With the advent of technology and globalization of financial flows, corporate financial reporting has taken a paradigm shift. Though the companies have not left behind the traditional practice of publishing annual reports to send them across to the stakeholders and shareholders, they have also initiated necessary steps to leverage technology in terms of making the information available to the world. On the other hand, scams such as WorldCom, Enron and Satyam are pointing to the need of timely and continuous information from regulators. These forces are inducing corporates to build up and publish information regarding their economic performance, corporate governance, social and ecological issues, promotional as well as other information at an increased frequency in detail and in a variety of formats. In this context, the paper, “Web-Based Corporate Reporting Practices in India” by M C Garg and Divya Verma, scrutinizes the use of web-based reporting by corporates by calculating an Internet disclosure index on the basis of web-based financial and non-financial disclosures of corporates. The authors opine that as the nature of web-based reporting being voluntary, the regulatory bodies should homogenize web-based disclosures of the company, including other information such as non-financial and marketing, to enable the Internet reporting to be the main medium of reporting and disclosure practices.

There is also a shift in the overall reporting and accountability of the governments across the globe with the right to information available to the citizens of the government representatives. The governments’ focus and activities are witnessing a fundamental change in terms of policies, answerability and liability. Awareness among the people has increased in terms of what the governments are doing, and how they are using the resources to provide better services to the public at large. On the other hand, the Comptroller and Audit Generals are doing the performance audit to evaluate and also certify the spending of the governments across the world. The paper, “From Project Audit to Performance Audit: Evolution of Performance Auditing in Australia” by Sarowar Hossain, makes an attempt to present the development of performance audit in Australia. The paper finds that the progress of performance audit in Australia is not candidly allied to the occasion; fairly it is more directly connected with the transformation in strategies, actions and purpose of the governments.

Ministry of Higher Education and Human Resources Development is spending huge amounts across the country to improve the education in the universities. In the process of bringing improvement and betterment, higher education in India, as a sector, is witnessing a sea change in the country, which can be called structural adjustments across, along with the proposal of opening up of the sector for the foreign universities to set up new universities. At present, a majority of the Higher Education Institutions (HEIs) in India are run by the central and state governments, and a reliable system to establish the costs at different levels is not prevailing, leading to the significant and perceptible fact that HEIs in the country need an identical and standard cost reporting system as that of the developed economies. The paper, “Cost Management Practices: A Cross-Country Study with Special Reference to Higher Educational Institutions in India” by Bibhas Chandra and J K Pattanayak, makes an attempt to present the practices adopted in different developed countries such as the US, the UK, Australia, New Zealand and Canada and proposes a suitable activity-based costing and management model at the university level and its successful implementation for the overall performance improvement in universities.

Information technology has been instrumental in changing the methods of manufacturing across the globe and in all the segments. The recessionary trends have forced all the companies to focus on their R&D to improve their overall performance in terms of minimizing cost and innovating new products which would have a higher demand. The paper, “An Analysis of Raw Material Cost in Indian Manufacturing Industry” by Shurveer S Bhanawat makes an effort to understand if there is any significant difference exists among different manufacturing industries and also to analyze the portion of cost of inputs in the overall cost of manufacturing industry, which comprise pharmaceutical, textile, cement, metal, oil, automobile, consumer goods and electrical industries. The paper finds that there exists a significant change in the raw material cost as percentage of gross sales.

Accounting for the current assets and current liabilities with a focus on liquidity can reveal many major issues that may become a big challenge for a firm, particularly at a time when the economy is witnessing recessionary trends. That short-term solvency of the firms may be in question and lead to the loss of brand and business due to funds crunch, highlights the importance of liquidity management in the functional area of finance. Corporates are setting up treasury departments and evolving better strategies to manage liquidity. In this background, the paper, “Liquidity Management and Control: A Comparative Study of Torrent Pharma and Cipla” by S C Bardia and Shweta Kastiya, throws light on the liquidity management of the two well-known companies—Torrent and Cipla—using a case based approach. The study results reveal that the rotation of working capital was quicker in Torrent than in Cipla and the credit and collection policy adopted by Torrent is more efficient than that of Cipla.

-- Vunyale Narender
Consulting Editor