Accounting window Dressing and Template Regulation: A Case Study of the Australian Credit Union Industry

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Author(s)
Hillier, David
Hodgson, Allan
Stevenson-Clarke, Peta
Lhaopadchan, Suntharee
Griffith University Author(s)
Year published
2008
Metadata
Show full item recordAbstract
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 ...
View more >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
View less >
View more >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
View less >
Journal Title
Journal of Business Ethics
Volume
83
Issue
3
Copyright Statement
© 2008 Elsevier. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
Subject
Marketing
Applied ethics