Unintended consequences of regulatory reporting requirements for small and medium size construction entities : Australian evidence
Falta, Michael & Gallery, Natalie (2011) Unintended consequences of regulatory reporting requirements for small and medium size construction entities : Australian evidence. Construction Management and Economics, 29(11), pp. 1121-1135.
The Queensland Building Services Authority (QBSA) regulates the construction industry in Queensland, Australia, with licensing requirements creating differential financial reporting obligations, depending on firm size. Economic theories of regulation and behaviour provide a framework for investigating effects of the financial constraints and financial reporting requirements imposed by QBSA licensing. Data are analysed for all small and medium construction entities operating in Queensland between 2001 and 2006. Findings suggesting that construction licensees are categorizing themselves as smaller to avoid the more onerous and costly financial reporting of higher licensee categories are consistent with US findings from the 2002 Sarbanes-Oxley (SOX) regulation which created incentives for small firms to stay small to avoid the costs of compliance with more onerous financial reporting requirements. Such behaviour can have the undesirable economic consequences of adversely affecting employment, investment, wealth creation and financial stability. Insights and implications from the analysed QBSA processes are important for future policy reform and design, and useful to be considered where similar regulatory approaches are planned.
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|Item Type:||Journal Article|
|Keywords:||Australia, construction companies, failure, licensing, regulation|
|Subjects:||Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Accounting Auditing and Accountability not elsewhere classified (150199)|
|Divisions:||Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
|Copyright Owner:||Copyright 2011 Routledge|
|Copyright Statement:||This is a preprint of an article submitted for consideration in the [Construction Management and Economics] ©  [copyright Taylor & Francis]; [Construction Management and Economics] is available online at: www.tandfonline.com|
|Deposited On:||14 Dec 2011 22:55|
|Last Modified:||08 Dec 2012 12:24|
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