Drawing a framework from stakeholder theory, this study uses 1994 data drawn from 100 United Kingdom listed companies to test empirically whether the level of discretionary donations made by companies to charitable, social and political causes is related to four company-speci®c factors, namely leverage, company size, pro®tability and ownership structure. Consistent with our hypotheses, the results indicate that the decision to contribute funds to charities and other bodies is positively related to company size and pro®tability and negatively related to leverage. However, the study provides no support for the view that there is a link between discretionary donations and a company's ownership structure.

Agency theory is extensively employed in the accounting literature to explain and predict the appointment and performance of external auditors. Argues that agency theory also provides a useful theoretical framework for the study of the internal auditing function. Proposes that agency theory not only helps to explain and predict the existence of internal audit but that it also helps to explain the role and responsibilities assigned to internal auditors by the organization, and that agency theory predicts how the internal audit function is likely to be affected by organizational change. Concludes that agency theory provides a basis for rich research which can benefit both the academic community and the internal auditing profession.

This study extends earlier research on corporate governance by examining whether the information-usefulness of annual accounting earnings varies with the fraction of outside directors serving on the board and board size. Using panel data from New Zealand (NZ) firms for the financial years 1991-97, we find that earnings informativeness is negatively related to board size but is not related to the fraction of outside directors serving on the board. Our results are robust to controlling for various firm-specific factors that are known to be associated with earnings informativeness. Copyright (c) 2006 The Authors; Journal compilation (c) 2006 Blackwell Publishing Ltd.

Drawing a framework from the organizational economics literature this study examines the determinants of corporate (i.e. underwriting and investment related) financial performance in the Bermuda insurance market. Using panel data for 1993-1997, it was found that, as expected, highly leveraged, lowly liquid companies and reinsurers have better operational performance than lowly leveraged, highly liquid companies and direct insurers. Contrary to what was hypothesized, performance was positively related to underwriting risk. However, the size of companies and the scope of their activities were not found to be important explanatory factors.