Accounting window dressing and template regulation: A case study of the Australian credit union industry

D.J. Hillier, Allan Hodgson, S. Lhaopadchan, P. Stevenson-Clarke

Research output: Contribution to journalArticle

12 Citations (Scopus)

Abstract

This article documents the response of cooperative institutions that were required to adhere to new capital adequacy regulations traditionally geared for profit-maximising organisations. 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.
Original languageEnglish
Pages (from-to)579-593
Number of pages14
JournalJournal of Business Ethics
Volume83
Issue number3
DOIs
Publication statusPublished - Dec 2008

    Fingerprint

Keywords

  • cooperative stakeholder governance
  • capital adequacy regulation
  • accounting window dressing

Cite this