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Congratulations to Sandy who has successfully defended her thesis examination and has been awarded with a PhD.

Sandy's thesis on "An Inefficient Deregulatory Initiative: The Australian Class Order Deed of Cross Guarantee", contested the benefits of executing a Deed of Cross Guarantee (DXG) that was advanced on the basis that relieving wholly-owned subsidiaries from financial reporting requirements would reduce audit costs.

Key results confirm the statistical significance of the DXG in audit fee determination for the Australian setting, but the reduction in audit fees seems to be only a transient effect since firms with a DXG in place for more than one year consistently pay higher audit fees overall, and this is irrespective of firm size or complexity.

This counterintuitive result refutes the conventional wisdom posited by corporate regulators. It seems that the DXG effect in reducing audit fees is far less pervasive than previously thought, as it quickly dissipates and bears no relevance in the long term.

Sandy's thesis was supervised by three MEAFA members: Prof Graeme Dean (principal supervisor), Prof Stewart Jones and Dr Demetris Christodoulou (associate supervisors).

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MEAFA is a cross-disciplinary research group that promotes methodical analytical work with empirical applications in financial analysis.