The aim of this paper is to investigate the extent to which benchmark beating by Australian firms can be reliably interpreted as evidence of earnings management. Researchers’ interest in evidence of benchmark beating likely reflects increasing interest in capital market incentives for earnings management (Dechow and Skinner, 2000). Managers frequently claim that they manage earnings in order to avoid so called “torpedo effects” associated with failing to achieve simple benchmarks such as negative rather than positive earnings, or avoiding a negative earnings change or surprise.
Several United States-based studies indicate that an unusually large number of firms manage to report a small (i.e., positive) income or a small increase in earnings. Despite differences in firm size, and institutional differences such as accounting standards, enforcement procedures, minimum financial reporting period and the extent of analyst following, Holland and Ramsay (2003) report similar results for Australian firms, and interpret this as evidence of earnings management by Australian firms.
Stock option grants to non-executive employees have become an important component of compensation policy in recent decades (Mehran and Tracy (2001), Murphy (2003)). While there is no firm consensus in the literature as to why options are granted to non-executives, many economic studies of non-executive option programs argue that free-riding among employees will outweigh any incentive effects provided by option compensation. Indeed, non-executive employee options have been referred to as incentives that have no incentive effects (Oyer (2004)), and several studies of non-executive option programs argue that pay-for performance is unlikely to be the primary motivation behind these option grants.
No written documents whatsoever on the construction of Chandi Borobudur survive. Nor are there any references to the authority who had it built or the purpose for which it was intended. However, inscriptions carved above the reliefs on the ‘hidden foot’ of the monument (see page 18) have graphical features similar to those in the script commonly used in royal charters between the last quarter of the eighth century and the first decades of the ninth. The obvious conclusion is that Chandi Borobudur was very likely founded around the year 800 A.D. This assumption accords quite well with Indonesian history in general and the history of Central Java in particular.
