be representative of student population in general as information is elicited from students from one particular university. Future research could extend the sample to more than one tertiary institution and consider the effect of other potential variables such as students' intrinsic motivation and learning strategies. Originality/value – Unlike many prior studies which lacked a theoretical framework to support their research, this study proposes a conceptual framework drawn from the education psychology literature for examining students' performance in the introductory accounting course.