Corporate Governance and Financial Reporting
Corporate governance is not just about the process by which elected representatives as directors make decisions. It is also about the way organizations are held accountable. The most obvious way is via financial reporting. The role of financial reporting in monitoring managerial and director performance, as well as possible deficiencies in the financial reporting and auditing process will be a major focus of the UTS Centre. This research will be directed to measuring the quality of financial reporting, and the extent to which stocks are efficiently priced in Australian and other markets. This program will begin with an examination of the incentives, which underlie the flow of information, including the reasons for the voluntary disclosure of information and the effect on firms' cost of capital. Subsequent studies will examine the influence of regulatory and governance environments on both the extent of voluntary disclosure, as well as the helpfulness of such disclosures.
Another research interest will examine the role of auditors in the information process. This includes an understanding of the economic demand for assurance and other services (including possible substitution effects with other forms of governance), as well as the effect of auditor assurance on the properties of earnings and other financial data.
A further project will focus on the role of information intermediaries, such as security analysts. Does the market pay attention to analysts' recommendations? What are the properties of analysts' earnings forecasts? Are such forecasts relevant in identifying the firms' value?