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Professor Andrew Ferguson

Biography

Andrew Ferguson is a Professor of Financial Accounting at UTS. His research has been published in leading journals both nationally and internationally including The Accounting Review, Contemporary Accounting Research, Pacific Basin Finance Journal, International Journal of Auditing, Accounting and Finance, Australian Journal of Management and Abacus. Andrew has recently received a CIFR (Centre for International Finance and Regulation) grant relating to Self Managed Superannuation Fund's.

Professor, Accounting Discipline Group
BComm, PhD
 
Phone
+61 2 9514 3565

Research Interests

Disclosure; Valuation; Capital Markets; Auditing; Extractive Industries

Can supervise: Yes

Supervised Student(s)

Alexey Feigin - Phd Student, Proposed Title/topic: Measuring the level of informed trading prior to a material mining stock progress report announcement.

Nelson Ma - PhD Student, Proposed Title/Topic: Auditing and the Capital Markets

Financial Accounting

Conferences

Ferguson, A.C., Pereira Pundrich, G. & Raftery, A.M. 2012, 'Auditor industry specialisation and market segmentation; evidence from the Perth mining cash-box market', 35th Annual Congress European Accounting Association Programme, European Accounting Association (EAA), Ljubljana, Slovenia.
Ferguson, A.C., Pereira Pundrich, G. & Raftery, A.M. 2012, 'Auditor industry specialisation and market segmentation: Evidence from the Perth mining cashbox market', AFAANZ Conference, AFAANZ, Melbourme, Australia.
Ferguson, A.C., Pereira Pundrich, G. & Raftery, A.M. 2012, 'Auditor industry specialisation and market segmentation: Evidence from Perth mining cashboxes', British Accounting and Finance Association Annual Conference 2012, British Accounting and Finance Association, Brighton, United Kingdom.
Brown, P., Feigin, A. & Ferguson, A.C. 2011, 'Daily and intraday market reactions to a star resource analyst's recommendations', AFAANZ Conference, AFAANZ, Darwin, Australia.
Brown, P., Ferguson, A.C. & Lam, P. 2011, 'Do shareholders gain from reverse takeover transactions? An analysis of the shell premium', AFAANZ Conference, AFAANZ, Darwin, Australia.
Ferguson, A.C. & Walker, A. 2011, 'Restoration and rehabilitation provisions in the Australian materials and energy sectors: Estimation and valuation implications', AFAANZ Conference, AFAANZ, Darwin, Australia.
Brown, P., Clout, V. & Ferguson, A.C. 2011, 'Market reactions to the proposed resources rent tax', AFAANZ Conference, AFAANZ, Darwin, Australia.
Brown, P.R., Ferguson, A.C. & Lam, P. 2010, 'Choice between alternative routes to go public: backdoor listing versus IPO', 2010 AFAANZ Conference Website Proceedings, Accounting and Finance Association of Australia and New Zealand Conference, AFAANZ, Christchurch, New Zealand, pp. 1-38.
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Going public is the dream of many private companies. It represents a major milestone in the development of a firm. The listing status brings a lot of advantages to a firm. Some of these advantages include (1) access to capital markets and lower cost of capital; (2) enhanced company reputation and profile; (3) providing liquidity for owners to cash out; and (4) use of stock to pay for acquisitions, among others. However, going public is also a costly process. The out-of-pocket costs for an IPO typically involve fees paid for investment banks, accountants, auditors, lawyers, other experts, underwriters and brokers. The IPO firm will also have to pay for the printing of a prospectus and listing fees and other compliance costs. Other hidden costs entail underpricing, more stringent disclosure and regulatory requirements and the time spent by senior management in preparing the company for public listing.
Brown, P.R., Ferguson, A.C. & Sherry, S. 2009, 'Tax-Loss Selling and Managerial Discretion', AFAANZ Conference Proceedings 2009 Website, Accounting and Finance Association of Australia and New Zealand Conference, AFAANZ, Adelaide, Australia, pp. 1-32.
We present evidence on the relationship between tax-loss selling (TLS), where investors with taxable gains sell stocks that have declined in value just before the fiscal year-end to generate offsetting tax losses, and managers incentives to use discretionary disclosure as a vehicle for influencing stock prices. We hypothesise that firms whose stock represents greater potential tax losses in investors portfolios at year-end will increase their disclosure level in June to prevent further share price falls due to TLS. Using the number of discretionary, market-sensitive news releases in the Signal G announcement database to measure disclosure frequency, we find that, for a large sample drawn from all ASX firms for the years 1994 to 2007, stocks with larger negative returns have higher disclosure in June. This is particularly true of small mining stocks. However, we find limited evidence that this increased disclosure contributes to the higher July returns earned by stocks that experienced significant TLS in June.
Ferguson, A.C. & Matolcsy, Z.P. 2004, 'Audit Quality and Post Earnings Announcement Drift', -, 5th Asia-Pacific Journal of Accounting & Economics Symposium, -, Kuala Lumpur, Malaysia.
Ferguson, A.C. & Matolcsy, Z.P. 2003, 'Audit quality and post earnings announcement drifts', 2003 Accounting and Finance Association of Australia and New Zealand Conference, 2003 Accounting and Finance Association of Australia and New Zealand, AFAANZ, Brisbane, pp. 1-27.
Ferguson, A.C. & Matolcsy, Z.P. 2003, 'Audit quality and post earnings announcement drifts', European Auditing Research Network 2003 Symposium, European Auditing Research Network 2003 Symposium, EARNet, Manchester, UK, pp. 1-27.
Ferguson, A.C. & Matolcsy, Z.P. 2003, 'Audit quality and post earnings announcement drifts', American Accounting Association - 2003 Annual Meeting, American Accounting Association - 2003 Annual Meeting, AAA, Honolulu, USA, pp. 1-27.
Ferguson, A.C. & Matolcsy, Z.P. 2003, 'Audit quality and post earnings announcement drift', 26th Annual Congress - European Accounting Association, Annual Congress of European Accounting Association, EAA, Seville, Spain, pp. 1-27.

Journal articles

Ferguson, A. & Pündrich, G. 2015, 'Does Industry Specialist Assurance of Non-Financial Information Matter to Investors?', AUDITING: A Journal of Practice & Theory, vol. 34, no. 2, pp. 121-146.
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Brown, P., Feigin, A. & Ferguson, A. 2014, 'Market reactions to the reports of a star resource analyst', Australian Journal of Management, vol. 39, no. 1, pp. 137-158.
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Keith Goode has for many years been one of Australia's highest profile mining analysts. He is unique among them, being a commissioned analyst. Goode's clients-mostly small cap mining companies with limited analyst coverage-pay for a report, which he publishes electronically, but only if his report is positive. Using reports published over eight years from September 2001, we estimate his clients typically benefit by about AUD$14m, or almost 10% of the company's share market value, with much of the benefit coming almost immediately after the report's release. Market liquidity surges in the first hour of trading, with the value of trades, flow of buy orders relative to sells, and level of overall activity all increasing significantly. To demonstrate significance, we develop 'fractile analysis', a robust, relatively powerful and quite general method for detecting abnormal market activity. Our study is relevant to day traders, analysts and other information intermediaries. The methodological refinement should also interest students of 'abnormal' market behaviour. © The Author(s) 2013.
Ferguson, A. & Scott, T. 2014, 'What If There Were Three? Audit Pricing within the Big 4 and the PricewaterhouseCoopers' Premium in the Australian Audit Market', International Journal of Auditing, vol. 18, no. 1, pp. 57-67.
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Ferguson, A., Pündrich, G. & Raftery, A. 2014, 'Auditor Industry Specialization, Service Bundling, and Partner Effects in a Mining-Dominated City', AUDITING: A Journal of Practice & Theory, vol. 33, no. 3, pp. 153-180.
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Ferguson, A. & Scott, T. 2014, 'The determinants and market reaction to Open Briefings: an investor relations option and evidence on the effectiveness of disclosure', Accounting & Finance, pp. n/a-n/a.
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Ferguson, A., Feigin, A. & Kean, S. 2013, 'Gold mine feasibility study disclosure in Australia: Determinants and implications', Resources Policy, vol. 38, no. 1, pp. 8-17.
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This study investigates disclosure practices for gold development companies in their feasibility studies. The information environment around feasibility studies released by developmental stage enterprises in the Australian gold mining industry is characterised by little in the way of disclosure guidance or rules. This contrasts with Canadian disclosure requirements which are highly prescriptive. Using a sample of 85 Australian gold feasibility studies, we develop a new voluntary disclosure index and consider three problems. First, we examine the association between levels of voluntary disclosure in the feasibility study and external involvement. Second, we consider whether levels of voluntary disclosure are associated with successful debt financing. Third, we analyse the relationship between levels of voluntary disclosure and a successful project outcome. Voluntary disclosure is found to be driven by the presence of an external feasibility manager and the number of external consultants named in the feasibility release. Our evidence also finds that voluntary disclosure levels are positively related to debt financing availability and project success, suggesting voluntary disclosure levels are a useful signal of project quality. © 2012 Elsevier Ltd.
Ferguson, A., Grosse, M., Kean, S. & Scott, T. 2011, 'Your Governance or Mine?', Australian Accounting Review, vol. 21, no. 4, pp. 406-417.
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In response to criticism directed at the resource sector's corporate governance, this paper examines the corporate governance and underlying firm characteristics of resource development stage entities (DSEs) relative to a size-matched sample of non-resource firms. We find that resource DSEs have different governance characteristics in the measures of board independence, chair/CEO duality and CEO cash bonuses. Furthermore, there are differences in the information environment measures of analyst following, debt levels, stock market return and stock turnover. Considering we document substantial differences in underlying firm characteristics, corporate governance differences are likely appropriate to the mining industry and should not be uniformly labelled as 'bad'. Our results suggest that media rankings based on corporate governance scores may not accurately portray the resource sector. Overall, our results are of interest to Australian investors and regulators and contribute to a broader understanding of contextually contingent corporate governance. © 2011 CPA Australia.
Ferguson, A. & Scott, T. 2011, 'Market reactions to Australian boutique resource investor presentations', Resources Policy, vol. 36, no. 4, pp. 330-338.
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Ferguson, A., Clinch, G. & Kean, S. 2011, 'Predicting the Failure of Developmental Gold Mining Projects', Australian Accounting Review, vol. 21, no. 1, pp. 44-53.
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Brown, P., Ferguson, A. & Sherry, S. 2010, 'Investor behaviour in response to Australia's capital gains tax', Accounting & Finance, vol. 50, no. 4, pp. 783-808.
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BROWN, P.H.I.L.I.P., FERGUSON, A.N.D.R.E.W. & JACKSON, A.N.D.R.E.W.B. 2009, 'Pierpont and the Capital Market', Abacus, vol. 45, no. 2, pp. 147-170.
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Brown, P., Ferguson, A. & Stone, K. 2008, 'Share Purchase Plans in Australia: Issuer Characteristics and Valuation Implications', Australian Journal of Management, vol. 33, no. 2, pp. 307-332.
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Ferguson, A.C., Francis, J.R. & Stokes, D.J. 2006, 'What matters in audit pricing: Industry specialization or overall market leadership?', Accounting and Finance, vol. 46, no. 1, pp. 97-106.
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Ferguson et al. (2003) report that audit industry fee premia primarily reside with joint national and city-specific industry leadership as opposed to merely firm-wide (national) industry expertise, suggesting auditor choice among the Big 5 is best conceptualized on joint industry specialization in city-specific markets and nationally. The present study examines whether the prior results could be confounded by the presence of city-specific overall market leadership effects. Our findings reaffirm that joint local and national auditor industry expertise is valued by audit clients. Furthermore, overall city-specific leadership, by itself, also matters in fee determination and results in higher fees, although at a slightly weaker level of statistical significance. © 2006 AFAANZ.
CARSON, E.L.I.Z.A.B.E.T.H., FERGUSON, A.N.D.R.E.W. & SIMNETT, R.O.G.E.R. 2006, 'Australian Audit Reports: 1996-2003', Australian Accounting Review, vol. 16, no. 38, pp. 89-96.
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Brown, P.R., Ferguson, A.C. & Stone, K. 2006, 'Share purchase plans', JASSA, vol. 1, no. Autumn, pp. 18-23.
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By mid-2005, share purchase plans (SPPs) had been used 600 times by 400 listed Australian companies since PPs were introduced in 1991. This form of seasoned equity offering (SEO), is available only to registered shareholders, with the shares being offered at a discount to the market price and without any brokerage charge.
Ferguson, A. 2005, 'A Review of Australian Audit Pricing Literature', Accounting Research Journal, vol. 18, no. 2, pp. 54-62.
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Ferguson, A. & Matolcsy, Z. 2004, 'Audit quality and post earnings announcement drift', Asia-Pacific Journal of Accounting & Economics, vol. 11, no. 2, pp. 121-137.
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Ferguson, A., Francis, J.R. & Stokes, D.J. 2003, 'The effects of firm-wide and office-level industry expertise on audit pricing', Accounting Review, vol. 78, no. 2, pp. 429-448.
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This study examines the role of auditor industry expertise in the pricing of Big 5 audits in Australia. We test if the audit market prices an auditor's firm-wide industry expertise, or alternatively if the audit market only prices office-level expertise in those specific cities where the auditor is the industry leader. We document that there is an average premium of 24 percent associated with industry expertise when the auditor is both the city-specific industry leader and one of the top two firms nationally in the industry. However, the top two firms nationally do not earn a premium in cities where they are not city leaders. We further document that national leadership rankings are, in fact, driven by the specific offices where accounting firms are city leaders. Thus, the overall evidence supports that the market perception and pricing of industry expertise in Australia is primarily based on office-level industry leadership in city-specific audit markets.
Ferguson, A.C. & Crockett, A. 2003, 'Information transfer and press coverage: The case of the Gawler Craton gold boom', Pacific-Basin Finance Journal, vol. 11, no. 1, pp. 101-120.
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This study examines intra-industry information transfer after Helix Resources announced a successful drill result in the Gawler Craton region of South Australia that sparked significant investor interest in mining companies with tenement holdings in the area. This study shows that the price response of competing explorers was determined by press coverage immediately following the discovery of gold, but stocks that received the most press attention in the immediate post-announcement period suffered the greatest long-term underperformance. The research is the first in capital market literature to make use of geographical information systems software technology.
Ferguson, A.C. & Stokes, D. 2002, 'Brand name audit pricing, industry specialization, and leadership premiums post-big 8 and big 6 mergers', Contemporary Accounting Research, vol. 19, no. 1, pp. 77-110.
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Other

Matolcsy, Z.P. & Ferguson, A.C. 2003, 'Audit quality and post earnings announcement drift (Acct paper #59)'.

Reports

Haas, M.R., Chapman, S., Viney, R.C., Hall, J.P. & Ferguson, A.C. CHERE 1999, The news on health economics: a study of resource allocation in health in the Australian print media for 1996, CHERE Discussion Paper No 40, Sydney.