Detailed Assignment instructions

On July 23 2019, the Australian Prudential Regulation Authority (APRA), which is responsible for regulating banks, insurance and superannuation companies in Australia, issued a Discussion Paper for Consultation “Strengthening Prudential Requirements for Remuneration” (download here) with recommendations for regulatory change concerning executive remuneration. One of the recommendations relates to potential clawback of variable remuneration (i.e., executive bonuses - refer APRA 2019 Ch 5) for senior executives in significant financial institutions.

Your task is to write a submission on the Consultation Paper that provides information to the Chair of APRA in the form of a Report# concerning what we know from academic research about bonus or salary clawbacks. Despite previous proposals to implement clawbacks, Australia has never implemented such a policy, but the United States and Europe, amongst other countries, have used clawbacks to deter manipulation of accounting numbers to maximise bonuses. You are to include what we know about clawbacks from at least three quality scholarly journal articles from journal titles listed on the Australian Business Deans Council (ABCD*) journal list in your explanation of what the research tells us. Please note that it is NOT the article titles that you will find on this list but the journal titles (e.g. Journal of Accounting and Economics).

Reference:

Australian Prudential Regulation Authority (APRA). Strengthening Prudential Requirements for Remuneration. (23 July 2019).

Rankin, M., Ferlauto, K., McGowan, S. & Stanton, P. (2018) Contemporary Issues in Accounting. 2nd Ed. Wiley. Australia.

Deegan, C. (2014) Financial Accounting Theory. McGraw Hill. Australia 

The Report should include:

 Title Page

 Contents Page

 An Executive Summary

 An Introduction explaining the purpose of your submission

 Your explanation of what your three chosen articles*** from journal titles, appropriately referenced using Harvard style in-text referencing, tell us about the merit or otherwise of implementing clawback regulation

 Conclusion (including your recommendation based on the research evidence you present)

 References – alphabetical by first author’s family name.