Academic literature on the topic 'Corporations Australia Auditing'

All companies (other than exempt proprietary ones) are required by the Corporations Law to have their books audited. For about 150 years there has been a controversy surrounding the auditors' role — whether they should be functioning as a ‘watchdog’ or a ‘bloodhound’. In recent years the auditing profession in Australia has been experiencing a credibility crisis. A spate of much publicised corporate collapses in the late 1980s at a time of economic recession has been instrumental in: (i) the Australian Securities Commission (ASC) adopting more heavy-handed ways of policing auditing standards; (ii) rocketing audit fees; and (iii) the accounting bodies redefining their role and revising auditing standards. This paper focuses on current approaches to regulating the auditing profession, and discusses their effectiveness, drawing on the criminological literature relevant to professional advisers, white collar illegality, and deterrence.

A significant part of the development funds for the INPEX-operated Ichthys liquefied natural gas (LNG) Project comes from a record-breaking US$20 billion project financing package, which involves commitments from eight export credit agencies and over 24 global banks. Due to the scale and complexity of the project and the size of the investment, there is a high level of ongoing scrutiny by the project’s lenders with a particular focus on social and environmental performance. Financing from lenders demanded extra requirements to obtain and maintain the project’s social licence. This included a commitment to ensure the project’s plans for managing environmental and social issues met additional obligations, including International Finance Corporation’s Environmental and Social Performance Standards. While these extra commitments posed some challenges, they have also supported INPEX and the project to improve its approach in engaging and working with local communities, including Aboriginal and Torres Strait Islander peoples, in the areas in which the project operates. The auditing of these requirements also provided independent and objective performance reviews that have supported INPEX and the project to continuously improve performance. The requirements have also encouraged INPEX to engage effectively and more openly with stakeholders to further develop and deepen positive and trusted relationships with key stakeholders. Through delivering on commitments to lenders, INPEX has raised the bar, to deliver higher standards of social performance. This has reaffirmed the Company’s commitment to community and social engagement and strengthened our performance within Australia, by adopting best practice approaches.

There is a moment in Al Gore’s 2006 documentary An Inconvenient Truth devised to expose the sheer audacity of fossil fuel lobby groups in the United States. In their attempts to address significant scientific consensus and growing public concern over climate change, these groups are resorting to what Gore’s film suggests are grotesque distortions of fact. A particular example highlighted in the film is the Competitive Enterprise Institute’s (CPE—a lobby group funded by ExxonMobil) “pro” energy industry advertisement: “Carbon dioxide”, the ad states. “They call it pollution, we call it life.” While on the one hand employing rhetoric against the “inconvenient truth” that carbon dioxide emissions are ratcheting up the Earth’s temperature, these advertisements also pose a question – though perhaps unintended – that is worth addressing. Where does life reside? This is not an issue of essentialism, but relates to the claims, materials and technologies through which life as a political object emerges. The danger of entertaining the vested interests of polluting industry in a discussion of climate change and its biopolitics is countered by an imperative to acknowledge the ways in which multiple positions in the climate change debate invoke and appeal to ‘life’ as the bottom line, or inviolable interest, of their political, social or economic work. In doing so, other questions come to the fore that a politics of climate change framed in terms of moral positions or competing values will tend to overlook. These questions concern the manifold practices of life that constitute the contemporary terrain of the political, and the actors and instruments put in this employ. Who speaks for life? And who or what produces it? Climate change as a matter of concern (Latour) has gathered and generated a host of experts, communities, narratives and technical devices all invested in the administration of life. It is, as Malcom Bull argues, “the paradigmatic issue of the new politics,” a politics which “draws people towards the public realm and makes life itself subject to the caprices of state and market” (2). This paper seeks to highlight the politics of life that have emerged around climate change as a public issue. It will argue that these politics appear in incremental and multiple ways that situate an array of actors and interests as active in both contesting and generating the terms of life: what life is and how we come to know it. This way of thinking about climate change debates opposes a prevalent moralistic framework that reads the practices and discourses of debate in terms of oppositional positions alone. While sympathies may flow in varying directions, especially when it comes to such a highly charged and massively consequential issue as climate change, there is little insight to be had from charging the CPE (for example) with manipulating consumers, or misrepresenting well-known facts. Where new and more productive understandings open up is in relation to the fields through which these gathering actors play out their claims to the project of life. These fields, from the state, to the corporation, to the domestic sphere, reveal a complex network of strategies and devices that seek to secure life in constantly renovated terms. Life Politics Biopolitical scholarship in the wake of Foucault has challenged life as a pre-given uncritical category, and sought to highlight the means through which it is put under question and constituted through varying and composing assemblages of practitioners and practices. Such work regards the project of human well-being as highly complex and technical, and has undertaken to document this empirically through close attention to the everyday ecologies in which humans are enmeshed. This is a political and theoretical project in itself, situating political processes in micro, as well as macro, registers, including daily life as a site of (self) management and governance. Rabinow and Rose refer to biopolitical circuits that draw together and inter-relate the multiple sites and scales operative in the administration of life. These involve not just technologies, rationalities and regimes of authority and control, but also politics “from below” in the form of rights claims and community formation and agitation (198). Active in these circuits, too, are corporate and non-state interests for whom the pursuit of maximising life’s qualities and capabilities has become a concern through which “market relations and shareholder value” are negotiated (Rabinow and Rose 211). As many biopolitical scholars argue, biopower—the strategies through which biopolitics are enacted—is characteristic of the “disciplinary neo-liberalism” that has come to define the modern state, and through which the conduct of conduct is practiced (Di Muzio 305). Foucault’s concept of governmentality describes the devolution of state-based disciplinarity and sovereignty to a host of non-state actors, rationalities and strategies of governing, including the self-managing subject, not in opposition to the state, but contributing to its form. According to Bratich, Packer and McCarthy, everyday life is thus “saturated with governmental techniques” (18) in which we are all enrolled. Unlike regimes of biopolitics identified with what Agamben terms “thanopolitics”—the exercise of biopower “which ultimately rests on the power of some to threaten the death of others” (Rabinow and Rose 198), such as the Nazi’s National Socialism and other eugenic campaigns—governmental arts in the service of “vitalist” biopolitics (Rose 1) are increasingly diffused amongst all those with an “interest” in sustaining life, from organisations to individuals. The integration of techniques of self-governance which ask the individual to work on themselves and their own dispositions with State functions has broadened the base by which life is governed, and foregrounded an unsettled terrain of life claims. Rose argues that medical science is at the forefront of these contemporary biopolitics, and to this effect “has […] been fully engaged in the ethical questions of how we should live—of what kinds of creatures we are, of the kinds of obligations that we have to ourselves and to others, of the kinds of techniques we can and should use to improve ourselves” (20). Asking individuals to self-identify through their medical histories and bodily specificities, medical cultures are also shaping new political arrangements, as communities connected by shared genetics or physical conditions, for instance, emerge, evolve and agitate according to the latest medical knowledge. Yet it is not just medicine that provokes ethical work and new political forms. The environment is a key site for life politics that entails a multi-faceted discourse of obligations and entitlements, across fields and scales of engagement. Calculating Environments In line with neo-liberal logic, environmental discourse concerned with ameliorating climate change has increasingly focused upon the individual as an agent of self-monitoring, to both facilitate government agendas at a distance, and to “self-fashion” in the mode of the autonomous subject, securing against external risks (Ong 501). Climate change is commonly represented as such a risk, to both human and non-human life. A recent letter published by the Royal Australasian College of Physicians in two leading British medical journals, named climate change as the “biggest global health threat of the twenty-first century” (Morton). As I have argued elsewhere (Potter), security is central to dominant cultures of environmental governance in the West; these cultures tie sustainability goals to various and interrelated regimes of monitoring which attach to concepts of what Clark and Stevenson call “the good ecological citizen” (238). Citizenship is thus practiced through strategies of governmentality which call on individuals to invest not just in their own well-being, but in the broader project of life. Calculation is a primary technique through which modern environmental governance is enacted; calculative strategies are seen to mediate risk, according to Foucault, and consequently to “assure living” (Elden 575). Rationalised schemes for self-monitoring are proliferating under climate change and the project of environmentalism more broadly, something which critics of neo-liberalism have identified as symptomatic of the privatisation of politics that liberal governmentality has fostered. As we have seen in Australia, an evolving policy emphasis on individual practices and the domestic sphere as crucial sites of environmental action – for instance, the introduction of domestic water restrictions, and the phasing out of energy-inefficient light bulbs in the home—provides a leading discourse of ethico-political responsibility. The rise of carbon dioxide counting is symptomatic of this culture, and indicates the distributed fields of life management in contemporary governmentality. Carbon dioxide, as the CPE is keen to point out, is crucial to life, but it is also—in too large an amount—a force of destruction. Its management, in vitalist terms, is thus established as an effort to protect life in the face of death. The concept of “carbon footprinting” has been promoted by governments, NGOs, industry and individuals as a way of securing this goal, and a host of calculative techniques and strategies are employed to this end, across a spectrum of activities and contexts all framed in the interests of life. The footprinting measure seeks to secure living via self-policed limits, which also—in classic biopolitical form—shift previously private practices into a public realm of count-ability and accountability. The carbon footprint, like its associates the ecological footprint and the water footprint, has developed as a multi-faceted tool of citizenship beyond the traditional boundaries of the state. Suggesting an ecological conception of territory and of our relationships and responsibilities to this, the footprint, as a measure of resource use and emissions relative to the Earth’s capacities to absorb these, calculates and visualises the “specific qualities” (Elden 575) that, in a spatialised understanding of security, constitute and define this territory. The carbon footprint’s relatively simple remit of measuring carbon emissions per unit of assessment—be that the individual, the corporation, or the nation—belies the ways in which life is formatted and produced through its calculations. A tangled set of devices, practices and discourses is employed to make carbon and thus life calculable and manageable. Treading Lightly The old environmental adage to “tread lightly upon the Earth” has been literalised in the metaphor of the footprint, which attempts both to symbolise environmental practice and to directly translate data in order to meaningfully communicate necessary boundaries for our living. The World Wildlife Fund’s Living Planet Report 2008 exemplifies the growing popularity of the footprint as a political and poetic hook: speaking in terms of our “ecological overshoot,” and the move from “ecological credit to ecological deficit”, the report urges an attendance to our “global footprint” which “now exceeds the world’s capacity to regenerate by about 30 per cent” (1). Angela Crombie’s A Lighter Footprint, an instruction manual for sustainable living, is one of a host of media through which individuals are educated in modes of footprint calculation and management. She presents a range of techniques, including carbon offsetting, shifting to sustainable modes of transport, eating and buying differently, recycling and conserving water, to mediate our carbon dioxide output, and to “show […] politicians how easy it is” (13). Governments however, need no persuading from citizens that carbon calculation is an exercise to be harnessed. As governments around the world move (slowly) to address climate change, policies that instrumentalise carbon dioxide emission and reduction via an auditing of credits and deficits have come to the fore—for example, the European Union Emissions Trading Scheme and the Chicago Climate Exchange. In Australia, we have the currently-under-debate Carbon Pollution Reduction Scheme, a part of which is the Australian Emissions Trading Scheme (AETS) that will introduce a system of “carbon credits” and trading in a market-based model of supply and demand. This initiative will put a price on carbon dioxide emissions, and cap the amount of emissions any one polluter can produce without purchasing further credits. In readiness for the scheme, business initiatives are forming to take advantage of this new carbon market. Industries in carbon auditing and off-setting services are consolidating; hectares of trees, already active in the carbon sequestration market, are being cultivated as “carbon sinks” and key sites of compliance for polluters under the AETS. Governments are also planning to turn their tracts of forested public land into carbon credits worth billions of dollars (Arup 7). The attachment of emission measures to goods and services requires a range of calculative experts, and the implementation of new marketing and branding strategies, aimed at conveying the carbon “health” of a product. The introduction of “food mile” labelling (the amount of carbon dioxide emitted in the transportation of the food from source to consumer) in certain supermarkets in the United Kingdom is an example of this. Carbon risk analysis and management programs are being introduced across businesses in readiness for the forthcoming “carbon economy”. As one flyer selling “a suite of carbon related services” explains, “early action will give you the edge in understanding and mitigating the risks, and puts you in a prime position to capitalise on the rewards” (MGI Business Solutions Worldwide). In addition, lobby groups are working to ensure exclusions from or the free allocation of permits within the proposed AETS, with degrees of compulsion applied to different industries – the Federal Government, for instance, will provide a $3.9 billion compensation package for the electric power sector when the AETS commences, to enable their “adjustment” to this carbon regime. Performing Life Noortje Mares provides a further means of thinking through the politics of life in the context of climate change by complicating the distinction between public and private interest. Her study of “green living experiments” describes the rise of carbon calculation in the home in recent years, and the implementation of technologies such as the smart electricity meter that provides a constantly updating display of data relating to amounts and cost of energy consumed and the carbon dioxide emitted in the routines of domestic life. Her research tracks the entry of these personal calculative regimes into public life via internet forums such as blogs, where individuals notate or discuss their experiences of pursing low-carbon lifestyles. On the one hand, these calculative practices of living and their public representation can be read as evidencing the pervasive neo-liberal governmentality at work in contemporary environmental practice, where individuals are encouraged to scrupulously monitor their domestic cultures. The rise of auditing as a technology of self, and more broadly as a technique of public accountability, has come under fire for its “immunity-granting role” (Charkiewicz 79), where internal audits become substituted for external compliance and regulation. Mares challenges this reading, however, by demonstrating the ways in which green living experiments “transform everyday material practices into practices of public involvement” that (118) don’t resolve or pin down relations between the individual, the non-human environment, and the social, or reveal a mappable flow of actions and effects between the public realm and the home. The empirical modes of publicity that these individuals employ, “the careful recording of measurements and the reliable descriptions of sensory observation, so as to enable ‘virtual witnessing’ by wider audiences”, open up to much more complex understandings than one of calculative self-discipline at work. As “instrument[s] of public involvement” (120), the experiments that Mares describe locate the politics of life in the embodied socio-material entanglements of the domestic sphere, in arrangements of humans and non-human technologies. Such arrangements, she suggests, are ontologically productive in that they introduce “not only new knowledge, but also new entities […] to society” (119), and as such these experiments and the modes of calculation they employ become active in the composition of reality. Recent work in economic sociology and cultural studies has similarly contended that calculation, far from either a naturalised or thoroughly abstract process, relies upon a host of devices, relations, and techniques: that is, as Gay Hawkins explains, calculative processes “have to be enacted” (108). Environmental governmentality in the service of securing life is a networked practice that draws in a host of actors, not a top-down imposition. The institution of carbon economies and carbon emissions as a new register of public accountability, brings alternative ways to calculate the world into being, and consequently re-calibrates life as it emerges from these heterogeneous arrangements. All That Gathers Latour writes that we come to know a matter of concern by all the things that gather around it (Latour). This includes the human, as well as the non-human actors, policies, practices and technologies that are put to work in the making of our realities. Climate change is routinely represented as a threat to life, with predicted (and occurring) species extinction, growing numbers of climate change refugees, dispossessed from uninhabitable lands, and the rise of diseases and extreme weather scenarios that put human life in peril. There is no doubt, of course, that climate change does mean death for some: indeed, there are thanopolitical overtones in inequitable relations between the fall-out of impacts from major polluting nations on poorer countries, or those much more susceptible to rising sea levels. Biosocial equity, as Bull points out, is a “matter of being equally alive and equally dead” (2). Yet in the biopolitical project of assuring living, life is burgeoning around the problem of climate change. The critique of neo-liberalism as a blanketing system that subjects all aspects of life to market logic, and in which the cynical techniques of industry seek to appropriate ethico-political stances for their own material ends, are insufficient responses to what is actually unfolding in the messy terrain of climate change and its biopolitics. What this paper has attempted to show is that there is no particular purchase on life that can be had by any one actor who gathers around this concern. Varying interests, ambitions, and intentions, without moral hierarchy, stake their claim in life as a constantly constituting site in which they participate, and from this perspective, the ways in which we understand life to be both produced and managed expand. This is to refuse either an opposition or a conflation between the market and nature, or the market and life. It is also to argue that we cannot essentialise human-ness in the climate change debate. For while human relations with animals, plants and weathers may make us what we are, so too do our relations with (in a much less romantic view) non-human things, technologies, schemes, and even markets—from carbon auditing services, to the label on a tin on the supermarket shelf. As these intersect and entangle, the project of life, in the new politics of climate change, is far from straightforward. References An Inconvenient Truth. Dir. Davis Guggenheim. Village Roadshow, 2006. Arup, Tom. “Victoria Makes Enormous Carbon Stocktake in Bid for Offset Billions.” The Age 24 Sep. 2009: 7. Bratich, Jack Z., Jeremy Packer, and Cameron McCarthy. “Governing the Present.” Foucault, Cultural Studies and Governmentality. Ed. Bratich, Packer and McCarthy. Albany: State University of New York Press, 2003. 3-21. Bull, Malcolm. “Globalization and Biopolitics.” New Left Review 45 (2007): 12 May 2009 . < http://newleftreview.org/?page=article&view=2675 >. Charkiewicz, Ewa. “Corporations, the UN and Neo-liberal Bio-politics.” Development 48.1 (2005): 75-83. Clark, Nigel, and Nick Stevenson. “Care in a Time of Catastrophe: Citizenship, Community and the Ecological Imagination.” Journal of Human Rights 2.2 (2003): 235-246. Crombie, Angela. A Lighter Footprint: A Practical Guide to Minimising Your Impact on the Planet. Carlton North, Vic.: Scribe, 2007. Di Muzio, Tim. “Governing Global Slums: The Biopolitics of Target 11.” Global Governance. 14.3 (2008): 305-326. Elden, Stuart. “Governmentality, Calculation and Territory.” Environment and Planning D: Society and Space 25 (2007): 562-580. Hawkins, Gay. The Ethics of Waste: How We Relate to Rubbish. Sydney: University of New South Wales Press, 2006. Latour, Bruno. “Why Has Critique Run Out of Steam?: From Matters of Fact to Matters of Concern.” Critical Inquiry 30.2 (2004): 225-248. Mares, Noortje. “Testing Powers of Engagement: Green Living Experiments, the Ontological Turn and the Undoability and Involvement.” European Journal of Social Theory 12.1 (2009): 117-133. MGI Business Solutions Worldwide. “Carbon News.” Adelaide. 2 Aug. 2009. Ong, Aihwa. “Mutations in Citizenship.” Theory, Culture and Society 23.2-3 (2006): 499-505. Potter, Emily. “Footprints in the Mallee: Climate Change, Sustaining Communities, and the Nature of Place.” Landscapes and Learning: Place Studies in a Global World. Ed. Margaret Somerville, Kerith Power and Phoenix de Carteret. Sense Publishers. Forthcoming. Rabinow, Paul, and Nikolas Rose. “Biopower Today.” Biosocieties 1 (2006): 195-217. Rose, Nikolas. “The Politics of Life Itself.” Theory, Culture and Society 18.6 (2001): 1-30. World Wildlife Fund. Living Planet Report 2008. Switzerland, 2008.

The purpose of this study was to examine the extent of voluntary environmental disclosure in relation to firm-specific characteristics of listed mineral mining firms within the stakeholder theory framework developed by Ullmann (1985). Three indices, word index, unweighted index and weighted index, were applied to measure the extent of total environmental disclosure and categories of total disclosure, which were environmental policy and strategy, public recognition of environmental activities, prevention or repair of environmental damage and environmental liabilities. A sample of 104 mineral firms was selected from the Australian Graduate . School of Management Annual Report Microfiche File for 1993. The• relationships between the extent of environmental disclosure for the three indices, for total disclosure and each category of disclosure, and firm . characteristics for twelve models in the stakeholder theory were tested by using multivariate analysis

This study examines the incentives of Australian listed mineral mining companies within the stakeholder theoretical framework to disclose socially responsible information in their corporate annual report. The three dimensions of the stakeholder theory were empirically tested to explain the association of a social disclosure model comprising categories of social disclosure for environment, energy, product and services, human resources and community involvement, with nine firm-specific characteristics. The sample of 179 Australian listed mineral mining companies for the financial year ending 1994 was obtained by personal contact. The extent of social disclosure was measured by a dichotomous index against the social disclosure model. Results of multivariate tests provide evidence that Membership of the Australian Mining Industry Council (Stakeholder Power dimension), and company size (a Control Variable) which was jointly represented by three surrogates (total assets, total sales, and market capitalisation), to be the most significant variables associated with the social disclosure model. The presence of a social responsibility group (Strategic Posture dimension) was also significantly related to the extent of total disclosure and four categories of social disclosure (environment, product and services, human resources, and community involvement). Company age (a Control Variable) was significantly associated with energy related disclosure. Commercial production (a Control Variable) was significant to the total disclosure and two categories of social disclosure (environment, and human resources). Return on equity, and systematic risk (Economic Performance dimension) did not explain social disclosure. The research findings imply that economic performance measures derived from the financial statements of corporate annual reports do not seem to be reliable surrogates for evaluating voluntary social disclosure. To improve the extent of disclosure of socially responsible information, accounting regulators may need to consider issuing an accounting standard on corporate social responsibility disclosure.

Despite its contribution to the economy, the resources sector faces growing pressure from stakeholders, including investors and regulators, for managing the environmental impacts of its operations. Being an environmentally sensitive sector, resource sector companies should provide disclosures of their environmental footprint in their annual and/or sustainability reports. However, it is claimed that, given that environmental disclosures in annual and sustainability reports are largely voluntary, the quality of those disclosures are questionable with respect to their relevance and faithful representation. Therefore, the overall objective of this thesis was to explore the quality of environmental disclosures by Australian resources sector companies. This was undertaken through an assessment of quality based on existing reporting frameworks and assessment of investors’ perspectives on the quality of disclosures. Thus, the aim of the project was twofold: first, to identify the extent to which corporate environmental disclosures align with the quality attributes suggested in established regulatory guidelines and frameworks; and second, to obtain investors’ perspectives regarding corporate environmental initiatives and environmental disclosures.

The auditor's role in the detection of fraudulent or illegal activities has posed a continuing dilemma. In the 1980's, a lengthy period of large profits made by Bond, Skase and others, was followed by corporate collapses and subsequent findings of significant losses. Recently, the large corporate collapses of HIH, Enron and Worldcom have again posed the question 'where were the auditors'? The auditor's failure to detect major weaknesses, fraud or illegal activities in the failed corporations has led to a widening of the audit expectation gap. This is the gap that exists between what auditors see as their role and what the financial commumity expects. Damaging publicity arising from subsequent litigation where auditors are found negligent focuses further attention on this problem. This research examines the AWA case. In AWA, the audit firm of Deloittes was faced with a combination of factors.