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What lies beneath? Financial reporting and corporate governance in Australian banks

Deo, Hemant , Abraham, Anne, & Irvine, Helen J. (2008) What lies beneath? Financial reporting and corporate governance in Australian banks. Asian Review of Accounting, 16(1), pp. 4-20.

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Abstract

Purpose - this paper aims to focus on a number of unexpected disclosures by major Australian banks, to highlight the subjectivity of financial reports and their failure to present an accurate portrayal of the underlying realities, and to propose that corporate governance disclosures are required to provide reassurance that financial reports are trustworthy. Design/methodology/approach - Moouck's institutional framework of financial regulation portrays financial reporting as a "game" played within a set of rules. It provides insights about the subjectivity of financial reports which are iillustrated with archival evidence from banks' reports and activities. Findings - The banks' financial reports were shown, in the light of later revelations, to portray an unrealistic view of their operations. Disclosures about corporate governance practices play a strong legitimising role, enhancing perceptions that financial reports correspond with organisational realities. Research limitations/implications - This study considers a narrow population of companies within one industry. By extending the focus, greater evidence could be provided that accountings tandards and financial reporting requirements have lost their connection with business practices. Practical implications - In spite of financial reporting reforms, financial reports are becoming less reflective of companies' activities and performance. This questions the usefulness of accounting standards, and the effectiveness of regulatory systems. Future reforms to accounting standards need to address these issues. Originality/value - The paper demonstrates the contention that the financial reports of several Australian banks fail to match the realities that lie beneath is really a broader challenge to the usefulness and credibility of Australia's system of financial reporting and regulation.

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ID Code: 13988
Item Type: Journal Article
Additional Information: For more information, please refer to the journal's website (see hypertext link) or contact the author.
Keywords: financial reporting, corporate governance, banks, Australia
DOI: 10.1108/13217340810872445
ISSN: 1321-7348
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Auditing and Accountability (150102)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Financial Accounting (150103)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 2008 Emerald Publishing
Deposited On: 07 Jul 2008
Last Modified: 29 Feb 2012 23:41

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