Purpose – The purpose of this paper is to examine intellectual capital reporting patterns of New Zealand companies over a longitudinal period, comparing knowledge intensive companies with traditional product-based companies. Design/methodology/approach – Content analysis was used to examine the intellectual capital reporting of five knowledge intensive companies and five traditional product-based companies listed on the New Zealand Stock Exchange during 2004-2010. Findings – The longitudinal study found that although there was an increase in intellectual capital reporting from 2004 to 2010, there was no strong pattern reflecting a marked increase in reporting over the time period. The findings also show that the level of intellectual capital reporting cannot be determined by the type of organisation. Further, the majority of intellectual capital reporting was found to be in discursive form and only a small percentage of reporting conveyed negative news. Research limitations/implications – The results of this study are limited by the small sample size overall and the small number of companies in both the knowledge intensive and the traditional product-based groups. Practical implications – The research suggests areas that could be considered by regulatory bodies and policy makers when developing more informed intellectual capital reporting guidelines. Originality/value – This research provides a basis for further research, debate and action regarding intellectual capital in both academia and practice. Longitudinal intellectual capital reporting research and distinctions between knowledge intensive and traditional product-based companies have seldom been undertaken. Consequently little is known about the changes in intellectual capital reporting over time or the differences in intellectual capital reporting, if any, between type of company.

The purpose of this paper is to investigate the effect of better compliance with corporate governance regulation on managerial accruals (discretionary accruals) in New Zealand listed companies. Unlike previous research of earnings management, Jones model (Jones 1991), Modified Jones model and Performance Matched Accruals Model (Kothari, Leone, & Wasley, 2005) this research focuses on free cash flow as a measure of discretionary accruals instead of cash flow from operating activities. Univariate and multivariate regression analysis was done on 70 New Zealand listed firms over the period of 2000 -2007 (inclusive). Results found that better compliance with corporate governance reduces discretionary accruals implying lower managerial opportunistic behaviour. Consistent with existing theories and models of discretionary accruals, this research documents that free cash flow increase managerial discretion by comparing with commonly used accruals model such as Jones Model, Modified Jones Model and Performance Matched Accruals Model. This study provides insights to regulators in developing corporate governance and financial reporting guidelines. It suggests that 'Comply or Explain' form of soft regulation reduces managerial discretion with stock exchange listing. This research uses a comparative analysis of traditional discretionary accrual measure with free cash flow approach of discretionary accruals. Moreover, an integration approach of discretionary accrual measure was never done in New Zealand. AbstractThe purpose of this paper is to investigate the effect of better compliance with corporate governance regulation on managerial accruals (discretionary accruals) in New Zealand listed companies. Unlike previous research of earnings management, Jones model (Jones 1991), Modified Jones model and Performance Matched Accruals Model (Kothari, Leone, & Wasley, 2005) this research focuses on free cash flow as a measure of discretionary accruals instead of cash flow from operating activities. Univariate and multivariate regression analysis was done on 70 New Zealand listed firms over the period of 2000 -2007 (inclusive). Results found that better compliance with corporate governance reduces discretionary accruals implying lower managerial opportunistic behaviour. Consistent with existing theories and models of discretionary accruals, this research documents that free cash flow increase managerial discretion by comparing with commonly used accruals model such as Jones Model, Modified Jones Model and Performance Matched Accruals Model. This study provides insights to regulators in developing corporate governance and financial reporting guidelines. It suggests that 'Comply or Explain' form of soft regulation reduces managerial discretion with stock exchange listing. This research uses a comparative analysis of traditional discretionary accrual measure with free cash flow approach of discretionary accruals. Moreover, an integration approach of discretionary accrual measure was never done in New Zealand. 3

The failures of corporations such as Enron, WorldCom and HIH Insurance, to name but a few, have heightened investor awareness of the need to not only evaluate company performance, but also to consider the possibility that financial statements may not be a true reflection of company results, as fraudulent activities may have occurred during the reporting period. Since parties who are outside of the firm do not have access to pertinent information, they have to rely upon published financial and non-financial data to form an opinion regarding performance and/or the risk that fraudulent activities may have occurred. The prior literature shows a relationship between weak corporate governance and fraudulent activities, although most if not all of this research relates to Western economies. The differences in institutional setting e.g. cultural values and legal environment in Malaysia would not give the same findings with the study in western economies. Composing of many ethnicities, Malaysia is a multicultural country. With each ethnic group upholding its own culture, values and belief, businesses are conducted according to each ethnic’s culture. The results of this study could shed some light on the influence of institutional setting regarding corporate governance. Companies that were charged with accounting and auditing offences from year 2003 to 2007 were selected as the fraudulent samples. Data was collected from the years these companies were charged with fraud and the year prior to that. Logistic regression analysis was carried out to determine the significant differences between fraudulent and non-fraudulent companies with respect to corporate governance characteristics. The results indicated that the size of the board and the percentage of institutional shareholdings had significant relationships with the likelihood of corporate fraud occurrences consistently across the two-year period studied. The results of this study will assist public, corporate and accounting policy makers in formulating more effective corporate governance mechanisms.

Accounting scandals are becoming perpetual in nature. They range from the ancient Mesopotamia, to the South Sea Bubble of 1720, to the famous Enron of 2001, down to Parmalat, Tesco, and Toshiba of today. The series of accounting scandals that have occurred in the last two decades calls for a greater concern by the accounting profession. The accounting scandals that have occurred in this 21st century alone have shown that there is a need to look beyond corporate governance in the fight against financial deception. In this paper, we argue that even in the face of the Sarbanes-Oxley Act (SOA) of 2002 and other regulations around the world that are targeted towards effective corporate governance, accounting scandals have never ceased to occur. Most of the legislations that have been passed in recent times were targeted at corporate governance, forgetting the crucial role that audit plays within the agency relationship. And whenever there is any revelation of fraudulent financial reporting, investors do not ask who are the directors, but the first question they ask is who are the auditors? Hence, there is a need to improve audit quality by approaching it from a forensic accounting perspective in order to reduce the incidence of financial statement frauds in this era of information revolution, thus restoring investors' confidence back in the financial reporting process and corporate governance. In this paper, we propose a forensic accounting paradigm as a viable option for reducing accounting scandals, since this will compliment corporate governance systems.

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