Academic dishonesty is a fundamental issue for the academic integrity of higher education institutions, and one that has lately been gaining increasing media attention. This study reports on a survey of 1206 students and 190 academic staff across four major Queensland universities in relation to student academic misconduct. The aim of the survey was to determine the prevalence of academic misconduct, and to investigate the extent to which perceptions of dishonesty are shared between students and staff, as preliminary steps toward developing effective strategies to deal with the academic dishonesty/misconduct problem. Results indicate a higher tolerance for academic misconduct by students in comparison to staff, particularly with respect to falsification of research results and plagiarism, as well as considerable underestimation by staff of the prevalence of virtually all forms of student academic misconduct. Overall, the study's findings confirm the significance of the issue of academic dishonesty within the Australian tertiary sector, indicating considerable divergence between students and staff in terms of perceptions of the seriousness and prevalence of student academic misconduct. We suggest that university administrators need to examine this issue closely in order to develop mechanisms for managing and curtailing the level of academic misconduct, since a failure to do so may lead to a further undermining of the academic integrity of the Australian tertiary sector.

The relation between stock returns, earnings and cashflows is of importance because it directly addresses the issue of whether accounting data provide value relevant information. The empirical evidence to date, however, has documented low explanatory power for earnings and inconclusive incremental information content for cashflows. This research re-evaluates the incremental information content debate using Australian data. Our research is motivated by: recent innovations in research design, including the specification of nonlinear functional relations between accounting variables and prices, and the fact that differences in firm size characteristics may influence the relative information content of the accounting variables. We observe that: (i) a nonlinear functional relation provides greater explanatory power for both earnings and cashflows; (ii) the results are consistent with more transitory earnings components for smaller firms; and (iii) contrary to received theory, cashflows add greater incremental explanatory power for large firms.

The fundamental relationship between accounting variables and firm valuation is a recurring theme in capital market research. This paper investigates this relationship within a balance sheet context and highlights the importance of controlling for relevant economic factors. We do this by conditioning explanatory power on the firm's relative financial leverage position, after controlling for cashflows and firm size, and using an arctan regression model to take account of temporary components in cash and earnings flows. Using data for 743 firm‐years for Australian Stock Exchange listed stocks, we find that for firms which are ‘above optimal leverage’: (i) earnings contain a greater level of transitory items, particularly when firm size is small; and (ii) cashflows provide higher incremental information. Our results are consistent with investors perceiving earnings as progressively less informative as the probability of failure increases, and the likelihood of earnings manipulation for the purpose of reducing proximity to debt covenants increases.

This paper highlights the response of cooperative institutions that are required to adhere to new capital adequacy regulation traditionally geared for profit-maximizing organizations. Using data from the Australian credit union industry, we demonstrate that the cooperative philosophy and internal corporate governance structure of cooperatives will lead management to increase capital adequacy ratios through the application of accounting window dressing techniques. This is opposite to the intended purpose of template regulation aimed at efficiently increasing operating margins and lowering risk. Our results raise several debatable issues regarding the ethics of accounting management and the imposition of one-shoe-fits-all external regulation.

at a GlanceThis study investigates the impact of non-GAAP earnings disclosure practices on nonsophisticated investors in Australia, given Australia's high investor participation rates, including those operating self-managed superannuation funds. The results show a positive association between the prominent disclosure of non-GAAP earnings information and the reliance of non-sophisticated investors on this information.The disclosure of non-GAAP earnings in Australian annual reports has risen steadily in recent years. These non-statutory earnings measures are generally disclosed in the unaudited section of the annual report and are not consistent with statutory profit as defined under generally accepted Australian accounting standards (GAAP). Recent research conducted in the United States has provided evidence that non-sophisticated investor decisions are influenced by the presence and prominence of non-GAAP earnings information. Further evidence suggests that investor perception changed after non-GAAP earnings disclosures became subject to regulation in that jurisdiction. Australia has high investor participation rates by international standards, including investors operating self-managed superannuation funds, resulting in a significant number of active individual investors. This study employs an experimental design to investigate the impact on non-sophisticated investors of the reporting of non-GAAP earnings information in addition to GAAP earnings information in Australian annual reports. The results of this study show a positive association between the prominent disclosure of non-GAAP earnings information and non-sophisticated investor reliance on this information. These results provide important evidence to Australian regulators as these narrative disclosures are not subject to regulation, in contrast to the United States where mandatory regulation has been in place since 2003.