Editorial of the Journal of Applied Research in Accounting and Finance (JARAF), Vol. 8, No. 2, 2013

Abstract

Welcome to this edition of the Journal of Applied Research in Accounting and Finance. Now in its eighth year, JARAF continues to encourage and promote applied research that has practical applications in the contemporary teaching and practice of accounting and corporate finance. In this issue we examine topics related to M&A activity and corporate governance, financial reporting under IAS and legal aspect of fundraising.

In our first article, Barbara Mescher and Brett Bondfield look at the nature of the corporate group structure and the challenges this presents for directors in acquitting their fiduciary duty to act in the best interest of the company. Ambiguity around the legal interpretation of this issue is highlighted through an examination of aspects of the Australian landmark case Westpac v Bell; the longest-running and most expensive case in the country’s history. A further dimension the authors bring to to this complex issue is revealed though the lens of the consolidation regime that applies to corporate groups through the income tax legislation.

Next, Elvis Jarnecic and Daniel Maroney look at the issue of securities fraud and the complexities in estimating damages for breaches of continuous disclosure. The authors highlight the absence of a generally accepted methodological approach in the Australian context for the calculation of damages and note this is in stark contrast to the legal practice in the United States. They critique the Market Model for the calculation of damages in the case of securities fraud and assess other major methods commonly adopted in the Unites States by applying these methods to actual Australian breaches of continuous disclosure to estimate losses.

Finally, Alina Maydybura, Dionigi Gerace and Brian Andrew look at the reliability of analyst forecasts in Australia by exploring the question of which method of consensus aggregation is more effective in predicting actual earnings.

Keywords: Accounting, Finance

JEL Classification: M40, M41