Template-Type: ReDIF-Article 1.0
Author-Name: John Lane
Author-X-Name-First: John
Author-X-Name-Last: Lane
Author-Name: Roger Willett
Author-X-Name-First: Roger
Author-X-Name-Last: Willett
Title: Depreciation Need Not Be Arbitrary
Abstract:
Abstract Following Thomas (1969, 1974) the depreciation
adjustment charged against accounting earnings is nowadays commonly
presumed to be entirely arbitrary when it is viewed from a measurement
perspective. This paper develops a statistical interpretation of
accounting measurement to show that the depreciation calculation need not
necessarily be viewed as incorrigible in Thomas's sense. A probability
modelling approach is adopted to illustrate how the depreciation
adjustment can be used to smooth accounting earnings over time.
Depreciation is thus shown to have potentially useful estimation
properties. The results have obvious policy implications regarding the
objectives that depreciation and other accounting allocations might serve.
They also have a bearing on fundamental questions regarding the nature of
accounting measurement.
Journal: Accounting and Business Research
Pages: 179-194
Issue: 3
Volume: 27
Year: 1996
Month: 11
X-DOI: 10.1080/00014788.1997.9729543
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729543
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:3:p:179-194
Template-Type: ReDIF-Article 1.0
Author-Name: Chan Kee Low
Author-X-Name-First: Chan Kee
Author-X-Name-Last: Low
Author-Name: Hian Chye Koh
Author-X-Name-First: Hian Chye
Author-X-Name-Last: Koh
Title: Concepts Associated with the ‘True and Fair View’: Evidence from Singapore
Abstract:
Abstract This study investigated the differential
perceptions of the ‘true and fair view’ among accountants,
bank officers and managers in Singapore and examined whether ‘true
and fair’ was perceived to mean compliance with GAAP and compliance
with legal requirements. The survey questionnaire required respondents to
evaluate simultaneously 12 phrases (including the ‘true and fair
view’) using the card-sorting technique. The questionnaire was
given to 300 accountants, 100 bank officers and 200 managers, yielding
response rates of 73%, 64% and 81.5% respectively, and 74.33% (or 446)
overall. Descriptive statistics, individual differences scaling analysis
(INDSCAL) and cluster analysis were performed to analyse the data. The
results showed that perceptions of the true and fair view did not differ
significantly across the three groups. Further, ‘true and
fair’ was clearly distinguished from compliance with GAAP and/or
legal requirements. Instead, it was grouped with ‘not
misleading’, ‘absence of material errors’ and
‘objective and free from bias’.
Journal: Accounting and Business Research
Pages: 195-202
Issue: 3
Volume: 27
Year: 1996
Month: 12
X-DOI: 10.1080/00014788.1997.9729544
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729544
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:3:p:195-202
Template-Type: ReDIF-Article 1.0
Author-Name: Ken C. Pratt
Author-X-Name-First: Ken C.
Author-X-Name-Last: Pratt
Author-Name: A. Colin Storrar
Author-X-Name-First: A. Colin
Author-X-Name-Last: Storrar
Title: UK Shareholders' Lost Access to Management Information
Abstract:
Abstract This paper examines the nature and use of the
rights that UK shareholders once had to inspect their companies' books of
account, and identifies seven factors that contributed to loss of those
rights, mainly in the second half of the 19th century. It also considers
whether those seven factors remain relevant today and might therefore
inhibit a return to more open access to information. The paper concludes
that, although each of the factors continues to apply to some extent,
current levels of disclosure may be less than optimal because of
subsequent developments in information technology and other changes in the
operating environment. It argues, further, that financial reporting
databases could help to improve the equity and utility of information
disclosure, but are unlikely to be initiated voluntarily by preparers.
Journal: Accounting and Business Research
Pages: 205-218
Issue: 3
Volume: 27
Year: 1997
Month: 2
X-DOI: 10.1080/00014788.1997.9729545
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729545
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:3:p:205-218
Template-Type: ReDIF-Article 1.0
Author-Name: Andrew W. Stark
Author-X-Name-First: Andrew W.
Author-X-Name-Last: Stark
Title: Linear Information Dynamics, Dividend Irrelevance, Corporate Valuation and the Clean Surplus Relationship
Abstract:
Abstract This paper adopts the linear information dynamics
framework pioneered in Ohlson (1979) and Garman and Ohlson (1980) (and
subsequently used in, in particular, Ohlson, 1989, 1995 and Feltham and
Ohlson, 1995) for thinking about desirable properties of earnings numbers
in the context of the market valuation of firms, where such valuations are
fundamentally based on expected future dividends. The first purpose of
this paper is to consider the valuation-relevance of clean surplus
earnings when there are two distinct components of clean surplus earnings
whose evolutions are governed, along with book value and dividends, by a
system of linear information dynamics, and dividend irrelevancy holds. The
system of linear information dynamics assumed ensures that corporate value
is a linear combination of the two components of clean surplus earnings,
book value and dividends. One question becomes—under what
circumstances are clean surplus earnings (combined with book value and
dividends) sufficient for corporate valuation without a knowledge of the
breakdown of clean surplus earnings into its separate components? This
paper develops the conditions defining these circumstances. At the other
extreme, another question can be asked—under what circumstances is
one component of clean surplus earnings irrelevant to corporate valuation?
This paper identifies some conditions that identify these latter
circumstances. The second purpose of the paper is to identify implications
of these results for both the traditional arguments about the desirability
of measuring earnings on a clean surplus basis and also the more
contemporary issues surrounding FRS3. A third purpose is to discuss the
implications of the overall analysis for the empirical testing of the
relationship between market prices and earnings numbers, and for
empirically-justified definitions of maintainable earnings.
Journal: Accounting and Business Research
Pages: 219-228
Issue: 3
Volume: 27
Year: 1997
Month: 2
X-DOI: 10.1080/00014788.1997.9729546
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729546
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:3:p:219-228
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Archer
Author-X-Name-First: Simon
Author-X-Name-Last: Archer
Title: The ASB's Exposure Draft Statement of Principles: A Comment
Abstract:
Abstract This paper is based on a shorter comment sent to
the Accounting Standards Board in response to the request for comments on
the exposure draft, Statement of Principles for Financial
Reporting. It is intended to be a comprehensive dissent from that
ED, and also to suggest an alternative course of action for the ASB. In
the first place, the ASB's position, according to which the provision of
more fair value accounting (FVA)-based information is a central plank
among its principles, is contested on the grounds of both (a) market
incompleteness (entailing limited availability of reliable FVA-based
information) and (b) lack of evidence of demand on the part of financial
statement users for FVA-based information. In the second place, the ASB's
approach to issues of recognition is subjected to critical analysis and
found to be inadequate. Finally, the ASB's decision that the essential
function of its Statement of Principles should be to
advocate a set of recognition rules and measurement bases (including some
that are controversial) is contested. Instead, it is proposed that the
Statement of Principles should incorporate a larger
framework, including a set of procedural principles,
according to which the Board would reach conclusions on the various issues
with which it has to deal, so that its conclusions would be seen to be
authoritative because they had been reached by a process of rigorous
enquiry in accordance with appropriate procedures. These principles would
incorporate Rawls' (1971) notions of reflective equilibrium and procedural
justice.
Journal: Accounting and Business Research
Pages: 229-241
Issue: 3
Volume: 27
Year: 1997
Month: 1
X-DOI: 10.1080/00014788.1997.9729547
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729547
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:3:p:229-241
Template-Type: ReDIF-Article 1.0
Author-Name: R. Murray Lindsay
Author-X-Name-First: R. Murray
Author-X-Name-Last: Lindsay
Title: Lies, Damned Lies and More Statistics: The Neglected Issue of Multiplicity in Accounting Research
Abstract:
Abstract The problem of ‘multiplicity’ (and
selection) is considered by many statisticians to be among the most
difficult and important problems they face. It includes such areas as
multiple tests, variable selection in regression analysis, subgroup
analysis and data mining. It undermines statistical inference by inflating
type I errors well above reported levels of significance. The basic issue
confronting researchers is how to adjust inferences to allow for
multiplicity, particularly in exploratory or model-building analyses where
standard textbook probability calculations associated with estimation and
hypothesis testing do not apply. Despite its importance, and unlike what
occurs in other disciplines, the multiplicity problem receives little or
no attention in accounting. This situation is of concern because survey
results suggest that serious type I error inflation is a real possibility
in management accounting. In attempting to remedy this situation, the
paper adopts a classical statistical framework for the purpose of
examining the key issues underlying the problem and to present some
strategies for dealing with it. These strategies offer the researcher a
reasoned approach that recognises the possibility that the observed
results may be due to chance, as well as the possibility that they are
real. The discussion also highlights the fact that the only way to deal
with the issue of multiplicity successfully is to repeat results on new
data.
Journal: Accounting and Business Research
Pages: 243-258
Issue: 3
Volume: 27
Year: 1997
Month: 2
X-DOI: 10.1080/00014788.1997.9729548
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729548
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:3:p:243-258
Template-Type: ReDIF-Article 1.0
Author-Name: Cyril Tomkins
Author-X-Name-First: Cyril
Author-X-Name-Last: Tomkins
Author-Name: Michael John Jones
Author-X-Name-First: Michael John
Author-X-Name-Last: Jones
Author-Name: Andrew W. Stark
Author-X-Name-First: Andrew W.
Author-X-Name-Last: Stark
Author-Name: David Alexander
Author-X-Name-First: David
Author-X-Name-Last: Alexander
Title: Book Reviews
Journal: Accounting and Business Research
Pages: 259-264
Issue: 3
Volume: 27
Year: 1997
Month: 6
X-DOI: 10.1080/00014788.1997.9729549
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729549
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:3:p:259-264
Template-Type: ReDIF-Article 1.0
Author-Name: R. C. Graham
Author-X-Name-First: R. C.
Author-X-Name-Last: Graham
Author-Name: C. E. Lefanowicz
Author-X-Name-First: C. E.
Author-X-Name-Last: Lefanowicz
Title: Parent and Subsidiary Earnings Announcements and Parent and Subsidiary Valuation
Abstract:
Abstract A firm's earnings announcements are an important
source of value relevant information to market participants. They are,
however, only one such source of information. The study reported in this
paper involves another source of information: the earnings announcements
within pairs of parents and their majority-held subsidiaries. We examine
both firms ‘security price reactions to both firms’ earnings
announcements for evidence of information flows within the pairs of firms.
We find significant parent and subsidiary price reactions at their own
earnings announcements only when the announcement is the first within a
parent-subsidiary pair. The implication is that the first earnings
announcement pre-empts some of the information released by the later
announcing firm. In addition, parent firms also exhibit significant price
reactions to subsidiary earnings announcements when subsidiaries announce
earnings first. The magnitude of the parent price reactions suggests that
incremental information is conveyed in the subsidiary earnings
announcement regarding the earnings of the parents' non-subsidiary assets.
The implication of this information transfer is that subsidiary earnings
are particularly valuation-relevant to parent firm shareholders.
Journal: Accounting and Business Research
Pages: 3-17
Issue: 1
Volume: 28
Year: 1997
Month: 7
X-DOI: 10.1080/00014788.1997.9728896
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9728896
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:1:p:3-17
Template-Type: ReDIF-Article 1.0
Author-Name: Max Munday
Author-X-Name-First: Max
Author-X-Name-Last: Munday
Author-Name: Michael J. Peel
Author-X-Name-First: Michael J.
Author-X-Name-Last: Peel
Title: The Japanese Manufacturing Sector in the UK: A Performance Appraisal
Abstract:
Abstract Japanese companies represent a particularly
dynamic sector of UK manufacturing industry. High levels of Japanese
investment, particularly during the mid-1980s, prompted research into many
aspects of Japanese operations such as work and management organisation,
personnel management and industrial relations practices. Rather less is
known about the financial performance of the Japanese sector, with
existing studies tending to concentrate on overall sector productivity
based on nationally aggregated Census of Production data. Using the FAME
corporate accounts database, this paper examines the performance of a
sample of Japanese manufacturing subsidiaries in the UK, with reference to
a wide range of financial and performance indicators, against a matched
sample of domestic firms. This is supplemented by an analysis of the
population of domestic, Japanese and other foreign-owned manufacturing
firms on the FAME database. While the empirical analysis confirms
expectations on comparative Japanese sector performance on labour
productivity, domestic firms are found to exhibit superior performance in
respect of profitability, asset efficiency, stock efficiency and credit
risk. The paper examines the extent to which UK accounts of Japanese
subsidiaries are providing an objective view of their performance, and
concludes that Japanese firms may be engaged in transfer-pricing
strategies which have the effect of minimising liability to UK corporation
tax. The policy implications of these findings are examined.
Journal: Accounting and Business Research
Pages: 19-39
Issue: 1
Volume: 28
Year: 1997
Month: 8
X-DOI: 10.1080/00014788.1997.9728897
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9728897
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:1:p:19-39
Template-Type: ReDIF-Article 1.0
Author-Name: Andrew W. Stark
Author-X-Name-First: Andrew W.
Author-X-Name-Last: Stark
Title: The Impact of Irreversibility, Uncertainty and Timing Options on Deprival Valuations and the Detection of Monopoly Profits
Abstract:
Abstract This paper has two purposes. The first is to
derive rules identifying the deprival value of an asset (i) which is
irreversible to one extent or another; (ii) the benefit stream of which is
subject to continuing uncertainty; and (iii) for which an option to wait
exists as to when to reacquire should the owner be deprived of it. The
second is to consider whether accounting rates of return employing these
deprival value rules can be developed to help in the detection of monopoly
profits in circumstances where investment decision-making takes place in
the presence of irreversibility, uncertainty and the existence of timing
options. The ‘new’ deprival value rules for an asset differ
from the ‘conventional’ ones in that present value less the
value of the option to reinvest in the asset appears in the
‘new’ rules wherever present value appears in the
‘conventional’ rules. Examples are provided which suggest
that ‘new’ and ‘conventional’ deprival value
rules can differ materially. A further result is that accounting rates of
return can be developed using the ‘new’ deprival value rules
that are, in principle, useful in the detection of monopoly profits.
Nonetheless, in practice such use requires a level of information that
renders the result superfluous in the sense that the provision of
replacement cost balance sheet data, combined with the level of
information needed, is sufficient to reveal the presence of monopoly
profits directly.
Journal: Accounting and Business Research
Pages: 40-52
Issue: 1
Volume: 28
Year: 1997
Month: 7
X-DOI: 10.1080/00014788.1997.9728898
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9728898
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:1:p:40-52
Template-Type: ReDIF-Article 1.0
Author-Name: D. J. Johnstone
Author-X-Name-First: D. J.
Author-X-Name-Last: Johnstone
Title: Comparative Classical and Bayesian Interpretations of Statistical Compliance Tests in Auditing
Abstract:
Abstract Within the theory of statistics there are three
main schools. The two longest established are based on the works of Fisher
and of Neyman and Pearson, these often being loosely grouped together
under the heading ‘classical’ statistics. The third and
oldest in terms of historical development rather than broad acceptance is
the school of ‘non-classical’ or, more precisely, Bayesian
statistics. The philosophical and methodological structures of these three
distinct brands of statistical thinking have some points of intersection
but ultimately differ from one another irreconcilably. In practical terms,
this divergence leads to incompatible and, in some cases, diametrically
opposite inferential outcomes, at the level of substance and not merely
form, all on the same data. In auditing, such inconsistencies can be
shown, for example, in the case of a standard statistical compliance test
(attribute sampling) of the test prescribed in nearly all audit sampling
textbooks. From the outset, auditors have interpreted this kind of test in
the way proposed and popularised by Neyman and Pearson. On comparing the
Neyman-Pearson standpoint with its Fisherian and Bayesian alternatives,
only the Bayesian view is seen to withstand logical criticism.
Journal: Accounting and Business Research
Pages: 53-82
Issue: 1
Volume: 28
Year: 1997
Month: 7
X-DOI: 10.1080/00014788.1997.9728899
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9728899
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:1:p:53-82
Template-Type: ReDIF-Article 1.0
Author-Name: Rob Gray
Author-X-Name-First: Rob
Author-X-Name-Last: Gray
Author-Name: David Alexander
Author-X-Name-First: David
Author-X-Name-Last: Alexander
Author-Name: Brian Rutherford
Author-X-Name-First: Brian
Author-X-Name-Last: Rutherford
Author-Name: Geoffrey Whittington
Author-X-Name-First: Geoffrey
Author-X-Name-Last: Whittington
Author-Name: Charles Sutcliffe
Author-X-Name-First: Charles
Author-X-Name-Last: Sutcliffe
Title: Book Reviews
Journal: Accounting and Business Research
Pages: 83-88
Issue: 1
Volume: 28
Year: 1997
Month: 12
X-DOI: 10.1080/00014788.1997.9728900
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9728900
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:1:p:83-88
Template-Type: ReDIF-Article 1.0
Author-Name: Mike Dempsey
Author-X-Name-First: Mike
Author-X-Name-Last: Dempsey
Title: Capital Gains Tax: Implications for the Firm's Cost of Capital, Share Valuation and Investment Decision-Making
Abstract:
Abstract The traditional ‘single-period' equity
valuation models assume that investors’ capital gains tax
liabilities can be represented as occurring annually, independently of
whether or not the share is actually sold. The assumption implies that
investors sell their shares on an annual basis. The essential issue as to
how capital gains tax might be expected to impact on the holding decisions
of shareholders, along with the likely responses of their firms, is
forestalled by these models. More realistic assumptions for the imposition
of capital gains tax have only recently been presented in the literature.
This paper, with resource to the implications of these contributions,
seeks to model the impact of capital gains tax in the functioning of
equity markets, and, thereby, the impact of the tax on the equity
financing and investment decisions of firms. The paper will predict that
it is entirely possible that the level of capital gains taxation has only
a limited impact on government revenue, while simultaneously having a
disruptive impact on the workings of capital markets. We observe that high
nominal levels of capital gains tax may work to increase the volatility of
equity share ownership, destabilise share prices, and distort the
viability of firms as ongoing concerns.
Journal: Accounting and Business Research
Pages: 91-96
Issue: 2
Volume: 28
Year: 1998
Month: 3
X-DOI: 10.1080/00014788.1998.9728901
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728901
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:2:p:91-96
Template-Type: ReDIF-Article 1.0
Author-Name: Mahmoud Ezzamel
Author-X-Name-First: Mahmoud
Author-X-Name-Last: Ezzamel
Author-Name: Hugh Willmott
Author-X-Name-First: Hugh
Author-X-Name-Last: Willmott
Title: Accounting, Remuneration and Employee Motivation in the New Organisation
Abstract:
Abstract The paper draws upon two detailed case studies of
global manufacturing companies to examine the role of accounting in
redesigned remuneration systems which are emerging as organisations
delayer their structures, change their production methods and move to
team-based systems of work and reward. In this way, changes in the content
and application of accounting measures are framed within new approaches to
rewarding and motivating employees that have been stimulated by efforts to
develop alternative, ‘leaner’ manufacturing practices. The
focus is principally upon the remuneration of shopfloor employees, but we
also consider the implications of team-based reward systems for managerial
staff. We argue that despite the recent complementing of financial with
non-financial forms of reward (e.g. skill acquisition, improvements to
health and safety), and an emphasis upon peer pressure from team members
in addition to individual incentives as a source of motivation, the
language and calculations of accounting remain central and pervasive in
developing, justifying and mobilising support for the new reward system.
Journal: Accounting and Business Research
Pages: 97-110
Issue: 2
Volume: 28
Year: 1997
Month: 10
X-DOI: 10.1080/00014788.1998.9728902
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728902
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:2:p:97-110
Template-Type: ReDIF-Article 1.0
Author-Name: Christian Leuz
Author-X-Name-First: Christian
Author-X-Name-Last: Leuz
Author-Name: Dominic Deller
Author-X-Name-First: Dominic
Author-X-Name-Last: Deller
Author-Name: Michael Stubenrath
Author-X-Name-First: Michael
Author-X-Name-Last: Stubenrath
Title: An International Comparison of Accounting-Based Payout Restrictions in the United States, United Kingdom and Germany
Abstract:
Abstract Agency theory shows that payout constraints can
play an important role in debt contracting and mitigating debt-related
incentive problems. In this paper, we compare how, empirically,
corporations in the UK, the US and Germany are restricted in their ability
to pay dividends (and other forms of payouts) to shareholders. Our study
is novel in two respects: First, although there is ample evidence on the
use of accounting-based payout restrictions in US debt contracts, and some
evidence in the UK, there are no comparable studies on accounting- based
payout constraints in German debt contracts. Second, we include debt
contracts as well as regulation on dividends in the comparison to
highlight the interdependencies between mandated and contractual payout
restrictions. Despite marked institutional differences between the US, the
UK and Germany, our comparison demonstrates that corporations are
restricted in a similar fashion in all three countries. This holds for the
shape of the dividend restrictions based on accounting numbers as well as
some key accounting principles determining net earnings and other
accounting numbers used in payout restrictions. We find that differences
mainly exist with regard to the origin of the restrictions. In Germany,
dividend restrictions are predominantly mandated; in the UK, mandated
restrictions are supplemented by debt covenants. In the US, dividend
restrictions follow primarily from debt contracting. By integrating
contractual provisions as well as regulation on dividends, our comparison
provides additional insights into the debt contracting process and offers
a more complete picture than previous studies.
Journal: Accounting and Business Research
Pages: 111-129
Issue: 2
Volume: 28
Year: 1997
Month: 7
X-DOI: 10.1080/00014788.1998.9728903
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728903
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:2:p:111-129
Template-Type: ReDIF-Article 1.0
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: The Determinants of Managerial Accounting Policy Choice: Further Evidence for the UK
Abstract:
Abstract This paper combines an accruals-based measure of
accounting discretion with a multivariate modelling framework as a means
of generating more appropriately specified tests of the determinants of
managerial accounting policy choice. Findings suggest that smoothing
considerations account for the majority of cross-sectional variation in
the degree of accounting discretion. Evidence is also presented that
managers employ accounting choices to (i) signal expected future cash flow
performance and (ii) reduce the probability of debt covenant violation, as
captured by the leverage ratio. However, the strength of the relation
between leverage and accounting policy choice is shown to vary across the
sample period, possibly reflecting changes in the probability of debt
contract violation for the average sample firm over time. Limited evidence
is also presented which suggests that the magnitude of the association
between discretionary accruals activity and leverage, ownership, and
smoothing may be conditional on prior-period accrual activity.
Journal: Accounting and Business Research
Pages: 131-143
Issue: 2
Volume: 28
Year: 1997
Month: 11
X-DOI: 10.1080/00014788.1998.9728904
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728904
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:2:p:131-143
Template-Type: ReDIF-Article 1.0
Author-Name: Ronald Ma
Author-X-Name-First: Ronald
Author-X-Name-Last: Ma
Author-Name: Cecilia Lambert
Author-X-Name-First: Cecilia
Author-X-Name-Last: Lambert
Title: In Praise of Occam's Razor: A Critique of the Decomposition Approach in IAS 32 to Accounting for Convertible Debt
Abstract:
Abstract IAS 32 Financial Instruments: Disclosure
and Presentation (1995) raises a number of questions. In
particular, it is argued that the Standard's requirements on accounting
for, and the classification of, compound financial instruments by the
issuer, are based on reasoning that is conceptually flawed. This paper
proposes that a compound financial instrument be viewed as a single
instrument with a dual nature, comprising the nature both of liability and
equity. Under this concept, the instrument cannot be decomposed into
severable component parts. Rather, it should be treated as wholly
liability or wholly equity, depending on whether the liability or equity
nature is dominant at a particular time.
Journal: Accounting and Business Research
Pages: 145-153
Issue: 2
Volume: 28
Year: 1997
Month: 11
X-DOI: 10.1080/00014788.1998.9728905
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728905
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:2:p:145-153
Template-Type: ReDIF-Article 1.0
Author-Name: John Christensen
Author-X-Name-First: John
Author-X-Name-Last: Christensen
Author-Name: Keith Robson
Author-X-Name-First: Keith
Author-X-Name-Last: Robson
Author-Name: Mary Bowerman
Author-X-Name-First: Mary
Author-X-Name-Last: Bowerman
Title: Book Reviews
Journal: Accounting and Business Research
Pages: 155-158
Issue: 2
Volume: 28
Year: 1998
Month: 3
X-DOI: 10.1080/00014788.1998.9728906
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728906
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:2:p:155-158
Template-Type: ReDIF-Article 1.0
Author-Name: Richard G. Brody
Author-X-Name-First: Richard G.
Author-X-Name-Last: Brody
Author-Name: Steven P. Golen
Author-X-Name-First: Steven P.
Author-X-Name-Last: Golen
Author-Name: Philip M. J. Reckers
Author-X-Name-First: Philip M. J.
Author-X-Name-Last: Reckers
Title: An Empirical Investigation of the Interface Between Internal and External Auditors
Abstract:
Abstract Professional standards place specific
responsibilities on auditors for the discovery of material mis-statements
in reports of corporate financial performance. Certain factors have been
shown to increase the likelihood of fraudulent financial reporting. One
warning sign is the potentially pervasive effect of a weak internal
control environment consistent with a weak internal audit group. This
study investigates the impact of internal audit department quality
differences on auditors ‘willingness to place reliance on the work
performed by internal auditors. The study also gives consideration to
auditors’ recent experiences with material errors and
irregularities and examines the influence of two previously untested
individual auditor differences on audit judgment decisions: (1) conflict
management style and (2) perception of internal/external auditor
communication barriers. The results indicate that auditors attend to
internal audit department quality differences and that individual auditor
differences exhibit significant influence over auditor judgments.
Implications for audit practice are considered and directions for future
research are suggested.
Journal: Accounting and Business Research
Pages: 160-171
Issue: 3
Volume: 28
Year: 1997
Month: 12
X-DOI: 10.1080/00014788.1998.9728907
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Handle: RePEc:taf:acctbr:v:28:y:1997:i:3:p:160-171
Template-Type: ReDIF-Article 1.0
Author-Name: Margaret Lamb
Author-X-Name-First: Margaret
Author-X-Name-Last: Lamb
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Author-Name: Alan Roberts
Author-X-Name-First: Alan
Author-X-Name-Last: Roberts
Title: International Variations in the Connections Between Tax and Financial Reporting
Abstract:
Abstract This paper constructs a method for assessing the
degree of connection between tax rules and practices and financial
reporting rules and practices in a country. Five types of connection and
disconnection are suggested, and 15 arenas of accounting are proposed for
assessment on this basis. The method is applied to four countries, partly
in order to test the claim of a clear distinction between Anglo-Saxon and
continental European countries.
Journal: Accounting and Business Research
Pages: 173-188
Issue: 3
Volume: 28
Year: 1998
Month: 3
X-DOI: 10.1080/00014788.1998.9728908
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728908
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:3:p:173-188
Template-Type: ReDIF-Article 1.0
Author-Name: P. Weetman
Author-X-Name-First: P.
Author-X-Name-Last: Weetman
Author-Name: E. A. E. Jones
Author-X-Name-First: E. A. E.
Author-X-Name-Last: Jones
Author-Name: C. A. Adams
Author-X-Name-First: C. A.
Author-X-Name-Last: Adams
Author-Name: S. J. Gray
Author-X-Name-First: S. J.
Author-X-Name-Last: Gray
Title: Profit Measurement and UK Accounting Standards: A Case of Increasing Disharmony in Relation to US GAAP and IASs
Abstract:
Abstract UK accounting practice differs from International
Accounting Standards (IASs) particularly with regard to amortisation of
goodwill, provision for deferred taxation and the accounting treatment of
pension costs. Under the core standards programme of the IASC the IASs
have emerged closer to US practice. This paper evaluates the profit of
those UK companies reporting to the Securities and Exchange Commission
(SEC) in 1988 and 1994, spanning a period which saw the establishment of
the ASB and the implementation of the IASC's comparability project. An
increasing gap was found between the reported profit under UK accounting
principles and that restated under US GAAP. The difference lay most
frequently in accounting for goodwill, provision for deferred tax, and the
accounting treatment of pension costs, with accounting for goodwill
showing a particularly significant impact in 1994. Notwithstanding the
introduction of FRS 10, an overall impression of increasing disharmony
could continue to cause reconciliations to be required of UK companies
seeking full listing on a US stock exchange, with consequent disadvantage
relative to companies in other European countries seeking international
capital in the US.
Journal: Accounting and Business Research
Pages: 189-208
Issue: 3
Volume: 28
Year: 1998
Month: 3
X-DOI: 10.1080/00014788.1998.9728909
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728909
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:3:p:189-208
Template-Type: ReDIF-Article 1.0
Author-Name: T. E. Cooke
Author-X-Name-First: T. E.
Author-X-Name-Last: Cooke
Title: Regression Analysis in Accounting Disclosure Studies
Abstract:
Abstract A problem that sometimes occurs in undertaking
empirical research in accounting and finance is that the theoretically
correct form of the relation between the dependent and independent
variables is not known, although often thought or assumed to be monotonic.
In addition, transformations of disclosure measures and independent
variables are proxies for underlying constructs and hence, while theory
may specify a functional form for the underlying theoretical construct, it
is unlikely to hold for empirical proxies. In order to cope with this
problem a number of accounting disclosure studies have transformed
variables so that the statistical analysis is more meaningful. One
approach that has been advocated in such circumstances is to rank the data
and then apply regression techniques, a method that has been used recently
in a number of accounting disclosure studies. This paper reviews a number
of transformations including the Rank Regression procedure. Because of the
inherent properties of ranks and their use in regression analysis, an
extension is proposed that provides an alternative mapping that replaces
the data with their normal scores. The normal scores approach retains the
advantages of using ranks but has other beneficial characteristics,
particularly in hypothesis testing. Regressions based on untransformed
data, on the log odds ratio of the dependent variable, on ranks and
regression using normal scores, are applied to data on the disclosure of
information in the annual reports of companies in Japan and Saudi Arabia.
It is found that regression using normal scores has some advantages over
ranks that, in part, depend on the structure of the data. However, the
case studies demonstrate that no one procedure is best but that multiple
approaches are helpful to ensure the results are robust across methods.
Journal: Accounting and Business Research
Pages: 209-224
Issue: 3
Volume: 28
Year: 1998
Month: 2
X-DOI: 10.1080/00014788.1998.9728910
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728910
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:3:p:209-224
Template-Type: ReDIF-Article 1.0
Author-Name: John Flower
Author-X-Name-First: John
Author-X-Name-Last: Flower
Author-Name: Peter Boys
Author-X-Name-First: Peter
Author-X-Name-Last: Boys
Author-Name: Brenda Porter
Author-X-Name-First: Brenda
Author-X-Name-Last: Porter
Author-Name: Rowan Jones
Author-X-Name-First: Rowan
Author-X-Name-Last: Jones
Title: Book Reviews
Journal: Accounting and Business Research
Pages: 225-230
Issue: 3
Volume: 28
Year: 1998
Month: 6
X-DOI: 10.1080/00014788.1998.9728911
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728911
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:3:p:225-230
Template-Type: ReDIF-Article 1.0
Author-Name: Michael John Jones
Author-X-Name-First: Michael John
Author-X-Name-Last: Jones
Title: The role of change agents and imitation in the diffusion of an idea: charge and discharge accounting
Abstract:
Abstract Medieval charge and discharge accounting was the
most prevalent accounting system of its time. The first medieval charge
and discharge system can be identified in the English Exchequer about
1110. This paper argues that the ideas behind the Exchequer were gradually
diffused both internationally and nationally. This paper charts the export
of charge and discharge systems to other European Exchequers, to
monasteries and bishoprics, to lay estates, to manorial accounting, to
guilds, boroughs, universities and parishes. From a single high status
source at the start of the 12th century, charge and discharge accounting
came to be imitated through mimetic and normative institutional
isomorphism by a wide range of lower status medieval institutions by the
late 15th century. In the first phase of diffusion, certain key
individuals of wealth and power are identified as change agents. In the
second phase, individuals, and accounting and estate management texts
played an important role in the diffusion. The role of geographical
proximity and accidents of history is also explored.
Journal: Accounting and Business Research
Pages: 355-371
Issue: 5
Volume: 38
Year: 2008
Month: 1
X-DOI: 10.1080/00014788.2008.9665771
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9665771
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:5:p:355-371
Template-Type: ReDIF-Article 1.0
Author-Name: John Richard Edwards
Author-X-Name-First: John Richard
Author-X-Name-Last: Edwards
Author-Name: Stephen P. Walker
Author-X-Name-First: Stephen P.
Author-X-Name-Last: Walker
Title: Occupational differentiation and exclusion in early Canadian accountancy
Abstract:
Abstract Canada’s 1881 census enumerators posed a
range of questions that provide scope for an in--depth investigation of
the identity of its accounting functionaries (accountants and bookkeepers)
in that year. The significance of our findings is explained by applying
the concept of closure through exclusion and occupational differentiation.
We discover that Canada’s accounting community, at the dawn of
professional organisation, was dominated by people originating from Great
Britain & Ireland. The rural/urban divide for Canada’s accountants
is the inverse of that for the population as a whole and, as in Britain,
congregation occurs around the major commercial ports. Significant
differentiation exists between the demographic profile of Canada’s
accounting functionaries compared with its entire population and between
that of accountants compared with bookkeepers. Strong evidence of
exclusionary closure is revealed through an analysis of the demographic
characteristics of the initial leaderships of Canada’s early
accounting associations. The paper concludes by identifying opportunities
for further research.
Journal: Accounting and Business Research
Pages: 373-391
Issue: 5
Volume: 38
Year: 2008
Month: 3
X-DOI: 10.1080/00014788.2008.9665772
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9665772
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:5:p:373-391
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Author-Name: Elizabeth A. Rainsbury
Author-X-Name-First: Elizabeth A.
Author-X-Name-Last: Rainsbury
Author-Name: Michael E. Bradbury
Author-X-Name-First: Michael E.
Author-X-Name-Last: Bradbury
Author-Name: Steven F. Cahan
Author-X-Name-First: Steven F.
Author-X-Name-Last: Cahan
Title: Firm characteristics and audit committees complying with ’best practice‘ membership guidelines
Abstract:
Abstract This study investigates demand and supply
characteristics associated with firms that voluntarily established audit
committees meeting ‘best practice’ membership guidelines. We
focus on a set of best practice criteria rather than on the separate
elements of the best practice criteria as in past studies. We conduct our
tests using a sample of New Zealand listed companies that, relative to
firms in other capital markets, are smaller and have more concentrated
ownership. This setting differs from prior research because we expect the
costs of voluntarily achieving best practice to be reasonably high. The
results show that demand factors are not significantly related to the
presence of an audit committee that conforms with best practice membership
guidelines. However, supply factors (i.e. those firms with larger and more
independent boards) are more likely to form audit committees that meet
best practice. These results suggest that compliance costs will be greater
for firms with smaller and less independent boards of directors if they
are required to comply with best practice requirements.
Journal: Accounting and Business Research
Pages: 393-408
Issue: 5
Volume: 38
Year: 2008
Month: 3
X-DOI: 10.1080/00014788.2008.9665773
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9665773
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:5:p:393-408
Template-Type: ReDIF-Article 1.0
Author-Name: Inderpal Singh
Author-X-Name-First: Inderpal
Author-X-Name-Last: Singh
Author-Name: J--L W. Mitchell Van der Zahn
Author-X-Name-First: J--L W.
Author-X-Name-Last: Mitchell Van der Zahn
Title: Determinants of intellectual capital disclosure in prospectuses of initial public offerings
Abstract:
Abstract Intellectual capital is recognised as the new
economic era’s pivotal factor underlying value creation. Deficient
and inconsistent intellectual capital reporting is escalating information
asymmetry between informed and uninformed investors. This provides fertile
ground for informed investors to extract higher abnormal returns and
higher wealth transfers from uninformed investors, particularly during a
firm’s initial public offering (IPO). This study investigates the
association between intellectual capital disclosure levels in prospectuses
of 444 IPOs listing on the Singapore Stock Exchange between 1997 and 2006,
and three potential explanatory determinants: (1) ownership retention; (2)
proprietary costs; and (3) corporate governance structure.
Statistical analysis supports our conjecture of a positive association
between intellectual capital disclosure and ownership retention. We also
find, consistent with expectations, a negative influence of proprietary
costs on the positive intellectual capital disclosure -- ownership
retention association. However, contrary to predictions, we do not find an
IPO’s corporate governance structure significantly influences the
negative interaction of proprietary costs on the ownership retention --
proprietary cost association. Our findings have implications for various
parties such as regulators who may impose unnecessary costs on issuers if
they introduce mandatory disclosures whilst lacking an understanding of
the factors influencing intellectual capital disclosures.
Journal: Accounting and Business Research
Pages: 409-431
Issue: 5
Volume: 38
Year: 2008
Month: 4
X-DOI: 10.1080/00014788.2008.9665774
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9665774
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:5:p:409-431
Template-Type: ReDIF-Article 1.0
Author-Name: Kevin Holland
Author-X-Name-First: Kevin
Author-X-Name-Last: Holland
Author-Name: Richard H.G. Jackson
Author-X-Name-First: Richard H.G.
Author-X-Name-Last: Jackson
Title: Taxation influences upon the market in venture capital trust stocks: theory and practice
Abstract:
Individuals investing in a venture capital trust (VCT) IPO listed on the
London Stock Exchange receive a number of conditional tax incentives; the
time-related nature of the associated conditions can create a
‘lock-in effect’. By deriving and testing a model of the
value of these incentives we examine how they influence investors’
pricing and trading decisions. This paper contributes to the ongoing tax
capitalisation debate in three ways: first, by calculating the magnitude
of the lock-in effect without reference to underlying shareholder records;
second, by adopting a time series approach in view of the time-varying
magnitude of the potential lock-in effect, and thereby avoiding control
issues involved in cross-sectional analysis of the effects of taxation on
pricing; and third, by focusing on changes in the bid--ask spread rather
than, for example, mid price, so reducing the impact of changes in the
market value of the instruments under consideration on the analysis. Our
results have direct policy implications in suggesting a conflict between
the existence of time-related conditional tax incentives and the
requirement for VCTs to be listed on the London Stock Exchange explicitly
in order to promote liquidity in a historically illiquid sector of the
market.
Journal: Accounting and Business Research
Pages: 1-27
Issue: 1
Volume: 41
Year: 2011
Month: 3
X-DOI: 10.1080/00014788.2011.549633
File-URL: http://hdl.handle.net/10.1080/00014788.2011.549633
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Author-Name: Sylvain Durocher
Author-X-Name-First: Sylvain
Author-X-Name-Last: Durocher
Author-Name: Anne Fortin
Author-X-Name-First: Anne
Author-X-Name-Last: Fortin
Title: Practitioners' participation in the accounting standard-setting process
Abstract:
Constituents' participation in standard-setting processes is seen as a
key indicator of a standard setter's legitimacy. While previous research
has mainly examined corporate economic determinants of participation,
limited evidence exists on practitioners' motivations to become involved
in developing accounting standards. This study uses expectancy theory to
explain practitioners' intentions to participate in the standard-setting
process in the context of the development of financial reporting standards
for private enterprises in Canada. The results suggest that the variables
of the expectancy valence model are determinant of the attractiveness of
becoming involved in the standard-setting process by submitting a comment
letter, and the variables of the expectancy force model are determinant of
a practitioner's behavioural intentions to participate in the
standard-setting process.
Journal: Accounting and Business Research
Pages: 29-50
Issue: 1
Volume: 41
Year: 2011
Month: 3
X-DOI: 10.1080/00014788.2011.549635
File-URL: http://hdl.handle.net/10.1080/00014788.2011.549635
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Template-Type: ReDIF-Article 1.0
Author-Name: Igor Goncharov
Author-X-Name-First: Igor
Author-X-Name-Last: Goncharov
Author-Name: Sander van Triest
Author-X-Name-First: Sander
Author-X-Name-Last: van Triest
Title: Do fair value adjustments influence dividend policy?
Abstract:
We examine the impact of positive fair value adjustments on dividend
policy. If fair value adjustments are transitory in nature and managers
are able to assess their implications for future earnings, fair value
adjustments in net income is expected to have no distribution
consequences. However, positive fair value adjustments may lead to higher
dividends when management incorrectly assesses their persistence. This can
have a procyclical impact because higher dividends increase leverage, and
thus risk. We use a Russian setting that mandates fair value accounting
for financial instruments and requires disclosure of unrealised fair value
adjustments in income. We find no empirical support for the concern that
dividends increase in response to positive fair value adjustments. Rather,
there is a negative relationship between positive fair value adjustments
and dividend changes, which holds after controlling for dividend policy
determinants and any endogenous nature of the revaluation decision. We
discuss several possible explanations for this finding.
Journal: Accounting and Business Research
Pages: 51-68
Issue: 1
Volume: 41
Year: 2011
Month: 3
X-DOI: 10.1080/00014788.2011.549637
File-URL: http://hdl.handle.net/10.1080/00014788.2011.549637
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:1:p:51-68
Template-Type: ReDIF-Article 1.0
Author-Name: Kenneth Peasnell
Author-X-Name-First: Kenneth
Author-X-Name-Last: Peasnell
Author-Name: Sayjda Talib
Author-X-Name-First: Sayjda
Author-X-Name-Last: Talib
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: The fragile returns to investor relations: evidence from a period of declining market confidence
Abstract:
This paper assesses the capital market effects of investor relations
activities during a period of high-profile corporate scandals. We find no
support for the prediction that an established reputation for effective
investor relations helped shield US firms from a perceived decline in
management credibility and financial reporting integrity associated with
Enron and related scandals. On the contrary, tests reveal that firms with
an established reputation for superior investor relations activities fared
worse on a series of market-related factors. Results suggest that distrust
in corporate reporting practices spilled over to investor relations
practices, and that best practice investor relations programmes developed
during normal market conditions offered little protection from systemic
declines in investor confidence arising from the corporate misdeeds of
other firms.
Journal: Accounting and Business Research
Pages: 69-90
Issue: 1
Volume: 41
Year: 2011
Month: 3
X-DOI: 10.1080/00014788.2011.549638
File-URL: http://hdl.handle.net/10.1080/00014788.2011.549638
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:1:p:69-90
Template-Type: ReDIF-Article 1.0
Author-Name: Lynn Rees
Author-X-Name-First: Lynn
Author-X-Name-Last: Rees
Author-Name: Brady Twedt
Author-X-Name-First: Brady
Author-X-Name-Last: Twedt
Title: The stock price effects from downward earnings guidance versus beating analysts' forecasts: which effect dominates?
Abstract:
This paper provides evidence on the net stock price effects associated
with managers following a disclosure strategy of guiding earnings down to
a level where they can report a positive earnings surprise. Prior
literature documents a stock price premium when firms meet or beat
analysts' forecasts. However, studies also show a substantial negative
price response to downward earnings guidance that can potentially negate
any benefit from reporting a positive earnings surprise. We find that the
negative stock price effect for firms that release downward earnings
guidance is substantially larger than the stock price premium from meeting
analysts' forecasts. Further, this downward guidance stock price penalty
persists after explicitly controlling for other news that might be
disclosed by managers that voluntarily provide guidance. These findings
challenge conclusions made in some prior research that the optimal
disclosure strategy is to ensure a positive earnings surprise at the
earnings announcement date.
Journal: Accounting and Business Research
Pages: 95-118
Issue: 2
Volume: 41
Year: 2011
Month: 6
X-DOI: 10.1080/00014788.2011.550738
File-URL: http://hdl.handle.net/10.1080/00014788.2011.550738
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:2:p:95-118
Template-Type: ReDIF-Article 1.0
Author-Name: Christine A. Mallin
Author-X-Name-First: Christine A.
Author-X-Name-Last: Mallin
Author-Name: Giovanna Michelon
Author-X-Name-First: Giovanna
Author-X-Name-Last: Michelon
Title: Board reputation attributes and corporate social performance: an empirical investigation of the US Best Corporate Citizens
Abstract:
The aim of the paper is to investigate the relationship between board
reputation and corporate social performance. Specifically, we claim that
corporate social performance may be a function of board attributes and we
investigate the association between board reputation -- in terms of board
composition, competence, diversity, leadership, structure and links with
the external environment -- and the social performance of firms, after
controlling for other company-specific characteristics. In order to
explore such a relationship, we analyse the association between corporate
social performance and board reputation of the Business Ethics 100 Best
Corporate Citizens over the period 2005--2007. Data on corporate social
responsibility are collected from the KLD's SOCRATES database, which is
derived from multiple sources and is not dependent upon corporate
self-reporting. Data on board reputation are hand-collected from corporate
reports and proxy statements. Our empirical evidence shows that the
proportions of independent, community influential and female directors are
positively associated with corporate social performance, while the
presence of a corporate social responsibility (CSR) committee is
positively associated with community performance. In contrast, we find
that CEO duality and community influential directors with multiple
directorships have a negative effect on corporate social performance.
Journal: Accounting and Business Research
Pages: 119-144
Issue: 2
Volume: 41
Year: 2011
Month: 6
X-DOI: 10.1080/00014788.2011.550740
File-URL: http://hdl.handle.net/10.1080/00014788.2011.550740
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:2:p:119-144
Template-Type: ReDIF-Article 1.0
Author-Name: Jason Zezhong Xiao
Author-X-Name-First: Jason Zezhong
Author-X-Name-Last: Xiao
Author-Name: Rong-Ruey Duh
Author-X-Name-First: Rong-Ruey
Author-X-Name-Last: Duh
Author-Name: Chee W. Chow
Author-X-Name-First: Chee W.
Author-X-Name-Last: Chow
Title: Exploring the direct and indirect performance effects of information/communication technology and management accounting and controls
Abstract:
The primary aim of this paper is to explore whether, and how, information
and communication technology (ICT) mediates the performance effect of
management accounting and controls (MAC). A second objective is to advance
understanding of Chinese firms' management practices. Archival and survey
data from 219 exchange-listed Chinese firms show that both ICT and a wide
range of MAC are extensively used, though there is great variation across
firms in the use of each technique. We also find that both ICT and MAC
(with a few exceptions, including activity-based costing/management) have
significant and positive direct performance effects and in addition, ICT
enables MAC to have a significant and positive indirect performance
effect. These results suggest that both the use and evaluation of ICT and
MAC would be made more effective by explicitly considering the mediating
role of ICT in MAC deployment. Since Chinese firms are rapidly expanding
their use of ICT and MAC, they will especially benefit from paying heed to
these lessons.
Journal: Accounting and Business Research
Pages: 145-169
Issue: 2
Volume: 41
Year: 2011
Month: 6
X-DOI: 10.1080/00014788.2011.550742
File-URL: http://hdl.handle.net/10.1080/00014788.2011.550742
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:2:p:145-169
Template-Type: ReDIF-Article 1.0
Author-Name: David Hay
Author-X-Name-First: David
Author-X-Name-Last: Hay
Author-Name: Debra Jeter
Author-X-Name-First: Debra
Author-X-Name-Last: Jeter
Title: The pricing of industry specialisation by auditors in New Zealand
Abstract:
A number of research papers present evidence of fee premiums paid to
specialist auditors. In this paper, we explore for listed and unlisted New
Zealand firms not only the question of whether such premiums exist, but
perhaps more importantly why they exist. We find evidence of fee premiums
for auditor specialisation defined at the city level but not at the
national level. We extend testing to examine the issue of self-selection
of auditors by clients; we examine several different industry
classification schemes and a number of different specialisation measures;
and we consider the issue of portfolio specialists. We find from these
additional tests that self-selection does not account for the existence of
specialisation premiums; various alternative classification schemes all
result in premiums at the city level; and portfolio specialists also earn
fee premiums when portfolio specialisation is measured at the city level.
We find that these specialist premiums apply most consistently to larger
client firms and to low-risk firms. We consider various explanations and
conclude that this result is consistent with non-specialist auditors
providing discounts to attract desirable clients. Desirable clients --
those that are large or low risk -- are not able to negotiate fees as
successfully with auditors who have differentiated themselves via industry
specialisation.
Journal: Accounting and Business Research
Pages: 171-195
Issue: 2
Volume: 41
Year: 2011
Month: 6
X-DOI: 10.1080/00014788.2011.550744
File-URL: http://hdl.handle.net/10.1080/00014788.2011.550744
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:2:p:171-195
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial
Journal: Accounting and Business Research
Pages: 201-201
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.575583
File-URL: http://hdl.handle.net/10.1080/00014788.2011.575583
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:201-201
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 203-205
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.575580
File-URL: http://hdl.handle.net/10.1080/00014788.2011.575580
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:203-205
Template-Type: ReDIF-Article 1.0
Author-Name: Gregory Waymire
Author-X-Name-First: Gregory
Author-X-Name-Last: Waymire
Author-Name: Sudipta Basu
Author-X-Name-First: Sudipta
Author-X-Name-Last: Basu
Title: Economic crisis and accounting evolution
Abstract:
We study changes in financial reporting around economic crises from a
historical perspective through the lens of punctuated equilibrium
evolution. Historical evidence and contemporary economic analyses indicate
that corporate financial reporting plays a minor role in precipitating
economic crises but might amplify them. Economic crises likely play a role
similar to major shocks in biological environments by selecting accounting
practices, accounting principles, firms and regulatory institutions for
survival based on how well they adapt to post-crisis environments.
Conscious attempts to improve accounting in the wake of crises, whether
through market or political forces, may not prove as beneficial as hoped
because we currently know far too little about the causes of economic
crises or the consequences of abrupt changes to complex adaptive systems
such as accounting. We outline several questions for future research that
would increase our knowledge about these fundamental issues.
Journal: Accounting and Business Research
Pages: 207-232
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.574266
File-URL: http://hdl.handle.net/10.1080/00014788.2011.574266
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:207-232
Template-Type: ReDIF-Article 1.0
Author-Name: Peter F. Pope
Author-X-Name-First: Peter F.
Author-X-Name-Last: Pope
Author-Name: Stuart J. McLeay
Author-X-Name-First: Stuart J.
Author-X-Name-Last: McLeay
Title: The European IFRS experiment: objectives, research challenges and some early evidence
Abstract:
This paper provides an academic perspective on the development of the
EU's harmonisation project based on International Financial Reporting
Standards (IFRS), on the costs and benefits of IFRS adoption in Europe,
and on the research challenges that arise. The paper reviews the
accumulating academic evidence, emphasizing the effectiveness and
transparency of the enforcement framework, and documenting the main
lessons to be learned from the research programme on EU IFRS
implementation conducted within the INTACCT network. Results on the
consequences of IFRS adoption and the quality of implementation are far
from uniform across Europe, and depend on factors reflecting preparer
incentives and the effectiveness of local enforcement. The paper also
outlines a possible alternative proposal for the organisation and
development of enforcement activities in Europe.
Journal: Accounting and Business Research
Pages: 233-266
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.575002
File-URL: http://hdl.handle.net/10.1080/00014788.2011.575002
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:233-266
Template-Type: ReDIF-Article 1.0
Author-Name: Peter Holgate
Author-X-Name-First: Peter
Author-X-Name-Last: Holgate
Title: Discussion
Journal: Accounting and Business Research
Pages: 267-268
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.575301
File-URL: http://hdl.handle.net/10.1080/00014788.2011.575301
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:267-268
Template-Type: ReDIF-Article 1.0
Author-Name: Philip Brown
Author-X-Name-First: Philip
Author-X-Name-Last: Brown
Title: International Financial Reporting Standards: what are the benefits?
Abstract:
When countries have announced plans to adopt IFRS in lieu of the
standards that had applied previously, they have referred to a number of
benefits, mostly to do with equity markets. So it is not surprising that
academics have looked to equity markets to assess the extent to which
benefits may have materialised. The evidence they have gathered can fairly
be characterised as mixed, partly because of differences in samples and
the use of a wide range of proxies for the same underlying but
unobservable idea. Nonetheless, it seems relatively clear that the shift
to IFRS has had many consequences both for the valuation of equities and
for equity markets more generally. Although there will always be winners
and losers from changes in accounting standards, if only because of their
distributive effects, undoubtedly some consequences are regarded by
companies and investors as, on balance, beneficial. However, the story is
far from complete. Ample scope remains to expand the range of possible
benefits that are investigated and to improve, substantially, the methods
used to seek them out.
Journal: Accounting and Business Research
Pages: 269-285
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.569054
File-URL: http://hdl.handle.net/10.1080/00014788.2011.569054
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:269-285
Template-Type: ReDIF-Article 1.0
Author-Name: Christoph Hütten
Author-X-Name-First: Christoph
Author-X-Name-Last: Hütten
Title: Discussion
Journal: Accounting and Business Research
Pages: 287-289
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.575302
File-URL: http://hdl.handle.net/10.1080/00014788.2011.575302
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:287-289
Template-Type: ReDIF-Article 1.0
Author-Name: Shyam Sunder
Author-X-Name-First: Shyam
Author-X-Name-Last: Sunder
Title: IFRS monopoly: the Pied Piper of financial reporting
Abstract:
The links among better financial reporting, better markets, and better
economy and society are arguable, but they remain poorly understood. The
addition of IFRS to the set of available alternatives may improve these
linkages, but granting them monopoly status does not. Claims that the
universal adoption of IFRS as a single set of high-quality
principles-based standards will yield global comparability are overblown.
Accounting standards operate less like a uniform system of weights and
measures and more like a single currency, in that both play multiple roles
in modern economies. An IFRS monopoly is evolutionarily disadvantageous in
that it eliminates the opportunity to compare alternative practices and
learn from them. It also disallows the tailoring of financial reporting to
local variations in economic, business, commercial, legal, auditing,
regulatory and governance conditions across the globe. Empirical studies
of statistical covariation across financial reports produced by IFRS have
yielded mixed results and, in any case, provide little insight as to the
merits of granting IFRS a world monopoly. The vociferous campaign in
support of IFRS monopoly is reminiscent of the 1990s campaign in support
of the now-discredited ‘Washington Consensus’. Then, as now,
it was a case of promoting theoretical benefits while obscuring potential
costs and risks. This is the familiar story of the Pied Piper leading his
trusting victims to their doom.
Journal: Accounting and Business Research
Pages: 291-306
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.569055
File-URL: http://hdl.handle.net/10.1080/00014788.2011.569055
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:291-306
Template-Type: ReDIF-Article 1.0
Author-Name: Ken Lee
Author-X-Name-First: Ken
Author-X-Name-Last: Lee
Title: Discussion
Journal: Accounting and Business Research
Pages: 307-308
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.575565
File-URL: http://hdl.handle.net/10.1080/00014788.2011.575565
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:307-308
Template-Type: ReDIF-Article 1.0
Author-Name: Peter Wysocki
Author-X-Name-First: Peter
Author-X-Name-Last: Wysocki
Title: New institutional accounting and IFRS
Abstract:
This paper reviews recent advances from the institutional economics and
accounting literature to help build a nascent framework for ‘new
institutional accounting’ (NIA) research. The framework has five
basic elements: (i) institutional structure (formal vs. informal); (ii)
level of analysis (macro institutions vs. micro organisations); (iii)
causation (exogenous vs. endogenous institutions); (iv) interdependencies
(complementarities); and (v) efficient vs. inefficient outcomes. I apply
the framework to help provide insights into the determinants and outcomes
of accounting institutions (including IFRS) and non-accounting
institutions observed around the world. I conclude with a discussion of
opportunities and directions for future research on ‘new
institutional accounting’.
Journal: Accounting and Business Research
Pages: 309-328
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.575298
File-URL: http://hdl.handle.net/10.1080/00014788.2011.575298
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:309-328
Template-Type: ReDIF-Article 1.0
Author-Name: Mario Abela
Author-X-Name-First: Mario
Author-X-Name-Last: Abela
Title: Discussion
Journal: Accounting and Business Research
Pages: 329-331
Issue: 3
Volume: 41
Year: 2011
Month: 8
X-DOI: 10.1080/00014788.2011.575571
File-URL: http://hdl.handle.net/10.1080/00014788.2011.575571
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:3:p:329-331
Template-Type: ReDIF-Article 1.0
Author-Name: Breda Sweeney
Author-X-Name-First: Breda
Author-X-Name-Last: Sweeney
Author-Name: Bernard Pierce
Author-X-Name-First: Bernard
Author-X-Name-Last: Pierce
Title: Audit team defence mechanisms: auditee influence
Abstract:
This study examines the perceived ability of auditees to influence
external auditor controls and audit team behaviour (through, for example,
delaying the availability of information and selecting samples in advance
for auditors). Semi-structured interviews were carried out with 18 auditee
staff from seven publicly-listed companies who interacted on an ongoing
basis with the audit team. The findings provide an external perspective on
weaknesses in auditors' control systems and suggest that game playing
occurs between auditee and auditor staff in coping with conflicts that
arise during audit fieldwork. These constitute a form of
inter-organisational defence mechanism (coping mechanisms employed by
individuals in organisations to avoid embarrassment and threat).
Furthermore, the findings reveal previously unidentified auditee-related
variables that can impact on the effectiveness of the auditor's control
system. A number of implications of the findings for audit firms and
society are identified, such as the level of trust placed by society in
inexperienced time-pressured audit trainees, societal expectations of
auditors and the need to reduce the predictability of audit testing.
Journal: Accounting and Business Research
Pages: 333-356
Issue: 4
Volume: 41
Year: 2011
Month: 9
X-DOI: 10.1080/00014788.2011.559575
File-URL: http://hdl.handle.net/10.1080/00014788.2011.559575
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:4:p:333-356
Template-Type: ReDIF-Article 1.0
Author-Name: Penelope Tuck
Author-X-Name-First: Penelope
Author-X-Name-Last: Tuck
Author-Name: Margaret Lamb
Author-X-Name-First: Margaret
Author-X-Name-Last: Lamb
Author-Name: Keith Hoskin
Author-X-Name-First: Keith
Author-X-Name-Last: Hoskin
Title: Customers? The reconstruction of the ‘taxpayer’ in Inland Revenue discourse and practice
Abstract:
References to ‘customers’ have become commonplace in the
policy discourses within UK government and other public sector bodies. It
is a working assumption of UK public sector management that the concept of
the ‘customer’ can be applied to any public sector service
agency or department; and this paper analyses how the UK government's
revenue department, formerly titled the Inland Revenue (IR),
re-characterised firstly taxpayers and latterly tax claimants as
‘customers’, rather than ‘users’, of IR
services. This paper identifies some problems, dilemmas and ambiguities
associated with this reconceptualisation in the context of an organisation
that is predominantly a regulating department. Far from being merely a
reclassification of the taxpayer as customer, the emerging discourse and
associated practices of the IR were in part embedded in organisational
change, including the merger with HM Customs and Excise to form the
present-day HMRC. Thus this case analysis illustrates the limits of
consumerism as a strategic tool of a government revenue department and
raises wider questions for public management.
Journal: Accounting and Business Research
Pages: 357-374
Issue: 4
Volume: 41
Year: 2011
Month: 9
X-DOI: 10.1080/00014788.2011.566015
File-URL: http://hdl.handle.net/10.1080/00014788.2011.566015
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:4:p:357-374
Template-Type: ReDIF-Article 1.0
Author-Name: D. Jordan Lowe
Author-X-Name-First: D. Jordan
Author-X-Name-Last: Lowe
Author-Name: Salvador Carmona-Moreno
Author-X-Name-First: Salvador
Author-X-Name-Last: Carmona-Moreno
Author-Name: Philip M.J. Reckers
Author-X-Name-First: Philip M.J.
Author-X-Name-Last: Reckers
Title: The influence of strategy map communications and individual differences on multidimensional performance evaluations
Abstract:
Multidimensional performance evaluation systems such as the Balanced
Scorecard (BSC) were developed to overcome the documented tendency of
managers to focus almost exclusively on short-term financial performance
measures while disregarding or de-emphasising other short-term and/or
long-term non-financial performance measures. Evidence suggests, however,
that implementation of many of these systems has not achieved desired
outcomes. Cogent communication of a corporation's goals and management's
strategy to achieve those goals can be expected to influence employee
‘buy-in’ and the subsequent use or resistance to
multidimensional performance measures. In this study we examine the role
of strategy maps in communicating goals and strategy. We also examine
individual differences (tolerance of ambiguity and functional background)
that we believe also influence individuals to be more (or less) receptive
to the guidance of strategy maps. An experiment was conducted with 165
experienced professionals enrolled in MBA programmes in Spain and the US.
Our experimental results indicate that a strategy map reflecting
integrated dependencies can de-bias evaluations of certain groups of
individuals, who have high tolerance for ambiguity and have a financial
work background. Implications and suggestions for future research are also
provided.
Journal: Accounting and Business Research
Pages: 375-391
Issue: 4
Volume: 41
Year: 2011
Month: 9
X-DOI: 10.1080/00014788.2011.566084
File-URL: http://hdl.handle.net/10.1080/00014788.2011.566084
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:4:p:375-391
Template-Type: ReDIF-Article 1.0
Author-Name: Ann L.-C. Chan
Author-X-Name-First: Ann L.-C.
Author-X-Name-Last: Chan
Author-Name: Stephen W.J. Lin
Author-X-Name-First: Stephen W.J.
Author-X-Name-Last: Lin
Author-Name: Norman Strong
Author-X-Name-First: Norman
Author-X-Name-Last: Strong
Title: Earnings components and the asymmetric timeliness of earnings: the case of FRS 3 in the UK
Abstract:
We exploit a unique setting to examine how an accounting regulation
change affects the asymmetric timeliness of earnings. Financial Reporting
Standard No. 3: Reporting Financial Performance (FRS 3) changed the way
listed UK companies recognised bad news through ordinary or extraordinary
items. FRS 3 tightened the definition of extraordinary items but gave
wider discretion in classifying exceptional items. The results were that,
after FRS 3, the asymmetric timeliness of earnings before extraordinary
items increased and the association of earnings conservatism with
discretionary accruals was weaker.
Journal: Accounting and Business Research
Pages: 393-410
Issue: 4
Volume: 41
Year: 2011
Month: 9
X-DOI: 10.1080/00014788.2011.573662
File-URL: http://hdl.handle.net/10.1080/00014788.2011.573662
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:4:p:393-410
Template-Type: ReDIF-Article 1.0
Author-Name: Doris M. Merkl-Davies
Author-X-Name-First: Doris M.
Author-X-Name-Last: Merkl-Davies
Author-Name: Niamh M. Brennan
Author-X-Name-First: Niamh M.
Author-X-Name-Last: Brennan
Title: A conceptual framework of impression management: new insights from psychology, sociology and critical perspectives
Abstract:
In this paper we develop a conceptual framework, based on the concepts of
rationality and motivation, which uses theories and empirical research
from psychology/behavioural finance, sociology and critical accounting to
systematise, advance and challenge research on impression management. The
paper focuses on research that departs from economic concepts of
impression management as opportunistic managerial discretionary disclosure
behaviour resulting in reporting bias or ‘cheap talk’. Using
alternative rationality assumptions, such as bounded rationality,
irrationality, substantive rationality and the notion of rationality as a
social construct, we conceptualise impression management in alternative
ways as (1) self-serving bias, (2) symbolic management and (3) accounting
rhetoric. This contributes to an enhanced understanding of impression
management in a corporate reporting context.
Journal: Accounting and Business Research
Pages: 415-437
Issue: 5
Volume: 41
Year: 2011
Month: 12
X-DOI: 10.1080/00014788.2011.574222
File-URL: http://hdl.handle.net/10.1080/00014788.2011.574222
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:5:p:415-437
Template-Type: ReDIF-Article 1.0
Author-Name: Frank G.H. Hartmann
Author-X-Name-First: Frank G.H.
Author-X-Name-Last: Hartmann
Author-Name: Victor S. Maas
Author-X-Name-First: Victor S.
Author-X-Name-Last: Maas
Title: The effects of uncertainty on the roles of controllers and budgets: an exploratory study
Abstract:
This paper explores how contextual uncertainty and the use of the
budgetary system explain cross-sectional variation in the organisational
role of business unit controllers. We argue that there are
complementarities between the role of the budgetary control system (i.e.
coercive vs. enabling) and the role of the controller (i.e. corporate
policeman vs. business partner). Thus, we explore both the direct effect
of uncertainty on the role of the controller and the indirect effect
through the role of the budgetary control system. Using survey data from
134 business unit controllers, we find that uncertainty provides a partial
explanation of the variation in the role of budgetary control systems and
in the role of controllers. In particular, our data suggest alignment
between the coercive (enabling) use of the budgetary control system and
the role of controllers acting as corporate policemen (business partners).
These findings add to our understanding of the functioning of business
unit controllers within their organisational context.
Journal: Accounting and Business Research
Pages: 439-458
Issue: 5
Volume: 41
Year: 2011
Month: 12
X-DOI: 10.1080/00014788.2011.597656
File-URL: http://hdl.handle.net/10.1080/00014788.2011.597656
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:5:p:439-458
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Glaum
Author-X-Name-First: Martin
Author-X-Name-Last: Glaum
Author-Name: André Klöcker
Author-X-Name-First: André
Author-X-Name-Last: Klöcker
Title: Hedge accounting and its influence on financial hedging: when the tail wags the dog
Abstract:
We analyse the application of hedge accounting and its influence on
hedging behaviour in German and Swiss non-financial corporations. Of our
sample companies, 72% apply hedge accounting. The likelihood of its use is
associated with frequency of derivatives usage, size, IFRS experience,
perceived importance of reduced earnings volatility and low growth
opportunities. More than half of the companies using hedge accounting
indicate that the accounting rules influence their hedging behaviour.
Companies are more likely to be affected if they use derivatives only
occasionally, are smaller, are highly leveraged, have dispersed
shareholding, have fewer growth opportunities and hedge selectively.
Journal: Accounting and Business Research
Pages: 459-489
Issue: 5
Volume: 41
Year: 2011
Month: 12
X-DOI: 10.1080/00014788.2011.573746
File-URL: http://hdl.handle.net/10.1080/00014788.2011.573746
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:5:p:459-489
Template-Type: ReDIF-Article 1.0
Author-Name: Joanne Horton
Author-X-Name-First: Joanne
Author-X-Name-Last: Horton
Author-Name: Richard Macve
Author-X-Name-First: Richard
Author-X-Name-Last: Macve
Author-Name: George Serafeim
Author-X-Name-First: George
Author-X-Name-Last: Serafeim
Title: ‘Deprival value’ vs. ‘fair value’ measurement for contract liabilities: how to resolve the ‘revenue recognition’ conundrum?
Abstract:
Revenue recognition and measurement principles can conflict with
liability recognition and measurement principles. We explore here under
different market conditions when the two measurement approaches coincide
and when they conflict. We show that where entities expect to earn
‘super profits’ (residual income) the conceptual conflict is
exacerbated by the adoption of ‘fair value’ (FV) as the
measurement basis for assets and liabilities rather than the more
theoretically grounded approach of ‘deprival value/relief
value’ (DV/RV) which better reflects the impact of, and rational
management response to, varying market conditions. However, while the
problems of balance sheet liability and revenue recognition, and the
related problems of income statement presentation, can be resolved by the
application of DV/RV reasoning, this is not sufficient fully to resolve
issues of the appropriate timing of profit recognition. Performance
measurement issues still need to be addressed directly. The standard
setters' current projects on ‘revenue recognition’,
‘insurance contracts’ and ‘measurement’
therefore need broadening to consider the pervasive issue of accounting
for internally generated intangibles.
Journal: Accounting and Business Research
Pages: 491-514
Issue: 5
Volume: 41
Year: 2011
Month: 12
X-DOI: 10.1080/00014788.2011.603206
File-URL: http://hdl.handle.net/10.1080/00014788.2011.603206
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:5:p:491-514
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: On relief value (deprival value) versus fair value measurement for contract liabilities: a comment and a response
Abstract:
Horton, Macve and Serafeim (2011) (HMS) argue for the use of relief value
for the measurement of certain types of liabilities, and that the
replacement liability (an entry price) is normally the appropriate measure
of relief. I had previously argued elsewhere for an exit price (normally,
the performance value, PV). In this paper, I first try to clarify the
terminology used, and then I show why PV rather than RL is usually
appropriate for the industries in HMS' example and for some others. My
scope is more modest than that of HMS because I do not address
revenue/profit issues, which I think should be dealt with separately.
Journal: Accounting and Business Research
Pages: 515-524
Issue: 5
Volume: 41
Year: 2011
Month: 12
X-DOI: 10.1080/00014788.2011.623280
File-URL: http://hdl.handle.net/10.1080/00014788.2011.623280
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:41:y:2011:i:5:p:515-524
Template-Type: ReDIF-Article 1.0
Author-Name: Reggy Hooghiemstra
Author-X-Name-First: Reggy
Author-X-Name-Last: Hooghiemstra
Title: What determines the informativeness of firms' explanations for deviations from the Dutch corporate governance code?
Abstract:
The comply-or-explain principle is a common feature of corporate
governance codes. While prior studies investigated compliance with
corporate governance codes as well as the effects of compliance on firm
behaviour and performance, explanations for deviations from a corporate
governance code remain largely unexamined. This paper intends to fill that
gap. The paper draws on the voluntary disclosure literature and agency
theory to examine the association between firm characteristics and the
informativeness of explanations for deviations from the Dutch corporate
governance code. Applying content analysis to corporate governance
statements for a sample of Dutch listed firms for the period 2005--2009,
the study finds that ownership concentration and number of analysts
following the firm are positively associated with informativeness.
Furthermore, there is indicative evidence that board strength and
informativeness are positively associated. The study also finds a negative
association between leverage and informativeness. Institutional investors,
however, do not seem to affect this type of disclosure. Taken together,
the findings suggest that certain firm characteristics are associated with
a firm's choice to provide either generic and uninformative explanations
or more firm-specific and informative explanations. On the basis of the
study's findings, I argue that firms having weaker boards, firms followed
by fewer analysts, firms having more dispersed ownership and firms relying
more on debt finance tend to approach comply-or-explain more symbolically
than substantively.
Journal: Accounting and Business Research
Pages: 1-27
Issue: 1
Volume: 42
Year: 2012
Month: 3
X-DOI: 10.1080/00014788.2011.600630
File-URL: http://hdl.handle.net/10.1080/00014788.2011.600630
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Template-Type: ReDIF-Article 1.0
Author-Name: Atasi Basu
Author-X-Name-First: Atasi
Author-X-Name-Last: Basu
Author-Name: Randal Elder
Author-X-Name-First: Randal
Author-X-Name-Last: Elder
Author-Name: Mohamed Onsi
Author-X-Name-First: Mohamed
Author-X-Name-Last: Onsi
Title: Reported earnings, auditor's opinion, and compensation: theory and evidence
Abstract:
We study the effect of the auditor's independence on executive
compensation and executive effort allocation. Using principal-agent
theory, we examine a compensation contract involving two signals, one for
incentives and the other for control. The incentive signal is the earnings
reported by the executive and the control signal is the auditor's opinion.
The optimal weights on earnings and audit opinion in the agent's
compensation contract are obtained in a LEN (linear compensation plan,
exponential utility, normally distributed outcome) framework. The
pay-performance sensitivity (incentive weight on earnings) increases
monotonically as the auditor becomes more independent. However, the
pay-opinion sensitivity (incentive weight on audit opinion) first
increases and then decreases as the auditor becomes more independent. We
test some of these results empirically with publicly available data and
find that the executive is rewarded for higher reported earnings and
penalised for audit qualification. Evidence also shows that the
pay-performance sensitivity increases as the auditor becomes more
independent.
Journal: Accounting and Business Research
Pages: 29-48
Issue: 1
Volume: 42
Year: 2012
Month: 3
X-DOI: 10.1080/00014788.2011.606179
File-URL: http://hdl.handle.net/10.1080/00014788.2011.606179
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Template-Type: ReDIF-Article 1.0
Author-Name: Walter Aerts
Author-X-Name-First: Walter
Author-X-Name-Last: Aerts
Author-Name: Peng Cheng
Author-X-Name-First: Peng
Author-X-Name-Last: Cheng
Title: Self-serving causal disclosures and short-term IPO valuation -- evidence from China
Abstract:
We examine the association of self-serving causal disclosures regarding
earnings-related outcomes in the prospectuses of Chinese IPO firms and
short-term IPO valuation (offer price-based valuation and IPO first-day
underpricing). Using detailed content analysis of causal explanations in
the management commentary section of the IPO prospectus, we find that
assertive causal disclosures regarding positive outcomes, such as
enhancements and entitlements, are associated with higher IPO offer price
valuation and subsequent lower first-day underpricing. Defensive causal
disclosures regarding negative outcomes, such as excuses, justifications
and causality denials, however, tend to negatively affect IPO offer price
valuation but are not associated with first-day underpricing. This study
provides empirical evidence of the close alignment between self-serving
causal performance disclosures and short-term valuation in a proactive
environment such as the IPO setting. Moreover, it underscores the
differential impact of assertive and defensive causal performance
disclosures in a context where management's reputation is not yet well
established and disclosure credibility is hard to assess.
Journal: Accounting and Business Research
Pages: 49-75
Issue: 1
Volume: 42
Year: 2012
Month: 3
X-DOI: 10.1080/00014788.2012.622946
File-URL: http://hdl.handle.net/10.1080/00014788.2012.622946
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:1:p:49-75
Template-Type: ReDIF-Article 1.0
Author-Name: Abdallah Atieh
Author-X-Name-First: Abdallah
Author-X-Name-Last: Atieh
Author-Name: Simon Hussain
Author-X-Name-First: Simon
Author-X-Name-Last: Hussain
Title: Do UK firms manage earnings to meet dividend thresholds?
Abstract:
This paper examines earnings management by dividend-paying firms in cases
where pre-managed earnings would fall below the expected dividend, and by
non-dividend paying firms aiming to avoid reporting losses. We find that
within the UK market the likelihood of upward earnings management is
significantly greater in the former case than the latter, though both are
drivers for earnings management. Large firms are less likely to upwardly
manage earnings to reach dividend thresholds, consistent with prior UK
evidence on the ability of the largest firms to avoid restrictive debt
covenants. We also find that earnings management is more clearly
observable through examining working capital discretionary accruals than
through examining total discretionary accruals.
Journal: Accounting and Business Research
Pages: 77-94
Issue: 1
Volume: 42
Year: 2012
Month: 3
X-DOI: 10.1080/00014788.2012.622187
File-URL: http://hdl.handle.net/10.1080/00014788.2012.622187
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:1:p:77-94
Template-Type: ReDIF-Article 1.0
Author-Name: Liansheng Wu
Author-X-Name-First: Liansheng
Author-X-Name-Last: Wu
Author-Name: Yaping Wang
Author-X-Name-First: Yaping
Author-X-Name-Last: Wang
Author-Name: Wei Luo
Author-X-Name-First: Wei
Author-X-Name-Last: Luo
Author-Name: Paul Gillis
Author-X-Name-First: Paul
Author-X-Name-Last: Gillis
Title: State ownership, tax status and size effect of effective tax rate in China
Abstract:
Political cost theory and political power theory are two views on the
effect of firm size on effective tax rate (ETR) in extant literature. The
size effect of ETR can be investigated further by focusing on the
relationship between firms and the government. This paper uses state
ownership and tax status to capture this relationship and examines how
firm size, state ownership and tax status jointly affect effective tax
rates. It is found that, when firms do not enjoy a preferential tax
status, firm size is positively associated with effective tax rates for
privately controlled firms and negatively associated for state-controlled
firms. The results show that political cost theory explains the
relationship between size and effective tax rate for privately controlled
firms, whereas political power theory explains this relationship for
state-controlled firms. For those firms that already enjoy a preferential
tax status, there is no significant relationship between their size and
their tax burdens.
Journal: Accounting and Business Research
Pages: 97-114
Issue: 2
Volume: 42
Year: 2012
Month: 6
X-DOI: 10.1080/00014788.2012.628208
File-URL: http://hdl.handle.net/10.1080/00014788.2012.628208
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:2:p:97-114
Template-Type: ReDIF-Article 1.0
Author-Name: Kevin Holland
Author-X-Name-First: Kevin
Author-X-Name-Last: Holland
Author-Name: Jennifer Lane
Author-X-Name-First: Jennifer
Author-X-Name-Last: Lane
Title: Perceived auditor independence and audit firm fees
Abstract:
Regulations requiring the disclosure of fees paid to an auditor for audit
and non-audit services (NAS) respond to concerns that such payments are
potentially detrimental to auditors' actual or perceived independence.
Although empirical studies have failed to produce unequivocal evidence of
detrimental effects on auditor independence, the actions of regulators,
audit firms and companies are consistent with the belief that economic
bonding generated by fees can impair perceived levels of auditor
independence. Using a sample of UK companies over a six year period to
March 2006, we study perceived impairment of auditor independence by
examining the relationship between levels of total relative fees (combined
audit and NAS fees payable by a company to its auditor as a proportion of
the audit firm's UK income) and market value. This paper's methodological
innovation is its use of a valuation framework in this setting. A further
contribution lies in dropping the assumption of linearity found in most
prior empirical studies. We provide evidence that shareholders perceive a
threat to auditor independence only at high total relative fee levels. At
lower levels, total relative fees are positively related to company value.
These results suggest that disclosure of NAS and audit fees are of
relevance to investors, as is information about auditor income. Our
results support the view that regulation by reference to the threshold at
which total relative fees are perceived negatively is more consistent with
investor preferences than prohibition of the supply of NAS by auditors to
their audit clients.
Journal: Accounting and Business Research
Pages: 115-141
Issue: 2
Volume: 42
Year: 2012
Month: 6
X-DOI: 10.1080/00014788.2012.628157
File-URL: http://hdl.handle.net/10.1080/00014788.2012.628157
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:2:p:115-141
Template-Type: ReDIF-Article 1.0
Author-Name: Encarna Guillamon-Saorin
Author-X-Name-First: Encarna
Author-X-Name-Last: Guillamon-Saorin
Author-Name: Beatriz García Osma
Author-X-Name-First: Beatriz García
Author-X-Name-Last: Osma
Author-Name: Michael John Jones
Author-X-Name-First: Michael John
Author-X-Name-Last: Jones
Title: Opportunistic disclosure in press release headlines
Abstract:
This paper examines managerial, self-serving, disclosure practices in the
headlines of press releases announcing annual results. Headlines are a
framing feature that can be used to capture and retain attention with the
ultimate intention of affecting the thoughts and feelings of readers, thus
influencing their opinions. Therefore, headlines have a key role in a
company's communication strategy. Using a large sample of Spanish listed
companies for the years 2005 and 2006, we provide evidence of persistent
impression management in press release headlines. Companies, irrespective
of whether they perform well or badly, are inclined to stress good news
and downplay bad news. Companies with very small profits report surprising
amounts of good news. We provide evidence that companies are selective in
the performance figures they include in the headlines of press releases.
In particular, the disclosure of profits or sales figures in press release
headlines is also associated with earnings performance. Finally, we find
that larger firms are more likely to issue press releases than smaller
ones, consistent with the theory that highly visible firms face a greater
demand for information transparency.
Journal: Accounting and Business Research
Pages: 143-168
Issue: 2
Volume: 42
Year: 2012
Month: 6
X-DOI: 10.1080/00014788.2012.632575
File-URL: http://hdl.handle.net/10.1080/00014788.2012.632575
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:2:p:143-168
Template-Type: ReDIF-Article 1.0
Author-Name: Lasse Niemi
Author-X-Name-First: Lasse
Author-X-Name-Last: Niemi
Author-Name: Juha Kinnunen
Author-X-Name-First: Juha
Author-X-Name-Last: Kinnunen
Author-Name: Hannu Ojala
Author-X-Name-First: Hannu
Author-X-Name-Last: Ojala
Author-Name: Pontus Troberg
Author-X-Name-First: Pontus
Author-X-Name-Last: Troberg
Title: Drivers of voluntary audit in Finland: to be or not to be audited?
Abstract:
This paper examines factors affecting the owner-manager's voluntary
decision to hire an auditor in small firms. Using a random sample of 412
small private companies in Finland responding to an Internet survey, we
first probe the institutional boundaries of a prior UK study [Collis, J.,
Jarvis, R., and Skerratt, L., 2004. The demand for the audit in small
companies in the UK. Accounting and business research, 34
(2), 87--100] and conclude that its main findings can be generalised to a
different regulatory setting (Finland) typical of many Continental
European countries. Second, we broaden the prior research by testing new
hypotheses regarding the drivers of an audit among small companies. We
hypothesise and find evidence that outsourcing of critical accounting
functions creates information asymmetry between the owner-manager and the
external accountant, which may arouse the need for monitoring the external
accountant through a voluntary audit. In addition, we find, as
hypothesised, that tax advisory services provided by the external
accountant reduce the likelihood of a voluntary audit. Moreover, we
hypothesise that receiving a qualified opinion from the auditor reduces
the likelihood of hiring an auditor voluntarily, whereas firms
experiencing financial distress would be more willing to have their
financial statements audited. We find evidence consistent with these
hypotheses.
Journal: Accounting and Business Research
Pages: 169-196
Issue: 2
Volume: 42
Year: 2012
Month: 6
X-DOI: 10.1080/00014788.2012.653742
File-URL: http://hdl.handle.net/10.1080/00014788.2012.653742
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:2:p:169-196
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Alan Goodacre
Author-X-Name-First: Alan
Author-X-Name-Last: Goodacre
Title: Publication records of accounting and finance faculty promoted to professor: evidence from the UK
Abstract:
This study investigates publication profiles of 137 accounting and
finance faculty promoted to professor at UK universities during
1992--2007. On average, nine papers in established academic journals, with
5 at the highest 3*/4* quality levels in a portfolio of 20 outputs are
required for promotion. Based on various theoretical perspectives,
multivariate models of key performance benchmarks (quality and quantity
measures) are constructed and have good explanatory power
(R2 ≥ 0.7). Publication requirements
seem to have increased over time, argued to be mainly attributable to
government-initiated Research Assessment Exercises. For internal
promotions, there is some evidence of higher hurdles but no evidence that
quality requirements differ based on gender; sub-discipline; research
intensity of institution peer group; or government-initiated research
ranking of unit. Similarly, the quality benchmark is not reduced for those
having an increased recent publication history, a high number of non-ABS
outputs or sole-authored papers. Comparison with the US suggests
underlying geographically-based paradigm differences. UK promotion
benchmarks are argued to have evolved through a dynamic and complex
interaction between university managers, the government and the accounting
and finance academic community.
Journal: Accounting and Business Research
Pages: 197-231
Issue: 2
Volume: 42
Year: 2012
Month: 6
X-DOI: 10.1080/00014788.2012.673159
File-URL: http://hdl.handle.net/10.1080/00014788.2012.673159
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:2:p:197-231
Template-Type: ReDIF-Article 1.0
Author-Name: Janet Richards
Author-X-Name-First: Janet
Author-X-Name-Last: Richards
Title: Call for papers
Journal: Accounting and Business Research
Pages: 233-234
Issue: 2
Volume: 42
Year: 2012
Month: 6
X-DOI: 10.1080/00014788.2012.687201
File-URL: http://hdl.handle.net/10.1080/00014788.2012.687201
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:2:p:233-234
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial
Journal: Accounting and Business Research
Pages: 235-235
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.687200
File-URL: http://hdl.handle.net/10.1080/00014788.2012.687200
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:235-235
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 237-238
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.683640
File-URL: http://hdl.handle.net/10.1080/00014788.2012.683640
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:237-238
Template-Type: ReDIF-Article 1.0
Author-Name: Christian Laux
Author-X-Name-First: Christian
Author-X-Name-Last: Laux
Title: Financial instruments, financial reporting, and financial stability
Abstract:
I review new empirical evidence from the recent financial crisis on the
relation between financial reporting and financial stability. I draw the
following conclusions: First, there is still no evidence that fair value
accounting caused widespread fire sales of asset or contagion. Second, the
empirical evidence suggests that accounting and regulation might have
contributed to the crisis by allowing several banks to delay actions.
Third, even if share prices reacted positively to the relaxation of fair
value accounting rules during the crisis, the origin of the problem might
be lax rules that allowed banks to run into financial and regulatory
problems. Fourth, fair values can be relevant for assets that a bank
intends to hold until maturity if that bank strongly relies on short-term
financing. Fifth, the recognition of fair values is no substitute for
information that allows investors to judge a bank's risk exposure and the
validity of reported fair values.
Journal: Accounting and Business Research
Pages: 239-260
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.681857
File-URL: http://hdl.handle.net/10.1080/00014788.2012.681857
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:239-260
Template-Type: ReDIF-Article 1.0
Author-Name: Andrew G. Haldane
Author-X-Name-First: Andrew G.
Author-X-Name-Last: Haldane
Title: Discussion of ‘Financial instruments, financial reporting, and financial stability’ by Christian Laux (2012)
Journal: Accounting and Business Research
Pages: 261-266
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.683330
File-URL: http://hdl.handle.net/10.1080/00014788.2012.683330
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:261-266
Template-Type: ReDIF-Article 1.0
Author-Name: Günther Gebhardt
Author-X-Name-First: Günther
Author-X-Name-Last: Gebhardt
Title: Financial instruments in non-financial firms: what do we know?
Abstract:
Accounting for financial instruments is one of the most controversial
standard setting issues. Attempts by standard setters to expand the scope
of fair value measurement provoked fierce opposition from preparers, in
particular from the financial industry but also, albeit less frequently
and less scathingly, from non-financial firms. Academic research could
help to bring the discussion onto a more objective level. Most of the
existing research focuses on the financial industry and uses US disclosure
data from the 1990s. More recent papers use recognition and measurement
data from IFRS financial statements, again primarily from the financial
industry. This paper provides novel evidence on the relevance of financial
instruments for non-financial firms of the STOXX Europe 600 Index. The
results in particular refute the myths that fair value measurement of
financial instruments is pervasive and that many fair value measurements
are of the problematic ‘level 3’ quality. The empirical
evidence forms the background for a survey of the small body of existing
research on the effects of accounting standards relating to financial
instruments on non-financial firms. This survey covers research on the
effects on risk management, on the volatility of cash flows and earnings,
on earnings management and on the effects on user decisions. Both in the
empirical sections and in the survey sections, I identify a number of
areas for further research to overcome the poor current state of
knowledge.
Journal: Accounting and Business Research
Pages: 267-289
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.681859
File-URL: http://hdl.handle.net/10.1080/00014788.2012.681859
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:267-289
Template-Type: ReDIF-Article 1.0
Author-Name: Roger Harrington
Author-X-Name-First: Roger
Author-X-Name-Last: Harrington
Title: Discussion of ‘Financial instruments in non-financial firms: what do we know?’ by Günther Gebhardt (2012)
Journal: Accounting and Business Research
Pages: 291-293
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.683334
File-URL: http://hdl.handle.net/10.1080/00014788.2012.683334
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:291-293
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen G. Ryan
Author-X-Name-First: Stephen G.
Author-X-Name-Last: Ryan
Title: Risk reporting quality: implications of academic research for financial reporting policy
Abstract:
In this paper, I survey empirical research on the relevance of
firms’ financial report information for the evaluation of their
risk. I recommend that financial reporting policymakers require or
encourage firms to enhance their risk reporting quality in four ways.
First, firms should report comprehensive income statements that: (1) use
fair value or a similarly information-rich accounting measurement
attribute and (2) separate the components of comprehensive income that are
primarily driven by variation in cash flows from those that are primarily
driven by variation in costs of capital. Such comprehensive income
statements would provide users of financial reports with the flexibility
to calculate alternative summary accounting numbers and to perform
different types of risk assessment analyses. Second, firms should conduct
and disclose the results of back-tests of prior significant accrual
estimates, indicating any identified trends in and drivers of revisions to
those estimates, and describing the effects of those revisions on current
or future summary accounting numbers. Third, firms should aggregate and
present risk disclosures in tabular or other well-structured formats that
promote the usability of the information. Identifying existing best
disclosure practices and encouraging new best practices are the most
natural way to do this. Fourth, for model-dependent risk disclosures,
firms should disclose the primary historical and forward-looking
attributes of the models and their implementation in practice, sensitivity
of the model outputs, and benchmarking of the models to standard
portfolios of exposures.
Journal: Accounting and Business Research
Pages: 295-324
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.681855
File-URL: http://hdl.handle.net/10.1080/00014788.2012.681855
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:295-324
Template-Type: ReDIF-Article 1.0
Author-Name: Paul Lee
Author-X-Name-First: Paul
Author-X-Name-Last: Lee
Title: Discussion of ‘Risk reporting quality: implications of academic research for financial reporting policy’ by Stephen G. Ryan (2012)
Journal: Accounting and Business Research
Pages: 325-327
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.683332
File-URL: http://hdl.handle.net/10.1080/00014788.2012.683332
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:325-327
Template-Type: ReDIF-Article 1.0
Author-Name: James Leisenring
Author-X-Name-First: James
Author-X-Name-Last: Leisenring
Author-Name: Thomas Linsmeier
Author-X-Name-First: Thomas
Author-X-Name-Last: Linsmeier
Author-Name: Katherine Schipper
Author-X-Name-First: Katherine
Author-X-Name-Last: Schipper
Author-Name: Edward Trott
Author-X-Name-First: Edward
Author-X-Name-Last: Trott
Title: Business-model (intent)-based accounting
Abstract:
We discuss how basing financial reporting on an entity's business model
is, in effect, basing financial reporting on management's intent with
respect to the use, transfer or other disposition of an asset or
liability. We provide several examples of existing International Financial
Reporting Standards and US Generally Accepted Accounting Principles that
permit or require intent-based accounting. We describe the meaning and
consequences of basing the accounting for financial assets on management's
intentions for realising value from those assets. We analyse the positive
and negative features of intent-based accounting in the context of the
Financial Accounting Standards Board's and International Accounting
Standards Board's conceptual frameworks, specifically, the qualitative
characteristics relevance and comparability and the objective of financial
reporting, and apply that analysis to existing and proposed guidance for
measuring financial assets. We also discuss evidence from academic
research on the measurement of financial assets.
Journal: Accounting and Business Research
Pages: 329-344
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.681860
File-URL: http://hdl.handle.net/10.1080/00014788.2012.681860
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:329-344
Template-Type: ReDIF-Article 1.0
Author-Name: Alex Brougham
Author-X-Name-First: Alex
Author-X-Name-Last: Brougham
Title: Discussion of ‘Business-model (intent)-based accounting’ by Jim Leisenring, Thomas Linsmeier, Katherine Schipper and Edward Trott (2012)
Journal: Accounting and Business Research
Pages: 345-347
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.683335
File-URL: http://hdl.handle.net/10.1080/00014788.2012.683335
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:345-347
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Stella Fearnley
Author-X-Name-First: Stella
Author-X-Name-Last: Fearnley
Author-Name: Tony Hines
Author-X-Name-First: Tony
Author-X-Name-Last: Hines
Title: Do UK audit committees really engage with auditors on audit planning and performance?
Abstract:
In the wake of the financial crisis, regulators intend to increase the
responsibilities of audit committees (ACs), yet little is known about how
ACs discharge their existing responsibilities and interact with auditors
and management. This study investigates the involvement of the AC, the AC
chair (ACC), the audit partner (AP) and the chief financial officer (CFO)
in relation to a range of audit-related matters in UK-listed companies in
the 2007 regulatory environment, which remains fundamentally unchanged.
The level of AC and ACC engagement in seven AC responsibilities set by the
Combined Code is high (over 80%). However, only 50% of 16 audit planning,
performance and finalisation matters are routinely discussed. The ACC acts
without the full AC in 11% of discussions, while 25% involve only the CFO
and AP without either the ACC or the AC. The extent of discussion and/or
ACC involvement is influenced by background characteristics (company size,
auditor size and ACC experience and qualifications). This evidence of less
than full AC engagement with audit-related issues suggests that regulators
may risk creating an AC expectations gap if AC duties under the extant
model are significantly increased without structural change.
Journal: Accounting and Business Research
Pages: 349-375
Issue: 3
Volume: 42
Year: 2012
Month: 8
X-DOI: 10.1080/00014788.2012.698090
File-URL: http://hdl.handle.net/10.1080/00014788.2012.698090
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:3:p:349-375
Template-Type: ReDIF-Article 1.0
Author-Name: Marcel Van Rinsum
Author-X-Name-First: Marcel
Author-X-Name-Last: Van Rinsum
Author-Name: Frank H.M. Verbeeten
Author-X-Name-First: Frank H.M.
Author-X-Name-Last: Verbeeten
Title: The impact of subjectivity in performance evaluation practices on public sector managers’ motivation
Abstract:
We conduct an explorative study to investigate the effect of subjectivity
in performance evaluation practices on managerial motivation in public
sector organisations. Increased subjectivity can enhance motivation if
supervisors are able to provide better informational feedback. However,
subjectivity is likely to reduce motivation if it reduces perceived
mission clarity or negatively affects relations between supervisors and
subordinates. Our analysis is based on a survey among 94 public sector
managers in the Netherlands. We predict and find that subjectivity in
performance evaluation practices reduces perceived mission clarity, which
in turn decreases motivation. We also find that subjectivity negatively
affects subordinate managers’ trust in their supervisor, which also
reduces motivation. Jointly, these results indicate that the negative
effects of subjectivity in performance evaluation practices outweigh its
potential positive consequences, suggesting that New Public Management's
focus on more objective performance measures can indeed be beneficial. By
itself, however, this does not automatically imply that more objective
systems in general are optimal in all public sector organisations as such
systems may have dysfunctional side effects such as distortion of
performance measures, gaming or manipulation. In addition, we find that
the effects of subjectivity are moderated by organisational
characteristics.
Journal: Accounting and Business Research
Pages: 377-396
Issue: 4
Volume: 42
Year: 2012
Month: 9
X-DOI: 10.1080/00014788.2012.653747
File-URL: http://hdl.handle.net/10.1080/00014788.2012.653747
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:4:p:377-396
Template-Type: ReDIF-Article 1.0
Author-Name: Elisabeth Dedman
Author-X-Name-First: Elisabeth
Author-X-Name-Last: Dedman
Author-Name: Asad Kausar
Author-X-Name-First: Asad
Author-X-Name-Last: Kausar
Title: The impact of voluntary audit on credit ratings: evidence from UK private firms
Abstract:
After a long period of universal mandatory audit, the UK reduced the
regulatory burden of private firms by introducing size-based audit
exemption in 1994; the size thresholds have subsequently been
progressively increased. Both accounting bodies and credit-rating agencies
(CRAs) have expressed reservations about this policy, arguing it could
diminish user confidence in reported accounting numbers, and lead to a
reduction in financial statement quality and credit ratings. Prior
research, however, suggests that the managers of small UK companies do not
perceive there to be an association between financial statement audit and
firm credit score. To provide evidence of any effect on user confidence of
making audit optional, we examine the credit scores and financial
reporting quality of a large sample of UK private firms which qualified
for audit exemption after major threshold changes in 2004. We find that,
even though they report lower average profits, companies which retain a
voluntary audit enjoy significantly higher credit scores than those which
opt out of audit. The results of both conservatism and accruals-based
tests indicate that opting out of audit is associated with less
conservative financial reporting, consistent with the concerns of the
accounting bodies and the CRAs, and providing an explanation for why
opt-out firms report higher profits but receive lower credit scores. This
study contributes to an important policy debate by providing large sample
evidence that the audit does confer benefits to private firms in terms of
financial reporting quality, assurance and the credit scores generated
from the financial reports.
Journal: Accounting and Business Research
Pages: 397-418
Issue: 4
Volume: 42
Year: 2012
Month: 9
X-DOI: 10.1080/00014788.2012.653761
File-URL: http://hdl.handle.net/10.1080/00014788.2012.653761
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:4:p:397-418
Template-Type: ReDIF-Article 1.0
Author-Name: Mark A. Clatworthy
Author-X-Name-First: Mark A.
Author-X-Name-Last: Clatworthy
Author-Name: Christopher K.M. Pong
Author-X-Name-First: Christopher K.M.
Author-X-Name-Last: Pong
Author-Name: Woon K. Wong
Author-X-Name-First: Woon K.
Author-X-Name-Last: Wong
Title: Auditor quality effects on the relationship between accruals, cash flows and equity returns: a variance decomposition analysis
Abstract:
In this paper, we examine the relative importance of the cash flow and
accruals components of earnings in explaining the variation in UK company
equity returns, together with the extent to which these relationships vary
by auditor quality. We use a multivariate time-series approach that can be
reconciled to a log-linear theoretical valuation model and, unlike the
standard linear regression of returns on earnings components, accommodates
time-varying discount rates. Based on a decomposition of the variance of
equity returns, cash flows and accruals, our results indicate that both
cash flow news and accruals news are important drivers of UK equity
returns, although cash flows are more influential than accruals. We also
find that variation in both earnings components has a more significant
effect on returns for clients of large auditors. Finally, our results
provide mixed evidence on the question of whether the impact of auditor
quality is highest for the accruals component of earnings.
Journal: Accounting and Business Research
Pages: 419-439
Issue: 4
Volume: 42
Year: 2012
Month: 9
X-DOI: 10.1080/00014788.2012.662791
File-URL: http://hdl.handle.net/10.1080/00014788.2012.662791
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:4:p:419-439
Template-Type: ReDIF-Article 1.0
Author-Name: Jill Collis
Author-X-Name-First: Jill
Author-X-Name-Last: Collis
Title: Determinants of voluntary audit and voluntary full accounts in micro- and non-micro small companies in the UK
Abstract:
This study investigates the link between the auditing and filing choices
made by a sample of 592 small private companies, which includes 419
micro-companies. It examines decisions made in connection with the 2006
accounts following UK's adoption of the maximum EU size thresholds in
2004, and the impact of the proposed Directive on the annual accounts of
micro-companies. The research extends the model of cost, management and
agency factors associated with voluntary audit, and develops a
complementary model for voluntary full accounts. The results show the
benefits of placing full audited accounts on public record that outweigh
the costs for a significant proportion of companies. In non-micro small
companies, voluntary audit is determined by cost and agency factors,
whereas in micro-companies it is driven by cost, management and agency
factors. In both groups, the predictors of voluntary full accounts include
management and agency factors, and choosing voluntary audit is one of the
key factors. The study provides models that can be tested in other
jurisdictions to provide evidence of the needs of micro-companies, and the
discussion of the methodological challenges for small company researchers
in the UK makes further contribution to the literature.
Journal: Accounting and Business Research
Pages: 441-468
Issue: 4
Volume: 42
Year: 2012
Month: 9
X-DOI: 10.1080/00014788.2012.667969
File-URL: http://hdl.handle.net/10.1080/00014788.2012.667969
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:4:p:441-468
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Sarah Jane Smith
Author-X-Name-First: Sarah Jane
Author-X-Name-Last: Smith
Title: Evaluating disclosure theory using the views of UK finance directors in the intellectual capital context
Abstract:
In contrast to most prior research in this area, which focuses on actual
disclosures, this study uses a large-scale direct method to investigate
the factors that a key preparer group believes influence intellectual
capital (IC) disclosure decisions. IC disclosures are typically
characterised by uncertainty of interpretation and high levels of
commercial sensitivity. A questionnaire elicits 93 UK-listed company
finance directors' views regarding the influences on these decisions.
Results are used to evaluate the relative explanatory power of several
theoretical and practical reasons for disclosure. Strongest support is
found for competitive disadvantage and capital market considerations.
Issues related to legitimacy theory, stakeholder theory and other economic
disclosure costs also feature. Factor analysis reduces the set of 28
incentives and disincentives to 10 uncorrelated dimensions, indicating
that a broad and complex set of overlapping factors affect the disclosure
decision. The importance of disclosure incentives and disincentives is
found to vary both within and between disclosure topics, which may explain
the variation in findings in prior research.
Journal: Accounting and Business Research
Pages: 471-494
Issue: 5
Volume: 42
Year: 2012
Month: 12
X-DOI: 10.1080/00014788.2012.668468
File-URL: http://hdl.handle.net/10.1080/00014788.2012.668468
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:5:p:471-494
Template-Type: ReDIF-Article 1.0
Author-Name: Ralph Kober
Author-X-Name-First: Ralph
Author-X-Name-Last: Kober
Author-Name: Janet Lee
Author-X-Name-First: Janet
Author-X-Name-Last: Lee
Author-Name: Juliana Ng
Author-X-Name-First: Juliana
Author-X-Name-Last: Ng
Title: Conceptual framework issues: perspectives of Australian public sector stakeholders
Abstract:
Recent international developments have refuelled the debate on public
sector conceptual framework issues. Drawing on the Australian experience,
this study surveys stakeholders of public sector financial reports to
examine issues of concern in the development of concepts, definitions and
principles pertinent to a public sector conceptual framework. The
empirical evidence reveals varying degrees of consensus to questions
relating to the objectives of financial reporting, the boundaries of
financial reporting and financial statement elements. Respondents are
generally not supportive of a single conceptual framework for both private
and public sectors. The study also draws on the practices from other
countries to provide a more insightful analysis. The study informs the
progress of the development of a public sector conceptual framework by
highlighting areas that need attention and identifying challenges that
exist for standard setters in the further development of a conceptual
framework that meets the needs of the public sector.
Journal: Accounting and Business Research
Pages: 495-518
Issue: 5
Volume: 42
Year: 2012
Month: 12
X-DOI: 10.1080/00014788.2012.670383
File-URL: http://hdl.handle.net/10.1080/00014788.2012.670383
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:5:p:495-518
Template-Type: ReDIF-Article 1.0
Author-Name: Michael J. Turner
Author-X-Name-First: Michael J.
Author-X-Name-Last: Turner
Author-Name: Chris Guilding
Author-X-Name-First: Chris
Author-X-Name-Last: Guilding
Title: Factors affecting biasing of capital budgeting cash flow forecasts: evidence from the hotel industry
Abstract:
This study contributes to a neglected aspect of the capital budgeting
process, namely, the proposal development stage, which is primarily
concerned with project cash flow estimation. Given that the deployment of
sophisticated selection techniques is severely undermined when directed to
input data suffering from bias, it is surprising that minimal empirical
research has sought to explore for antecedent factors associated with
biasing of capital budgeting cash flow forecasts. This paper reports the
findings of a survey concerned with determining factors associated with
biasing of capital budget cash flow forecasts in hotels that are mediated
by a management contract. Statistically significant support is provided
for the view that higher levels of biasing of capital budget cash flow
forecasts occur in the presence of: high emphasis attached to the payback
investment appraisal method; deficient reserve funds for furniture,
fittings, and equipment (FF&E); low operator accessibility to reserve
funds for FF&E; shorter periods of time to management contract expiry; and
high emphasis attached to non-financial factors in capital budgeting
appraisal.
Journal: Accounting and Business Research
Pages: 519-545
Issue: 5
Volume: 42
Year: 2012
Month: 12
X-DOI: 10.1080/00014788.2012.670405
File-URL: http://hdl.handle.net/10.1080/00014788.2012.670405
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:5:p:519-545
Template-Type: ReDIF-Article 1.0
Author-Name: Thomas Schleicher
Author-X-Name-First: Thomas
Author-X-Name-Last: Schleicher
Title: When is good news really good news?
Abstract:
The impression management literature suggests that managers often resort
to biased disclosures. However, there is little systematic evidence on
what types of strategies management uses to achieve this bias. Do managers
simply lie? Or, do they use more subtle ways of introducing positive bias
into corporate narratives, such as selecting specific information items
which result in a more positive impression (‘selectivity’)
or by keeping their narratives vague and general
(‘vagueness’)? In order to differentiate between the two
scenarios, I re-examine the positive forward-looking statements examined
by Schleicher and Walker (2010) and compare, across firms with improving
and deteriorating financial performance, the managerial choices made in
relation to eight forecast attributes. I make two observations. First,
there are significant differences in the characteristics of good- and
bad-news firms’ positive statements. In particular, bad-news
firms’ positive statements involve more non-specific time horizons,
more segmental forecasts, and more references to conditions and aims and
objectives, but fewer directional forecasts, fewer numbers, and fewer
reinforcing qualifiers. Second, the identified differences in good- and
bad-news firms’ positive statements can be exploited for
classification purposes: including into a classification model additional
regressors that measure a positive forward-looking statement's level of
selectivity and vagueness significantly increases the model's ability to
separate firms with improving financial performance from firms with
deteriorating financial performance. Overall, my results are consistent
with (a) impression management operating predominantly through selectivity
and vagueness and (b) selectivity and vagueness being an important signal
for future financial performance.
Journal: Accounting and Business Research
Pages: 547-573
Issue: 5
Volume: 42
Year: 2012
Month: 12
X-DOI: 10.1080/00014788.2012.685275
File-URL: http://hdl.handle.net/10.1080/00014788.2012.685275
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Handle: RePEc:taf:acctbr:v:42:y:2012:i:5:p:547-573
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Title: Editorial
Journal: Accounting and Business Research
Pages: 1-2
Issue: 1
Volume: 43
Year: 2013
Month: 2
X-DOI: 10.1080/00014788.2013.764131
File-URL: http://hdl.handle.net/10.1080/00014788.2013.764131
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:1:p:1-2
Template-Type: ReDIF-Article 1.0
Author-Name: Yong Li
Author-X-Name-First: Yong
Author-X-Name-Last: Li
Author-Name: Paul Klumpes
Author-X-Name-First: Paul
Author-X-Name-Last: Klumpes
Title: Determinants of expected rate of return on pension assets: evidence from the UK
Abstract:
This study explores whether UK managers behaved opportunistically when
determining the expected rate of return on pension assets (ERRs) during an
extended period of major changes in pension accounting rules (1998--2002),
and whether this behaviour changed with the transitional adoption of FRS
17. The empirical results support the contracting hypothesis that UK firms
with tightening debt covenants inflated their reported ERRs over this
period. The contracting cost incentive underlying reported ERRs appears to
be stronger during the FRS 17 transitional adoption period, and ERRs were
used jointly with salary growth rate to manage balance sheet leverage. One
important implication of our findings is that the IASB's 2011 revision to
IAS 19, Employee Benefits, which removed the flexibility that firms could
exercise in selection of ERR assumptions, potentially improves the
reliability of reported pension cost components.
Journal: Accounting and Business Research
Pages: 3-30
Issue: 1
Volume: 43
Year: 2013
Month: 2
X-DOI: 10.1080/00014788.2012.685286
File-URL: http://hdl.handle.net/10.1080/00014788.2012.685286
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:1:p:3-30
Template-Type: ReDIF-Article 1.0
Author-Name: Stefan Sundgren
Author-X-Name-First: Stefan
Author-X-Name-Last: Sundgren
Author-Name: Tobias Svanström
Author-X-Name-First: Tobias
Author-X-Name-Last: Svanström
Title: Audit office size, audit quality and audit pricing: evidence from small- and medium-sized enterprises
Abstract:
Using Swedish data, we investigate how audit quality and audit pricing
vary with audit firm and office size. In contrast to prior studies, we use
disciplinary sanctions issued against auditors not meeting the quality
requirement as the measure of audit quality. We find no significant
differences in the likelihood of sanctions between Big 4 audit firms and
the fifth and sixth largest audit firms in Sweden (Grant Thornton and
BDO). We refer to these collectively as ‘Top 6’. However, we
find that the probabilities of warnings or exclusions from the profession
are much higher for non-Top 6 auditors in Sweden than for Top 6 auditors.
Furthermore, we find a strong negative association between the likelihood
of sanctions and audit office size for non-Top 6 auditors. This
association is insignificant for Top 6 audit firms. Audit fees follow a
similar pattern and indicate that larger audit firms and offices put in
more effort or have greater expertise. These results suggest that audit
quality is differentiated in the private segment market. However, contrary
to prior studies, our results suggest that the important dimensions are
Top 6 versus non-Top 6 and the office size of non-Top 6 audit firms.
Journal: Accounting and Business Research
Pages: 31-55
Issue: 1
Volume: 43
Year: 2013
Month: 2
X-DOI: 10.1080/00014788.2012.691710
File-URL: http://hdl.handle.net/10.1080/00014788.2012.691710
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:1:p:31-55
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Stella Fearnley
Author-X-Name-First: Stella
Author-X-Name-Last: Fearnley
Author-Name: Tony Hines
Author-X-Name-First: Tony
Author-X-Name-Last: Hines
Title: Perceptions of factors affecting audit quality in the post-SOX UK regulatory environment
Abstract:
Global repercussions of the Enron scandal and particularly the enactment
of the Sarbanes--Oxley Act (SOX) in the USA, resulted in significant
changes in the UK regulatory regime for audit and corporate governance,
including an increased role for audit committees and independent
inspection of audit firms. UK-listed company chief financial officers,
audit committee chairs (ACCs) and audit partners were surveyed in 2007 to
obtain views on the impact of 36 economic and regulatory factors on audit
quality post-SOX. Four hundred and ninety-eight usable responses were
received, representing a response rate of 36%. All groups rated various
audit committee interactions with auditors among the factors most
enhancing audit quality. However, International Standards on Auditing
(ISAs) and the audit inspection regime, aspects of the
‘standards-surveillance-compliance’ regulatory system, are
viewed as less effective. Exploratory factor analysis reduces the 36
factors to nine independent dimensions: economic risk; audit committee
activities; risk of regulatory action; audit firm ethics; economic
independence of auditor; audit partner rotation; risk of client loss;
audit firm size and, lastly, ISAs and audit inspection. Post-SOX
regulations have introduced additional dimensions to the factors
influencing audit quality. Respondents commented that aspects of the
changed regime are largely process and compliance driven, with high costs
for limited benefits, a finding consistent with regulatory over-reaction.
Journal: Accounting and Business Research
Pages: 56-81
Issue: 1
Volume: 43
Year: 2013
Month: 2
X-DOI: 10.1080/00014788.2012.703079
File-URL: http://hdl.handle.net/10.1080/00014788.2012.703079
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:1:p:56-81
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: The continued survival of international differences under IFRS
Abstract:
The claimed starting point for much recent literature is that
International Financial Reporting Standards (IFRS) have been very widely
adopted. That is somewhere between an error and a misleading
simplification. This paper begins by providing an antidote by analysing
the degree to which IFRS have not been adopted in the
jurisdictions containing the world's largest 16 stock markets. This might
help researchers with their institutional settings. The paper then
examines several issues which can lead to international differences in
IFRS practice, starting with language and enforcement, but focusing mainly
on policy options. Previously published lists of these are up-dated, the
extensive recent literature on IFRS policy choice and policy change is
synthesised, and new data are provided. Finally, researchers are offered
some lessons from the past and some directions for the future.
Journal: Accounting and Business Research
Pages: 83-111
Issue: 2
Volume: 43
Year: 2013
Month: 4
X-DOI: 10.1080/00014788.2013.770644
File-URL: http://hdl.handle.net/10.1080/00014788.2013.770644
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:2:p:83-111
Template-Type: ReDIF-Article 1.0
Author-Name: Breda Sweeney
Author-X-Name-First: Breda
Author-X-Name-Last: Sweeney
Author-Name: Bernard Pierce
Author-X-Name-First: Bernard
Author-X-Name-Last: Pierce
Author-Name: Donald F. Arnold
Author-X-Name-First: Donald F.
Author-X-Name-Last: Arnold
Title: The impact of perceived ethical intensity on audit-quality-threatening behaviours
Abstract:
Although there has been significant interest among researchers in
audit-quality-threatening behaviours (QTBs), the decision process through
which staff auditors engage in those behaviours has received relatively
little attention. It seems likely that the ethical intensity of the
behaviours perceived by auditors may play an important role in that
process; to date, this has not been tested. This study examines the
mediating role of perceived ethical intensity in the relationship between
perceived ethical culture of the firm and the auditors' ethical evaluation
of, and intention to engage in, three different forms of QTBs. A
multi-item measure of ethical intensity is developed and the findings
provide the first empirical evidence of a direct relationship between
perceived ethical intensity and ethical decision-making regarding QTBs.
Moreover, the findings show that perceived ethical intensity fully
mediates the relationship between perceived ethical culture and ethical
decision-making. Implications of the findings for accounting firms and for
researchers are discussed and areas for future research on the mediating
role of perceived ethical intensity are suggested in the paper.
Journal: Accounting and Business Research
Pages: 112-137
Issue: 2
Volume: 43
Year: 2013
Month: 4
X-DOI: 10.1080/00014788.2013.771571
File-URL: http://hdl.handle.net/10.1080/00014788.2013.771571
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:2:p:112-137
Template-Type: ReDIF-Article 1.0
Author-Name: Anne-Mie Reheul
Author-X-Name-First: Anne-Mie
Author-X-Name-Last: Reheul
Author-Name: Tom Van Caneghem
Author-X-Name-First: Tom
Author-X-Name-Last: Van Caneghem
Author-Name: Sandra Verbruggen
Author-X-Name-First: Sandra
Author-X-Name-Last: Verbruggen
Title: Audit report lags in the Belgian non-profit sector: an empirical analysis
Abstract:
In the current study, we examine audit report lags (ARLs) among a large
sample of Belgian non-profit organisations (NPOs). Doing so, we (i) add to
the very recent, but rapidly growing literature on financial reporting and
auditing in the non-profit sector; and (ii) test the generalisability of
findings regarding the ARL from the for-profit sector to the non-profit
sector. We note that ARLs for Belgian NPOs are substantially larger than
those reported in prior studies based on for-profit firms, which can be
explained by differences in reporting incentives (e.g. the absence of
capital markets pressures). In addition to determinants of the ARL that
have been identified in prior studies based on for-profit firms (e.g.
auditor business risk), we find that also the way of funding the
organisation (i.e. the degree of reliance upon donations and/or grants)
and its specific area of activity are significantly related to the ARL.
The requirement of an external financial statement audit (together with
new accounting and financial reporting requirements) for Belgian NPOs was
only recently introduced (i.e. from 2006 onwards). We do not observe a
decrease in ARLs in the two years after the introduction of the new legal
obligations.
Journal: Accounting and Business Research
Pages: 138-158
Issue: 2
Volume: 43
Year: 2013
Month: 4
X-DOI: 10.1080/00014788.2013.777828
File-URL: http://hdl.handle.net/10.1080/00014788.2013.777828
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:2:p:138-158
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Glaum
Author-X-Name-First: Martin
Author-X-Name-Last: Glaum
Author-Name: Peter Schmidt
Author-X-Name-First: Peter
Author-X-Name-Last: Schmidt
Author-Name: Donna L. Street
Author-X-Name-First: Donna L.
Author-X-Name-Last: Street
Author-Name: Silvia Vogel
Author-X-Name-First: Silvia
Author-X-Name-Last: Vogel
Title: Compliance with IFRS 3- and IAS 36-required disclosures across 17 European countries: company- and country-level determinants
Abstract:
In this study, we analyse compliance for a large sample of
European companies mandatorily applying International Financial Reporting
Standards (IFRS). Focusing on disclosures required by IFRS 3
Business Combinations and International Accounting
Standard 36 Impairment of Assets, we find substantial
non-compliance. Compliance levels are determined jointly by company- and
country-level variables, indicating that accounting traditions and other
country-specific factors continue to play a role despite the use of common
reporting standards under IFRS. At the company level, we identify the
importance of goodwill positions, prior experience with IFRS, type of
auditor, the existence of audit committees, the issuance of equity shares
or bonds in the reporting period or in the subsequent period, ownership
structure and the financial services industry as influential factors. At
the country level, the strength of the enforcement system and the size of
the national stock market are associated with compliance. Both factors not
only directly influence compliance but also moderate and mediate some
company-level factors. Finally, national culture in the form of the
strength of national traditions (‘conservation’) also
influences compliance, in combination with company-level factors.
Journal: Accounting and Business Research
Pages: 163-204
Issue: 3
Volume: 43
Year: 2013
Month: 6
X-DOI: 10.1080/00014788.2012.711131
File-URL: http://hdl.handle.net/10.1080/00014788.2012.711131
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:3:p:163-204
Template-Type: ReDIF-Article 1.0
Author-Name: Eleanor Dart
Author-X-Name-First: Eleanor
Author-X-Name-Last: Dart
Author-Name: Roy Chandler
Author-X-Name-First: Roy
Author-X-Name-Last: Chandler
Title: Client employment of previous auditors: shareholders’ views on auditor independence
Abstract:
The role of auditors is to add credibility to financial
information and to reduce the risk of management manipulation or
concealment. It is vital that auditors be independent of company
management. In practice, however, various circumstances may pose a
potential threat to auditor independence. One of these threats is the
employment of an ex-auditor by a client company. Relatively little
research has so far been carried out in this area. We investigated whether
investors (both private and institutional) perceived the employment of a
former auditor by an audit client as a threat to the independence of the
audit firm and whether they would invest in a company which had
‘poached’ a member of the audit team. We found little
evidence of concern on the part of institutional investors about the risks
posed by auditors joining former client companies. However, private
investors demonstrated significantly greater levels of concern about
issues related to auditor independence. Although there were differences in
the views of institutional and private investors, there did not appear to
be a strong demand from respondents to our survey for more stringent
restrictions on the movement of auditors from audit firms to audit
clients.
Journal: Accounting and Business Research
Pages: 205-224
Issue: 3
Volume: 43
Year: 2013
Month: 6
X-DOI: 10.1080/00014788.2012.707968
File-URL: http://hdl.handle.net/10.1080/00014788.2012.707968
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:3:p:205-224
Template-Type: ReDIF-Article 1.0
Author-Name: John O'Hanlon
Author-X-Name-First: John
Author-X-Name-Last: O'Hanlon
Title: Did loan-loss provisioning by UK banks become less timely after implementation of IAS 39?
Abstract:
Following the financial and banking crisis of the late 2000s,
accounting regulators sought to replace the incurred-loss method of
loan-loss provisioning by a more forward-looking expected-loss method.
Difficulties arose, including with respect to the weight that
expected-loss provisioning should place on objective evidence of loss
relative to evidence of a less specific and more judgemental nature. This
paper provides evidence relevant to this issue by examining whether
loan-loss provisioning by UK banks was less timely under the stricter
evidence requirements of the IAS 39 incurred-loss regime implemented in
2005 than under the less strict evidence requirements of the previous UK
incurred-loss regime. It does so by reference to the relationship in time
between loan write-offs and loan-loss expense. The results do not suggest
that provisioning became less timely under the stricter evidence
requirements of IAS 39. There is no evidence that provisioning became less
timely immediately prior to the crisis of the late 2000s. Also, there is
no evidence that general provisioning, permitted under the pre-IAS 39
regime, enhanced the timeliness of loan-loss provisioning. The results do
not suggest that stricter requirements regarding the evidence necessary to
support recognition of loan losses have resulted in less timely loan-loss
provisioning.
Journal: Accounting and Business Research
Pages: 225-258
Issue: 3
Volume: 43
Year: 2013
Month: 6
X-DOI: 10.1080/00014788.2013.747260
File-URL: http://hdl.handle.net/10.1080/00014788.2013.747260
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:3:p:225-258
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial
Journal: Accounting and Business Research
Pages: 259-259
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.801654
File-URL: http://hdl.handle.net/10.1080/00014788.2013.801654
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:259-259
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 260-261
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.799409
File-URL: http://hdl.handle.net/10.1080/00014788.2013.799409
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:260-261
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen A. Zeff
Author-X-Name-First: Stephen A.
Author-X-Name-Last: Zeff
Title: The objectives of financial reporting: a historical survey and analysis
Abstract:
This article is a survey and analysis of the succession of
writings on the objectives of financial reporting during the past 90
years. Its aim is to contribute towards an understanding of the origins,
significance, and limitations of conceptual frameworks. The article begins
with a review of the extensive literature, including the series of
recommended and approved conceptual frameworks, in the USA and then
proceeds to examine the corresponding literatures in Great Britain,
Canada, and Australia, followed by a discussion of the framework issued by
the International Accounting Standards Committee in 1989 and Chapters 1
and 3 of the framework issued by the International Accounting Standards
Board and Financial Accounting Standards Board in 2010. Summary remarks
about Continental Europe conclude the survey. Attention is drawn to the
criticisms of the objectives approach as well as to its possible perverse
consequences for the remainder of the framework. In the course of the
survey, there is an attempt to trace the evolution of stewardship and
conservatism, or prudence, in the series of frameworks.
Journal: Accounting and Business Research
Pages: 262-327
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.782237
File-URL: http://hdl.handle.net/10.1080/00014788.2013.782237
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:262-327
Template-Type: ReDIF-Article 1.0
Author-Name: Luzi Hail
Author-X-Name-First: Luzi
Author-X-Name-Last: Hail
Title: Financial reporting and firm valuation: relevance lost or relevance regained?
Abstract:
In this study, I examine whether balance sheet and income
statement numbers have lost or regained their relevance over the last 30
years. Institutional and macroeconomic factors like the global trend
towards strengthening regulation and harmonising financial reporting, the
extended use of fair values over historical cost, and the recurring
occurrence of accounting scandals, market bubbles, and financial crises
make it likely that the role of financial reporting for firm valuation has
changed. Following prior research, I estimate four models for the
concurrent relation between market value and accounting numbers, and then
examine the pattern in explanatory power over time. I find that the loss
in relevance of the income statement continues in recent years and is
present in a large international sample, in particular in countries with
strong institutions. While the overall relevance of the balance sheet
remains stable, I find a downward trend during the first sample half,
which reverses in the second half, especially in common law countries with
strong investor protection, strict disclosure requirements, and integrated
markets. Even though several caveats apply, the results suggest that
changes in the economy, the institutional environment, and in how firms
operate affect the relative importance of accounting information for the
use in firm valuation by outside stakeholders.
Journal: Accounting and Business Research
Pages: 329-358
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.799402
File-URL: http://hdl.handle.net/10.1080/00014788.2013.799402
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:329-358
Template-Type: ReDIF-Article 1.0
Author-Name: Peter Elwin
Author-X-Name-First: Peter
Author-X-Name-Last: Elwin
Title: Discussion of ‘Financial Reporting and Firm Valuation: Relevance Lost or Relevance Regained?’ by Luzi Hail (2013)
Journal: Accounting and Business Research
Pages: 359-361
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.801674
File-URL: http://hdl.handle.net/10.1080/00014788.2013.801674
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:359-361
Template-Type: ReDIF-Article 1.0
Author-Name: Lakshmanan Shivakumar
Author-X-Name-First: Lakshmanan
Author-X-Name-Last: Shivakumar
Title: The role of financial reporting in debt contracting and in stewardship
Abstract:
In this paper, I review the role that financial accounting
plays in contracts aimed at mitigating agency problems between
shareholders and managers and between shareholders and debtholders. The
paper discusses the reasons why and how financial accounting numbers are
used in debt and stewardship contracting. It further considers the effects
of conservatism and fair-value accounting on the relevance of financial
reports for contracting. The paper provides some key takeaways from
academic literature for accounting practice and regulation.
Journal: Accounting and Business Research
Pages: 362-383
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.785683
File-URL: http://hdl.handle.net/10.1080/00014788.2013.785683
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:362-383
Template-Type: ReDIF-Article 1.0
Author-Name: Trevor Pitman
Author-X-Name-First: Trevor
Author-X-Name-Last: Pitman
Title: Discussion of ‘The role of financial reporting in debt contracting and in stewardship’ by Lakshmanan Shivakumar (2013)
Journal: Accounting and Business Research
Pages: 384-385
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.801673
File-URL: http://hdl.handle.net/10.1080/00014788.2013.801673
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:384-385
Template-Type: ReDIF-Article 1.0
Author-Name: Peter Taylor
Author-X-Name-First: Peter
Author-X-Name-Last: Taylor
Title: What do we know about the role of financial reporting in debt contracting and debt covenants?
Abstract:
The paper examines the role of financial reporting in debt
contracting and in particular focuses on the definition, measurement, and
monitoring of accounting-based covenants used to manage agency
relationships arising from borrowing by firms. The paper also reviews
research in areas of financial reporting where the presence of
accounting-based covenants provides incentives to managers, notably choice
of accounting method, lobbying on standard setters' proposals, and
accounting earnings management. Although US dominated and latterly
increasingly focused on large datasets and quantitative and analytical
methods, relevant research is available from a range of methodologies and
countries and the paper reflects this variety and identifies both
inter-jurisdictional differences and inter-temporal changes in debt
contracting practices. Despite the extensive research which is reviewed
important areas for new research remain.
Journal: Accounting and Business Research
Pages: 386-417
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.798551
File-URL: http://hdl.handle.net/10.1080/00014788.2013.798551
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:386-417
Template-Type: ReDIF-Article 1.0
Author-Name: David J. Cooper
Author-X-Name-First: David J.
Author-X-Name-Last: Cooper
Author-Name: Wayne Morgan
Author-X-Name-First: Wayne
Author-X-Name-Last: Morgan
Title: Meeting the evolving corporate reporting needs of government and society: arguments for a deliberative approach to accounting rule making
Abstract:
We review ways in which corporate reporting might be useful
for the government's management of the macro economy and for society's
needs for more comprehensive reporting of corporate social and
environmental performance. We highlight the constitutive as well as the
representational nature of corporate reporting and how accounting subtlety
impacts the culture and focus of governments, societies and corporations.
Prominent examples are the ways accounting encourages financialisation and
fails to account for externalities and the environment. While many
proposals for the reform of corporate reporting emphasise more standards
and rules, we suggest that what is needed instead are different rules,
brought about by a more deliberative approach. A move to deliberation,
however, requires that accountants highlight the pervasive but often
subtle impacts of accounting.
Journal: Accounting and Business Research
Pages: 418-441
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.794411
File-URL: http://hdl.handle.net/10.1080/00014788.2013.794411
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:418-441
Template-Type: ReDIF-Article 1.0
Author-Name: David Nussbaum
Author-X-Name-First: David
Author-X-Name-Last: Nussbaum
Title: Discussion of ‘Meeting the evolving corporate reporting needs of government and society: arguments for a deliberative approach to accounting rule making’ by David Cooper and Wayne Morgan (2013)
Journal: Accounting and Business Research
Pages: 442-444
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.801668
File-URL: http://hdl.handle.net/10.1080/00014788.2013.801668
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:442-444
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: How far can we trust earnings numbers? What research tells us about earnings management
Abstract:
The article reviews the recent academic research literature
on earnings management (EM) with a view to identifying research themes and
results of interest to users and preparers of financial statements,
accounting standard setters, and others with responsibility for ensuring
that companies provide financial information to shareholders that can be
relied upon. Hopefully students of accounting with an interest in
exploring the EM literature will find that the article provides a useful
framework. The literature on this topic is vast, and it is not possible to
cover every article in detail. I provide an impressionistic survey that
highlights examples of specific research themes and methods that regularly
appear in the literature. Most of the examples are chosen from the
literature published since 2000, although I do also highlight a few
methodological contributions that appeared earlier. It is inevitable that
the selection of articles reflects to some extent my personal interests
and biases (intentional or otherwise). Thus, I wish to acknowledge that I
owe a very substantial intellectual debt to the insights and contributions
of the many uncited authors of a literature that spans over 40 years in
over 20 accounting and finance journals.
Journal: Accounting and Business Research
Pages: 445-481
Issue: 4
Volume: 43
Year: 2013
Month: 8
X-DOI: 10.1080/00014788.2013.785823
File-URL: http://hdl.handle.net/10.1080/00014788.2013.785823
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:4:p:445-481
Template-Type: ReDIF-Article 1.0
Author-Name: Alessandro Mura
Author-X-Name-First: Alessandro
Author-X-Name-Last: Mura
Author-Name: Clive Emmanuel
Author-X-Name-First: Clive
Author-X-Name-Last: Emmanuel
Author-Name: Francesco Vallascas
Author-X-Name-First: Francesco
Author-X-Name-Last: Vallascas
Title: Challenging the reliability of comparables under profit-based transfer pricing methods
Abstract:
Under profit-based transfer pricing
methods, the selection of comparable companies is essential if detection
of transfer price manipulation is to be reliable. Comparative advantage as
embedded in internalisation theory argues that foreign-controlled
companies (FCCs) should, in the long run, display greater profitability
than domestic-controlled companies. In high-tax host countries, transfer
pricing manipulation theory predicts an opposite effect on profitability.
Applying a refined set of tests to a large sample of firms operating in a
high-tax country such as Italy offers strong support for the
internalisation prediction. Furthermore, the analysis of the interquartile
range of our measure of profitability indicates that only a low percentage
of FCCs would be subject to fiscal enquires, as implied by the
Organisation for Economic Co-operation and Development guidelines, under
the suspicious of transfer pricing manipulation. These results suggest
that current comparability tests are likely to fail the identification of
transfer pricing practices in countries where the comparative advantage of
FCCs is particularly pronounced and question the reliability of these
tests.
Journal: Accounting and Business Research
Pages: 483-505
Issue: 5
Volume: 43
Year: 2013
Month: 10
X-DOI: 10.1080/00014788.2013.798581
File-URL: http://hdl.handle.net/10.1080/00014788.2013.798581
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:5:p:483-505
Template-Type: ReDIF-Article 1.0
Author-Name: Jim Rooney
Author-X-Name-First: Jim
Author-X-Name-Last: Rooney
Author-Name: Suresh Cuganesan
Author-X-Name-First: Suresh
Author-X-Name-Last: Cuganesan
Title: The control dynamics of outsourcing involving an early-stage firm
Abstract:
Firms in the early stage of their
organisational lifecycle experience challenges that shape the adoption of
management controls. They are also recognised for their use of
outsourcing. However, the accounting research has provided limited insight
on how these control challenges and inter-organisational control concerns
interact to influence the adoption of specific controls within an
outsourcing relationship involving an early-stage firm. Exploration of
this gap provides a key motivation for this paper. Contrary to existing
management control and organisational science literature, we find a strong
preference for new or enhanced action controls. Conversely, we find low
levels of interest in result controls by managers within the buyer but not
the supplier firm. These preferences influence inter-organisational
control adoption within the frame of an incomplete outsourcing contract
that emphasises flexibility in terms of relationship exit. Within the
limits of a case study methodology, we argue that adoption of
inter-organisational controls is shaped by tensions between the control
challenges of early-stage firms, the control preferences of managers
within these firms and inter-organisational control concerns. These
findings have theoretical implications, expanding the Davila et
al. [2009. Reasons for management control systems adoption:
insights from product development systems choice by early-stage
entrepreneurial companies. Accounting, Organizations and
Society, 34 (3--4), 322--347] framework and the Merchant [1985.
Control in Business Organizations. Boston, MA: Pitman]
control typology into an ESF inter-organisational control context.
Journal: Accounting and Business Research
Pages: 506-529
Issue: 5
Volume: 43
Year: 2013
Month: 10
X-DOI: 10.1080/00014788.2013.818916
File-URL: http://hdl.handle.net/10.1080/00014788.2013.818916
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:5:p:506-529
Template-Type: ReDIF-Article 1.0
Author-Name: Pengguo Wang
Author-X-Name-First: Pengguo
Author-X-Name-Last: Wang
Title: The role of disaggregation of earnings in stock valuation and earnings forecasting
Abstract:
This paper compares and contrasts two
accounting information systems, the aggregate earnings system and the
disaggregated cash flow/accrual system, examining their relative
performance in stock valuation and in forecasting of earnings. It finds,
in general, that the forecasts of earnings and predicted market values
from the cash flow and accrual system have smaller forecasting errors than
those from the aggregate earnings system. The adjusted
R-squareds from the disaggregated system are in the main
higher than those from the aggregated system when considering the
explanatory power of the model-predicted values. The results also show
that the cash flow and accrual system forecasts dominate the aggregate
earnings system forecasts in a large majority of industries.
Journal: Accounting and Business Research
Pages: 530-557
Issue: 5
Volume: 43
Year: 2013
Month: 10
X-DOI: 10.1080/00014788.2013.804794
File-URL: http://hdl.handle.net/10.1080/00014788.2013.804794
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:5:p:530-557
Template-Type: ReDIF-Article 1.0
Author-Name: Steve Yu Shuo Su
Author-X-Name-First: Steve Yu Shuo
Author-X-Name-Last: Su
Title: Volatility of accounting earnings
Abstract:
The theoretical derivation of the
volatility of accounting earnings is an important topic. Not only does it
concern the uncertainty in earnings measurement, but it also allows for an
objective comparison between different accounting allocation procedures.
An accounting allocation that yields a lower volatility of earnings can be
desirable because it makes periodic earnings better estimates of
underlying long-term earnings of a firm over time. Based on this
information, accounting professionals can make more rational judgements of
the most appropriate accounting method to be used in preparing financial
reports. This paper shows how to calculate the volatility of earnings
under uncertainty across a range of different scenarios.
Journal: Accounting and Business Research
Pages: 558-578
Issue: 5
Volume: 43
Year: 2013
Month: 10
X-DOI: 10.1080/00014788.2013.779204
File-URL: http://hdl.handle.net/10.1080/00014788.2013.779204
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:5:p:558-578
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Barker
Author-X-Name-First: Richard
Author-X-Name-Last: Barker
Author-Name: Anne McGeachin
Author-X-Name-First: Anne
Author-X-Name-Last: McGeachin
Title: Why is there inconsistency in accounting for liabilities in IFRS? An analysis of recognition, measurement, estimation and conservatism
Abstract:
We report that International Financial
Reporting Standards (IFRS) are inconsistent with respect to the
recognition and measurement of liabilities, both in the conceptual
framework for financial reporting and in accounting standards themselves.
We demonstrate that this arises in part because the International
Accounting Standards Board (IASB) does not make a conceptual distinction
between the process of measurement, which requires a currently observable
measurement attribute, and the process of estimation, which is inherently
subjective. The IASB employs only the logic and language of measurement,
while actually requiring entities to report both measurements and
estimates in financial statements. Our contribution is to identify and
interpret this conceptual conflict, to demonstrate that this has
particular relevance to accounting for liabilities, and to draw
implications for accounting research and policy with respect to
recognition, measurement and conservatism.
Journal: Accounting and Business Research
Pages: 579-604
Issue: 6
Volume: 43
Year: 2013
Month: 12
X-DOI: 10.1080/00014788.2013.834811
File-URL: http://hdl.handle.net/10.1080/00014788.2013.834811
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:6:p:579-604
Template-Type: ReDIF-Article 1.0
Author-Name: Thomas Riise Johansen
Author-X-Name-First: Thomas Riise
Author-X-Name-Last: Johansen
Author-Name: Thomas Plenborg
Author-X-Name-First: Thomas
Author-X-Name-Last: Plenborg
Title: Prioritising disclosures in the annual report
Abstract:
Drawing upon information economics, this
paper presents a relative assessment of 24 of the most common disclosure
items in the management commentary and notes sections of the annual
report. We design and conduct an Internet survey using a large
representative sample of users with an investment focus
(n = 288) and preparers of annual reports
(n = 89). Using cost-effectiveness
analysis, an evaluation method widely used in healthcare economics, the
balance between preparation costs and user satisfaction, relative to user
demand is assessed. Our main findings show that corporate social
responsibility and corporate governance, the least demanded disclosure
items in the management commentary, are also costly items to prepare.
Further, preparers do not consider indirect costs (i.e. competitive
position costs and potential litigation costs) of information provided in
the management commentary to be a major concern. With regard to the notes,
we find that business combinations (IFRS 3), financial instruments (IFRS
7) and impairment tests (IAS 36) are highly demanded but are also among
the items most costly to prepare, and users are less satisfied with these
notes. The findings have important implications for practitioners and
policy-makers and can be used for setting priorities.
Journal: Accounting and Business Research
Pages: 605-635
Issue: 6
Volume: 43
Year: 2013
Month: 12
X-DOI: 10.1080/00014788.2013.827105
File-URL: http://hdl.handle.net/10.1080/00014788.2013.827105
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:6:p:605-635
Template-Type: ReDIF-Article 1.0
Author-Name: Michael J. Peel
Author-X-Name-First: Michael J.
Author-X-Name-Last: Peel
Title: The pricing of initial audit engagements by big 4 and leading mid-tier auditors
Abstract:
The recent investigation of the UK audit
market by the Competition Commission testifies to perennial regulatory
concerns regarding increasing supplier concentration, big 4 dominance of
large company audits and the capacity of mid-tier auditors to compete.
Against this backdrop, this paper presents new evidence on whether there
is competitive pricing for initial audit engagements by big 4 auditors
relative to their next four largest mid-tier (mid 4) counterparts for the
UK quoted and private corporate sectors. Based on data from FAME for 2007
and 2010, the evidence indicates that larger quoted companies switching
between the big 4 benefit from substantial discounts, with smaller
discounts attracted by clients switching to the mid 4. Coupled with
evidence that fees for both audit and non-audit services recover in
subsequent periods, and consistent with the theoretical framework, the
paper concludes that big 4 discounting is a competitive outcome aimed at
securing future economic rents. New evidence demonstrates that smaller
clients switching to big 4 or mid 4 auditors do not benefit from
low-balling.
Journal: Accounting and Business Research
Pages: 636-659
Issue: 6
Volume: 43
Year: 2013
Month: 12
X-DOI: 10.1080/00014788.2013.827106
File-URL: http://hdl.handle.net/10.1080/00014788.2013.827106
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:6:p:636-659
Template-Type: ReDIF-Article 1.0
Author-Name: Yun Shen
Author-X-Name-First: Yun
Author-X-Name-Last: Shen
Author-Name: Andrew W. Stark
Author-X-Name-First: Andrew W.
Author-X-Name-Last: Stark
Title: Evaluating the effectiveness of model specifications and estimation approaches for empirical accounting-based valuation models
Abstract:
This study considers the effectiveness of
different model specifications and estimation approaches for empirical
accounting-based valuation models in the UK. Primarily, we are interested
in the accounting determinants of market value and, in particular, whether
accounting-based valuation models can be estimated that not only have
in-sample explanatory power but also potentially can be used as a tool of
financial statement analysis in developing useful estimates of value
out-of-sample. This requires models to be estimated on one sample, and
tested for effectiveness on a different sample. Then, issues of model
specification arise, together with choosing between methods of estimating
the empirical models, in identifying the effectiveness of each
combination. Using the criteria of bias and accuracy to capture
effectiveness, we suggest estimation methods and models that, overall,
provide the most effective models in this context.
Journal: Accounting and Business Research
Pages: 660-682
Issue: 6
Volume: 43
Year: 2013
Month: 12
X-DOI: 10.1080/00014788.2013.840236
File-URL: http://hdl.handle.net/10.1080/00014788.2013.840236
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:6:p:660-682
Template-Type: ReDIF-Article 1.0
Author-Name: Stergios Leventis
Author-X-Name-First: Stergios
Author-X-Name-Last: Leventis
Title: The failure and the future of accounting: Strategy, stakeholders, and business value
Journal: Accounting and Business Research
Pages: 683-685
Issue: 6
Volume: 43
Year: 2013
Month: 12
X-DOI: 10.1080/00014788.2013.850856
File-URL: http://hdl.handle.net/10.1080/00014788.2013.850856
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Handle: RePEc:taf:acctbr:v:43:y:2013:i:6:p:683-685
Template-Type: ReDIF-Article 1.0
Author-Name: Oksana Kim
Author-X-Name-First: Oksana
Author-X-Name-Last: Kim
Author-Name: Matt Pinnuck
Author-X-Name-First: Matt
Author-X-Name-Last: Pinnuck
Title: Competition among exchanges through simplified disclosure requirements: evidence from the American and Global Depositary Receipts
Abstract:
In this study, we address the ongoing
debate as to whether the competition among the world's major exchanges
through simplified disclosure requirements is justified. Companies from
across the globe have a choice of cross-listing shares as either American
or Global Depositary Receipts (ADRs and GDRs, respectively). The former
are primarily listed on the US exchanges -- NYSE, NASDAQ and AMEX --
whereas the latter are issued into non-US markets such as the London Stock
Exchange (LSE). The GDRs listed on the LSE are subject to simplified
disclosure requirements compared to their exchange-listed ADR peers that
have to meet more stringent compliance standards. Proponents of the 'light
touch' approach argue that firms cross-listing as GDRs are not subject to
the higher reporting costs faced by ADRs yet still face similar valuation
benefits. Those who challenge this approach argue that simplified
disclosure requirements set by the LSE will ultimately be recognised by
the market as ineffective, diverting traders from investing in GDRs. This
study provides evidence that supports the LSE's 'light touch' approach and
shows that the benefits of information risk reduction for ADRs and GDRs
are comparable. The explanation for this finding is that the two avenues
through which information asymmetry is expected to be resolved after
cross-listing -- disclosure and analysts -- are substitutive and make
equally important contribution to information risk reduction, eventually
leading to similar cost of capital decline for ADRs and GDRs.
Journal: Accounting and Business Research
Pages: 1-40
Issue: 1
Volume: 44
Year: 2014
Month: 2
X-DOI: 10.1080/00014788.2013.849193
File-URL: http://hdl.handle.net/10.1080/00014788.2013.849193
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Template-Type: ReDIF-Article 1.0
Author-Name: Gerrit Sarens
Author-X-Name-First: Gerrit
Author-X-Name-Last: Sarens
Author-Name: Rita Lamboglia
Author-X-Name-First: Rita
Author-X-Name-Last: Lamboglia
Title: The (mis)fit between the profile of internal auditors and internal audit activities
Abstract:
This study investigates whether there is a
fit between the profile of internal auditors and the activities of the
internal audit department (IAD). It also seeks to discover which type of
internal auditors fit which type of internal audit (IA) activities. This
is commonly referred to as the person-job (P-J) fit. Furthermore, this
study investigates whether this (mis)fit is associated with the
outsourcing/co-sourcing of IA activities and turnover within the IAD.
Bringing strategic human resource management (SHRM) into IA can be
considered as the key contribution of this paper. The results of this
study are based on a questionnaire completed by 280 members of the
Institute of Internal Auditors in Belgium. The results show that there is
a fit between some characteristics of internal auditors working in an IAD
and the activities of the IAD. The results also show that certain internal
auditor characteristics fit with certain types of IA activities. However,
the degree of fit varies. Furthermore, it was found that IADs that
co-source/outsource were significantly more associated with a misfit
between the profile of the internal auditors and the activities of the
IAD, whereas a misfit was not significantly associated with a high
turnover of internal auditors.
Journal: Accounting and Business Research
Pages: 41-62
Issue: 1
Volume: 44
Year: 2014
Month: 2
X-DOI: 10.1080/00014788.2013.857591
File-URL: http://hdl.handle.net/10.1080/00014788.2013.857591
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Template-Type: ReDIF-Article 1.0
Author-Name: Nicola Moscariello
Author-X-Name-First: Nicola
Author-X-Name-Last: Moscariello
Author-Name: Len Skerratt
Author-X-Name-First: Len
Author-X-Name-Last: Skerratt
Author-Name: Michele Pizzo
Author-X-Name-First: Michele
Author-X-Name-Last: Pizzo
Title: Mandatory IFRS adoption and the cost of debt in Italy and UK
Abstract:
This paper analyses the effect of the
mandatory adoption of International Financial Reporting Standards (IFRS)
within the EU on the cost of corporate debt. In order to avoid the
imprecision involved in a large-scale cross-country study, we examine the
impact of IFRS in two very clearly different institutional settings, the
UK and Italy. The UK is a common-law country characterised by strong
enforcement and national generally accepted accounting principles (GAAP)
which are equivalent to IFRS. Italy is a typical European code-law
country, characterised by a weak outside investor protection system, and
national GAAP significantly different from the IFRS model. No IFRS effect
is observed in the UK, consistent with it having standards which are close
to IFRS. During the post-IFRS period, in Italy more weight is placed on
the accounting numbers to assess the cost of debt. We also find that
accruals quality improves in Italy, thus suggesting that public financial
reporting data are enhanced relative to privately held information about
borrowers' credit ratings.
Journal: Accounting and Business Research
Pages: 63-82
Issue: 1
Volume: 44
Year: 2014
Month: 2
X-DOI: 10.1080/00014788.2013.867402
File-URL: http://hdl.handle.net/10.1080/00014788.2013.867402
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Template-Type: ReDIF-Article 1.0
Author-Name: Sven Modell
Author-X-Name-First: Sven
Author-X-Name-Last: Modell
Title: The societal relevance of management accounting: An introduction to the special issue
Abstract:
This essay introduces the special issue of Accounting and Business
Research exploring the societal relevance of management
accounting and locates the individual contributions within this research
agenda. In contrast to prevailing, managerialist conceptions of relevance,
the discussion is guided by an over-riding ambition to turn management
accounting research "inside out" to examine the effects of management
accounting practices on a broader range of constituencies and interests in
society and the formation of such practices beyond individual
organisations. I start by charting the development of extant and emerging
debates on the relevance of management accounting research and practice
and then outline some pertinent research themes worthy of further
exploration. In doing so, I pay particular attention to emerging research
illustrating how management accounting becomes implicated in the external
regulation and governance of organisations, the shaping of markets and the
wider, societal consequences of such processes. I also discuss some
theoretical and methodological implications of exploring such topics.
Journal: Accounting and Business Research
Pages: 83-103
Issue: 2
Volume: 44
Year: 2014
Month: 4
X-DOI: 10.1080/00014788.2014.882741
File-URL: http://hdl.handle.net/10.1080/00014788.2014.882741
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:2:p:83-103
Template-Type: ReDIF-Article 1.0
Author-Name: Basil Tucker
Author-X-Name-First: Basil
Author-X-Name-Last: Tucker
Author-Name: Lee Parker
Author-X-Name-First: Lee
Author-X-Name-Last: Parker
Title: In our ivory towers? The research-practice gap in management accounting
Abstract:
This study reports on an investigation of 64 senior management accounting
academics from 55 universities in 14 countries about the extent to which
academic management accounting research does, and should inform practice.
Drawing on the diffusion of innovations theory as a point of departure,
and based on evidence obtained from a questionnaire survey and subsequent
interviews, our findings reveal the prevalence of two broad schools of
thought. One school, represented by the majority of senior academics,
holds that there is a significant and widening 'gap' between academic
research and the practice of management accounting, and that this gap is
of considerable concern. In contrast, the other school holds that a divide
between academic management accounting research and practice is
appropriate, and that efforts to bridge this divide are unnecessary,
untenable or irrelevant. From this empirical evidence, we advance a
conceptual framework distinguishing between the 'type' of academic
research undertaken, and the 'users' of academic research, and on the
basis of this framework, contend that framing the relationship between
academic research and practice as a 'gap' is potentially an
oversimplification, and directs attention away from the broader but
fundamental question of the role and societal relevance of academic
research in management accounting.
Journal: Accounting and Business Research
Pages: 104-143
Issue: 2
Volume: 44
Year: 2014
Month: 4
X-DOI: 10.1080/00014788.2013.798234
File-URL: http://hdl.handle.net/10.1080/00014788.2013.798234
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Template-Type: ReDIF-Article 1.0
Author-Name: Pimsiri Chiwamit
Author-X-Name-First: Pimsiri
Author-X-Name-Last: Chiwamit
Author-Name: Sven Modell
Author-X-Name-First: Sven
Author-X-Name-Last: Modell
Author-Name: Chun Lei Yang
Author-X-Name-First: Chun Lei
Author-X-Name-Last: Yang
Title: The societal relevance of management accounting innovations: economic value added and institutional work in the fields of Chinese and Thai state-owned enterprises
Abstract:
This paper contributes to the ongoing debate about the relevance of
management accounting. In doing so, we widen the definition of 'relevance'
from the largely managerialist focus dominating this debate to examine how
management accounting innovations get imbued with a broader range of
societal interests and how actors representing vested interests go about
entrenching and resisting such innovations. We explore these issues with
reference to the institutionalisation of Economic Value Added (EVA™)
as a governance mechanism for Chinese and Thai state-owned enterprises.
Adopting a comparative, institutional field perspective, we theorise our
observations through the conceptual lens of institutional work, or the
human agency involved in creating, maintaining and disrupting
institutions. We extend extant research on institutional work by exploring
how the evolution of such work was conditioned by differences in field
cohesiveness, defined in terms of how consistent and tightly coordinated
key interests clustered around EVA™ are. Our analysis also draws
attention to how different types of institutional work support and detract
from each other in the process of upholding such cohesiveness. We discuss
the implications for future research on the societal relevance of
management accounting innovations and institutional work.
Journal: Accounting and Business Research
Pages: 144-180
Issue: 2
Volume: 44
Year: 2014
Month: 4
X-DOI: 10.1080/00014788.2013.868300
File-URL: http://hdl.handle.net/10.1080/00014788.2013.868300
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Template-Type: ReDIF-Article 1.0
Author-Name: Ed Vosselman
Author-X-Name-First: Ed
Author-X-Name-Last: Vosselman
Title: The 'performativity thesis' and its critics: Towards a relational ontology of management accounting
Abstract:
This paper explores accounting's mediating role in bringing theoretical
statements from economics into life. It addresses the so-called
performativity thesis that claims that economic theory does not just
observe and explain a reality, but rather shapes, formats and performs
reality. Accounting mediates in that process by creating cognitive
boundaries that embed societal practices in economic theory. However, the
performativity thesis is not without criticisms. Its main criticisms
concern a lack of proof of the thesis; an overestimation of the power of
economics to extend beyond the virtual; and a lack of a critical stance.
In order to bring more nuance in the discussion on the performativity
thesis the paper reflects on evidence from the field of accounting. The
review of accounting studies reveals how accounting, to different degrees,
is implicated in strategic and operational activities in markets and
organisations and how it is a performative mechanism of economisation.
Moreover, in order to accentuate the 'good' in society and to challenge
the 'bad', the paper suggests a further development of (critical)
management accounting research into the performativity of both economics
and other social theories. A relational ontology of management accounting
that is in politics and that is sensitive to
'unlocalisable' virtual powers of social-historical formations of
management accounting may be developed.
Journal: Accounting and Business Research
Pages: 181-203
Issue: 2
Volume: 44
Year: 2014
Month: 4
X-DOI: 10.1080/00014788.2013.856748
File-URL: http://hdl.handle.net/10.1080/00014788.2013.856748
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:2:p:181-203
Template-Type: ReDIF-Article 1.0
Author-Name: Kari Lukka
Author-X-Name-First: Kari
Author-X-Name-Last: Lukka
Author-Name: Petri Suomala
Author-X-Name-First: Petri
Author-X-Name-Last: Suomala
Title: Relevant interventionist research: balancing three intellectual virtues
Abstract:
This paper argues for a balanced approach to considering the three
intellectual virtues of Aristotle, brought forth by Flyvbjerg [2001.
Making Social Science Matter: Why Social Inquiry Fails and How It
Can Succeed Again. Cambridge: Cambridge University Press] -
techne, episteme and phronesis - and links them to recent debates on the
relevance of management accounting research. The intellectual virtue of
phronesis is viewed as opening an avenue for conducting management
accounting research that is societally relevant and the interventionist
research (IVR) approach is suggested to form one natural platform for such
research. The paper underlines that the intellectual virtue of episteme,
being related to theoretical relevance, is a necessary element in all
scholarly endeavours and that IVR has so far tended to suffer from being
too much focused on the intellectual virtue of techne and thereby
practical relevance only. The method of 'engaged scholarship' is offered
as one fruitful option for balancing the three intellectual virtues and
conducting research that is relevant to several dimensions.
Journal: Accounting and Business Research
Pages: 204-220
Issue: 2
Volume: 44
Year: 2014
Month: 4
X-DOI: 10.1080/00014788.2013.872554
File-URL: http://hdl.handle.net/10.1080/00014788.2013.872554
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:2:p:204-220
Template-Type: ReDIF-Article 1.0
Author-Name: Vasiliki Athanasakou
Author-X-Name-First: Vasiliki
Author-X-Name-Last: Athanasakou
Author-Name: Khaled Hussainey
Author-X-Name-First: Khaled
Author-X-Name-Last: Hussainey
Title: The perceived credibility of forward-looking performance disclosures
Abstract:
We investigate the credibility of forward-looking performance disclosures
(FLPDs) in the narrative sections of annual reports, as perceived by
investors. Our proxy for these disclosures is an index of statements about
future performance. We find that companies issue more FLPDs when raising
debt or conveying bad news in the financial statements. In the presence of
these managerial incentives, investor reliance on FLPDs increases with the
quality of earnings reported in the audited financial statements. Our
results suggest that firms derive a benefit in terms of higher credibility
for their narrative disclosures from having a reputation for high quality
earnings.
Journal: Accounting and Business Research
Pages: 227-259
Issue: 3
Volume: 44
Year: 2014
Month: 6
X-DOI: 10.1080/00014788.2013.867403
File-URL: http://hdl.handle.net/10.1080/00014788.2013.867403
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:3:p:227-259
Template-Type: ReDIF-Article 1.0
Author-Name: Sven P. Jost
Author-X-Name-First: Sven P.
Author-X-Name-Last: Jost
Author-Name: Michael Pfaffermayr
Author-X-Name-First: Michael
Author-X-Name-Last: Pfaffermayr
Author-Name: Hannes Winner
Author-X-Name-First: Hannes
Author-X-Name-Last: Winner
Title: Transfer pricing as a tax compliance risk
Abstract:
This paper studies the role of transfer pricing as a critical compliance
issue. Specifically, we analyse whether and to what extent the perceived
risk associated with transfer pricing responds to country-, industry- and
firm-specific characteristics. Empirically, transfer pricing risk
awareness is measured as a professional assessment reported by the person
with ultimate responsibility for transfer pricing in their company. Based
on a unique global survey conducted by a Big 4 accounting firm in 2007 and
2008, we estimate the number of firms reporting transfer pricing being the
largest risk issue with regard to subsequent tax payments. We find that
transfer pricing risk awareness depends on variables accounting for
general tax and transfer pricing specific strategies, the types and
characteristics of intercompany transactions the multinational firms are
involved in, their individual transfer pricing compliance efforts and
resources dedicated to transfer pricing matters.
Journal: Accounting and Business Research
Pages: 260-279
Issue: 3
Volume: 44
Year: 2014
Month: 6
X-DOI: 10.1080/00014788.2014.883062
File-URL: http://hdl.handle.net/10.1080/00014788.2014.883062
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:3:p:260-279
Template-Type: ReDIF-Article 1.0
Author-Name: Christian Ott
Author-X-Name-First: Christian
Author-X-Name-Last: Ott
Author-Name: Ulrike Schmidt
Author-X-Name-First: Ulrike
Author-X-Name-Last: Schmidt
Author-Name: Thomas Guenther
Author-X-Name-First: Thomas
Author-X-Name-Last: Guenther
Title: Information dissemination on intellectual capital in mergers and acquisitions: purchase price allocations, press releases and business press
Abstract:
In order to reduce information asymmetries in relation to a firm's current
decisions and long-term strategy, firms must consistently provide
information to stakeholders. This paper investigates intellectual capital
(IC) information disclosed in mergers and acquisitions (M&A) provided
through three different disclosure channels (voluntary press releases,
related newspaper articles and subsequent mandatory corporate disclosures
in the notes to the financial statements). For a sample of 215 randomly
selected US and European M&As, we analyse 215 press releases, 1025
newspaper articles and 215 purchase price allocations. Our findings
suggest that IC disclosure in press releases is not perceived as
informative and qualitative forward-looking IC information in voluntary
corporate disclosures appears to lack credibility. Moreover, we
empirically demonstrate interdependencies across the three disclosure
channels. The business press seems to filter IC information provided in
press releases. The amount of IC disclosure in the notes to the financial
statements is positively associated with prior IC disclosure in newspaper
articles, but negatively associated with IC disclosure in press releases.
The managements of acquirer firms appear to pay attention to news coverage
and public opinion. However, both voluntary and mandatory corporate
disclosures appear to substitute rather than complement each other.
Journal: Accounting and Business Research
Pages: 280-314
Issue: 3
Volume: 44
Year: 2014
Month: 6
X-DOI: 10.1080/00014788.2014.883915
File-URL: http://hdl.handle.net/10.1080/00014788.2014.883915
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Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Stella Fearnley
Author-X-Name-First: Stella
Author-X-Name-Last: Fearnley
Author-Name: Tony Hines
Author-X-Name-First: Tony
Author-X-Name-Last: Hines
Title: Boundary spanning and gatekeeping roles of UK audit committees
Abstract:
Post-financial crisis, audit committee (AC) reforms are proposed to
improve the quality of financial reporting.-super-†The editorial process for this paper was undertaken by Pauline
Weetman, former ABR editor. This paper's empirical contribution is to
investigate the extent to which ACs and audit committee chairs (ACCs)
engage with chief financial officers (CFOs) and audit partners (APs)
across a range of 32 financial reporting issues. It is the first
large-scale survey of interactions to move beyond the micro-CFO/AP dyad
and to distinguish the individual ACC from the AC group. While 37% of the
5445 reported discussions involve all three key individuals together with
the full AC, 35% involve neither the AC nor the ACC and the ACC acts
without the full AC in a significant minority of cases. The parties
reported to be involved are similar across the three respondent groups but
vary with financial reporting issue, company size and audit firm size. The
paper's theoretical contribution is to interpret the evidence using the
concepts of boundary spanning and gatekeeping roles. The research reveals
incomplete levels of AC and ACC engagement with financial reporting
issues. Findings have implications for policy-makers regarding the role,
influence and effectiveness of the AC in financial reporting matters.
Directions for future research are identified.
Journal: Accounting and Business Research
Pages: 315-343
Issue: 3
Volume: 44
Year: 2014
Month: 6
X-DOI: 10.1080/00014788.2014.898434
File-URL: http://hdl.handle.net/10.1080/00014788.2014.898434
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Template-Type: ReDIF-Article 1.0
Author-Name: Richard Slack
Author-X-Name-First: Richard
Author-X-Name-Last: Slack
Title: The Routledge companion to accounting communication
Journal: Accounting and Business Research
Pages: 344-346
Issue: 3
Volume: 44
Year: 2014
Month: 6
X-DOI: 10.1080/00014788.2014.874711
File-URL: http://hdl.handle.net/10.1080/00014788.2014.874711
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:3:p:344-346
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 347-348
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.910379
File-URL: http://hdl.handle.net/10.1080/00014788.2014.910379
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:347-348
Template-Type: ReDIF-Article 1.0
Author-Name: Alfred Wagenhofer
Author-X-Name-First: Alfred
Author-X-Name-Last: Wagenhofer
Title: The role of revenue recognition in performance reporting
Abstract:
This paper examines revenue and profit or loss recognition and how these
measures provide financial information about companies' performance.
First, I review academic literature that examines the importance of
revenue in informing capital markets and in performance evaluation and
discuss findings on revenue management. Second, I describe fundamental
revenue recognition concepts developed in the academic literature based on
the economics of risks involved in the earnings cycle. Third, I evaluate
the new revenue recognition standard of the International Accounting
Standards Board, which aims to state a single consistent criterion for
revenue recognition. I argue that striving for a conceptually consistent
standard is undesirable because the economic characteristics of earnings
cycles differ across firms and so does the usefulness of information.
Consistent with that, the new standard actually contains different
recognition criteria, does not fully follow the asset-liability approach
and, although the Conceptual Framework favours neutrality over
conservatism, includes several instances of conservatism.
Journal: Accounting and Business Research
Pages: 349-379
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.897867
File-URL: http://hdl.handle.net/10.1080/00014788.2014.897867
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:349-379
Template-Type: ReDIF-Article 1.0
Author-Name: Bob Laux
Author-X-Name-First: Bob
Author-X-Name-Last: Laux
Title: Discussion of 'The role of revenue recognition in performance reporting' by Alfred Wagenhofer (2014)
Journal: Accounting and Business Research
Pages: 380-382
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.897868
File-URL: http://hdl.handle.net/10.1080/00014788.2014.897868
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:380-382
Template-Type: ReDIF-Article 1.0
Author-Name: Charles M.C. Lee
Author-X-Name-First: Charles M.C.
Author-X-Name-Last: Lee
Title: Performance measurement: an investor's perspective
Abstract:
This article discusses the role of GAAP accounting from an investor's
perspective. For all its flaws, a historical-based system of accounting is
vital to the investment community, and I believe the moves toward fair
value accounting should proceed with great caution. Framing the discussion
in terms of valuation theory, I argue that investors are typically more
interested in assessing the present value of residual income than the
value of assets-in-place. I also provide examples of how historical
accounting numbers can be (and are being) used by professional investors.
A simple residual-income framework succinctly captures the essence of
value investing. In fact, what academics have learned about fundamental
investing in recent years dovetails nicely with the strategies used by
legendary investors such as Ben Graham, Warren Buffett, and Joel
Greenblatt.
Journal: Accounting and Business Research
Pages: 383-406
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.910376
File-URL: http://hdl.handle.net/10.1080/00014788.2014.910376
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:383-406
Template-Type: ReDIF-Article 1.0
Author-Name: Nick Anderson
Author-X-Name-First: Nick
Author-X-Name-Last: Anderson
Title: Discussion of 'Performance measurement: an investor's perspective' by Charles Lee (2014)
Journal: Accounting and Business Research
Pages: 407-409
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.910377
File-URL: http://hdl.handle.net/10.1080/00014788.2014.910377
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:407-409
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Libby
Author-X-Name-First: Robert
Author-X-Name-Last: Libby
Author-Name: Scott A. Emett
Author-X-Name-First: Scott A.
Author-X-Name-Last: Emett
Title: Earnings presentation effects on manager reporting choices and investor decisions
Abstract:
We survey recent (mainly US) research on the effects of earnings
presentation attributes on manager and user behavior. The literature we
discuss relates to three primary earnings presentation attributes: (1)
disaggregation (vertical and horizontal), (2) location (recognition vs.
disclosure, which statement for recognized items, and within statement
classification, labeling, and subtotals), and (3) narrative attributes
(location of key amounts within narratives, readability, medium, and
timing of disclosure). We show that disaggregation operates mainly by
directly affecting information content. Location operates mainly by
indirectly affecting information content through changes in managers'
actions and by affecting ease of processing. Narrative
presentation attributes operate mainly by affecting ease of processing.
These differences in mechanisms determine the implications of the
presentation attributes for contracting and valuation uses of accounting
information. They also have implications for future research and standard
setting.
Journal: Accounting and Business Research
Pages: 410-438
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.906121
File-URL: http://hdl.handle.net/10.1080/00014788.2014.906121
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:410-438
Template-Type: ReDIF-Article 1.0
Author-Name: Kathryn Cearns
Author-X-Name-First: Kathryn
Author-X-Name-Last: Cearns
Title: Discussion of 'Earnings presentation effects on manager reporting choices and investor decisions' by Robert Libby and Scott Emett (2014)
Journal: Accounting and Business Research
Pages: 439-443
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.906122
File-URL: http://hdl.handle.net/10.1080/00014788.2014.906122
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:439-443
Template-Type: ReDIF-Article 1.0
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: The drivers, consequences and policy implications of non-GAAP earnings reporting
Abstract:
Non-generally accepted accounting principles (GAAP) (pro forma) earnings
form an increasingly important part of firms' performance reporting
narrative. This paper reviews the academic and professional debate
surrounding non-GAAP earnings reporting by management. I argue that the
demand for customised performance reporting is a natural response to
constraints imposed by a one-size-fits-all reporting system and that the
non-GAAP phenomenon forms part of a long-standing debate over the
definition and presentation of periodic performance. A review of extant
research suggests non-GAAP disclosures are driven by informative reporting
and opportunistic motives. Opaque presentation of non-GAAP earnings is
associated with earnings mispricing, particularly among unsophisticated
investor groups. Regulations and governance systems designed to ensure
transparency are associated with higher quality disclosures and less
mispricing. While customised reporting behaviour is evident in many
settings, I argue that such disclosures create particular risks in a
financial reporting context because they threaten the integrity of the
underlying reporting system. Prevailing regulatory approaches are reviewed
and factors limiting disclosure transparency are highlighted. The paper
concludes with suggestions for further research.
Journal: Accounting and Business Research
Pages: 444-465
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.900952
File-URL: http://hdl.handle.net/10.1080/00014788.2014.900952
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:444-465
Template-Type: ReDIF-Article 1.0
Author-Name: Gunnar Miller
Author-X-Name-First: Gunnar
Author-X-Name-Last: Miller
Title: Discussion of 'The drivers, consequences and policy implications of non-GAAP earnings reporting' by Steven Young (2014)
Journal: Accounting and Business Research
Pages: 466-468
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.900953
File-URL: http://hdl.handle.net/10.1080/00014788.2014.900953
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:466-468
Template-Type: ReDIF-Article 1.0
Author-Name: Alnoor Bhimani
Author-X-Name-First: Alnoor
Author-X-Name-Last: Bhimani
Author-Name: Leslie Willcocks
Author-X-Name-First: Leslie
Author-X-Name-Last: Willcocks
Title: Digitisation, 'Big Data' and the transformation of accounting information
Abstract:
Developments in digitisation, software and processing power and the
accompanying data explosion create significant alterations, dilemmas and
possibilities for enterprises and their finance function. The article
discusses a model for understanding data, information and knowledge
relationships. We apply the model to examine developments in strategy,
organisational and cost structures, digitisation, business analytics,
outsourcing, offshoring and cloud computing. We argue that organisations
need to be sensitised to different types of knowledge, the challenges in
creating and applying that knowledge, and be more circumspect about what
can be achieved through advances in information-based technologies and
software. We point to both the potential of and the complexities presented
by Big Data in relation to the finance function generally and to
management accounting information provision specifically. We suggest that
'Big Data' and data analysis techniques enable executives to act on
structured and unstructured information but such action must recognise
that the traditionally presumed sequential and linear links among
corporate strategy, firm structure and information systems design are no
longer in play. Additionally, cost structure changes are affected by
developments in how data, information and knowledge can be utilised. We
discuss the outsourcing and offshoring of work and their data, information
and knowledge ramifications as well as those related to cloud computing.
We conclude that the possibilities for the digitally enabled business
create a range of 'information literacy' challenges as well as new
possibilities for accounting information providers.
Journal: Accounting and Business Research
Pages: 469-490
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.910051
File-URL: http://hdl.handle.net/10.1080/00014788.2014.910051
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:469-490
Template-Type: ReDIF-Article 1.0
Author-Name: Rick Payne
Author-X-Name-First: Rick
Author-X-Name-Last: Payne
Title: Discussion of 'Digitisation, 'Big Data' and the transformation of accounting information' by Alnoor Bhimani and Leslie Willcocks (2014)
Journal: Accounting and Business Research
Pages: 491-495
Issue: 4
Volume: 44
Year: 2014
Month: 8
X-DOI: 10.1080/00014788.2014.910053
File-URL: http://hdl.handle.net/10.1080/00014788.2014.910053
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:4:p:491-495
Template-Type: ReDIF-Article 1.0
Author-Name: Maleen Z. Gong
Author-X-Name-First: Maleen Z.
Author-X-Name-Last: Gong
Author-Name: Aldónio Ferreira
Author-X-Name-First: Aldónio
Author-X-Name-Last: Ferreira
Title: Does consistency in management control systems design choices influence firm performance? An empirical analysis
Abstract:
This study examines the impact on firm performance of theoretically
consistent relationships between three management control systems (MCS)
design choices - delegation, performance measurement, and incentive
compensation. Based upon the 'three-legged stool' model and agency theory,
the hypothesis is that theoretically consistent MCS design choices are
associated with enhanced firm performance. Using survey data from large
Australian firms, the findings support the hypothesis, suggesting that an
appropriate MCS design is a determinant of firm performance. The study
contributes to the literature by moving beyond a focus on the antecedents
of the three key MCS design choices to the consequence of alignment of
those choices.
Journal: Accounting and Business Research
Pages: 497-522
Issue: 5
Volume: 44
Year: 2014
Month: 10
X-DOI: 10.1080/00014788.2014.901164
File-URL: http://hdl.handle.net/10.1080/00014788.2014.901164
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:5:p:497-522
Template-Type: ReDIF-Article 1.0
Author-Name: Lei Wang
Author-X-Name-First: Lei
Author-X-Name-Last: Wang
Author-Name: Brad Tuttle
Author-X-Name-First: Brad
Author-X-Name-Last: Tuttle
Title: Using corporate social responsibility performance to evaluate financial disclosure credibility
Abstract:
Due to the paucity of immediate and direct information about financial
disclosure credibility, it is often difficult for investors to assess the
credibility of financial disclosures (e.g. whether reported earnings are
biased). Given this situation, the present study proposes and finds that
investors use additional cues, such as information about corporate social
responsibility (CSR) performance, to form overall impressions about
management's honesty, credibility, and trustworthiness. Similar to other
findings in the halo effect literature, we find that these overall
impressions subsequently influence both investors' assessments of
financial disclosure credibility and the prices they are willing to pay
for a company's stock. The findings support the theoretical framework on
financial disclosure credibility by (1) showing that management
credibility is an important tool that investors use to assess disclosure
credibility and (2) suggesting that management credibility is a
multidimensional latent construct for which CSR performance can be one of
several relevant indicators.
Journal: Accounting and Business Research
Pages: 523-544
Issue: 5
Volume: 44
Year: 2014
Month: 10
X-DOI: 10.1080/00014788.2014.922408
File-URL: http://hdl.handle.net/10.1080/00014788.2014.922408
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:5:p:523-544
Template-Type: ReDIF-Article 1.0
Author-Name: Michael J. Peel
Author-X-Name-First: Michael J.
Author-X-Name-Last: Peel
Title: Addressing unobserved endogeneity bias in accounting studies: control and sensitivity methods by variable type
Abstract:
Together with their associated statistical routines, this paper describes
the control and sensitivity methods that can be employed by accounting
researchers to address the important issue of unobserved (omitted)
variable bias in regression and matching models according to the types of
variables employed. As with other social science disciplines, an important
and pervasive issue in observational (non-experimental) accounting
research is omitted variable bias (endogeneity). Causal inferences for
endogenous explanatory variables are biased. This occurs in regression
models where an unobserved (confounding) variable is correlated with both
the dependent (outcome) variable in a regression model and the causal
explanatory (often a selection) variable of interest. The Heckman
treatment effect model has been widely employed to control for hidden bias
for continuous outcomes and endogenous binary selection variables.
However, in accounting studies, limited (categorical) dependent variables
are a common feature and endogenous explanatory variables may be other
than binary in nature. The purpose of this paper is to provide an overview
of contemporary control methods, together with the statistical routines to
implement them, which extend the Heckman approach to binary, multinomial,
ordinal, count and percentile outcomes and to where endogenous variables
take various forms. These contemporary methods aim to improve causal
estimates by controlling for hidden bias, though at the price of increased
complexity. A simpler approach is to conduct sensitivity analysis. This
paper also presents a synopsis of a number of sensitivity techniques and
their associated statistical routines which accounting researchers can
employ routinely to appraise the vulnerability of causal effects to
potential (simulated) unobserved bias when estimated with conventional
regression and propensity score matching estimators.
Journal: Accounting and Business Research
Pages: 545-571
Issue: 5
Volume: 44
Year: 2014
Month: 10
X-DOI: 10.1080/00014788.2014.926249
File-URL: http://hdl.handle.net/10.1080/00014788.2014.926249
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:5:p:545-571
Template-Type: ReDIF-Article 1.0
Author-Name: Klaus Ruhnke
Author-X-Name-First: Klaus
Author-X-Name-Last: Ruhnke
Author-Name: Martin Schmidt
Author-X-Name-First: Martin
Author-X-Name-Last: Schmidt
Title: The audit expectation gap: existence, causes, and the impact of changes
Abstract:
Recent regulatory initiatives targeting the statutory audit regime support
the notion that the audit expectation gap is still a driver of change.
This study seeks to analyse causes of the gap as well as the impact of
proposed changes to the current statutory audit regime using an approach
that differs from those used in prior literature. This approach allows us
to attribute the audit expectation gap under the current regime to a
failure of the public, the standard-setter, or the auditor. Based on a
questionnaire survey conducted in 2011 in Germany, we find the public to
have exaggerated expectations of auditors' responsibilities under current
standards. Other causes of the gap relate to the public's difficulty in
assessing the performance of auditors, but also to deficiencies in
auditors' performance. In addition, we find that auditors are not fully
aware of their responsibilities. Increasing the information content of the
audit opinion is expected to narrow the gap. By contrast, recent proposed
changes, such as mandatory rotation and a ban on non-audit services, may
reduce the gap only to a lesser extent. Overall, it can be shown that the
audit expectation gap is by its nature a persistent phenomenon comprising
complex social aspects and interactions with changing accounting
requirements, such as increased uncertainties in accounting estimates.
Journal: Accounting and Business Research
Pages: 572-601
Issue: 5
Volume: 44
Year: 2014
Month: 10
X-DOI: 10.1080/00014788.2014.929519
File-URL: http://hdl.handle.net/10.1080/00014788.2014.929519
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:5:p:572-601
Template-Type: ReDIF-Article 1.0
Author-Name: Rania Kamla
Author-X-Name-First: Rania
Author-X-Name-Last: Kamla
Title: Modernity, space-based patriarchy and global capitalism: implications for Syrian women accountants
Abstract:
This paper contributes to the current literature on gender, modernity,
patriarchy and accounting by bringing insights into the experiences of
women accountants in Syria: an Arab and predominantly Muslim country. By
doing so, this paper enhances understanding of women's interrelationship
with accounting beyond the Anglo-American context that currently dominates
the research agenda on gender and accounting. Face-to-face interviews with
20 women accountants were carried out in Syria in 2008. This study reveals
that in the context of global capitalism and patriarchy, factors of class,
alienation, tradition and economic difficulties are contributing to the
subordinated role of women in society in general and in the accounting
profession in particular. The increased commercialisation of the
accounting profession in the Arab world, including Syria, has resulted in
socio-economic hierarchies and discriminatory practices, where
interviewees spoke of discrimination based on class, sex and on the
knowledge held. Further, despite advances to Syrian women's access to the
public space, the public space for Syrian women accountants often operates
based largely on how men act in this space. Men (and socially/financially
advantaged women) often occupy aspects of the public (accounting) space
that are perceived to be more significant and better financially rewarded.
Thus, the dichotomy of public/private spaces in this study is understood
in a broader sense to incorporate the symbolic as well as spatial aspects.
This paper concludes that the accounting profession's aspirations need to
be challenged through critically evaluating and redefining work roles and
values to ensure emancipation for women. Furthermore, in the Arab world,
dominant patriarchal structures will only be challenged and changed when
obstacles preventing women from enjoying their human rights and
contributing fully in society are addressed and eliminated.
Journal: Accounting and Business Research
Pages: 603-629
Issue: 6
Volume: 44
Year: 2014
Month: 12
X-DOI: 10.1080/00014788.2014.933401
File-URL: http://hdl.handle.net/10.1080/00014788.2014.933401
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:6:p:603-629
Template-Type: ReDIF-Article 1.0
Author-Name: Sylvain Durocher
Author-X-Name-First: Sylvain
Author-X-Name-Last: Durocher
Author-Name: Yves Gendron
Author-X-Name-First: Yves
Author-X-Name-Last: Gendron
Title: Epistemic commitment and cognitive disunity toward fair-value accounting
Abstract:
This paper critically explores knowledge/professionalization relationships
in a jurisdictional context characterized by shifting standards of
practice. Focusing on the growing movement toward fair value within
accounting standards, we examine practitioners' reactions to the growing
compulsory application of fair-value accounting standards. To make sense
of these reactions, we introduce the notion of epistemic
commitment, that is to say one's degree of allegiance to a given
knowledge template. Utilizing 27 interviews with Canadian experienced
accountants, we rely on epistemic commitment to analyze the extent of
variability in practitioners' reactions to the standardization movement
toward fair-value accounting. Our analysis demonstrates an important level
of variability in practitioners' epistemic commitment toward fair-value
accounting, highlighting a lack of cognitive unity in the field. Our
findings point to other important professionalization issues:
practitioners' inclinations to refer to profitability issues when
reflecting on the appropriateness of standards; practitioners' conception
of accounting as an objective technology; practitioners' hesitations in
voicing deep-level concerns over implementation ambiguities and lack of
professional cognitive authority. Overall, our study raises doubts about
the professional status of accountancy.
Journal: Accounting and Business Research
Pages: 630-655
Issue: 6
Volume: 44
Year: 2014
Month: 12
X-DOI: 10.1080/00014788.2014.938012
File-URL: http://hdl.handle.net/10.1080/00014788.2014.938012
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:6:p:630-655
Template-Type: ReDIF-Article 1.0
Author-Name: Yu-Lin Chen
Author-X-Name-First: Yu-Lin
Author-X-Name-Last: Chen
Title: Determinants of biased subjective performance evaluations: evidence from a Taiwanese public sector organization
Abstract:
Drawing on the notion of guanxi, which is
obligation-bound, in Confucian cultures, this study investigates
whether rating leniency and rating compression in performance evaluation
are based on supervisor-subordinate acquaintanceship, alma mater ties, and
subordinates' physical proximity to their supervisor. After controlling
for supervisor-subordinate gender similarity and age difference, this
study first finds that public sector supervisors are willing to provide
relatively lenient ratings and compressed ratings for their subordinates
when their personal acquaintanceship with them is strong, and when there
is close physical proximity between them. Second, an alma mater connection
with a subordinate leads to rating leniency by the supervisor. Finally, it
is worth noting where this study differs from Bol's research (from Western
cultures). In particular, while Bol, J.C. [2011. The determinants and
performance effects of managers' performance evaluation biases.
The Accounting Review, 86 (5), 1549-1575] demonstrates
that age differences between supervisors and subordinates decrease rating
leniency, this study documents insignificant results for similar
demographic characteristics in age and gender. Bol, J.C. [2011. The
determinants and performance effects of managers' performance evaluation
biases. The Accounting Review, 86 (5), 1549-1575] also
demonstrates that if a private sector supervisor sharing a work location
with subordinates faces relatively lower information-gathering costs, he
or she will give less lenient and less compressed ratings. However, this
study shows opposite findings for the guanxi norm in
Confucian societies.
Journal: Accounting and Business Research
Pages: 656-675
Issue: 6
Volume: 44
Year: 2014
Month: 12
X-DOI: 10.1080/00014788.2014.954517
File-URL: http://hdl.handle.net/10.1080/00014788.2014.954517
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Handle: RePEc:taf:acctbr:v:44:y:2014:i:6:p:656-675
Template-Type: ReDIF-Article 1.0
Author-Name: Maarten Corten
Author-X-Name-First: Maarten
Author-X-Name-Last: Corten
Author-Name: Tensie Steijvers
Author-X-Name-First: Tensie
Author-X-Name-Last: Steijvers
Author-Name: Nadine Lybaert
Author-X-Name-First: Nadine
Author-X-Name-Last: Lybaert
Title: The demand for auditor services in wholly family-owned private firms: the moderating role of generation
Abstract:
Former audit demand studies generally consider wholly family-owned private
firms as a homogeneous group of firms that incur minimal agency costs.
Family firm literature, however, argues that these firms might incur
significant agency costs as well and we therefore examine audit demand in
this particular type of firm. As we examine private family firms from the
USA, which have no audit requirement, we broaden the concept of audit
demand to the demand for auditor services, which encompasses audits,
reviews and compilations. Consistent with former audit demand studies, we
hypothesise a negative association between management ownership and the
demand for auditor services, but only for first-generation private family
firms. We hypothesise that this relation turns positive for subsequent
generation private family firms due to entrenching behaviour caused by
weakened altruistic feelings between the family shareholders. Our results
support this hypothesis, but only regarding the demand for reviews and
compilations. Therefore, our findings suggest that reviews and
compilations seem to be sufficient and more cost-effective in this
specific context to mitigate shareholder-manager agency costs compared to
more expensive audits. Moreover, results suggest that the level of
shareholder-debtholder agency costs do seem to be a driver for the demand
for audits.
Journal: Accounting and Business Research
Pages: 1-26
Issue: 1
Volume: 45
Year: 2015
Month: 1
X-DOI: 10.1080/00014788.2014.959462
File-URL: http://hdl.handle.net/10.1080/00014788.2014.959462
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:1:p:1-26
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Carlsson-Wall
Author-X-Name-First: Martin
Author-X-Name-Last: Carlsson-Wall
Author-Name: Kalle Kraus
Author-X-Name-First: Kalle
Author-X-Name-Last: Kraus
Author-Name: Johnny Lind
Author-X-Name-First: Johnny
Author-X-Name-Last: Lind
Title: Strategic management accounting in close inter-organisational relationships
Abstract:
This paper provides a conceptual comparison between the 'mainstream
strategic management accounting' literature, the 'accounting and
strategising' literature and 'strategic management accounting (SMA) in
close inter-organisational relationships'. It concludes that 'SMA in close
inter-organisational relationships' shares some important characteristics
with the 'accounting and strategising' literature. Important differences
were found, too, though. These mainly concerned the need to understand
individuals working for close partners as preparers of strategic
information; the need for disaggregated accounting information about
unique connections to close partners and about the role of indirect
benefits that follow from close connections and the need for the company
to not only collect information but also disperse diverse information
within close inter-organisational relationships. Through an intensive case
study of a global robot manufacturer, Robotics, this paper also provides
novel empirical evidence on 'SMA in close inter-organisational
relationships'. For instance, SMA practices included indirect benefits,
something mainly neglected in the existing literature on SMA. These
indirect benefits involved a close customer's willingness to invest time
and effort in Robotics' technological development, thereby contributing to
Robotics' ability to attain revenue gains in its interactions with other
customers. Our findings also have important implications for the
'inter-organisational accounting' literature, for instance, by
highlighting the need to link more explicitly strategic decision-making
with the current interest in the role of accounting in
inter-organisational dynamics.
Journal: Accounting and Business Research
Pages: 27-54
Issue: 1
Volume: 45
Year: 2015
Month: 1
X-DOI: 10.1080/00014788.2014.965128
File-URL: http://hdl.handle.net/10.1080/00014788.2014.965128
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:1:p:27-54
Template-Type: ReDIF-Article 1.0
Author-Name: Mohammad Alhadab
Author-X-Name-First: Mohammad
Author-X-Name-Last: Alhadab
Author-Name: Iain Clacher
Author-X-Name-First: Iain
Author-X-Name-Last: Clacher
Author-Name: Kevin Keasey
Author-X-Name-First: Kevin
Author-X-Name-Last: Keasey
Title: Real and accrual earnings management and IPO failure risk
Abstract:
This paper analyses the relationship between real and accrual earnings
management activities and IPO failure risk. While the association between
accrual earnings management and IPO failure has been researched in a
limited setting, to date, there has been no work that analyses the impact
of real activities-based manipulation on the probability of IPO failure.
Based on a sample of 570 UK IPO firms that went public over the period
1998-2008, we find evidence that IPO firms manipulate earnings upward
utilising real and accrual earnings management during the IPO year. We
also find that IPO firms with high levels of real and/or accrual earnings
management during the IPO year have a higher probability of IPO failure
and lower survival rates in subsequent periods. In addition, we find that
IPO firms experience a higher probability of IPO failure and lower
survival rates in the post-IPO period when greater real earnings
management takes place during the IPO as compared to accrual earnings
management. While our work contributes to the growing literature on real
and accrual earnings management around IPOs, the majority of our failed
IPO events are from the Alternative Investment Market and occur during the
financial crisis. Future research, therefore, should consider whether
these results are generalisable to more developed firms and less turbulent
economic environments.
Journal: Accounting and Business Research
Pages: 55-92
Issue: 1
Volume: 45
Year: 2015
Month: 1
X-DOI: 10.1080/00014788.2014.969187
File-URL: http://hdl.handle.net/10.1080/00014788.2014.969187
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:1:p:55-92
Template-Type: ReDIF-Article 1.0
Author-Name: Devrimi Kaya
Author-X-Name-First: Devrimi
Author-X-Name-Last: Kaya
Author-Name: Maximilian Koch
Author-X-Name-First: Maximilian
Author-X-Name-Last: Koch
Title: Countries' adoption of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) - early empirical evidence
Abstract:
The International Financial Reporting Standard for Small and Medium-sized
Entities (IFRS for SMEs) is increasingly being adopted in a number of
jurisdictions. Despite the economic importance of non-publicly accountable
entities, little is known about what factors influence countries'
decisions to adopt IFRS for SMEs. In a unique sample of 128 countries, we
find that countries that are not capable of developing their own local
generally accepted accounting principles are more likely to adopt IFRS for
SMEs. We also provide evidence that in jurisdictions where full IFRS have
been applied to private firms, the likelihood of adoption of IFRS for SMEs
increases, suggesting that jurisdictions reduce the financial reporting
burden on SMEs. Moreover, in line with prior literature, there is evidence
that countries with a relatively low quality of governance institutions
are more likely to adopt this new set of accounting standards. The results
also hold under alternative measures and different estimation approaches.
Overall, our results are helpful in understanding the worldwide diffusion
of IFRS for SMEs. Standard setters and regulators might consider our study
in the future development of accounting harmonisation of non-publicly
accountable entities.
Journal: Accounting and Business Research
Pages: 93-120
Issue: 1
Volume: 45
Year: 2015
Month: 1
X-DOI: 10.1080/00014788.2014.969188
File-URL: http://hdl.handle.net/10.1080/00014788.2014.969188
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:1:p:93-120
Template-Type: ReDIF-Article 1.0
Author-Name: Jane Davison
Author-X-Name-First: Jane
Author-X-Name-Last: Davison
Title: Visualising accounting: an interdisciplinary review and synthesis
Abstract:
This paper offers the first wide-ranging review and synthesis of visual
research in accounting. It aims to shape, order and evaluate the field for
the first time. Visual forms are important to accounting because of their
power and their ubiquity in an increasingly visual society. Visual forms
constitute representation (incremental information) or construction
(impression management) or both. The paper defines the visual broadly to
include pictures, photographs, film, architecture, diagrams,
advertisements and web pages that appear in a wide variety of documentary
and geographical locations. It encompasses papers that examine a wide
range of issues (from impression management, visual rhetoric, professional
identity, gender and diversity to corporate social responsibility,
intellectual capital, myth and religion). First is an overview of the
'visual turn' in contemporary society, critical thought and accounting.
The second part brings together for the first time a wide range of work on
the visual in accounting. It gives order by means of a framework
constructed from the interdisciplinarity that is fundamental to the field,
from arts disciplines, through sociology, to psychology and economics. The
third section is an evaluative discussion of the strengths and challenges
of the field. Finally, a rich agenda for future research is outlined.
Journal: Accounting and Business Research
Pages: 121-165
Issue: 2
Volume: 45
Year: 2015
Month: 2
X-DOI: 10.1080/00014788.2014.987203
File-URL: http://hdl.handle.net/10.1080/00014788.2014.987203
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:2:p:121-165
Template-Type: ReDIF-Article 1.0
Author-Name: Niclas Hellman
Author-X-Name-First: Niclas
Author-X-Name-Last: Hellman
Author-Name: Sidney J. Gray
Author-X-Name-First: Sidney J.
Author-X-Name-Last: Gray
Author-Name: Richard D. Morris
Author-X-Name-First: Richard D.
Author-X-Name-Last: Morris
Author-Name: Axel Haller
Author-X-Name-First: Axel
Author-X-Name-Last: Haller
Title: The persistence of international accounting differences as measured on transition to IFRS
Abstract:
The international accounting classification literature emphasises the
importance of understanding how institutional factors shape accounting
regulations and practices. With the mandatory adoption of International
Financial Reporting Standards (IFRS) in the European Union and Australia
in 2005, our empirical study examines whether three international
accounting classification systems relating to equity financing, law and
culture still had merit as measured on transition to IFRS and explore
whether they are effective in grouping accounting systems. Using IFRS as
the yardstick, we find statistically significant differences in the
measurement of shareholders' equity as between strong (Class A) versus
weak (Class B) equity financing systems, common law versus code law
systems and cultural systems based on 'Anglo', 'Nordic' and 'More
Developed Latin' cultural groups. With regard to the measurement of net
income, however, we find statistically significant differences only in
respect of strong (Class A) versus weak (Class B) equity financing
systems. Our findings demonstrate that traditional international
accounting system differences still persisted at the time of IFRS adoption
even after long periods of harmonisation and growing international
accounting convergence.
Journal: Accounting and Business Research
Pages: 166-195
Issue: 2
Volume: 45
Year: 2015
Month: 2
X-DOI: 10.1080/00014788.2014.987202
File-URL: http://hdl.handle.net/10.1080/00014788.2014.987202
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:2:p:166-195
Template-Type: ReDIF-Article 1.0
Author-Name: Indrit Troshani
Author-X-Name-First: Indrit
Author-X-Name-Last: Troshani
Author-Name: Lee D. Parker
Author-X-Name-First: Lee D.
Author-X-Name-Last: Parker
Author-Name: Andy Lymer
Author-X-Name-First: Andy
Author-X-Name-Last: Lymer
Title: Institutionalising XBRL for financial reporting: resorting to regulation
Abstract:
By integrating and streamlining financial information within and among
various organisations, eXtensible Business Reporting Language (XBRL) has
been developed with a view to enhancing the efficiency, accuracy, and
transparency of corporate accounting information. Taking an
inter-organisational focus, this paper investigates the process of how
XBRL was institutionalised. It explains and offers insights on how
institutional arrangements emerge and become relevant as heterogeneous
organisations consider adopting accounting innovations while evidence
concerning their benefits is unavailable. The original and overall
contribution of this study is that it improves current understanding of
coal-face actors' perceptions, behaviours, and strategies as they interact
in the organisational field and become engaged in developing accounting
innovations to produce the macro-level observations documented in existing
institutional theory studies.
Journal: Accounting and Business Research
Pages: 196-228
Issue: 2
Volume: 45
Year: 2015
Month: 2
X-DOI: 10.1080/00014788.2014.980772
File-URL: http://hdl.handle.net/10.1080/00014788.2014.980772
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:2:p:196-228
Template-Type: ReDIF-Article 1.0
Author-Name: Thomas Schleicher
Author-X-Name-First: Thomas
Author-X-Name-Last: Schleicher
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: Are interim management statements redundant?
Abstract:
In 2004 the Transparency Directive increased the reporting frequency by
mandating the Interim Management Statement (IMS). However, only nine years
later, the EU announced that it was making quarterly reporting voluntary
again, arguing that IMSs are redundant as they are unlikely to contain any
additional information not already required by the Market Abuse Directive
(MAD). The current paper tests this argument empirically. For that it
collects data on trading statements from a post-MAD pre-IMS year and uses
these statements to predict which IMSs are genuinely incremental firm
announcements ('incremental IMSs') and not simply substitutes for
otherwise disclosed trading statements ('non-incremental IMSs'). It then
calculates three-day abnormal return variability and abnormal trading
volume associated with incremental and non-incremental IMSs and it makes
three observations. First, the introduction of IMSs coincided with a
substantial reduction in other trading statements consistent with a large
substitution effect between IMSs and non-periodic trading statements.
Second, incremental third-quarter IMSs, but not incremental first-quarter
IMSs, exhibit significantly positive abnormal return variability and
abnormal trading volume, suggesting that the withdrawal of IMSs will
involve the loss of some relevant information. Third,
higher abnormal return variability and trading volume for non-incremental
IMSs, relative to incremental IMSs, are consistent with the argument that
a MAD-only regime will ensure the release of most
relevant information.
Journal: Accounting and Business Research
Pages: 229-255
Issue: 2
Volume: 45
Year: 2015
Month: 2
X-DOI: 10.1080/00014788.2014.1002444
File-URL: http://hdl.handle.net/10.1080/00014788.2014.1002444
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:2:p:229-255
Template-Type: ReDIF-Article 1.0
Author-Name: John Richard Edwards
Author-X-Name-First: John Richard
Author-X-Name-Last: Edwards
Title: The method of bookkeeping, deduced from clear principles
Abstract:
James Dodson FRS devised a new way of teaching double-entry bookkeeping
based on deductive logic, and he employed this method of scientific
analysis to require recognition of assets and changes in their value in
the absence of prior market transactions. This paper is designed to
advance knowledge of accounting history by demonstrating diversity in the
history of accounting thought and by revealing how it can be influenced by
new ways of thinking gaining credence within the wider contemporary
environment. Understanding of the history of double-entry bookkeeping is
broadened and deepened by locating Dodson's treatise within the context of
the scientific revolution; a time when complete obedience to the
scriptures and classical authorities came under challenge from the
systematic pursuit of knowledge based on reasoning, critical questioning,
and the establishment of clear relationships between cause and effect.
Journal: Accounting and Business Research
Pages: 256-277
Issue: 2
Volume: 45
Year: 2015
Month: 2
X-DOI: 10.1080/00014788.2014.978255
File-URL: http://hdl.handle.net/10.1080/00014788.2014.978255
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:2:p:256-277
Template-Type: ReDIF-Article 1.0
Author-Name: Subhash Abhayawansa
Author-X-Name-First: Subhash
Author-X-Name-Last: Abhayawansa
Author-Name: Mark Aleksanyan
Author-X-Name-First: Mark
Author-X-Name-Last: Aleksanyan
Author-Name: John Bahtsevanoglou
Author-X-Name-First: John
Author-X-Name-Last: Bahtsevanoglou
Title: The use of intellectual capital information by sell-side analysts in company valuation
Abstract:
This paper investigates the role of intellectual capital information (ICI)
in sell-side analysts' fundamental analysis and valuation of companies.
Using in-depth semi-structured interviews, it penetrates the black box of
analysts' valuation decision-making by identifying and conceptualising the
mechanisms and rationales by which ICI is integrated within their
valuation decision processes. We find that capital market participants are
not ambivalent to ICI, and ICI is used: (1) to form analysts' perceptions
of the overall quality, strengths and future prospects of companies; (2)
in deriving valuation model inputs; (3) in setting price targets and
making investment recommendations; and (4) as an important and integral
element in analyst-client communications. We show that: there is a
'pecking order' of mechanisms for incorporating ICI in valuations, based
on quantifiability; IC valuation is grounded in valuation theory; there
are designated entry points in the valuation process for ICI; and a number
of factors affect analysts' ICI use in valuation. We also identify a need
to redefine 'value-relevant' ICI to include non-price-sensitive
information; acknowledge the boundedness and contextuality of analysts'
rationality and motives of their ICI use; and the important role of
analyst-client meetings for ICI communication.
Journal: Accounting and Business Research
Pages: 279-306
Issue: 3
Volume: 45
Year: 2015
Month: 4
X-DOI: 10.1080/00014788.2014.1002445
File-URL: http://hdl.handle.net/10.1080/00014788.2014.1002445
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:3:p:279-306
Template-Type: ReDIF-Article 1.0
Author-Name: Katrien Bosquet
Author-X-Name-First: Katrien
Author-X-Name-Last: Bosquet
Author-Name: Peter de Goeij
Author-X-Name-First: Peter
Author-X-Name-Last: de Goeij
Author-Name: Kristien Smedts
Author-X-Name-First: Kristien
Author-X-Name-Last: Smedts
Title: Analysts' earnings forecasts: coexistence and dynamics of overconfidence and strategic incentives
Abstract:
This paper formulates a two-stage model to capture the decision process of
financial analysts when issuing earnings forecasts. Our model extends the
model of Chen and Jiang [(2005). Analysts' weighting of private and public
information. Review of Financial Studies, 19 (1),
319-355], by allowing for a distortion of forecasts independent of whether
an analyst has private information. Using quarterly earnings forecasts, we
provide empirical evidence on the coexistence of overconfidence and
strategic incentives. Financial analysts overweight their private
information and at the same time strategically inflate their forecast.
Journal: Accounting and Business Research
Pages: 307-322
Issue: 3
Volume: 45
Year: 2015
Month: 4
X-DOI: 10.1080/00014788.2015.1009359
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1009359
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:3:p:307-322
Template-Type: ReDIF-Article 1.0
Author-Name: Danture Wickramasinghe
Author-X-Name-First: Danture
Author-X-Name-Last: Wickramasinghe
Title: Getting management accounting off the ground: post-colonial neoliberalism in healthcare budgets
Abstract:
Taking Modell's [(2014) The societal relevance of management accounting:
an introduction to the special issue. Accounting and Business
Research, 44 (2), 83-103] 'societal relevance of management
accounting' agenda forward, and based on a cost accounting initiative in a
Sri Lankan hospital, this paper examines how management accounting is
implicated in societal relevance. It reports on a post-colonial neoliberal
state's use of cost-saving experiments and the resultant emancipation of
the individuals involved. It conducts a bottom-up analysis, from micro
events in the hospital to policymaking at the level of the Provincial
Council. This analysis suggests that cost accounting acts as a mediating instrument: it begins to loosen the old Keynesian post-colonial
bureaucratic budget confinements, creates a social space for individuals
to consider cost-saving experiments, and addresses wider policy concerns
about hospital resource management. The story is illuminated by Gilles
Deleuze's and Zigmund Bauman's ideas on post-panoptic societies: old
confinements are being problematised and new flexible, 'liquid' spaces
created, in which individuals are emancipated in terms of their ability to
influence resource management within and beyond the organisational
constituency.
Journal: Accounting and Business Research
Pages: 323-355
Issue: 3
Volume: 45
Year: 2015
Month: 4
X-DOI: 10.1080/00014788.2015.1009358
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1009358
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:3:p:323-355
Template-Type: ReDIF-Article 1.0
Author-Name: Josep Bisbe
Author-X-Name-First: Josep
Author-X-Name-Last: Bisbe
Author-Name: Ricardo Malagueño
Author-X-Name-First: Ricardo
Author-X-Name-Last: Malagueño
Title: How control systems influence product innovation processes: examining the role of entrepreneurial orientation
Abstract:
This paper yields insights into the channels through which management
accounting and control systems (MACS) exert an influence on product
innovation by examining the extent to which different forms of control
(i.e. value systems (VS), diagnostic control systems and interactive
control systems (ICS)) are directly associated with the distinct phases of
innovation processes. Using survey data collected from 118 medium and
large Spanish companies, we find that (1) VS and ICS have significant main
effects on the creativity, co-ordination and knowledge integration, and
filtering (sub-)phases of innovation processes and (2) the significance
and direction of these influences vary depending on the entrepreneurial
orientation (EO) of firms. By highlighting the relevance of EO in shaping
the influence of MACS on product innovation processes, this study calls
for caution in generalising the expected effects of MACS on innovation.
Journal: Accounting and Business Research
Pages: 356-386
Issue: 3
Volume: 45
Year: 2015
Month: 4
X-DOI: 10.1080/00014788.2015.1009870
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1009870
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:3:p:356-386
Template-Type: ReDIF-Article 1.0
Author-Name: David Ashton
Author-X-Name-First: David
Author-X-Name-Last: Ashton
Author-Name: Pengguo Wang
Author-X-Name-First: Pengguo
Author-X-Name-Last: Wang
Title: Conservatism in residual income models: theory and supporting evidence
Abstract:
In this paper, we develop a framework for evaluating the impact of
conservative accounting on the structure of residual income models of
equity valuation. We explore specific examples of both unconditional and
conditional conservatism and observe a common mathematical structure. We
proceed to generalise our model and identify the joint dependency of
conservatism and the persistence of abnormal earnings on the weights
attached to book values, earnings and dividends. We are able to show
theoretically the likely numerical impact of conservatism on
price-earnings ratios and under-valuations produced by residual income
models. We investigate empirically the interaction between conservatism
and persistence and find they accord well with the theory developed. We
briefly discuss the implications of testing the effect of conservatism on
valuation and linear information dynamics.
Journal: Accounting and Business Research
Pages: 387-410
Issue: 3
Volume: 45
Year: 2015
Month: 4
X-DOI: 10.1080/00014788.2015.1009869
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1009869
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:3:p:387-410
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 411-412
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1033848
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1033848
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:411-412
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: Accounting for capital: the evolution of an idea
Abstract:
The word 'capital' has many meanings, within and beyond business. In
accounting, it was originally a credit concept but has
many uses related to assets. In economics and tax, it has exclusively
asset meanings. This paper investigates the development of the concept of
capital, focussing on accounting and related disciplines, especially in
the UK. Even as a credit term, 'capital' can be as narrow
as original equity or wide enough to include debt. A
credit/debit confusion can be seen in Pacioli's treatise
and through to recent documents by standard setters. At various dates,
amounts called 'capital' have been shown on different sides of the balance
sheet. Capital maintenance is central to the measurement of income for
various purposes. It was thrown off course in 1889 by a legal case which
seems to have been influenced by the double-account system, which also had
echoes in economics. However, the conventional accountants' view was
re-established in 1980 because of an EU Directive. Maintenance of capital
(both credit and debit forms) was much
discussed in the 1970s in a period of high inflation. The concept of
equity began to become clear with the separation of provisions and
reserves (in the 1940s) and when liabilities were defined (from the
1960s). However, accounting practice departs from the definition and it
measures liabilities in various ways, so that there is still no clear
concept of equity capital. A number of policy implications are set out in
the paper.
Journal: Accounting and Business Research
Pages: 413-441
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1033130
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1033130
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:413-441
Template-Type: ReDIF-Article 1.0
Author-Name: Geoffrey Whittington
Author-X-Name-First: Geoffrey
Author-X-Name-Last: Whittington
Title: Discussion of 'Accounting for capital: the evolution of an idea' by Christopher Nobes (2015)
Journal: Accounting and Business Research
Pages: 442-446
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1030939
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1030939
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:442-446
Template-Type: ReDIF-Article 1.0
Author-Name: Partha Dasgupta
Author-X-Name-First: Partha
Author-X-Name-Last: Dasgupta
Title: Disregarded capitals: what national accounting ignores
Abstract:
In this paper, I review - and to an extent further develop - a methodology
of national accounting that responds to the needs of governments when they
engage in sustainability and policy analyses. Those needs would be served
only if national accounts were directed at estimating the economy's wealth
(which is the social worth of an economy's entire stock of capital
assets), not growth in gross domestic product or improvements in the many
ad hoc indicators of human development that have been proposed in recent
years. Concurrently, I show that by poverty, we should mean a low level of
wealth, not income, and that the distribution of human well-being ought to
be judged in terms of the distribution of wealth, not income or education,
or any of the several indicators that are currently in use. I show that
the concept of wealth invites us to extend the notion of assets and the
idea of investment well beyond conventional usage. This perspective has
radical implications for the way national accounts are prepared and
interpreted. I then sketch a recent publication that has put the theory to
work by studying the composition of wealth accumulation in contemporary
India. Private firms routinely produce balance sheets. Nations should do
the same.
Journal: Accounting and Business Research
Pages: 447-464
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1033851
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1033851
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:447-464
Template-Type: ReDIF-Article 1.0
Author-Name: Joe Grice
Author-X-Name-First: Joe
Author-X-Name-Last: Grice
Title: Discussion of 'Disregarded capitals: what national accounting ignores' by Partha Dasgupta (2015)
Journal: Accounting and Business Research
Pages: 465-467
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1030940
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1030940
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:465-467
Template-Type: ReDIF-Article 1.0
Author-Name: Dirk Schoenmaker
Author-X-Name-First: Dirk
Author-X-Name-Last: Schoenmaker
Title: Regulatory capital: Why is it different?
Abstract:
The global financial crisis has highlighted that deviations between the
accounting and regulatory concepts of equity capital have gone too far.
Accounting standards have been going too far in the application of fair
value accounting. If there are no markets during times of crises, it does
not make sense to mark-to-market. These exceptions have now been included
in the accounting standards. At the same time, regulatory capital has gone
astray by allowing debt elements, such as subordinated debt, to be
incorporated, which did not absorb losses during the crisis. The new Basel
III capital framework is rightfully reinforcing the central role of equity
capital. While the special liquidity function of banks may justify lower
levels of capital than those of industrial firms, the social cost of bank
failures (externalities) requires higher levels than the extremely low
levels of bank capital before the crisis. The level of regulatory capital
has been increased, with a systemic surcharge for the large banks, to
reduce the too-big-to-fail subsidy for these banks.
Journal: Accounting and Business Research
Pages: 468-483
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1030961
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1030961
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:468-483
Template-Type: ReDIF-Article 1.0
Author-Name: Jerold L. Zimmerman
Author-X-Name-First: Jerold L.
Author-X-Name-Last: Zimmerman
Title: The role of accounting in the twenty-first century firm
Abstract:
I explore the evolving role of accounting information in allocating
capital. Accounting arose to control conflicts of interest in
organizations (stewardship role). The industrial revolution spawned
capital-intensive firms and public capital markets with dispersed
shareholders to finance these firms. The regulation of these public
capital markets shifted the role of accounting toward providing investors
with information for making informed investment decisions (valuation
role). With the advent of the semiconductor and global competition,
emerging and public firms today differ from their predecessors in
fundamental ways. Exploiting the information technologies created by the
semiconductor, twenty-first century firms are now more knowledge based,
have more intangible assets, are more reliant on their employees' human
capital, confront increased competition, and face diverse conflicts of
interests and hence different challenges accessing capital than their
forerunners. Responding to the demands of twenty-first century firms,
private-equity (PE) markets provide a bundled service - capital and
governance. To supply this bundle, PE firms require accounting information
to control the conflicts of interest both within the PE firm (between the
general and limited partners) and within their investees. Controlling
these conflicts shifts the role of accounting back toward its original
stewardship roots. The valuation role remains important, but there is
little to value unless the conflicts of interest are first mitigated.
Journal: Accounting and Business Research
Pages: 485-509
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1035549
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1035549
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:485-509
Template-Type: ReDIF-Article 1.0
Author-Name: Gervais Williams
Author-X-Name-First: Gervais
Author-X-Name-Last: Williams
Title: Discussion of 'The role of accounting in the 21st century firm' by Jerold L. Zimmerman (2015)
Journal: Accounting and Business Research
Pages: 510-513
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1030944
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:510-513
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Barker
Author-X-Name-First: Richard
Author-X-Name-Last: Barker
Title: Conservatism, prudence and the IASB's conceptual framework
Abstract:
The argument in this paper is that financial accounting is inherently
conservative, in that a neutral application of the International
Accounting Standards Board (IASB's) definition of (net) assets leads to
book value being less than economic value. There are both conceptual and
practical reasons for this outcome, neither of which is explained by an
intention to be conservative, by an asymmetry or bias that is designed to
lead to a conservative outcome. Financial accounting is not a system for
the neutral measurement of economic value. Book value and economic value
are instead conceptually different, with conservatism resulting from that
difference. This inherent conservatism seems to have been overlooked both
by the IASB and by its critics. The IASB has sought to remove prudence
from its framework and has attracted criticism from the academic and
practitioner communities for doing so. Yet the challenges to the framework
implied by adopting an agency-based, contracting demand for prudent
accounting are criticisms of a problem that for the most part does not
exist.
Journal: Accounting and Business Research
Pages: 514-538
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1031983
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1031983
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:514-538
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Author-Name: Eric Tracey
Author-X-Name-First: Eric
Author-X-Name-Last: Tracey
Title: Discussion of 'Conservatism, prudence and the IASB's conceptual framework' by Richard Barker (2015)
Journal: Accounting and Business Research
Pages: 539-542
Issue: 4
Volume: 45
Year: 2015
Month: 6
X-DOI: 10.1080/00014788.2015.1030937
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1030937
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:4:p:539-542
Template-Type: ReDIF-Article 1.0
Author-Name: Mary E. Barth
Author-X-Name-First: Mary E.
Author-X-Name-Last: Barth
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Author-Name: Ann Tarca
Author-X-Name-First: Ann
Author-X-Name-Last: Tarca
Title: Conceptual framework for financial reporting: an introduction to the special issue by the guest editors
Journal: Accounting and Business Research
Pages: 543-544
Issue: 5
Volume: 45
Year: 2015
Month: 8
X-DOI: 10.1080/00014788.2015.1060807
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1060807
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:5:p:543-544
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Author-Name: Alan Teixeira
Author-X-Name-First: Alan
Author-X-Name-Last: Teixeira
Title: Conceptual framework for financial reporting: an introduction to the special issue
Journal: Accounting and Business Research
Pages: 545-546
Issue: 5
Volume: 45
Year: 2015
Month: 8
X-DOI: 10.1080/00014788.2015.1060808
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1060808
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:5:p:545-546
Template-Type: ReDIF-Article 1.0
Author-Name: Arjan Brouwer
Author-X-Name-First: Arjan
Author-X-Name-Last: Brouwer
Author-Name: Martin Hoogendoorn
Author-X-Name-First: Martin
Author-X-Name-Last: Hoogendoorn
Author-Name: Ewout Naarding
Author-X-Name-First: Ewout
Author-X-Name-Last: Naarding
Title: Will the changes proposed to the conceptual framework's definitions and recognition criteria provide a better basis for IASB standard setting?
Abstract:
In this paper we evaluate the International Accounting Standards Board's
(IASB) efforts, in a discussion paper (DP) of 2013, to develop a new
conceptual framework (CF) in the light of its stated ambition to establish
a robust and consistent basis for future standard setting, thereby guiding
standard setting decisions in complex and controversial areas. We
investigate the impact of the definitions and recognition criteria for
assets and liabilities in the existing CF and the DP. We conclude that, in
areas where standards have diverged from the CF in the past, that is, not
consistently applying probability thresholds, the DP supports the existing
standards by removing those thresholds. Furthermore, the DP includes the
more judgemental criteria of relevance and faithful representation to
determine whether an item should be recognised as an asset or liability.
This would justify those existing standards which currently do not
recognise items that meet the (current and revised) definitions of asset
or liability. Altogether, we conclude that the development of IFRSs will
continue to be the outcome of professional debate, negotiation, consensus
seeking and political influence. We therefore recommend that additional
measures should be taken by the IASB to ensure coherence in the
development and application of standards after implementation of a new CF.
Journal: Accounting and Business Research
Pages: 547-571
Issue: 5
Volume: 45
Year: 2015
Month: 8
X-DOI: 10.1080/00014788.2015.1048769
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1048769
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Template-Type: ReDIF-Article 1.0
Author-Name: Christopher W. Nobes
Author-X-Name-First: Christopher W.
Author-X-Name-Last: Nobes
Author-Name: Christian Stadler
Author-X-Name-First: Christian
Author-X-Name-Last: Stadler
Title: The qualitative characteristics of financial information, and managers' accounting decisions: evidence from IFRS policy changes
Abstract:
This is the first empirical study that uses publicly available data to
provide direct evidence about the role of the qualitative
characteristics (QCs) of financial information in managements' accounting
decisions. Based on 40,895 hand-collected IFRS (International Financial
Reporting Standards) policy choices on 16 topics made by 514 large firms
of 10 jurisdictions in the period 2005-2011, we identify 204 reasons for
policy changes. The majority of these refer to QCs from the conceptual
framework of the standard-setter, in particular to relevance, faithful
representation, comparability and understandability. Firms also frequently
refer to transparency, which is not directly mentioned in the framework.
Furthermore, we analyse the circumstances under which firms explain their
policy changes in terms of improved quality. We hypothesise and find that
QCs are more often referred to if the change relates to measurement (i.e.
to a more important accounting policy decision). We also find that
references to QCs are positively associated both with firm size and with a
measure of a jurisdiction's transparency. This complements previous
research by providing evidence that managers are, at the least, alert to
QCs.
Journal: Accounting and Business Research
Pages: 572-601
Issue: 5
Volume: 45
Year: 2015
Month: 8
X-DOI: 10.1080/00014788.2015.1044495
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1044495
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:5:p:572-601
Template-Type: ReDIF-Article 1.0
Author-Name: Anne Bean
Author-X-Name-First: Anne
Author-X-Name-Last: Bean
Author-Name: Helen Irvine
Author-X-Name-First: Helen
Author-X-Name-Last: Irvine
Title: Derivatives disclosure in corporate annual reports: bank analysts' perceptions of usefulness
Abstract:
Responding to mixed evidence on the decision-usefulness of annual report
disclosures for derivative financial instruments to capital market
participants, and concerns identified by practice, this paper examines
usefulness in a direct study of user perceptions. Interviews with analysts
from Australia's four major banks reveal essential usefulness, limited by
the disclosures' failure to reflect companies' actual use of derivatives
throughout the period, and inability of users to understand companies'
off-balance sheet risk and risk management practices from information
considered generic and boilerplate. The research complements and extends
existing archival and survey research and provides new evidence suggesting
low-cost ways for increasing usefulness. It supports the International
Accounting Standards Board's disclosure recommendations in its recent
Discussion Paper: A Review of the Conceptual Framework for
Financial Reporting, but, at the same time, highlights that for
these proposed measures to be successful in relation to IFRS 7, they may
need to address other issues. The research increases knowledge of the
informational requirements of lenders, an important class of financial
information user, and supports calls from practice for companies to
improve their disclosure of material economic risks.
Journal: Accounting and Business Research
Pages: 602-619
Issue: 5
Volume: 45
Year: 2015
Month: 8
X-DOI: 10.1080/00014788.2015.1059312
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1059312
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Author-Name: Araceli Mora
Author-X-Name-First: Araceli
Author-X-Name-Last: Mora
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: The implications of research on accounting conservatism for accounting standard setting
Abstract:
This paper provides a commentary on the academic literature on accounting
conservatism with a view to highlighting the insights of that literature
that are potentially useful for accounting standard setters. We begin by
introducing the basic concepts of conservatism focusing on the distinction
between conditional and unconditional conservatism. We then briefly
discuss the objectives of financial reporting and the economics of
information, paying particular attention to the role of stewardship in the
Conceptual Framework, and the economic concepts of adverse selection and
moral hazard. The two middle sections of the paper provide overviews of,
respectively, the theoretical and empirical literatures on accounting
conservatism. Having summarised the theoretical and empirical literatures,
we then try to synthesis the implications of the literature for standard
setters, paying particular attention to understanding the costs and
benefits of conservatism, implications for the Conceptual Framework,
highlighting the particular demands of public debt markets for
conservatism, and explaining how accounting standards might be adapted to
allow some degree of flexibility in conservative accounting choice. The
final section discusses the limitations of the academic literature from
the practical point of view of standard setters, and highlights areas for
new research that may be of more direct value for policy-making.
Journal: Accounting and Business Research
Pages: 620-650
Issue: 5
Volume: 45
Year: 2015
Month: 8
X-DOI: 10.1080/00014788.2015.1048770
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1048770
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Template-Type: ReDIF-Article 1.0
Author-Name: Carol A. Tilt
Author-X-Name-First: Carol A.
Author-X-Name-Last: Tilt
Title: Accounting for biodiversity
Journal: Accounting and Business Research
Pages: 651-653
Issue: 5
Volume: 45
Year: 2015
Month: 8
X-DOI: 10.1080/00014788.2015.1025528
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1025528
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:5:p:651-653
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Jane Davison
Author-X-Name-First: Jane
Author-X-Name-Last: Davison
Title: Accounting narratives: storytelling, philosophising and quantification
Journal: Accounting and Business Research
Pages: 655-660
Issue: 6-7
Volume: 45
Year: 2015
Month: 12
X-DOI: 10.1080/00014788.2015.1081520
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1081520
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Template-Type: ReDIF-Article 1.0
Author-Name: Lisa Evans
Author-X-Name-First: Lisa
Author-X-Name-Last: Evans
Author-Name: Jacqueline Pierpoint
Author-X-Name-First: Jacqueline
Author-X-Name-Last: Pierpoint
Title: Framing the Magdalen: sentimental narratives and impression management in charity annual reporting
Abstract:
We analyse the annual report narratives, between 1801 and 1914, of the
Edinburgh Magdalen Asylum, a reformatory for 'fallen' women. We aim to
provide new insights by combining interdisciplinary perspectives: the work
of Erving Goffman on stigma, asylums, impression management and framing,
and writings on literary genres, in particular eighteenth- and
nineteenth-century fiction. We also contribute to research on the annual
report as source material for social history and to accounting histories
of women. We find that the narratives were employed to discharge the
directors' accountability by portraying their work and the asylum as
socially and economically useful, accounting for the inmates in their
charge, securing funding and finding suitable employment for inmates after
release. The narratives and their subjects were framed in accordance with
conventions of sentimental novels and recurring literary plot structures.
By creating a dichotomy between victims of seduction and 'hardened'
prostitutes, the directors could manage expectations: not all Magdalens
could be saved. On the other hand, this dichotomy allowed the directors to
advertise their 'product' in the market for domestic labour: Case
histories and personal narratives were presented to show that the
remorseful Magdalen could become a docile domestic servant and productive
citizen.
Journal: Accounting and Business Research
Pages: 661-690
Issue: 6-7
Volume: 45
Year: 2015
Month: 12
X-DOI: 10.1080/00014788.2015.1039931
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1039931
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Template-Type: ReDIF-Article 1.0
Author-Name: Arman Eshraghi
Author-X-Name-First: Arman
Author-X-Name-Last: Eshraghi
Author-Name: Richard Taffler
Author-X-Name-First: Richard
Author-X-Name-Last: Taffler
Title: Heroes and victims: fund manager sensemaking, self-legitimation and storytelling
Abstract:
This paper explores how fund managers continue to do their job when on one
level they know they cannot all be exceptional. They do this by telling
stories, constructing satisfying narratives to explain to themselves, as
well as others, why their investments work out and providing equally
plausible reasons for when they underperform. Using the story typology of
Gabriel (2000. Storytelling in Organizations: Facts, Fictions, and
Fantasies. Oxford: Oxford University Press.) - epic, tragic,
comic and romantic, we explore two sets of fund manager narratives.
First, we analyse the transcripts of interviews with 50
equity fund managers in some of the world's largest investment houses.
Second, we examine a similar number of published fund
manager reports to their investors. In both cases, we show how
storytelling is used by asset managers to make sense of what they do and
justify their value to themselves as well their clients and employers.
Similar processes are employed in both sets of narratives, one verbal and
informal, the other written and formal. Our study serves to highlight how
storytelling is an integral part of the work of the professional investor.
Journal: Accounting and Business Research
Pages: 691-714
Issue: 6-7
Volume: 45
Year: 2015
Month: 12
X-DOI: 10.1080/00014788.2015.1081556
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1081556
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:6-7:p:691-714
Template-Type: ReDIF-Article 1.0
Author-Name: David Collins
Author-X-Name-First: David
Author-X-Name-Last: Collins
Author-Name: Ian Dewing
Author-X-Name-First: Ian
Author-X-Name-Last: Dewing
Author-Name: Peter Russell
Author-X-Name-First: Peter
Author-X-Name-Last: Russell
Title: Between Maxwell and Micawber: plotting the failure of the Equitable Life
Abstract:
This paper offers reflections on the failure of The Equitable Life
Assurance Society. Noting that the collapse of this financial institution
precipitated a raft of official inquiries, we provide a detailed analysis
and 're-view' of the public inquiry report that was produced by Lord
Penrose. The paper observes that Lord Penrose's text presents itself as a
factual description of events. Yet we counter that this report remains, at
root, a creative product which depends upon narrative strategies of
characterisation and emplotment. Analysing the narrative resources and the
broader narratological choices that underpin Lord Penrose's account of the
Equitable affair, we suggest that this report turns upon a Maxwellian
rendering of the drama's key protagonist. Questioning the assumptions,
omissions and elisions which underpin this method of plotting the failure
of the Equitable, we propose another means of characterising the drama's
principal. Building upon a reading of David Copperfield,
we proffer a Micawberish alternative to the Maxwellian autocrat favoured
by Lord Penrose's text. Readers are invited to consider the relative
merits of these contrasting narratives and are, furthermore, encouraged to
reflect upon the manner in which the interplay between text, author and
reader acts to shape public understanding of accounting, accountability
and financial regulation more broadly.
Journal: Accounting and Business Research
Pages: 715-737
Issue: 6-7
Volume: 45
Year: 2015
Month: 12
X-DOI: 10.1080/00014788.2015.1042355
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1042355
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Template-Type: ReDIF-Article 1.0
Author-Name: Helen Oakes
Author-X-Name-First: Helen
Author-X-Name-Last: Oakes
Author-Name: Steve Oakes
Author-X-Name-First: Steve
Author-X-Name-Last: Oakes
Title: An analysis of business phenomena and austerity narratives in the arts sector from a new materialist perspective
Abstract:
The paper adopts a lens of new materialism to analyse narratives of
managers in the arts sector in response to the master narrative of
austerity and proposed 'solutions' using business models (including
accounting). It explores the complex trajectories of the master narrative
through the analysis of a diverse range of funding and arts organisations.
Accounting, business models and austerity reveal rhizomatic
characteristics as they diverge from their origin and are implicated in
uncertainty about the future and a variety of unintended consequences.
Accounting is depicted by many interviewees as not fulfilling many of its
promises, thus creating uncertainty regarding its effectiveness. The new
materialist approach offers insights into the nature and scale of
uncertainty and pays attention to affect and emotion in interviewee
responses, fostering an empathetic approach to social analysis. Three
implications of new materialism relating to accountability, individual
responsibility and inter-organisational communication are highlighted.
Journal: Accounting and Business Research
Pages: 738-764
Issue: 6-7
Volume: 45
Year: 2015
Month: 12
X-DOI: 10.1080/00014788.2015.1081555
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1081555
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Template-Type: ReDIF-Article 1.0
Author-Name: Caterina Pesci
Author-X-Name-First: Caterina
Author-X-Name-Last: Pesci
Author-Name: Ericka Costa
Author-X-Name-First: Ericka
Author-X-Name-Last: Costa
Author-Name: Teerooven Soobaroyen
Author-X-Name-First: Teerooven
Author-X-Name-Last: Soobaroyen
Title: The forms of repetition in social and environmental reports: insights from Hume's notion of 'impressions'
Abstract:
This paper focuses on the use of repetition, both in narrative and visual forms,
in social and environmental reports. It investigates the forms of repetition as
a rhetorical device adopted by the preparer of a social and environmental report
in helping the process of knowledge acquisition, as outlined by Hume [1739. A
Treatise of Human Nature. Available from: http://www.gutenberg.org/files/4705/4705-h/4705-h.htm#link2H_4_0006].
Drawing from Hume's (1739) philosophical idea of an 'impression', and the work
of Davison [2014a. Visual rhetoric and the case of intellectual capital. Accounting
Organization and Society, 39 (1), 20-37], we classify repetitions into 'identical',
'similar', and 'accumulated' forms. It is argued that the rationale for distinguishing
between the different forms of repetition can be linked to their different potential
or intensity in acting on different stimuli with a view to enhance learning. The
empirical element of this study is based on the stand-alone social and environmental
reports of a sample of 86 cooperative banks (CBs) in Northern Italy; the analysis of
these reports indicates that repetition is widespread and that CBs use all forms of
repetition, albeit to a varying extent within the different reported themes. The paper
contributes to the literature by offering an alternative interpretation of repetition
using an interdisciplinary perspective and by providing new insights on social and
environmental reporting practices in the cooperative banking sector.
Journal: Accounting and Business Research
Pages: 738-764
Issue: 6-7
Volume: 45
Year: 2015
Month: 12
X-DOI: 10.1080/00014788.2015.1084224
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1084224
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:6-7:p:765-800
Template-Type: ReDIF-Article 1.0
Author-Name: Stuart Cooper
Author-X-Name-First: Stuart
Author-X-Name-Last: Cooper
Author-Name: Richard Slack
Author-X-Name-First: Richard
Author-X-Name-Last: Slack
Title: Reporting practice, impression management and company performance: a longitudinal and comparative analysis of water leakage disclosure
Abstract:
This paper aims to determine whether corporate reporting practice,
consistent with impression management, changes depending upon company
performance. A longitudinal analysis, rarely used in prior impression
management research, enables changes in annual report disclosures, both
narrative and visual, to be identified and considered relative to a
company's performance. Our analysis is based upon the disclosure of
leakage performance, a strategic and stakeholder issue in the water
industry, by all 10 water and sewerage companies (WASCs) in England and
Wales over the 7-year period 2005-2006 to 2011-2012. Our longitudinal data
are also compared across companies and contrasted with the expert counter
account provided by the industry regulator, OFWAT. We find that the level,
nature and presentation of a WASC's leakage disclosures change markedly
reflective of their performance against OFWAT's target. Our evidence shows
that the changes in reporting practice include the use of tactics and
presentational methods consistent with impression management, raising
concerns regarding the balance and trustworthiness of voluntary
disclosures in the annual report. We suggest that the International
Accounting Standards Board should further consider their guidance on
narrative disclosures, including presentational format, to reduce the
scope for impression management within corporate reporting.
Journal: Accounting and Business Research
Pages: 801-840
Issue: 6-7
Volume: 45
Year: 2015
Month: 12
X-DOI: 10.1080/00014788.2015.1081554
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1081554
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:6-7:p:801-840
Template-Type: ReDIF-Article 1.0
Author-Name: Shuyu Zhang
Author-X-Name-First: Shuyu
Author-X-Name-Last: Zhang
Author-Name: Walter Aerts
Author-X-Name-First: Walter
Author-X-Name-Last: Aerts
Title: Management's performance justification and failure to meet earnings thresholds
Abstract:
We examine the intensity of management's performance justification as a
remedial narrative impression management device, by investigating the
association between behavioural earnings thresholds and causal language
intensity on earnings-related outcomes in annual management commentary
reports. Not meeting key earnings thresholds, such as positive earnings,
positive earnings change and analyst earnings consensus, is argued to be a
significant accountability predicament to which firms tend to respond with
more intense use of causal language on performance in order to mitigate
expected negative consequences of these events. Our results document a
significant positive association between failure to meet earnings
thresholds and causal language intensity. Moreover, we find that failure
firms (not meeting earnings thresholds) tend to use more causal language
in a weaker information environment. In addition, we document that firms
that miss key earnings thresholds and use more causal language experience
a less volatile abnormal stock return after the 10-K filing release. This
study contributes to the impression management literature by evidencing
incentives for the remedial use of causal language in management
commentary.
Journal: Accounting and Business Research
Pages: 841-868
Issue: 6-7
Volume: 45
Year: 2015
Month: 12
X-DOI: 10.1080/00014788.2015.1048771
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1048771
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Template-Type: ReDIF-Article 1.0
Author-Name: Osman Yukselturk
Author-X-Name-First: Osman
Author-X-Name-Last: Yukselturk
Author-Name: Jon Tucker
Author-X-Name-First: Jon
Author-X-Name-Last: Tucker
Title: The impact of analyst sentiment on UK stock recommendations and target prices
Abstract:
The aim of this paper is to investigate the relationship between narrative
sentiment in analysts' company reports and their recommendation and target
price outputs. We study an industry-balanced sample of 275 UK quoted
company sell-side analyst reports over the period 2006-2010 using a
content analysis methodology to measure net sentiment for a range of
themes. We then model analysts' outputs against themed sentiment scores to
analyse the impact of the Global Financial Crisis. We find that themed
sentiments impact upon analysts' outputs, but their magnitude and
direction vary over the pre-crisis, crisis and post-crisis periods. In
particular, before the crisis we find a strong negative relationship
between the macroeconomic and regulatory environment and report outputs,
though this effect diminishes somewhat with the onset of the crisis, to be
restored thereafter. Growth sentiment exerts a weak positive impact before
the crisis which disappears thereafter. Financial performance sentiment
becomes a significant positive driver of outputs following the crisis.
There is evidently a "back to basics" approach following the crisis which
restores financial fundamentals to the heart of stock analysis. Our
findings provide some insight into the thought processes of analysts by
identifying the dynamic relation between analysts' outputs and themed
sentiments.
Journal: Accounting and Business Research
Pages: 869-904
Issue: 6-7
Volume: 45
Year: 2015
Month: 12
X-DOI: 10.1080/00014788.2015.1044496
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1044496
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Handle: RePEc:taf:acctbr:v:45:y:2015:i:6-7:p:869-904
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Clatworthy
Author-X-Name-First: Mark
Author-X-Name-Last: Clatworthy
Author-Name: Juan Manuel García Lara
Author-X-Name-First: Juan Manuel
Author-X-Name-Last: García Lara
Author-Name: Edward Lee
Author-X-Name-First: Edward
Author-X-Name-Last: Lee
Title: Editorial
Journal: Accounting and Business Research
Pages: 1-2
Issue: 1
Volume: 46
Year: 2016
Month: 1
X-DOI: 10.1080/00014788.2016.1120792
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1120792
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:1:p:1-2
Template-Type: ReDIF-Article 1.0
Author-Name: Boochun Jung
Author-X-Name-First: Boochun
Author-X-Name-Last: Jung
Author-Name: Konduru Sivaramakrishnan
Author-X-Name-First: Konduru
Author-X-Name-Last: Sivaramakrishnan
Author-Name: Naomi Soderstrom
Author-X-Name-First: Naomi
Author-X-Name-Last: Soderstrom
Title: When do stock analysts find bond rating changes informative?
Abstract:
Credit rating agencies (CRAs) have considerable privileged access to
corporate management and are therefore a potentially important source of
information to the equity market. We study how stock analysts incorporate
bond ratings in their earnings forecasts. We develop an economic framework
to explain why equity analysts might look to CRAs as an information
source, especially after Regulation Fair Disclosure. Using this framework,
we characterize the association between ratings changes and earnings
forecast revisions surrounding these changes. We examine whether the
extent to which equity analysts glean information from ratings changes is
related to the extent and importance of information conveyed in the
ratings change and analysts’ information uncertainty. We find that
characteristics we examine are strongly related to stock analysts’
use of information in rating downgrades.
Journal: Accounting and Business Research
Pages: 3-30
Issue: 1
Volume: 46
Year: 2016
Month: 1
X-DOI: 10.1080/00014788.2015.1014464
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1014464
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Template-Type: ReDIF-Article 1.0
Author-Name: Vineet Agarwal
Author-X-Name-First: Vineet
Author-X-Name-Last: Agarwal
Author-Name: Richard J. Taffler
Author-X-Name-First: Richard J.
Author-X-Name-Last: Taffler
Author-Name: Xijuan Bellotti
Author-X-Name-First: Xijuan
Author-X-Name-Last: Bellotti
Author-Name: Elly A. Nash
Author-X-Name-First: Elly A.
Author-X-Name-Last: Nash
Title: Investor relations, information asymmetry and market value
Abstract:
Evidence to date on the market value of investor relations (IR) strategies
is limited. We test the market relevance of IR activity directly employing
a proprietary database measuring IR quality across all firms listed on
NYSE, Amex and NASDAQ. Although, in theory, ‘repackaging’
and communicating existing information should have no market impact, we
find that firms with higher quality IR strategies are rewarded with
significantly higher valuation multiples. In addition, increase in IR
quality is associated with increases in analyst following and liquidity.
Overall, our findings are generally stronger for small firms which are
more likely to be ‘neglected’. Our evidence is consistent
with effective IR successfully raising firm visibility leading to enhanced
recognition and reduced information asymmetry in line with Merton (1987)
and thus ‘fairer’ firm valuation as argued by IR
professionals.
Journal: Accounting and Business Research
Pages: 31-50
Issue: 1
Volume: 46
Year: 2016
Month: 1
X-DOI: 10.1080/00014788.2015.1025254
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1025254
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:1:p:31-50
Template-Type: ReDIF-Article 1.0
Author-Name: Ahsan Habib
Author-X-Name-First: Ahsan
Author-X-Name-Last: Habib
Author-Name: Mostafa Monzur Hasan
Author-X-Name-First: Mostafa Monzur
Author-X-Name-Last: Hasan
Title: Auditor-provided tax services and stock price crash risk
Abstract:
This paper examines whether auditor-provided tax services affect stock
price crash risk: an important consideration for stock investors.
Provision of tax services by incumbent auditors could accentuate or
attenuate crash risk depending on whether such services give rise to
knowledge spillover or impair auditor independence. The study investigates
two channels through which tax services might affect crash risk: earnings
management in tax expenses and tax avoidance. Also examined is whether the
association between tax services and crash risk is moderated by the
particular business strategy that organizations pursue. A two-stage model
is used to control for the potential endogeneity inherent in the selection
of auditors for tax services. Empirical findings reveal that
auditor-provided tax services attenuate crash risk by constraining both
earnings management in tax expenses and tax avoidance. Further evidence
shows that auditor-provided tax services reduce crash risk for firms
following innovator business strategies. Taken together, empirical
findings reported in this study support knowledge spillover benefits, that
is, insights gained from tax services can enhance audit effectiveness.
Journal: Accounting and Business Research
Pages: 51-82
Issue: 1
Volume: 46
Year: 2016
Month: 1
X-DOI: 10.1080/00014788.2015.1035222
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1035222
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:1:p:51-82
Template-Type: ReDIF-Article 1.0
Author-Name: N. Rowbottom
Author-X-Name-First: N.
Author-X-Name-Last: Rowbottom
Author-Name: J. Locke
Author-X-Name-First: J.
Author-X-Name-Last: Locke
Title: The emergence of >IR>
Abstract:
The emergence of >IR> as developed by the International Integrated
Reporting Council (IIRC) is traced from antecedent concepts of
‘integrated reporting’ and earlier voluntary corporate
reporting initiatives. The paper uses actor network theory and its
conceptions of detour, affordance and laboratory to examine the
development of >IR> while still controversial and where meanings remained
open and malleable to the inscription of interests from a wide coalition
of actors. The programme of action is interpreted through interviews with
key individuals, official documents, publications and integrated reports
circulated by the IIRC. The analysis highlights the imperatives of private
standard setters and indicates how integrated reporting corporate
governance regulation in South Africa provided a laboratory prototype for
reshaping the UK ‘Connected Reporting’ initiative into the
IIRC >IR> framework. The analysis reveals important detours and the
associated affordances made during the development of >IR>: (a) the
repositioning of >IR> in the corporate reporting infrastructure to ensure
that it did not usurp the pre-existing frameworks of supporting actors;
and (b) the specification of providers of financial capital as the
intended reporting audience to ensure that it could meet the interests of
those actors seeking a solution for more entity-specific, communicative,
‘de-cluttered’ corporate reporting.
Journal: Accounting and Business Research
Pages: 83-115
Issue: 1
Volume: 46
Year: 2016
Month: 1
X-DOI: 10.1080/00014788.2015.1029867
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1029867
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:1:p:83-115
Template-Type: ReDIF-Article 1.0
Author-Name: Chris Mallin
Author-X-Name-First: Chris
Author-X-Name-Last: Mallin
Title: The Cadbury Committee, a history
Journal: Accounting and Business Research
Pages: 116-117
Issue: 1
Volume: 46
Year: 2016
Month: 1
X-DOI: 10.1080/00014788.2016.1093747
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1093747
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:1:p:116-117
Template-Type: ReDIF-Article 1.0
Author-Name: Mike Jones
Author-X-Name-First: Mike
Author-X-Name-Last: Jones
Author-Name: Richard Slack
Author-X-Name-First: Richard
Author-X-Name-Last: Slack
Title: Financial Reporting and Business Communication, Twentieth Annual Conference University of Bristol, Thursday 30 June & Friday 1 July 2016: First Call for Papers
Journal: Accounting and Business Research
Pages: 118-119
Issue: 1
Volume: 46
Year: 2016
Month: 1
X-DOI: 10.1080/00014788.2015.1117218
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1117218
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:1:p:118-119
Template-Type: ReDIF-Article 1.0
Author-Name: Ahsan Habib
Author-X-Name-First: Ahsan
Author-X-Name-Last: Habib
Author-Name: Md. Borhan Uddin Bhuiyan
Author-X-Name-First: Md. Borhan Uddin
Author-X-Name-Last: Bhuiyan
Title: Problem directors on the audit committee and financial reporting quality
Abstract:
The objective of this paper is to examine empirically the consequences for
financial reporting quality of having audit committees that include
problem directors, that is, directors with prior involvement in corporate
bankruptcies, major accounting restatements, or other accounting scandals.
An ordinary least squares regression model is used to examine the
association between problem directors on the audit committee and financial
reporting quality as proxied by accruals and real earnings management.
Results reveal that there is a positive association between the presence
of problem directors on the audit committee and real earnings management,
and this association is more pronounced in cases where those problem
directors have been involved in prior instances of accounting restatements
and fraudulent reporting practices.
Journal: Accounting and Business Research
Pages: 121-144
Issue: 2
Volume: 46
Year: 2016
Month: 2
X-DOI: 10.1080/00014788.2015.1039477
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1039477
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:2:p:121-144
Template-Type: ReDIF-Article 1.0
Author-Name: K. Hung Chan
Author-X-Name-First: K. Hung
Author-X-Name-Last: Chan
Author-Name: Vivian Wei Luo
Author-X-Name-First: Vivian Wei
Author-X-Name-Last: Luo
Author-Name: Phyllis L.L. Mo
Author-X-Name-First: Phyllis L.L.
Author-X-Name-Last: Mo
Title: Determinants and implications of long audit reporting lags: evidence from China
Abstract:
Audit reporting lag is the single most important determinant influencing
the timeliness of the release of financial statements. In this study, we
first explore the determinants of audit reporting lags in China where the
audit market for listed firms is dominated by non-Big 4 auditors. We then
examine the implications of long audit reporting lags in subsequent years.
We find that selected measures of audit risk and complexity, and auditor
expertise are all associated with the length of audit reporting lags in
China. Firms with long audit reporting lags are more likely to have the
receipt of non-standard opinions in subsequent periods. There is also
evidence that firms with extremely long audit reporting lags tend to have
more restatements in the subsequent year. As prior research has not
specifically investigated the consequences of long audit reporting lags in
subsequent years, this study makes an important contribution to the
literature in this area.
Journal: Accounting and Business Research
Pages: 145-166
Issue: 2
Volume: 46
Year: 2016
Month: 2
X-DOI: 10.1080/00014788.2015.1039475
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1039475
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:2:p:145-166
Template-Type: ReDIF-Article 1.0
Author-Name: Charl de Villiers
Author-X-Name-First: Charl
Author-X-Name-Last: de Villiers
Author-Name: Ana Marques
Author-X-Name-First: Ana
Author-X-Name-Last: Marques
Title: Corporate social responsibility, country-level predispositions, and the consequences of choosing a level of disclosure
Abstract:
We study the different levels of corporate social responsibility (CSR)
disclosures of the largest European firms. We find that firms are more
predisposed to disclose more CSR information in countries with better
investor protection, higher levels of democracy, more effective government
services, higher quality regulations, more press freedom, and a lower
commitment to environmental policies. Our analysis of the association of
different levels of CSR disclosure with share prices indicates that a high
level of CSR disclosure is associated with higher share prices, whereas a
low level of CSR disclosure in sensitive industries is associated with
lower share prices (compared to no disclosure). These results are also
present when we analyse changes in CSR disclosure and are robust to the
inclusion of an accounting quality measure in our model. The overall
effect of the association of higher levels of CSR disclosure with higher
share prices is stronger in countries with more democracy, more government
effectiveness, better regulatory quality, and more press freedom.
Therefore, market participants find CSR disclosures more informative in
countries where investors are in a better position to voice their concerns
and where there is better regulation and more effective government
implementation of regulations.
Journal: Accounting and Business Research
Pages: 167-195
Issue: 2
Volume: 46
Year: 2016
Month: 2
X-DOI: 10.1080/00014788.2015.1039476
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1039476
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:2:p:167-195
Template-Type: ReDIF-Article 1.0
Author-Name: Richard T. Fisher
Author-X-Name-First: Richard T.
Author-X-Name-Last: Fisher
Author-Name: Samuel T. Naylor
Author-X-Name-First: Samuel T.
Author-X-Name-Last: Naylor
Title: Corporate reporting on the Internet and the expectations gap: new face of an old problem
Abstract:
While the practice of Internet financial reporting (IFR) has evolved
rapidly, research has questioned the corresponding responsiveness of the
auditing profession. This study investigates the existence and nature of
an expectations gap that may have arisen in relation to the auditor's role
and responsibilities with respect to IFR. Based on a questionnaire survey
in New Zealand, results confirm the existence of an expectations gap
between auditors and stakeholder groups. Specific responsibilities
contributing to deficient performance, deficient standards, and
unreasonable expectations components of this gap are identified. The
principal pronouncement dealing with auditors’ relevant
responsibilities in New Zealand is AGS 1003 Audit Issues Relating
to the Electronic Presentation of Financial Statements and Related
Auditor's Reports. AGS 1003 discusses, inter
alia, the auditor's role and responsibilities in relation to
electronic financial statements before and after online publication, and
the implications of IFR for the auditor's report and other audit
communications. The study argues that the authoritative status of such
guidance statements may contribute to a perpetuation of the gap.
Furthermore, the profession is urged to avoid ‘standard’
professional responses to the issues, which risk being labelled
insufficient and/or strategically motivated. The findings have policy
implications for standard-setters internationally.
Journal: Accounting and Business Research
Pages: 196-220
Issue: 2
Volume: 46
Year: 2016
Month: 2
X-DOI: 10.1080/00014788.2015.1029866
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1029866
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:2:p:196-220
Template-Type: ReDIF-Article 1.0
Author-Name: Wei Jiang
Author-X-Name-First: Wei
Author-X-Name-Last: Jiang
Author-Name: Nuno Soares
Author-X-Name-First: Nuno
Author-X-Name-Last: Soares
Author-Name: Andrew W. Stark
Author-X-Name-First: Andrew W.
Author-X-Name-Last: Stark
Title: Loss persistence and returns in the UK
Abstract:
In this study, we examine whether estimated loss reversal probabilities
are fully reflected in UK stock market prices. Overall, we provide
evidence of varying degrees and types of loss firm mispricing with respect
to estimated loss reversal probabilities. In particular, a significant and
positive relationship between loss reversal probability and
annual returns is found only for firms with higher
trading costs. When looking at monthly returns, however,
especially for the financial statement release month subsequent to the
loss year, a significant and positive relationship is found for all firms.
Thus, the evidence is consistent with UK market participants not fully
incorporating relevant information into the pricing of loss firms and, as
a consequence, being surprised by the content of the earnings for many or
all UK loss firms.
Journal: Accounting and Business Research
Pages: 221-242
Issue: 3
Volume: 46
Year: 2016
Month: 4
X-DOI: 10.1080/00014788.2015.1048768
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1048768
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:3:p:221-242
Template-Type: ReDIF-Article 1.0
Author-Name: Jari Huikku
Author-X-Name-First: Jari
Author-X-Name-Last: Huikku
Author-Name: Kari Lukka
Author-X-Name-First: Kari
Author-X-Name-Last: Lukka
Title: The construction of persuasiveness of self-assessment-based post-completion auditing reports
Abstract:
In this study, we investigate how persuasiveness of self-assessment-based
post-completion auditing (PCA) reports on capital investment is
constructed. We examine what makes companies consider that information in
these reports rises to an acceptable quality level. The investigation was
motivated by extant agency theory (AT) informed literature suggesting that
self-auditing will entail obvious risks for the quality of PCA reports in
terms of data manipulation. We employed actor-network theory as our method
theory. The empirical evidence of our case study came from 24
semi-structured interviews and the analysis of the construction of 22 PCA
reports of strategic investments in one of the major European forest
companies. We add to the capital budgeting literature by identifying and
discussing the role of various conditions affecting the construction of
persuasiveness of PCA reports. We maintain that the existence of three
conditions (i.e. an appropriate collective process, alignment with
relevant external/internal reference points, and following of formal
guidance) can play a major role in facilitating the production of a
persuasive PCA report. Additionally, the paper is able to make sense of
the complex process of fabricating the persuasiveness of PCA reports,
which would remain a black box when examined from the AT viewpoint only.
Journal: Accounting and Business Research
Pages: 243-277
Issue: 3
Volume: 46
Year: 2016
Month: 4
X-DOI: 10.1080/00014788.2015.1085363
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1085363
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:3:p:243-277
Template-Type: ReDIF-Article 1.0
Author-Name: Paul Klumpes
Author-X-Name-First: Paul
Author-X-Name-Last: Klumpes
Author-Name: Iliya Komarev
Author-X-Name-First: Iliya
Author-X-Name-Last: Komarev
Author-Name: Konstantinos Eleftheriou
Author-X-Name-First: Konstantinos
Author-X-Name-Last: Eleftheriou
Title: The pricing of audit and non-audit services in a regulated environment: a longitudinal study of the UK life insurance industry
Abstract:
This paper studies the relationship between audit and non-audit service
fees paid to the statutory auditor by UK life insurance firms, utilising
an extensive panel-data sample set for the period 1999--2009. Consistent
with a knowledge spillover (impairment of independence) hypothesis, we
predict and find that audit fees are positively (negatively) associated
with actuarial (tax service) fees. Additionally, our results indicate that
regulatory changes enforced after 2004 deterred UK life insurance firms
from purchasing non-audit services that are perceived to impair auditor
independence. Finally, we find evidence concerning the inter-temporal
determination of audit fees.
Journal: Accounting and Business Research
Pages: 278-302
Issue: 3
Volume: 46
Year: 2016
Month: 4
X-DOI: 10.1080/00014788.2015.1056719
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1056719
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:3:p:278-302
Template-Type: ReDIF-Article 1.0
Author-Name: Pasi Sajasalo
Author-X-Name-First: Pasi
Author-X-Name-Last: Sajasalo
Author-Name: Tommi Auvinen
Author-X-Name-First: Tommi
Author-X-Name-Last: Auvinen
Author-Name: Tuomo Takala
Author-X-Name-First: Tuomo
Author-X-Name-Last: Takala
Author-Name: Marko Järvenpää
Author-X-Name-First: Marko
Author-X-Name-Last: Järvenpää
Author-Name: Teppo Sintonen
Author-X-Name-First: Teppo
Author-X-Name-Last: Sintonen
Title: Strategy implementation as fantasising -- becoming the leading bank
Abstract:
In this empirical case study we explore the fantasy nature of strategy
work and propose fantasising as a framework contributing to the nascent
literature dealing with the previously overlooked fantasy nature of
strategy. More specifically, our interest is on examining how the meaning
of official strategy gets constructed as it is being implemented, as well
as and how and why the perceptions may evolve during implementation. Our
data consists of official strategy documents and interviews from Finland's
largest financial services group and its largest unit. The interviews
cover all organisational levels, enabling us to reveal the variations of
perceptions of strategy as it is being implemented. The data analysis is
carried out by means of qualitative interpretation. According to our
findings, the main goal of becoming the leading bank, as outlined in the
official strategy, had been adopted throughout the organisation
hierarchically. However, conceptions of what would constitute ‘a
leading bank’ varied, especially horizontally. The plausibility of
the official strategy is constructed through rational techniques (e.g.
numerical ‘objective’ accounting information) intertwined
with storytelling. As a result we propose that strategy implementation may
best be understood as fantasising involving two forms: functional
(explicit, short-term-oriented) and symbolic (metaphorical,
long-term-oriented). We offer fantasising in these two forms as an
addition to fantasy-oriented strategy literature for further exploration
to better understand the nature of strategy work.
Journal: Accounting and Business Research
Pages: 303-325
Issue: 3
Volume: 46
Year: 2016
Month: 4
X-DOI: 10.1080/00014788.2015.1112764
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1112764
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:3:p:303-325
Template-Type: ReDIF-Article 1.0
Author-Name: Nico Lehmann
Author-X-Name-First: Nico
Author-X-Name-Last: Lehmann
Title: The role of corporate governance in shaping accruals manipulation prior to acquisitions
Abstract:
Based on stock swap transactions involving public acquirers originating
from the UK between 1998 and 2011, this paper investigates the role of
corporate governance in shaping accruals manipulation prior to stock swap
deals. In contrast to common claims that strong corporate governance
constrains accruals manipulation, my results show that well-governed
acquirers engage more aggressively in income-increasing accruals
manipulation than those with weak governance. This finding is consistent
with a role of corporate governance that incentivises managerial actions
in the interests of firms’ shareholders. Overall, this finding
highlights the setting-specific nature of the earnings management and
corporate governance relation. My results are robust to different
discretionary accrual models, differences in the firm's growth structure,
merger and acquisition control variables, a control group of 100% cash
acquirers, an analysis of buy-and-hold abnormal returns, and potential
sample selection problems.
Journal: Accounting and Business Research
Pages: 327-364
Issue: 4
Volume: 46
Year: 2016
Month: 6
X-DOI: 10.1080/00014788.2015.1116969
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1116969
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:4:p:327-364
Template-Type: ReDIF-Article 1.0
Author-Name: Muhammad Kaleem Zahir-ul-Hassan
Author-X-Name-First: Muhammad Kaleem
Author-X-Name-Last: Zahir-ul-Hassan
Author-Name: Reinald A. Minnaar
Author-X-Name-First: Reinald A.
Author-X-Name-Last: Minnaar
Author-Name: Ed Vosselman
Author-X-Name-First: Ed
Author-X-Name-Last: Vosselman
Title: Governance and control as mediating instruments in an inter-firm relationship: towards collaboration or transactions?
Abstract:
This paper explores the mediation of governance and control structures in
an inter-firm relationship between a semiconductor producer and its
contractor. As mediating instruments the contract and the control
structures are not just pre-given results of distanced managerial
decision-making, but are generated in and constitutive of the
relationship. They offer the possibility to interpret and to interact and
they contribute to more or less unexpected transformations in the
relationship. In particular, the study explores how the mediation of the
governance and control structures has socialising and/or individualising
consequences. The paper particularly offers insights into how the
mediation of the governance and control structures is impacted by changes
in boundary spanners (i.e. managers who represent their organisations in
an inter-firm relationship). The paper draws on Roberts 2001. Trust and
control in Anglo-American systems of corporate governance: the
individualizing and socializing effects of processes of accountability.
Human Relations, 54 (12), 1547--1572. and distinguishes
four patterns of governance that may be consequential of mediation by
governance and control structures: immobilised governance, individualised
governance, socialised governance and complementary governance. The study
illustrates that accounting is not so much a force that
creates transparency for distanced others, but a constitutive mechanism
that produces a collaborative inter-firm relationship with socialised
governance. It provides a basis for discussion and debate in the
relationship.
Journal: Accounting and Business Research
Pages: 365-389
Issue: 4
Volume: 46
Year: 2016
Month: 6
X-DOI: 10.1080/00014788.2015.1123601
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1123601
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:4:p:365-389
Template-Type: ReDIF-Article 1.0
Author-Name: Noel Hyndman
Author-X-Name-First: Noel
Author-X-Name-Last: Hyndman
Author-Name: Mariannunziata Liguori
Author-X-Name-First: Mariannunziata
Author-X-Name-Last: Liguori
Title: Justifying accounting change through global discourses and legitimation strategies. The case of the UK central government
Abstract:
Accounting has been viewed, especially through the lens of the recent
managerial reforms, as a neutral technology that, in the hands of rational
managers, can support effective and efficient decision-making. However,
the introduction of new accounting practices can be framed in a variety of
ways, from value-neutral procedures to ideologically charged instruments.
Focusing on financial accounting, budgeting and performance management
changes in the UK central government, and through extensive textual
analysis and interviews in three government departments, this paper investigates: how accounting changes are discussed and introduced at the
political level through the use of global discourses; and what strategies
organisational actors subsequently use to talk about and legitimate such
discourses at different organisational levels. The results show that in
political discussions there is a consistency between the discourses
(largely New Public Management) and the accounting-related changes that
took place. The research suggests that a cocktail of legitimation
strategies was used by organisational actors to construct a sense of the
changes, with authorisation, often in combination with, at the very least,
rationalisation strategies most widely utilised. While previous literature
posits that different actors tend to use the same rhetorical sequences
during periods of change, this study highlights differences at different
organisational levels.
Journal: Accounting and Business Research
Pages: 390-421
Issue: 4
Volume: 46
Year: 2016
Month: 6
X-DOI: 10.1080/00014788.2015.1124256
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1124256
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:4:p:390-421
Template-Type: ReDIF-Article 1.0
Author-Name: Domenico Campa
Author-X-Name-First: Domenico
Author-X-Name-Last: Campa
Author-Name: Ray Donnelly
Author-X-Name-First: Ray
Author-X-Name-Last: Donnelly
Title: Non-audit services provided to audit clients, independence of mind and independence in appearance: latest evidence from large UK listed companies
Abstract:
This paper investigates whether the provision of non-audit services (NAS)
to audit clients impairs auditor independence of mind and independence in
appearance. The main contributions of this paper are in terms of its
timeliness with respect to regulatory changes, the simultaneous
examination of both forms of auditor independence and the methodological
innovation whereby it uses a variable derived from the level of abnormal
audit fees as a moderating variable in order to capture the direct impact
of the NAS fee level on auditor independence as well as how its influence
is moderated by the level of unexpected audit fees. Our results indicate
that auditor independence of mind is compromised by the size of NAS fees,
particularly for clients who pay below the level of expected audit fee.
The stock market perceives that auditor independence is compromised by NAS
fees but, at the same time, additional tests indicate that there are
benefits that accrue from NAS and, in particular, the relation between
return and non-discretionary net income is increasing in NAS fees. The
balance of evidence suggests that the European Union is correct in
undertaking some reform of the auditing market.
Journal: Accounting and Business Research
Pages: 422-449
Issue: 4
Volume: 46
Year: 2016
Month: 6
X-DOI: 10.1080/00014788.2015.1048772
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1048772
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Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 451-452
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182711
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182711
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:451-452
Template-Type: ReDIF-Article 1.0
Author-Name: Laurence Capron
Author-X-Name-First: Laurence
Author-X-Name-Last: Capron
Title: Strategies for M&As: when is acquisition the right mode to grow?
Abstract:
This paper examines the conditions under which an acquisition makes sense
compared with alternative modes of resource-sourcing such as internal
development, licensing and alliances. Drawing on the transaction costs
economics and capability views, it presents governance and knowledge
reasons for choosing an acquisition over alternative modes of sourcing.
While firms may have preferences for using M&A over alternatives, it is
important to review and balance carefully the different resource-sourcing
modes.
Journal: Accounting and Business Research
Pages: 453-462
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182705
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182705
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:453-462
Template-Type: ReDIF-Article 1.0
Author-Name: Steve Webster
Author-X-Name-First: Steve
Author-X-Name-Last: Webster
Title: ‘Strategies for M&As: when is acquisition the right mode to grow?’ A practitioner’s view
Journal: Accounting and Business Research
Pages: 463-466
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182712
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182712
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:463-466
Template-Type: ReDIF-Article 1.0
Author-Name: Christina Dargenidou
Author-X-Name-First: Christina
Author-X-Name-Last: Dargenidou
Author-Name: Alan Gregory
Author-X-Name-First: Alan
Author-X-Name-Last: Gregory
Author-Name: Shan Hua
Author-X-Name-First: Shan
Author-X-Name-Last: Hua
Title: How far does financial reporting allow us to judge whether M&A activity is successful?
Abstract:
Evidence from share price returns suggests that acquisitions destroy
value. On the other hand, evidence from accounting measures of performance
suggests that acquisitions give rise to synergies and therefore
potentially create value. In this paper, we first revisit the UK evidence
using an updated sample, and confirm that these findings still hold, and
importantly hold in the period following the introduction of FRS10. We
then reconcile the (apparently conflicting) findings from these
market-based and accounting-based approaches. Using accounting measures of
performance, we confirm the presence of synergies developed during
acquisitions. Finally we show that post-acquisition abnormal returns are
associated with news of synergistic benefits conveyed in the financial
statements.
Journal: Accounting and Business Research
Pages: 467-499
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182702
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182702
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:467-499
Template-Type: ReDIF-Article 1.0
Author-Name: Amir Amel-Zadeh
Author-X-Name-First: Amir
Author-X-Name-Last: Amel-Zadeh
Author-Name: Geoff Meeks
Author-X-Name-First: Geoff
Author-X-Name-Last: Meeks
Author-Name: J. Gay. Meeks
Author-X-Name-First: J. Gay.
Author-X-Name-Last: Meeks
Title: Historical perspectives on accounting for M&A
Abstract:
This paper attempts to tease out some of the reasons why the history of
M&A accounting has been so fraught. It compares the different M&A
accounting regimes which have been tried over time in UK, US and
international standards. It illustrates the quantitative impact of
alternative accounting regimes on financial statements. It asks whether
the resulting numbers make any difference to decisions and behaviour. It
charts the rising scale of M&A expenditures which have accompanied the
different accounting regimes. And it suggests that a number of historical
developments have intensified the challenges posed by accounting for M&A
-- developments in firms’ investment choice between M&A or new
tangibles, in the role of intangibles, in means of payment for M&A, in
stock market price movements, in the synergies created by M&A, and in
‘creative accounting’.
Journal: Accounting and Business Research
Pages: 501-524
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182703
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182703
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:501-524
Template-Type: ReDIF-Article 1.0
Author-Name: Liesel Knorr
Author-X-Name-First: Liesel
Author-X-Name-Last: Knorr
Title: ‘Historical perspectives on accounting for M&A’: a practitioner view
Journal: Accounting and Business Research
Pages: 525-527
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182706
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182706
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:525-527
Template-Type: ReDIF-Article 1.0
Author-Name: Paul M. Healy
Author-X-Name-First: Paul M.
Author-X-Name-Last: Healy
Title: Reflections on M&A accounting from AOL’s acquisition of Time Warner
Abstract:
In early 2000, AOL announced the acquisition of Time Warner for $162
billion. The acquisition, one of the largest in history, generated $127
billion of goodwill. Yet after only a few years, the merged firm had taken
an impairment charge for $99 billion, and the acquisition was viewed as a
colossal failure. This study examines how the deal was initially reported
and valued, the timeliness of the goodwill impairments, and how the market
interpreted the reporting. Given this field evidence, I revisit key
questions on M&A reporting standards and implications for future research.
Journal: Accounting and Business Research
Pages: 528-541
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182709
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182709
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:528-541
Template-Type: ReDIF-Article 1.0
Author-Name: Gunnar Miller
Author-X-Name-First: Gunnar
Author-X-Name-Last: Miller
Title: ‘Reflections on M&A accounting from AOL’s acquisition of Time Warner’: a practitioner view
Journal: Accounting and Business Research
Pages: 542-544
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182704
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182704
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:542-544
Template-Type: ReDIF-Article 1.0
Author-Name: Ray Ball
Author-X-Name-First: Ray
Author-X-Name-Last: Ball
Title: IFRS -- 10 years later
Abstract:
A decade ago, the near-simultaneous adoption of International Financial
Reporting Standards (IFRS) in over 100 countries could fairly have been
described as a brave new world in financial reporting. Any systems
innovation, and especially an innovation of such importance and magnitude,
thrusts those involved (companies, users, and accountants) into the
unknown. There was good reason to expect success, based largely on
widespread enthusiasm for international standards and, behind that,
recognition of the strong forces of globalization. Nevertheless, there
were risks involved and there was limited a priori evidence to guide the
decision-makers. A decade later, this is still the case. Globalization
remains a potent economic and political force, and drives the demand for
globalization in accounting. Nevertheless, most political and commercial
activity remains local, so adoption of uniform rules does not by itself
lead to uniform reporting behavior around the world. For many of the
claimed benefits of IFRS adoption to be realized, uniform implementation
would have to occur in a wide range of countries, which seems unlikely and
requires more than simply creating regulatory enforcement mechanisms. Some
evidence of actual outcomes from IFRS adoption has come to light, but, as
will be argued below, by and large the evidence to date is not very
useful. The IASB’s (International Accounting Standards Board)
valuation-centric Conceptual Framework leads it to pay little or no heed
to the use of accounting information in contracting, despite the lip
service recent amendments pay to even the narrower notion of stewardship.
So IFRS adoption is an innovation of historical proportions whose
worldwide effects remain somewhat uncertain. The essay concludes with
comments on the status of China and the US.
Journal: Accounting and Business Research
Pages: 545-571
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182710
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182710
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Template-Type: ReDIF-Article 1.0
Author-Name: Mary B. Tokar
Author-X-Name-First: Mary B.
Author-X-Name-Last: Tokar
Title: ‘IFRS -- ten years later’: a standard-setter’s view
Abstract:
This essay is based on a response to Professor Ray Ball’s PD Leake
Lecture delivered at the Institute of Chartered Accountants of England and
Wales in October 2015. The views expressed in this essay are those of the
author and do not necessarily represent the views of the International
Accounting Standards Board (the Board) or the IFRS® Foundation.
Journal: Accounting and Business Research
Pages: 572-576
Issue: 5
Volume: 46
Year: 2016
Month: 8
X-DOI: 10.1080/00014788.2016.1182708
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182708
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:572-576
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 3
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728934
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728934
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:3:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Niamh Brennan
Author-X-Name-First: Niamh
Author-X-Name-Last: Brennan
Title: An empirical examination of forecast disclosure by bidding companies
Abstract: This paper examines voluntary disclosure of profit forecasts by bidding companies during takeovers. Disclosure is examined from two perspectives: (i) factors influencing disclosure and (ii) the influence of good news and bad news on disclosure. Takeover documents published during 701 takeover bids for public companies listed on the London Stock Exchange in the period 1988 to 1992 were examined. Two variables accounted for almost all the influences on disclosure of forecasts: bid horizon and type of bid. Probability of forecast disclosure was greater the shorter the bid horizon and during contested bids. In addition, there was some evidence that the nature of the purchase consideration offered by the bidder (cash or paper) and the industry of the bidder influenced disclosure. Disclosure was significantly more likely in paper bids and in the durable goods industry. Forecasts were more likely to be disclosed when firms had good news to report.
Journal: Accounting and Business Research
Pages: 175-194
Issue: 3
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728935
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728935
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:3:p:175-194
Template-Type: ReDIF-Article 1.0
Author-Name: A. Fleming
Author-X-Name-First: A.
Author-X-Name-Last: Fleming
Author-Name: S. McKinstry
Author-X-Name-First: S.
Author-X-Name-Last: McKinstry
Author-Name: K. Wallace
Author-X-Name-First: K.
Author-X-Name-Last: Wallace
Title: Cost accounting in the shipbuilding, engineering and metals industries of the West of Scotland, ‘The Workshop of the Empire’, cl900–1960
Abstract: This article examines the nature, use and development of costing systems employed in the shipbuilding, engineering and metals industries of the West of Scotland between the years c 1900–1960. The research is for the most part archivally-based, and is founded on the surviving records of 11 firms across the sector. The sector's business history is outlined, the systems in use are then examined firm by firm, after which general conclusions are drawn about their common characteristics. Most were job or contract-based cost systems, in which rudimentary absorption techniques for overheads were applied, estimates were compared progressively with actuals and the control of departmental overhead expenditure was broadbrush. Cost accounting development within the sector is next examined, in particular the rejection of standard costing and budgetary control. This is linked with scepticism which existed about the relevance of Taylorism and Scientific Management to the area's industries, and also with the fragile industrial relations climate which prevailed over much of the period and which caused some firms to avoid payment by results remuneration systems. An engineering culture among management may also have inhibited the development of costing. The costing systems which were employed are assessed as having been adequate. The article concludes by suggesting that the factors identified as inhibiting costing development may well apply in future studies of the history of cost accounting in the UK.
Journal: Accounting and Business Research
Pages: 195-211
Issue: 3
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728936
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728936
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:3:p:195-211
Template-Type: ReDIF-Article 1.0
Author-Name: Pelham Gore
Author-X-Name-First: Pelham
Author-X-Name-Last: Gore
Author-Name: Fauziah Taib
Author-X-Name-First: Fauziah
Author-X-Name-Last: Taib
Author-Name: Paul Taylor
Author-X-Name-First: Paul
Author-X-Name-Last: Taylor
Title: Accounting for goodwill: an examination of factors influencing management preferences
Abstract: This paper investigates factors that influenced the position of managements of UK-listed companies in the heated debate that surrrounded proposals for a new standard on goodwill accounting, i.e. the factors influencing whether managements preferred immediate write-off or capitalisation-based approaches. The factors investigated are derived from contracting cost theory, and include those associated with debt covenant restrictions and profit- based management schemes. They also include non-agency contracting costs. A key feature of the design is that, compared to prior research, we specify more rigorously circumstances where such contracting cost effects are, or are not, likely to be binding. In addition, the paper investigates the effects on management preferences of their beliefs about revisions in market perceptions of their companies resulting from changes in goodwill accounting. Our results support certain contracting cost-based hypotheses, but they also indicate that management beliefs about changes in market perceptions of their companies constitute a strong influence on their preferences.
Journal: Accounting and Business Research
Pages: 213-225
Issue: 3
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728937
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728937
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:3:p:213-225
Template-Type: ReDIF-Article 1.0
Author-Name: Alan Gregory
Author-X-Name-First: Alan
Author-X-Name-Last: Gregory
Title: Motives underlying the method of payment by UK acquirers: the influence of goodwill
Abstract: The treatment of goodwill in the UK has been the subject of a recent contentious Financial Reporting Standard, FRS 10. It is shown that goodwill write-off considerations appear to have an influence on the form of payment used in the acquisition, and that this influence is associated with the relative portion of the acquirer's net worth which is available for write-offs and the ratio of goodwill to target asset value. These findings are robust to controlling for factors shown to have influenced the choice of acquisition financing by Martin (1996), and to additional controls for any over-valuation of equity. The result that the accounting treatment of goodwill is associated with the financing decision in an acquisition is one that may have important policy implications for UK accounting.
Journal: Accounting and Business Research
Pages: 227-240
Issue: 3
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728938
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728938
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:3:p:227-240
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Owusu-Ansah
Author-X-Name-First: Stephen
Author-X-Name-Last: Owusu-Ansah
Title: Timeliness of corporate financial reporting in emerging capital markets: empirical evidence from the Zimbabwe Stock Exchange
Abstract: This article reports on the results of an empirical investigation of the timeliness of annual reporting by 47 non-financial companies listed on the Zimbabwe Stock Exchange. It also reports on the factors that affect timely reporting by these companies. The results of a descriptive analysis indicate that 98% of the companies in the sample reported promptly to the public (i.e., submitted their audited annual reports to the Zimbabwe Stock Exchange by the regulatory deadline). A two-stage least squares regression identified company size, profitability and company age as statistically significant explanators of the differences in the timeliness of annual reports issued by the sample companies. No evidence was found to support the monitoring costs theory argument, which suggests that highly-geared companies are timely reporters. Furthermore, the empirical data indicate that audit reporting lead time is significantly associated with the timeliness with which sample companies release their preliminary annual earnings announcement, but not with the timeliness of their audited annual reports. Plausible explanations for these findings along with the limitations of the underlying research are provided.
Journal: Accounting and Business Research
Pages: 241-254
Issue: 3
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728939
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728939
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:3:p:241-254
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Conyon
Author-X-Name-First: Martin
Author-X-Name-Last: Conyon
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: Book Reviews
Journal:
Pages: 255-257
Issue: 3
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728940
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728940
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:3:p:255-257
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: ANNOUNCEMENT
Journal:
Pages: 258-258
Issue: 3
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728941
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728941
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:3:p:258-258
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: CALL FOR PAPERS
Journal:
Pages: 259-259
Issue: 3
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728942
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728942
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:3:p:259-259
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 3
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729961
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729961
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:3:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: ii-ii
Issue: 3
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729962
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729962
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:3:p:ii-ii
Template-Type: ReDIF-Article 1.0
Author-Name: Muhammad Ali
Author-X-Name-First: Muhammad
Author-X-Name-Last: Ali
Author-Name: Kamran Ahmed
Author-X-Name-First: Kamran
Author-X-Name-Last: Ahmed
Author-Name: Darren Henry
Author-X-Name-First: Darren
Author-X-Name-Last: Henry
Title: Disclosure compliance with national accounting standards by listed companies in South Asia
Abstract: This paper empirically examines the level of compliance with disclosure requirements mandated by 14 national accounting standards for a large sample of companies within the three major countries in South Asia, namely India, Pakistan and Bangladesh, and evaluates the corporate attributes which influence the degree of compliance with these standards. Using a scoring system to develop a total compliance index (TCI) for each sample company, the results indicate significant variation in total disclosure compliance levels across countries and different national accounting standards. Compliance levels are found to be positively related to company size, profitability and multinational-company status, and unrelated to leverage levels and the quality of external auditors.
Journal: Accounting and Business Research
Pages: 183-199
Issue: 3
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729963
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729963
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:3:p:183-199
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Firth
Author-X-Name-First: Michael
Author-X-Name-Last: Firth
Author-Name: Thomas Lau
Author-X-Name-First: Thomas
Author-X-Name-Last: Lau
Title: Audit pricing following mergers of accounting practices: evidence from Hong Kong
Abstract: This study investigates what happens to audit fees after audit firms merge. In particular, we examine whether pre-merger fee premiums of the strong brand name auditor spread to the other auditor. Using data from Hong Kong we analyse the 1997 merger between Kwan Wong Tan & Fong (KWTF) and Deloitte Touche & Tohmatsu (DTT) to become DTT, and the 1998 merger between Coopers & Lybrand (CL) and Price Waterhouse (PW) to form PricewaterhouseCoopers (PwC). We find that DTT audit fees are 55% higher than KWTF prior to the merger and this premium falls to 41% in 1998 and to 34% in 1999. However, we find no increase in audit fees for incumbent property company clients, a sector where KWTF is the leading supplier. Prior to its merger. PW earned audit fees 16.4% higher than those earned by CL and the premium is even larger for clients in the consolidated enterprises and property companies sectors. We find no change in audit fees after the PwC merger. This result suggests that the PwC merger is a response to increased competition and clients are unwilling to pay higher fees for within-Big 5 re-branding.
Journal: Accounting and Business Research
Pages: 201-213
Issue: 3
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729964
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729964
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:3:p:201-213
Template-Type: ReDIF-Article 1.0
Author-Name: Warwick Funnell
Author-X-Name-First: Warwick
Author-X-Name-Last: Funnell
Title: Further evidence on the roots of public sector operational (value-for-money) auditing: a response to Flesher and Zarzeski
Abstract: Flesher and Zarzeski in their recent examination of the North American origins of value-for-money auditing highlight the reluctance of public sector auditors in Australia, New Zealand and Britain to assume operational auditing as part of their mandate until the 1970s, and then only gradually. It is suggested here that the very different constitutional forms of Westminster and American governments and their associated conventions denied auditors-general the authority to follow the American example. In their paper Flesher and Zarzeski also recognize Canada as an unusually early adopter of operational auditing, although suggesting that actual practices owed little to direct borrowings from the US. Canada was also the primary influence on the form taken by value-for-money auditing in other Westminster countries. It is suggested here that the decision by Canada in the early 1960s to recruit auditors-general from the private sector accelerated the transfer of value-for-money auditing to the public sector as did the admiration of Canadian auditors-general for the work of the GAO, even though they were constitutionally constrained in the extent of their borrowings.
Journal: Accounting and Business Research
Pages: 215-222
Issue: 3
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729965
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729965
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:3:p:215-222
Template-Type: ReDIF-Article 1.0
Author-Name: Charles Piot
Author-X-Name-First: Charles
Author-X-Name-Last: Piot
Title: The existence and independence of audit committees in France
Abstract: This paper uses an agency theory framework to investigate the determinants of audit committees in France. Empirical tests address a cross-sectional sample of 285 listed companies for the fiscal year 1997, which is two years after the first Viénot report recommending the creation of audit committees among listed companies. Multivariate analyses show that the existence of an audit committee, and the committee's independence, are both negatively correlated with insider ownership, consistent with the owner-manager agency theory that considers audit committees as devices aimed at strengthening the monitoring system, the quality of financial reporting and the whole corporate governance environment. The existence of an audit committee that complies with corporate governance recommendations (i.e., a minimum of three directors, all of whom are non-executive directors) also positively depends on leverage if the firm has a high-IOS (Investment Opportunity Set). The quality of accounting numbers thus seems important in shareholder-debtholder relationships if lenders are potentially more exposed to default risk and expropriation mechanisms. However, this result might be sensitive to the IOS measurement and classification of high- and low-IOS companies. Finally, the presence of an audit committee is found to be positively correlated with board size, firm size, auditor reputation, and with the diversity of the company's operations.
Journal: Accounting and Business Research
Pages: 223-246
Issue: 3
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729966
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729966
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:3:p:223-246
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Walker
Author-X-Name-First: Stephen
Author-X-Name-Last: Walker
Title: Conflict, collaboration, fuzzy jurisdictions and partial settlements. Accountants, lawyers and insolvency practice during the late 19th century
Abstract: Inter-professional conflict over insolvency work in Victorian England and Wales is often considered a formative instance of jurisdictional competition between accountants and lawyers. The paper explores this episode in the context of Abbott's theory of The System of Professions. It is shown that the Bankruptcy Act, 1869 disturbed inter-professional relations and unleashed competition between accountants and lawyers for insolvency work. However, the resultant hostility was substantially conducted through the professional media and did not engage unified occupational communities. In everyday practice accountants and lawyers maintained relations of mutual dependency rather than conflict. Some elements of a jurisdictional settlement between accountants and lawyers over bankruptcy work was achieved during the 1870s and 1880s through an intellectual division of labour, judicial decision making and organisational change. However, these forms of settlement seldom proved conclusive and statutory changes effectively perpetuated inter-professional competition for insolvency work into the 20th century.
Journal: Accounting and Business Research
Pages: 247-265
Issue: 3
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729967
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729967
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:3:p:247-265
Template-Type: ReDIF-Article 1.0
Author-Name: Irvine Lapsley
Author-X-Name-First: Irvine
Author-X-Name-Last: Lapsley
Author-Name: Chris Mallin
Author-X-Name-First: Chris
Author-X-Name-Last: Mallin
Author-Name: Falconer Mitchell
Author-X-Name-First: Falconer
Author-X-Name-Last: Mitchell
Title: Book reviews
Journal:
Pages: 267-269
Issue: 3
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729968
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729968
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:3:p:267-269
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Special section of European Accounting Review on Conservatism in Accounting
Journal:
Pages: 270-270
Issue: 3
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729969
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729969
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:3:p:270-270
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663328
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663328
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial
Journal:
Pages: 167-167
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663329
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663329
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:167-167
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal:
Pages: 169-170
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663330
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663330
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:169-170
Template-Type: ReDIF-Article 1.0
Author-Name: Sudipta Basu
Author-X-Name-First: Sudipta
Author-X-Name-Last: Basu
Author-Name: Gregory Waymire
Author-X-Name-First: Gregory
Author-X-Name-Last: Waymire
Title: Has the importance of intangibles really grown? And if so, why?
Abstract: Intangibles are ideas or knowledge about the natural (physical and biological) and socio‐cultural worlds that enable people to better accomplish their goals, both in primitive societies and in modern economies. Intangibles include basic research and technology improvements, as well as knowledge to better organise exchange and production, and over time become inextricably embedded in improved tangible assets. Accounting intangibles are legally excludable subsets of economic intangibles, which in turn are the subsets of cultural intangibles that can be used to create tradable goods or services. Because economic intangibles are cumulative, synergistic, and frequently inseparable from other tangible assets and/or economic intangibles not owned by any single entity, it is usually futile to estimate a separate accounting value for individual intangibles. However, the income that intangibles together generate provides useful inputs for equity valuation, and voluntary non‐financial disclosures could be informative for this purpose.
Journal: Accounting and Business Research
Pages: 171-190
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663331
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663331
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:171-190
Template-Type: ReDIF-Article 1.0
Author-Name: Douglas Skinner
Author-X-Name-First: Douglas
Author-X-Name-Last: Skinner
Title: Accounting for intangibles – a critical review of policy recommendations
Abstract: I review and critically evaluate the arguments in favour of reforming current accounting and disclosure practices related to intangibles. I argue that the case for reform is actually rather weak. Proponents of reform provide little cogent evidence in support of claims that current practice is having adverse capital market effects. In fact, theory and evidence from corporate finance suggest that capital markets perform well in financing investments in innovative, high‐technology activities. I discuss why mandating additional disclosure in this area is unlikely to be successful and that proposals to recognise intangibles are also flawed.
Journal: Accounting and Business Research
Pages: 191-204
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663332
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663332
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:191-204
Template-Type: ReDIF-Article 1.0
Author-Name: Peter Elwin
Author-X-Name-First: Peter
Author-X-Name-Last: Elwin
Title: Discussion of ‘Accounting for intangibles – a critical review of policy recommendations’
Journal:
Pages: 205-207
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663333
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663333
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:205-207
Template-Type: ReDIF-Article 1.0
Author-Name: Baruch Lev
Author-X-Name-First: Baruch
Author-X-Name-Last: Lev
Title: A rejoinder to Douglas Skinner's ‘Accounting for intangibles – a critical review of policy recommendations’
Journal:
Pages: 209-213
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663334
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663334
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:209-213
Template-Type: ReDIF-Article 1.0
Author-Name: Douglas Skinner
Author-X-Name-First: Douglas
Author-X-Name-Last: Skinner
Title: A reply to Lev's rejoinder to ‘Accounting for intangibles – a critical review of policy recommendations’
Journal:
Pages: 215-216
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663335
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663335
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:215-216
Template-Type: ReDIF-Article 1.0
Author-Name: Anne Wyatt
Author-X-Name-First: Anne
Author-X-Name-Last: Wyatt
Title: What financial and non‐financial information on intangibles is value‐relevant? A review of the evidence
Abstract: This paper evaluates what we have learned about the relevance and reliability of financial and non‐financial information on intangibles from the value‐relevance literature. Because value‐relevance studies do not easily allow judgments about the reliability of information on intangibles, and this is an issue of central interest, this paper takes a rather wide look across a range of literatures to try to piece together some indirect evidence on both relevance and reliability. The evidence from a package of value‐relevance and triangulation studies suggests research and development (R&D) is generally not reliably measured and may be less relevant in some contexts than others as well (e.g. established versus growth firms). Further purchased goodwill and some non‐financial measures of brands and customer loyalty do not appear to be reliably measured. While a large number of financial and nonfinancial information is value‐relevant, it is difficult to make categorical judgments about most other items, as differences in value‐relevance could be due to different relevance or reliability, or both. Several rich areas for future research include designing direct tests of reliability, focusing on settings where intangibles are changing due to shocks, finding new economic benchmarks to test reliability, and studying the impact of accounting discretion and factors such as strategy and capabilities on value‐relevance tests of information on intangibles. Two regulatory issues arising from this review paper are the gap in the reporting of separate line items of expenditures on intangibles; and the possibility that giving management discretion, with regulatory guidance, to report intangibles might facilitate more value‐relevant information on intangibles.
Journal: Accounting and Business Research
Pages: 217-256
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663336
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663336
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:217-256
Template-Type: ReDIF-Article 1.0
Author-Name: Jed Wrigley
Author-X-Name-First: Jed
Author-X-Name-Last: Wrigley
Title: Discussion of ‘What financial and non‐financial information on intangibles is value‐relevant? A review of the evidence’
Journal:
Pages: 257-260
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663337
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663337
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:257-260
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Ittner
Author-X-Name-First: Christopher
Author-X-Name-Last: Ittner
Title: Does measuring intangibles for management purposes improve performance? A review of the evidence
Abstract: Despite the development of dozens of frameworks and techniques for measuring intangible assets, an open question is whether the internal measurement of intangible assets for management purposes is associated with higher economic performance. This paper provides an overview of the statistical evidence on the performance consequences of intangible asset measurement. Although the bulk of these studies provide at least some evidence that intangible asset measurement is associated with higher performance, many are limited by over‐reliance on perceptual satisfaction or outcome variables, inadequate controls for contingency factors, simple variables for capturing complex measurement practices, and the lack of data on implementation practices. I conclude by offering suggestions for improving and extending studies on the performance consequences of intangible asset measurement.
Journal: Accounting and Business Research
Pages: 261-272
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663338
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663338
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:261-272
Template-Type: ReDIF-Article 1.0
Author-Name: Julian Heslop
Author-X-Name-First: Julian
Author-X-Name-Last: Heslop
Title: Discussion of ‘Does measuring intangibles for management purposes improve performance? A review of the evidence’
Journal:
Pages: 273-274
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663339
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663339
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:273-274
Template-Type: ReDIF-Article 1.0
Author-Name: Andrew Stark
Author-X-Name-First: Andrew
Author-X-Name-Last: Stark
Title: Intangibles and research – an overview with a specific focus on the UK
Journal:
Pages: 275-285
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663340
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663340
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:275-285
Template-Type: ReDIF-Article 1.0
Author-Name: Alan Mackay
Author-X-Name-First: Alan
Author-X-Name-Last: Mackay
Title: Discussion of ‘Intangibles and research – an overview with a specific focus on the UK’
Journal:
Pages: 287-289
Issue: 3
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663341
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663341
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:3:p:287-289
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 2
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663386
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663386
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:2:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Renata Stenka
Author-X-Name-First: Renata
Author-X-Name-Last: Stenka
Author-Name: Peter Taylor
Author-X-Name-First: Peter
Author-X-Name-Last: Taylor
Title: Setting UK standards on the concept of control: An analysis of lobbying behaviour
Abstract: The present study aims to contribute to an understanding of the complexity of lobbying activities within the accounting standard‐setting process in the UK. The paper reports detailed content analysis of submission letters to four related exposure drafts. These preceded two accounting standards that set out the concept of control used to determine the scope of consolidation in the UK, except for reporting under international standards. Regulation on the concept of control provides rich patterns of lobbying behaviour due to its controversial nature and its significance to financial reporting. Our examination is conducted by dividing lobbyists into two categories, corporate and non‐corporate, which are hypothesised (and demonstrated) to lobby differently. In order to test the significance of these differences we apply ANOVA techniques and univariate regression analysis. Corporate respondents are found to devote more attention to issues of specific applicability of the concept of control, whereas non‐corporate respondents tend to devote more attention to issues of general applicability of this concept. A strong association between the issues raised by corporate respondents and their line of business is revealed. Both categories of lobbyists are found to advance conceptually‐based arguments more often than economic consequences‐based or combined arguments. However, when economic consequences‐based arguments are used, they come exclusively from the corporate category of respondents.
Journal: Accounting and Business Research
Pages: 109-130
Issue: 2
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663387
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663387
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:2:p:109-130
Template-Type: ReDIF-Article 1.0
Author-Name: Muhammad Islam
Author-X-Name-First: Muhammad
Author-X-Name-Last: Islam
Author-Name: Craig Deegan
Author-X-Name-First: Craig
Author-X-Name-Last: Deegan
Title: Media pressures and corporate disclosure of social responsibility performance information: A study of two global clothing and sports retail companies
Abstract: This paper investigates the social and environmental disclosure practices of two large multinational companies, specifically Nike and Hennes&Mauritz. Utilising a joint consideration of legitimacy theory and media agenda setting theory, we investigate the linkage between negative media attention, and positive corporate social and environmental disclosures. Our results generally support a view that for those industry‐related social and environmental issues attracting the greatest amount of negative media attention, these corporations react by providing positive social and environmental disclosures. The results were particularly significant in relation to labour practices in developing countries – the issue attracting the greatest amount of negative media attention for the companies in question.
Journal: Accounting and Business Research
Pages: 131-148
Issue: 2
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663388
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663388
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:2:p:131-148
Template-Type: ReDIF-Article 1.0
Author-Name: Brian Rutherford
Author-X-Name-First: Brian
Author-X-Name-Last: Rutherford
Title: The social scientific turn in UK financial accounting research: A philosophical and sociological analysis
Abstract: The demise of the classical programme of financial accounting research is generally represented as a progressive development. This paper argues that the academy's abandonment of classical methods was justified neither by the fruitfulness of post‐classical programmes nor by their incontestable epistemological superiority. Rather, what occurred was a turn to mainstream social science, reflecting sociological characteristics of the UK financial accounting research community. The paper concludes with a call for a revival of the classical programme.
Journal: Accounting and Business Research
Pages: 149-171
Issue: 2
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663389
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663389
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:2:p:149-171
Template-Type: ReDIF-Article 1.0
Author-Name: Erlend Kvaal
Author-X-Name-First: Erlend
Author-X-Name-Last: Kvaal
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: International differences in IFRS policy choice: A research note
Abstract: Building on literature that suggests motives and opportunities for national versions of IFRS practice, we examine whether there are systematic differences in IFRS accounting policies between countries. Using information from the annual reports of companies in the blue chip indices of the largest five stock markets that use IFRS, we reject a null hypothesis that IFRS practice is the same across countries. For 16 accounting policy issues, we find instead significant evidence that pre‐ IFRS national practice continues where this is allowed within IFRS. By this, we document the existence of national patterns of accounting within IFRS. We also point out some policy implications that arise from our findings.
Journal:
Pages: 173-187
Issue: 2
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663390
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663390
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:2:p:173-187
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Glaum
Author-X-Name-First: Martin
Author-X-Name-Last: Glaum
Author-Name: Tobias Keller
Author-X-Name-First: Tobias
Author-X-Name-Last: Keller
Author-Name: Donna L. Street
Author-X-Name-First: Donna L.
Author-X-Name-Last: Street
Title: Discretionary accounting choices: the case of IAS 19 pension accounting
Abstract:
Based on a sample of 3207 firm-year observations for the years 2005–2013, we investigate how stock-listed companies in France, Germany and the UK use two discretionary choices in their accounting for defined benefit pension plans under International Accounting Standard (IAS) 19 Employee Benefits. We first analyse companies’ decision whether to voluntarily early adopt the equity method of accounting for actuarial gains and losses. Second, we analyse companies’ choice to present pension interest cost and expected return on plan assets, or, in 2013, net pension interest cost, in operating or financial income. Our findings provide evidence that companies’ decisions to early adopt the equity method in 2005, the first year this accounting choice was available, were motivated by short-term effects on equity. Our analyses also indicate that the choice regarding where to present interest cost and expected return on plan assets in the income statement is associated with the resulting effect on Earnings before Interest and Tax. Finally, we document country-specific differences in the use of the discretion provided under IAS 19, suggesting that discretionary pension accounting choices may impede comparability.
Journal: Accounting and Business Research
Pages: 139-170
Issue: 2
Volume: 48
Year: 2018
Month: 2
X-DOI: 10.1080/00014788.2017.1354760
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1354760
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:2:p:139-170
Template-Type: ReDIF-Article 1.0
Author-Name: Arnold Schneider
Author-X-Name-First: Arnold
Author-X-Name-Last: Schneider
Title: Financial expertise on audit committees of loan applicants: a research note to test the effects on lending decisions
Abstract:
The purpose of this study is to examine whether audit committee financial expertise matters when making commercial lending decisions. Commercial lenders rely on audited financial statements in making lending decisions, and the quality of these financial statements is impacted by the capabilities of audit committees having oversight of financial reporting. It is widely believed that this oversight is enhanced when audit committees contain members with financial expertise. A behavioural experiment is conducted where commercial lending officers make risk assessments and provide probabilities of granting loans based on a hypothetical scenario. This paper finds insufficient evidence to conclude that the existence of financial expertise on audit committees makes a difference to lenders. When replacing audit committee members, however, financial expertise does appear to matter to lenders in some cases.
Journal: Accounting and Business Research
Pages: 225-235
Issue: 2
Volume: 48
Year: 2018
Month: 2
X-DOI: 10.1080/00014788.2017.1357460
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1357460
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:2:p:225-235
Template-Type: ReDIF-Article 1.0
Author-Name: Alex Young
Author-X-Name-First: Alex
Author-X-Name-Last: Young
Title: Do analysts affect bad news timeliness?
Abstract:
I investigate the effect of analysts on the speed with which bad news is reflected in earnings. Intuitively, the more analysts that cover a firm, the more costly it will be for the firm to keep bad news suppressed. Thus, analyst coverage should positively affect bad news timeliness (BNT) (but not necessarily the differential timeliness of bad news over good news, or conditional conservatism). Using brokerage house mergers as a natural experiment with a difference-in-differences design, I find that an exogenous decrease in analyst coverage decreases BNT; that is, analysts positively affect BNT. The decrease in BNT is robust to controlling for unobserved firm heterogeneity, using a propensity score matched sample, persists for up to three years after the brokerage house merger, and is stronger for firms with relatively low analyst coverage before the merger. The result improves our understanding of how analysts affect a firm's information environment.
Journal: Accounting and Business Research
Pages: 171-189
Issue: 2
Volume: 48
Year: 2018
Month: 2
X-DOI: 10.1080/00014788.2017.1360174
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1360174
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:2:p:171-189
Template-Type: ReDIF-Article 1.0
Author-Name: Muhammad Azizul Islam
Author-X-Name-First: Muhammad Azizul
Author-X-Name-Last: Islam
Author-Name: Craig Deegan
Author-X-Name-First: Craig
Author-X-Name-Last: Deegan
Author-Name: Rob Gray
Author-X-Name-First: Rob
Author-X-Name-Last: Gray
Title: Social compliance audits and multinational corporation supply chain: evidence from a study of the rituals of social audits
Abstract:
This study investigates the use of social compliance audits in the supply chain of multinational corporations (MNCs). Particularly, we explore the use of such audits in assessing and managing the working conditions of factory workers in the garment industry in a developing nation. Through a range of interviews with MNCs’ internal auditors, with commissioned external auditors and with representatives of the suppliers in Bangladesh, this study finds that social compliance audits become ritual strategies and are not a primary means of advancing workers’ rights. Drawing on the concept of surrogate accountability, the study suggests that to create real change in workers’ conditions and in order to hold MNCs and their suppliers accountable, some form of surrogate (government, non-governmental organisations or media) intervention is necessary. This is, we argue, preferable to leaving it in the hands of ‘markets’ and simply waiting for another major incident such as Rana Plaza to stir public concern. This study contributes to the literature by investigating how social compliance audits are undertaken by MNCs sourcing products from a developing nation, what motivations drive the adoption of such audits, and what, if anything, are the likely outcomes from the process.
Journal: Accounting and Business Research
Pages: 190-224
Issue: 2
Volume: 48
Year: 2018
Month: 2
X-DOI: 10.1080/00014788.2017.1362330
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1362330
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:2:p:190-224
Template-Type: ReDIF-Article 1.0
Author-Name: Josep Garcia-Blandon
Author-X-Name-First: Josep
Author-X-Name-Last: Garcia-Blandon
Author-Name: Josep Maria Argiles-Bosch
Author-X-Name-First: Josep Maria
Author-X-Name-Last: Argiles-Bosch
Title: The interaction effects of firm and partner tenure on audit quality
Abstract:
This paper investigates the impact of firm and partner tenure on audit quality, where audit quality is proxied by discretionary accruals. We study a sample of Spanish listed companies between 2005 and 2011 and address both the individual and the interaction effects of firm and partner tenure. Our study is motivated by the current debate, particularly intense at the EU level, on the impact of the auditor rotation regime on the quality of auditing. We find that, without considering the interaction effects, firm and partner tenure do not seem to play a relevant role as determinants of audit quality. Importantly, the interaction of firm and partner tenure shows stronger effects on audit quality than both forms of tenure separately considered. Finally, our analysis suggests that audit quality is maximized when medium firm and partner tenures interact. However, results for the interaction variables are sensitive to the accruals estimation method.
Journal: Accounting and Business Research
Pages: 810-830
Issue: 7
Volume: 47
Year: 2017
Month: 11
X-DOI: 10.1080/00014788.2017.1289073
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1289073
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:7:p:810-830
Template-Type: ReDIF-Article 1.0
Author-Name: Reginald Wilson
Author-X-Name-First: Reginald
Author-X-Name-Last: Wilson
Title: The impact of revolving door practice and policy on nonprofessional investors’ perceptions of auditor independence
Abstract:
This study investigates whether an ex-auditor’s employment with an audit client impairs nonprofessional investors’ perceptions of auditor independence, and whether the strength of the US revolving door policy improves their perceptions of auditor independence. Despite nonprofessional investors owning over one-third of the US equity holdings, the literature has not examined how revolving door policy impacts their perceptions of auditor independence. Two between-subjects experiments examine these issues. The first experiment finds that investors perceive the ex-auditor’s integrity to be significant in explaining the firm’s decision to manage earnings, irrespective of the firm’s previous working relationship with the ex-auditor. The results from experiment two indicate that strengthening the revolving door policy above that of the American Institute of Certified Public Accountants’ policy does not improve perceptions of auditor independence. Academics may be interested in triangulating the independence ‘in appearance’ results of this study to the independence ‘in fact’ results of other studies, since the Securities and Exchange Commission asserts that both facets of independence are equally important. The results may also be of interest to academics and practitioners, as prior research suggests that restricting auditors’ moves to management positions with the client impairs firms’ abilities to hire quality auditors.
Journal: Accounting and Business Research
Pages: 752-779
Issue: 7
Volume: 47
Year: 2017
Month: 11
X-DOI: 10.1080/00014788.2017.1299618
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1299618
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:7:p:752-779
Template-Type: ReDIF-Article 1.0
Author-Name: Hironori Fukukawa
Author-X-Name-First: Hironori
Author-X-Name-Last: Fukukawa
Author-Name: Hyonok Kim
Author-X-Name-First: Hyonok
Author-X-Name-Last: Kim
Title: Effects of audit partners on clients’ business risk disclosure
Abstract:
We empirically investigate audit engagement partners’ involvement in business risk disclosure. Specifically, we examine whether the quality of business risk disclosure is influenced by engagement partner tenure and knowledge. We also examine whether the effects of partner tenure and knowledge are similar for Big 4 audit firms and non-Big 4 firms. Since fiscal year 2003, listed companies in Japan have been required to disclose business risk information. Although the business risk information is not audited, auditors concerned about their audit quality may seek to influence clients’ business risk disclosure practices. Giving advice to management on the narrative business risk disclosure can contribute to improving the perceived value of the auditor’s services which can be a competitive advantage. Using a sample of Japanese listed companies from 2003 to 2010, we find that if the engagement partners’ tenure is shorter, a company discloses more business risk information and the disclosure is more detailed. Furthermore, companies with audit partners who have a larger number of client engagements disclose larger amounts of business risk information in more detail. However, the engagement partner effects are mitigated if they belong to a Big 4 firm.
Journal: Accounting and Business Research
Pages: 780-809
Issue: 7
Volume: 47
Year: 2017
Month: 11
X-DOI: 10.1080/00014788.2017.1299619
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1299619
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:7:p:780-809
Template-Type: ReDIF-Article 1.0
Author-Name: Victor S. Maas
Author-X-Name-First: Victor S.
Author-X-Name-Last: Maas
Author-Name: Niels Verdoorn
Author-X-Name-First: Niels
Author-X-Name-Last: Verdoorn
Title: The effects of performance report layout on managers’ subjective evaluation judgments
Abstract:
Managers tend to provide subjective performance evaluations that are relatively high (leniency) and not very dispersed (compression). This paper reports on an experiment that investigates whether the layout of performance reports affects the leniency and compression of managers’ subjective evaluations. Relying on psychology theory, we predict that subjective ratings will be higher and more compressed if performance reports contain alphabetically listed indicators rather than categorically listed indicators (as in a balanced scorecard). Moreover, we predict that ratings will be higher and more compressed if performance reports present indicator target and actual values in tables than when this information is presented in graphs. The results from the experiment provide support for the hypothesis that performance ratings are higher if measures are listed in alphabetical order as opposed to presented in a four-category balanced scorecard format. However, there is no support for the other hypotheses. We discuss the implications of the study for accounting research and practice.
Journal: Accounting and Business Research
Pages: 731-751
Issue: 7
Volume: 47
Year: 2017
Month: 11
X-DOI: 10.1080/00014788.2017.1324756
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1324756
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:7:p:731-751
Template-Type: ReDIF-Article 1.0
Author-Name: Margaret J. Greenwood
Author-X-Name-First: Margaret J.
Author-X-Name-Last: Greenwood
Author-Name: Richard M. Baylis
Author-X-Name-First: Richard M.
Author-X-Name-Last: Baylis
Author-Name: Lei Tao
Author-X-Name-First: Lei
Author-X-Name-Last: Tao
Title: Regulatory incentives and financial reporting quality in public healthcare organisations
Abstract:
English National Health Service Foundation Trusts are subject to a regulatory regime in which the level of monitoring and intervention is determined by performance against two key performance metrics: a ‘financial risk rating’, based on a number of performance metrics, such as the reported surplus margin and return on assets, and a ‘prudential borrowing limit’. In this paper, we investigate the variation in financial reporting quality, proxied by discretionary accruals, with the incentives introduced by this regime. We find: first, that discretionary accruals are managed to report small surpluses; second, that, consistent with the avoidance of regulatory intervention in both the short and medium term, discretionary accruals are more positive when pre-managed performance is below intervention triggering thresholds and more negative when well above threshold; third, that, despite a move away from financial breakeven as the primary performance objective, there remains an aversion to small loss reporting. We further find that the level of discretionary accruals is driven by two metrics of strategic significance: the surplus margin (a measure of retained earnings) and the prudential borrowing limit (a measure of borrowing capacity).
Journal: Accounting and Business Research
Pages: 831-855
Issue: 7
Volume: 47
Year: 2017
Month: 11
X-DOI: 10.1080/00014788.2017.1343116
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1343116
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:7:p:831-855
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal: Accounting and Business Research
Pages: ebi-ebi
Issue: 7
Volume: 47
Year: 2017
Month: 11
X-DOI: 10.1080/00014788.2017.1367989
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1367989
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:7:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Mary Canning
Author-X-Name-First: Mary
Author-X-Name-Last: Canning
Author-Name: Brendan O’Dwyer
Author-X-Name-First: Brendan
Author-X-Name-Last: O’Dwyer
Author-Name: George Georgakopoulos
Author-X-Name-First: George
Author-X-Name-Last: Georgakopoulos
Title: Processes of auditability in sustainability assurance – the case of materiality construction
Abstract:
This study examines how financial audit-styled concepts such as materiality are transferred to non-financial audit arenas. Drawing on a case study of assurors working within a Big 4 professional services firm, we uncover a number of interrelated features of the materiality determination and assessment process within sustainability assurance (assurance on sustainability reports). We illustrate how assuror flexibility, underpinned by assuror intuition, is central to uncovering assurance technologies deemed capable of addressing the materiality of ambiguous sustainability data. Assurors with no financial audit background retrospectively rationalise their intuition using the assumed authority of structured financial audit methodologies. This facilitates the tentative translation of financial audit knowledge to the sustainability assurance domain. Collaborative, holistic decision-making processes inform the assurors’ continual construction of materiality and are characterised by alliances of (accountant and non-accountant) ‘expert’ assurors merging formal and tacit knowledge. These alliances seek social cohesion within sustainability assurance teams in order to establish a social consensus among assurors around the materiality determination and assessment process. Our analysis develops and extends Power’s theorisation of how new areas are made auditable and advances our understanding of the more practical aspects of non-financial assurance services offered by Big 4 professional services firms.
Journal: Accounting and Business Research
Pages: 1-27
Issue: 1
Volume: 49
Year: 2019
Month: 1
X-DOI: 10.1080/00014788.2018.1442208
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1442208
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:1:p:1-27
Template-Type: ReDIF-Article 1.0
Author-Name: Jeff Downing
Author-X-Name-First: Jeff
Author-X-Name-Last: Downing
Author-Name: John Christian Langli
Author-X-Name-First: John Christian
Author-X-Name-Last: Langli
Title: Audit exemptions and compliance with tax and accounting regulations
Abstract:
We examine small firms’ compliance with tax and accounting regulations before and after a change in the threshold for mandatory auditing. Prior to 2011, all Norwegian firms were required to be audited. In 2011, a law change allowed small Norwegian firms to choose not to be audited. After this change, the Norwegian Directorate of Taxes conducted on- and off-site inspections of a representative sample of 2117 Norwegian firms, with a focus on compliance with specific requirements in tax and accounting regulation. We use the results from these inspections to construct a compliance quality score (CQS). We find that the firms that chose to opt out of auditing have lower CQS than do firms that chose to continue to be audited; that the CQS of firms that chose not to be audited declined after opting out; and that some of the opt-out firms fully mitigated the decline in CQS by engaging external accountants or auditors to prepare their annual financial statements. The results should be of interest to regulators considering increasing the thresholds for mandatory auditing, as our results show that (i) firms that choose not to be audited can experience a decline in CQS after opting out and (ii) CQS can be maintained at the same level as before if opt-out firms engage external consultants that assist in preparing the annual accounts.
Journal: Accounting and Business Research
Pages: 28-67
Issue: 1
Volume: 49
Year: 2019
Month: 1
X-DOI: 10.1080/00014788.2018.1442707
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1442707
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:1:p:28-67
Template-Type: ReDIF-Article 1.0
Author-Name: Skrålan Vergauwe
Author-X-Name-First: Skrålan
Author-X-Name-Last: Vergauwe
Author-Name: Ann Gaeremynck
Author-X-Name-First: Ann
Author-X-Name-Last: Gaeremynck
Title: Do measurement-related fair value disclosures affect information asymmetry?
Abstract:
Using a sample of European real estate firms over the 2007–2010 period, this study provides some evidence that measurement-related fair value disclosures reduce information asymmetry. We find a negative association between the extent of fair value disclosures and the bid-ask spread, but no association with two additional measures of information asymmetry (zero returns and price impact). Contrary to our expectation, we fail to find evidence that firms using model estimates exclusively benefit the most from such additional disclosure. Analysing measurement errors (the absolute difference between the selling price of an asset and its fair value prior to sale), we find that firms that use model estimates exclusively and provide more measurement-related disclosures have lower errors and more accurate fair value estimates. In other words, if our lack of results is due to investors not using this additional disclosure this is to their detriment.
Journal: Accounting and Business Research
Pages: 68-94
Issue: 1
Volume: 49
Year: 2019
Month: 1
X-DOI: 10.1080/00014788.2018.1434608
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1434608
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:1:p:68-94
Template-Type: ReDIF-Article 1.0
Author-Name: George Salijeni
Author-X-Name-First: George
Author-X-Name-Last: Salijeni
Author-Name: Anna Samsonova-Taddei
Author-X-Name-First: Anna
Author-X-Name-Last: Samsonova-Taddei
Author-Name: Stuart Turley
Author-X-Name-First: Stuart
Author-X-Name-Last: Turley
Title: Big Data and changes in audit technology: contemplating a research agenda
Abstract:
This study explores the most recent episode in the evolution of audit technology, namely the incorporation of Big Data and Data Analytics (BDA) into audit firm approaches. Drawing on 22 interviews with individuals with significant experience in developing, implementing or assessing the impact of BDA in auditing, together with publicly available documents on BDA published within the audit field, the paper provides a holistic overview of BDA-related changes in audit practice. In particular, the paper focuses on three key aspects, namely the impact of BDA on the nature of the relationship between auditors and their clients; the consequences of the technology for the conduct of audit engagements and the common challenges associated with embedding BDA in the audit context. The study’s empirical findings are then used to establish an agenda of areas suitable for further research on the topic. The study is one of the first empirical accounts providing a perspective on the rise of BDA in auditing.
Journal: Accounting and Business Research
Pages: 95-119
Issue: 1
Volume: 49
Year: 2019
Month: 1
X-DOI: 10.1080/00014788.2018.1459458
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1459458
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:1:p:95-119
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Index to Volume 27—1996/97
Journal:
Pages: 1-3
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729550
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729550
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:1-3
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729551
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729551
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Alan Dunk
Author-X-Name-First: Alan
Author-X-Name-Last: Dunk
Author-Name: Ken Peasnell
Author-X-Name-First: Ken
Author-X-Name-Last: Peasnell
Author-Name: Mahmoud Ezzamel
Author-X-Name-First: Mahmoud
Author-X-Name-Last: Ezzamel
Author-Name: Peter Moizer
Author-X-Name-First: Peter
Author-X-Name-Last: Moizer
Title: Professor Peter Brownell
Journal:
Pages: 267-267
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729552
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729552
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:267-267
Template-Type: ReDIF-Article 1.0
Author-Name: Vincent Chong
Author-X-Name-First: Vincent
Author-X-Name-Last: Chong
Author-Name: Kar Chong
Author-X-Name-First: Kar
Author-X-Name-Last: Chong
Title: Strategic Choices, Environmental Uncertainty and SBU Performance: A Note on the Intervening Role of Management Accounting Systems
Abstract: This paper examines the role of management accounting systems (MAS) design on the relationship between: (1) strategic business unit (SBU) strategy and SBU performance and (2) perceived environmental uncertainty (PEU) on SBU performance. MAS design was defined in terms of the extent to which managers use broad scope MAS information for managerial decision making. The responses of 62 SBU managers, drawn from a cross-section of manufacturing companies in Western Australia, to a questionnaire survey were analysed by using a path analysis. The results suggest that SBU strategy and PEU are important antecedents of MAS design, and that broad scope MAS information is an important antecedent of SBU performance.
Journal: Accounting and Business Research
Pages: 268-276
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729553
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729553
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:268-276
Template-Type: ReDIF-Article 1.0
Author-Name: David Citron
Author-X-Name-First: David
Author-X-Name-Last: Citron
Author-Name: Ken Robbie
Author-X-Name-First: Ken
Author-X-Name-Last: Robbie
Author-Name: Mike Wright
Author-X-Name-First: Mike
Author-X-Name-Last: Wright
Title: Loan Covenants and Relationship Banking in MBOs
Abstract: This paper examines the role of accounting-based covenants and other sources of information in signalling financial distress in UK MBOs. Using an in-depth questionnaire and follow-up interviews to investigate the perceptions of senior UK MBO lenders, we find that: MBO loan agreements contain more covenants than general corporate lending agreements; monthly management accounts and telephone communication are more frequent first indicators of distress than are accounting-based covenant breaches; lenders with specialist MBO lending units are more likely to waive covenant breaches and less likely to recall loans in default than those without such units; syndicate members find both information flows prior to breach and subsequent action taken to be less effective than do syndicate leaders or sole lenders; and the presence of a specialist MBO lending unit provides the skills and reputation needed to establish a high degree of trust between the banks on the one hand and the MBOs and the equity houses on the other, but there is wide variety in the ways that banks manage these relationships. These findings confirm the expectation that the relatively more acute adverse selection and moral hazard problems inherent in MBO lending increase the demand for monitoring via covenants, and that the closer the lender/borrower relationship, the more effective the monitoring.
Journal: Accounting and Business Research
Pages: 277-294
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729554
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729554
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:277-294
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: FOURTH INTERNATIONAL MANAGEMENT CONTROL SYSTEMS RESEARCH CONFERENCE
Journal:
Pages: 295-295
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729555
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729555
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:295-295
Template-Type: ReDIF-Article 1.0
Author-Name: Leslie Kren
Author-X-Name-First: Leslie
Author-X-Name-Last: Kren
Author-Name: Jeffrey Kerr
Author-X-Name-First: Jeffrey
Author-X-Name-Last: Kerr
Title: The Effects of Outside Directors and Board Shareholdings on the Relation Between Chief Executive Compensation and Firm Performance
Abstract: Critics of corporate governance have suggested that improvements in board monitoring will arise from more independent boards consisting of outside directors and from increased stock ownership by directors. Presumably these changes should result in more rational, more defensible compensation decisions in which pay is clearly tied to results. In this paper, we test the premise that boards with a relatively higher proportion of outsiders and boards with significant shareholdings maintain a closer link between corporate performance and executive pay than do boards with fewer outsiders and boards holding little stock. The results of the study, based on a sample of 268 large corporations, are mixed. As expected, boards with significant shareholdings maintain a stronger linkage between compensation and firm-level performance. This finding persists even after controls are included for CEO and outsider shareholdings. Contrary to expectations, however, evidence was not found that firms with a higher proportion of outsiders on the board of directors relate compensation more strongly to firm results.
Journal: Accounting and Business Research
Pages: 297-309
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729556
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729556
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:297-309
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Peel
Author-X-Name-First: Michael
Author-X-Name-Last: Peel
Title: UK Auditor Concentration: A Descriptive Note
Abstract: This note describes supplier concentration in the UK market for audit services. It extends previous research, which has focused on listed markets, by examining auditor concentration ratios across all corporate (quoted, unquoted plc and private) sub-markets. Individual and combined Big Six supplier concentration (CR6) ratios are calculated with reference to the number of clients audited, corporate size and disclosed audit fees. Compared with previous studies, the analysis is based on a larger number (171,799) of corporate audits, and indicates that, inter alia, corporate size (across different sub-markets) is a key determinant of supplier concentration. However, variations are reported in relation to individual auditors, auditee size and corporate sub-sectors. Other key findings are that the CR6 ratio in the quoted market has continued to rise in recent years, from 72.3% in 1991 (Beattie and Fearnley, 1994) to 78.4% in 1994/95, and that the Big Six currently audit a substantial proportion (58.2%) of companies in the UK middle market, which they appear to be targeting, as the large auditee sub-sector becomes saturated, to increase market share.
Journal: Accounting and Business Research
Pages: 311-322
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729557
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729557
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:311-322
Template-Type: ReDIF-Article 1.0
Author-Name: Anthony Puxty
Author-X-Name-First: Anthony
Author-X-Name-Last: Puxty
Author-Name: Prem Sikka
Author-X-Name-First: Prem
Author-X-Name-Last: Sikka
Author-Name: Hugh Willmott
Author-X-Name-First: Hugh
Author-X-Name-Last: Willmott
Title: Mediating Interests: The Accountancy Bodies' Responses to the McFarlane Report
Abstract: There is now a considerable literature on the significance for accountants of their being accepted as a profession. The claim that they have regard to ‘the public interest’ in their activities is a central feature of the accountancy bodies’ claims to being accepted as a ‘profession’. This, they argue, distinguishes them from trade associations and trade unions. The claim is significant for both their economic and symbolic value. This paper examines the accountancy bodies’ claims by examining their responses to the 1992 publication of a discussion document The Future of Auditing by the Auditing Practices Board. Responses by four major professional bodies are analysed in detail. It is concluded that most of them do not attempt to redeem the claim to have regard to the public interest. Instead, they are mainly concerned to promote their members' private interests, frequently by advocating policy measures that will advance their own members' interests at the expense of those of other accountancy bodies. The significance of the contradiction between the transparency of this advocacy and the considerable effort expended in claiming to act in the public interest is discussed.
Journal:
Pages: 323-340
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729558
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729558
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:323-340
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: Clean Surplus Accounting Models and Market-based Accounting Research: A Review
Abstract: This paper reviews recent attempts to provide a rigorous theoretical basis for market-based accounting research based on the pioneering ideas of Ohlson. We argue that the Ohlson development can best be understood as an attempt to restate economic theories of income measurement in the light of advances in the economics of asset pricing under uncertainty. We contrast the Ohlson approach with other economic theories of financial reporting, and conclude that, while the Ohlson approach has made a significant contribution to understanding the theoretical basis of market-based accounting research, it remains to be seen whether the method can be extended beyond the simple linear models that have so far been developed.
Journal:
Pages: 341-355
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729559
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:341-355
Template-Type: ReDIF-Article 1.0
Author-Name: John Lane
Author-X-Name-First: John
Author-X-Name-Last: Lane
Author-Name: Roger Willett
Author-X-Name-First: Roger
Author-X-Name-Last: Willett
Title: Depreciation Need Not Be Arbitrary
Journal:
Pages: 356-356
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729560
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729560
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:356-356
Template-Type: ReDIF-Article 1.0
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Author-Name: Chris Poullaos
Author-X-Name-First: Chris
Author-X-Name-Last: Poullaos
Title: Book Reviews
Journal:
Pages: 357-359
Issue: 4
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729561
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729561
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:4:p:357-359
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 2
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729571
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729571
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:2:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: John Dunn
Author-X-Name-First: John
Author-X-Name-Last: Dunn
Author-Name: David Hillier
Author-X-Name-First: David
Author-X-Name-Last: Hillier
Author-Name: Andrew Marshall
Author-X-Name-First: Andrew
Author-X-Name-Last: Marshall
Title: The market reaction to auditor resignations
Abstract: Under UK company law, external auditors who resign must warn shareholders and creditors of any matter that ought to be brought to their attention. Auditor resignations and the subsequent change in auditor are informative corporate events. Resignation from office is likely to be a costly signal for the audit firm, particularly when the client is a quoted company. Our analysis of daily data suggests that there is a negative reaction to the auditor resignation on the date of the resignation letter, even though very few auditors indicate there were problems of which the shareholders and creditors should be made aware. This provides backing for the statutory rules on disclosure of the auditor resignation. We also find that the extent of the market reaction on the day of the resignation is related to the size of the resigning audit firm.
Journal: Accounting and Business Research
Pages: 95-108
Issue: 2
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729572
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:2:p:95-108
Template-Type: ReDIF-Article 1.0
Author-Name: Pascal Frantz
Author-X-Name-First: Pascal
Author-X-Name-Last: Frantz
Title: Discretionary write-downs, write-offs, and other restructuring provisions: a signaling approach
Abstract: This paper introduces a model seeking to explain the discretionary write-downs, write-offs, and other restructuring provisions reported by managers. The model comprises a firm, a manager, and a financial market. The firm is about to be restructured. The manager has some private information about the likelihood of success of his restructuring action. The manager may recognise all or part of the expenditure associated with his future restructuring action by reporting a discretionary restructuring provision. The manager chooses whether or not to report a provision, recognising the impact of the provision on his compensation. The paper shows how, under certain conditions, the manager may credibly communicate his private information to investors through his provision policy. Testable implications are consistent with the empirical evidence reported by Strong and Meyer (1987), Elliott and Shaw (1988), and Zucca and Campbell (1992).
Journal: Accounting and Business Research
Pages: 109-121
Issue: 2
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729573
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729573
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:2:p:109-121
Template-Type: ReDIF-Article 1.0
Author-Name: Ann Gaeremynck
Author-X-Name-First: Ann
Author-X-Name-Last: Gaeremynck
Author-Name: Reinhilde Veugelers
Author-X-Name-First: Reinhilde
Author-X-Name-Last: Veugelers
Title: The revaluation of assets as a signalling device: a theoretical and an empirical analysis
Abstract: In many countries, firms can choose whether or not to report a revaluation in the financial statements. An analytical model is developed to indicate conditions in which it is more likely that successful firms will choose not to revalue assets as a credible signal to potential investors. These industry settings include a high variance in performance and low equity-to-debt ratios. The empirical results for Belgium confirm that successful firms are less likely to revalue assets in those industries. However, only the revaluation of fixed tangible assets and not financial assets seems to be a credible signal. Finally, the results support the choice to revalue, but not the amount of revaluation, as a signalling device.
Journal: Accounting and Business Research
Pages: 123-138
Issue: 2
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729574
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729574
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:2:p:123-138
Template-Type: ReDIF-Article 1.0
Author-Name: Noel O'Sullivan
Author-X-Name-First: Noel
Author-X-Name-Last: O'Sullivan
Author-Name: Pauline Wong
Author-X-Name-First: Pauline
Author-X-Name-Last: Wong
Title: Board composition, ownership structure and hostile takeovers: some UK evidence
Abstract: This paper examines the relationship between internal and external control mechanisms in a sample of hostile takeover targets and a control group of non-target firms in the UK for the period 1989–93. The paper investigates whether there are significant differences in board composition, executive ownership and external shareholder control between the two groups. We find that hostile targets are more likely to have different individuals in the roles of chairman and CEO but employ non-executives with fewer additional directorships than non-targets. Executive share ownership is significantly lower in targets, suggesting that hostile bids are more likely to be pursued when target managers possess insufficient equity either to defeat the bid or make the bid too expensive for bidders. We find some evidence that institutional and unaffiliated blockholders in smaller targets help managers defeat unwanted bids.
Journal: Accounting and Business Research
Pages: 139-155
Issue: 2
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729575
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729575
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:2:p:139-155
Template-Type: ReDIF-Article 1.0
Author-Name: Rhoda Pierce-Brown
Author-X-Name-First: Rhoda
Author-X-Name-Last: Pierce-Brown
Author-Name: Tony Steele
Author-X-Name-First: Tony
Author-X-Name-Last: Steele
Title: The economics of
Abstract: This is a study of the accounting policies of the leading UK companies analysed by Terry Smith in Accounting for Growth (1992). Smith's critical survey achieved a certain notoriety at the time both for the content, which catalogued important ambiguities in UK GAAP, and also because the author was a leading investment analyst whose employers attempted to suppress the publication. The events that led to his dismissal were extensively reported in the financial press. In this paper we revisit the original analysis in the context of recent advances in the economics of accounting policy choice. Agency theory variables are used to predict the individual accounting policy choices and combinations of policies in Terry Smith's analysis. In particular, size, gearing, the presence of an industry regulator and industry classification are good predictors of accounting policy choices. Our results are stronger for the whole set of accounting policies than for each individual policy. This is consistent with accounting policy choice being a strategic and comprehensive selection from interactive policies rather than a series of independent decisions.
Journal: Accounting and Business Research
Pages: 157-173
Issue: 2
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729576
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729576
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:2:p:157-173
Template-Type: ReDIF-Article 1.0
Author-Name: J. Edwards
Author-X-Name-First: J.
Author-X-Name-Last: Edwards
Title: Book Review
Journal:
Pages: 175-176
Issue: 2
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729577
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729577
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:2:p:175-176
Template-Type: ReDIF-Article 1.0
Author-Name: Zhiming Ma
Author-X-Name-First: Zhiming
Author-X-Name-Last: Ma
Author-Name: Derrald Stice
Author-X-Name-First: Derrald
Author-X-Name-Last: Stice
Author-Name: Rencheng Wang
Author-X-Name-First: Rencheng
Author-X-Name-Last: Wang
Title: Auditor choice and information asymmetry: evidence from international syndicated loans
Abstract:
Analyzing a large sample of non-US public firms from 31 countries that obtain private loans, we find that loan syndicates that lend to borrowers that employ Big N auditors are larger and less concentrated and that the lead arrangers and largest investors of these syndicates are able to hold a lower proportion of the loan after issuance. Further analysis demonstrates that this effect exists only in countries with strong creditor rights and in those countries with high levels of societal trust, suggesting that both sound formal and informal institutional factors are prerequisites for lenders and borrowers to benefit from differential audit quality on loan syndicate structure efficiency. Furthermore, we find that the loan syndicate structure benefits for borrowers that employ Big N auditors are higher for borrowers with greater information asymmetry problems, but we do not find that Big N audits are able to address the information asymmetry and moral hazard issues between the lenders themselves.
Journal: Accounting and Business Research
Pages: 365-399
Issue: 4
Volume: 49
Year: 2019
Month: 6
X-DOI: 10.1080/00014788.2018.1507810
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1507810
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:4:p:365-399
Template-Type: ReDIF-Article 1.0
Author-Name: Sven Modell
Author-X-Name-First: Sven
Author-X-Name-Last: Modell
Title: Constructing institutional performance: a multi-level framing perspective on performance measurement and management
Abstract:
Research on performance measurement and management (PMM) informed by institutional theory has proliferated over the past two decades. Much of this research has concentrated on the institutional effects on organisational PMM practices and their consequences for organisational behaviour and has only recently started to pay more focussed attention to the effects of such practices on the construction of the very conceptions of performance that come to dominate institutional fields. To further integrative theory development, I pull these strands of research together into an analytical framework pivoting on the concept of institutional performance. Institutional performance is defined as the socially constructed conceptions of organisational performance that become firmly institutionalised as legitimate aspects of achievement in institutional fields. Adopting a multi-level framing perspective, I develop a set of research propositions reflecting how contradictory PMM practices, emerging in response to the institutional complexity attributable to heterogeneous and competing constituency demands, shape such conceptions of performance and how this contributes to reducing or reinforcing institutional complexity over time. I discuss the implications of applying this framework in empirical research and the contributions to institutional research on PMM as well as institutional theory, more generally, that may emerge from such research.
Journal: Accounting and Business Research
Pages: 428-453
Issue: 4
Volume: 49
Year: 2019
Month: 6
X-DOI: 10.1080/00014788.2018.1507811
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1507811
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:4:p:428-453
Template-Type: ReDIF-Article 1.0
Author-Name: Pernill van der Rijt
Author-X-Name-First: Pernill
Author-X-Name-Last: van der Rijt
Author-Name: John Hasseldine
Author-X-Name-First: John
Author-X-Name-Last: Hasseldine
Author-Name: Kevin Holland
Author-X-Name-First: Kevin
Author-X-Name-Last: Holland
Title: Sharing corporate tax knowledge with external advisers
Abstract:
Tax knowledge is critical for companies to comply with tax laws and engage in tax planning and avoidance. Firms rely on external advisers in handling tax issues, however, sharing corporate tax knowledge with external advisers entails both opportunities and risks. We identify four relational factors that are associated with the decision of corporate taxpayers to share knowledge with external tax advisers. Survey data from 221 corporate taxpayers reveals a novel distinction between operational and strategic knowledge sharing. The operational dimension has a functional nature, whereas the strategic dimension has a more intentional character. Accessibility to, and a positive experience with, external advisers enables operational knowledge sharing. When firms perceive specific tax benefits in relation to sharing knowledge, they are more inclined to engage in operational knowledge sharing with external advisers but less prone to strategic knowledge sharing. Instead, strategic knowledge sharing is enhanced when firms have access to, and value the knowledge of their advisers, although this latter factor plays no significant role in explaining operational knowledge sharing. A positive experience with advisers also associates with strategic knowledge sharing. We link our results to other research and discuss implications for regulators considering, or requiring, firm disclosures of corporate tax strategy.
Journal: Accounting and Business Research
Pages: 454-473
Issue: 4
Volume: 49
Year: 2019
Month: 6
X-DOI: 10.1080/00014788.2018.1526058
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1526058
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:4:p:454-473
Template-Type: ReDIF-Article 1.0
Author-Name: Christian Mellado-Cid
Author-X-Name-First: Christian
Author-X-Name-Last: Mellado-Cid
Author-Name: Surendranath R. Jory
Author-X-Name-First: Surendranath R.
Author-X-Name-Last: Jory
Author-Name: Thanh N. Ngo
Author-X-Name-First: Thanh N.
Author-X-Name-Last: Ngo
Title: Options trades, short sales and real earnings management
Abstract:
We study the link between measures of stock options’ volatility and firms’ real earnings management (RM). We hypothesise that RM causes uncertainty in the value of a firm’s common stock and, as a result, increases the volatility spread and skew of the firm’s options. Spread and skew proxy for investors’ uncertainty in the value of the options underlying a stock. Consistent with our hypothesis, we find an association between a firm’s use of RM, and the volatility spread and skew in the firm’s options, more precisely in its put options. We also study the link between short selling and the extent of RM but do not find a consistent relationship between the two.
Journal: Accounting and Business Research
Pages: 400-427
Issue: 4
Volume: 49
Year: 2019
Month: 6
X-DOI: 10.1080/00014788.2019.1573655
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1573655
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:4:p:400-427
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 2
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729953
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729953
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:2:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: ii-ii
Issue: 2
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729954
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729954
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:2:p:ii-ii
Template-Type: ReDIF-Article 1.0
Author-Name: Jill Collis
Author-X-Name-First: Jill
Author-X-Name-Last: Collis
Author-Name: Robin Jarvis
Author-X-Name-First: Robin
Author-X-Name-Last: Jarvis
Author-Name: Len Skerratt
Author-X-Name-First: Len
Author-X-Name-Last: Skerratt
Title: The demand for the audit in small companies in the UK
Abstract: A recent development of the big GAAP/little GAAP debate in the UK was the proposal to raise the audit exemption thresholds for small companies to EC levels. This paper is based on a survey of the directors of 385 companies conforming to the EC definition of ‘small’. The study investigates whether the three size criteria in company legislation (turnover, balance sheet total and number of employees) are appropriate and sufficient proxies for the demand for the audit by developing and testing a number of theoretical models. The results found that 63% of companies would choose to have their accounts audited if they were exempt, which suggests that the majority of those affected by the proposed increase consider the benefits outweigh the costs. It was found that turnover alone could represent size, but that size was less important than the directors' perceptions of the value of the audit in terms of improving the quality of information and providing a check on internal records. Agency relationships with owners and lenders were also found to be significant influences on the demand for the audit in companies of the size studied.
Journal: Accounting and Business Research
Pages: 87-100
Issue: 2
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729955
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729955
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:2:p:87-100
Template-Type: ReDIF-Article 1.0
Author-Name: Kevin Holland
Author-X-Name-First: Kevin
Author-X-Name-Last: Holland
Author-Name: Richard Jackson
Author-X-Name-First: Richard
Author-X-Name-Last: Jackson
Title: Earnings management and deferred tax
Abstract: This study analyses the deferred tax provisions of firms during a period in which the firms' incentive to manage earnings may have been be particularly strong and in which firms made disclosures in relation to partial deferred tax provisions which revealed readily their under- or over-provision of deferred tax. Using a sample of 58 firms for the two years 1991 and 1992, the magnitude of the under- or over-provisions found is economically significant, amounting, on average, to around 20% of the maximum potential deferred tax liability and, more important, 9% of profit or loss before tax. This paper takes such under- and over-provision of deferred tax and investigates its relationship with a number of posited explanatory variables - as derived and developed from the earnings management literature. In a multivariate setting it is found that the level of under-/over-provision is related to the following characteristics: whether the firm is reporting a pre-tax loss or a pre-tax profit; the extent of adjustment to prior year tax; and the level of surplus advance corporation tax (ACT). These findings support a general profit- smoothing hypothesis, and the finding in relation to ACT suggests that firms take an overall view in determining the required level of provision in order to manage earnings, rather than concentrating upon particular line items. There is also weaker evidence of a relationship between the level of under-/over-provision and firms' levels of gearing and effective tax rates.
Journal: Accounting and Business Research
Pages: 101-123
Issue: 2
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729956
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729956
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:2:p:101-123
Template-Type: ReDIF-Article 1.0
Author-Name: Stefan Sundgren
Author-X-Name-First: Stefan
Author-X-Name-Last: Sundgren
Author-Name: Christian Johansson
Author-X-Name-First: Christian
Author-X-Name-Last: Johansson
Title: The effects of the auditor's professional qualification and the firm's financial health on depreciation in Finland
Abstract: This study examines the relationship in Finland between the firm's financial health and the depreciation policy for a sample with 1,610 firm-years of data for mainly non-public firms. We find a negative correlation between leverage and depreciation in relation to depreciable assets. This result is consistent with prior studies showing that firms with a higher leverage use income-increasing accounting methods. However, since accounting-based debt covenants are rare among the size class of firms studied, the correlation is likely to be driven by implicit contracting related factors. We also study whether the auditors' professional qualifications correlate with the depreciation policy. The results indicate that Big 5 audited firms depreciate their assets over somewhat shorter periods of time than non-Big 5 audited firms. This result is consistent with the notion that Big 5 auditors are more conservative, perhaps because they have more reputation capital at stake.
Journal: Accounting and Business Research
Pages: 125-143
Issue: 2
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729957
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729957
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:2:p:125-143
Template-Type: ReDIF-Article 1.0
Author-Name: Luca Zan
Author-X-Name-First: Luca
Author-X-Name-Last: Zan
Title: Accounting and management discourse in proto-industrial settings: the Venice Arsenal in the turn of the 16th century
Abstract: This paper investigates managerial ideas and accounting notions developing at the Venetian state shipyard, the Arsenal, in the turn of the 16th century, with three major elements of interest. First, it shows the existence of rather sophisticated managerial and accounting discourse in the Renaissance period, where modern forms of management through accounting can be highlighted inside the ‘Venetian method’. Second, it allows for an understanding of the evolution of accounting discourse over time: in the particular time span under investigation (1580-1643) new concepts and notions emerged, coupled with new ways of talking about managing issues through emerging accounting concepts (the invention of the idea of work in progress; costing expertise and other calculative practices). Third, it shows how a modern form of economic discourse gradually established itself in the face of hostile social and moral norms. The event under investigation describes a process in which the formal meaning of the economic (Polanyi, 1977) took place, with its associated moral imperative of organising and economising, conflicting to a large extent with social order. Though the term efficiency never appears in the documents, its ethos and pathos are there, fostered by accounting and discourse about managing.
Journal: Accounting and Business Research
Pages: 145-175
Issue: 2
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729958
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729958
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:2:p:145-175
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: CALL FOR PAPERS
Journal:
Pages: 176-176
Issue: 2
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729959
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729959
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:2:p:176-176
Template-Type: ReDIF-Article 1.0
Author-Name: Mike Jones
Author-X-Name-First: Mike
Author-X-Name-Last: Jones
Author-Name: Richard Laughlin
Author-X-Name-First: Richard
Author-X-Name-Last: Laughlin
Title: Book reviews
Journal:
Pages: 177-180
Issue: 2
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729960
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729960
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:2:p:177-180
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 1
Volume: 31
Year: 2000
X-DOI: 10.1080/00014788.2000.9729594
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9729594
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Handle: RePEc:taf:acctbr:v:31:y:2000:i:1:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: John Forker
Author-X-Name-First: John
Author-X-Name-Last: Forker
Title: Models of the reporting entity and accounting for equity-based consideration
Abstract: Conventional accounting practice for equity-based consideration (EBC) and, in particular for employee share schemes (ESS), recognises an expense for cash-based settlement but not for settlement by the issue of new shares. In principle, expense recognition based on a choice of method of settlement is inconsistent and, in the case of ESS, undermines managerial accountability by understating pay, overstating profit and weakening the link between reported profit and the change in the wealth of existing shareholders. The choice of a model of the reporting entity (MRE) provides the conceptual basis to address issues in accounting for EBC. In the light of the controversy over the FASB's recommendation for partial expense recognition based on the date of grant fair value of EBC, and the recent decisions of the ASB and G4+1 to consider how to account for EBC. this paper reviews the role of MRE in expense recognition for EBC. To provide a consistent, reliable and relevant measure of expense for resources acquired by EBC, the application of fair value and clean surplus accounting is recommended. A method of presentation is proposed to separate the expense based on the date of grant fair value from the cost of subsequent changes in the value of EBC. This allows income measured according to different MREs to be reported in a single set of financial statements, and allows users to choose the information best suited to their purposes.
Journal: Accounting and Business Research
Pages: 3-17
Issue: 1
Volume: 31
Year: 2000
X-DOI: 10.1080/00014788.2000.9729595
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9729595
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Handle: RePEc:taf:acctbr:v:31:y:2000:i:1:p:3-17
Template-Type: ReDIF-Article 1.0
Author-Name: Elizabeth Gammie
Author-X-Name-First: Elizabeth
Author-X-Name-Last: Gammie
Title: The use of biodata in the pre-selection of fully-accredited graduates for chartered accountancy training places in Scotland
Abstract: The aim of this paper is to critically evaluate whether biodata could be used as a valid tool in the preselection process of trainee chartered accountants. Biographical details of recently qualified accountants, who trained within the whole spectrum of ICAS training offices, were collected from a self-completion questionnaire. The data collected were used to develop statistical models predicting the ability to pass the ICAS examinations at the first attempt. The validity of the developed models for use within the Scottish chartered accountancy profession was then evaluated. A rational approach was adopted through the formulation of a conceptual framework. General background areas were hypothesised to be relevant in the determination of ICAS examination success, and within these general areas specific factors were highlighted and entered into a logistic regression model using data from trainees who qualified in the years 1993–94. Statistically significant models were developed for fully-accredited honours (n= 149) and ordinary graduates (n = 225) and these models continued to retain their validity when applied to trainees who qualified in 1995 as demonstrated by the reported tetrachoric correlation coefficients (honours graduates, 0.48, and ordinary graduates, 0.42). This paper has therefore identified that a rationally derived model based on biographical information can be used to differentiate between fully accredited trainees who pass their examinations at the first attempt and those who experience failure. This work calls into question many of the current pre-selection practices used by the training providers and provides training principals who employ fully-accredited graduates to undertake ICAS training with a useful pre-selection tool.
Journal: Accounting and Business Research
Pages: 19-35
Issue: 1
Volume: 31
Year: 2000
X-DOI: 10.1080/00014788.2000.9729596
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9729596
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Handle: RePEc:taf:acctbr:v:31:y:2000:i:1:p:19-35
Template-Type: ReDIF-Article 1.0
Author-Name: Chong Lau
Author-X-Name-First: Chong
Author-X-Name-Last: Lau
Author-Name: Christen Buckland
Author-X-Name-First: Christen
Author-X-Name-Last: Buckland
Title: Budget emphasis, participation, task difficulty and performance: the effect of diversity within culture
Abstract: Recent research on the impact of national culture on control systems had overlooked two important aspects. First, while cross-cultural studies have saturated mainly Anglo-American and Asian nations, other important cultural regions, such as the Nordic cultural group, have largely been overlooked. More importantly, the impact of the diversity within national culture, brought about by the diversity of the population, in terms of ethnic background, religion, language and egalitarianism, has also not been considered. With a low power distance and moderate individualism culture, and relatively centralised and formalised industrial relations systems which emphasise democratic work environment, Norwegian managers' budgetary participation is expected to be high. More importantly, as the Norwegian culture is old and the society homogeneous in terms of ethnic background, religion and egalitarianism, the diversity within the Norwegian culture is likely to be much lower than those of the newer, and much more ethnically diverse, societies.such as Australia and Singapore. Consequently, Norwegian managers' participation is expected to range from medium to high, rather than from low to high. Since high participation situations are common in Norway, prior studies' findings pertaining to high participation situations are expected to be supported in Norway. In contrast, since low participation situations are rare in Norway, prior studies' findings pertaining to low participation are unlikely to be supported in Norway. These expectations are supported by the results of this study.
Journal: Accounting and Business Research
Pages: 37-55
Issue: 1
Volume: 31
Year: 2000
X-DOI: 10.1080/00014788.2000.9729597
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9729597
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Handle: RePEc:taf:acctbr:v:31:y:2000:i:1:p:37-55
Template-Type: ReDIF-Article 1.0
Author-Name: Alfred Wagenhofer
Author-X-Name-First: Alfred
Author-X-Name-Last: Wagenhofer
Title: Disclosure of proprietary information in the course of an acquisition
Abstract: Proprietary information plays a crucial role in the process of selling a firm or an operation, particularly if the prospective buyer is a competitor. Favourable information increases the selling price, but increases competition in case the buyer does not buy, and vice versa. This paper explores equilibrium disclosure strategies in such a setting. If the information is verifiable then a high degree of uncertainty as to the buyer's intention or alternatives results in less disclosure. If the information is unverifiable then a high degree of uncertainty is necessary for any information transfer in equilibrium. If information can be verified by the seller, in equilibrium this will generally drive out unverified disclosure.
Journal: Accounting and Business Research
Pages: 57-69
Issue: 1
Volume: 31
Year: 2000
X-DOI: 10.1080/00014788.2000.9729598
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9729598
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Handle: RePEc:taf:acctbr:v:31:y:2000:i:1:p:57-69
Template-Type: ReDIF-Article 1.0
Author-Name: T. Lee
Author-X-Name-First: T.
Author-X-Name-Last: Lee
Title: The golden age of Raymond John Chambers, professional accountant and university educator 1917 to 1999: a memorial
Journal:
Pages: 71-74
Issue: 1
Volume: 31
Year: 2000
X-DOI: 10.1080/00014788.2000.9729599
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9729599
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Handle: RePEc:taf:acctbr:v:31:y:2000:i:1:p:71-74
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: CALL FOR PAPERS: INTERNATIONAL ACCOUNTING HISTORY
Journal:
Pages: 75-75
Issue: 1
Volume: 31
Year: 2000
X-DOI: 10.1080/00014788.2000.9729600
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9729600
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Handle: RePEc:taf:acctbr:v:31:y:2000:i:1:p:75-75
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: FINANCIAL REPORTING AND BUSINESS COMMUNICATION RESEARCH UNIT
Journal:
Pages: 76-76
Issue: 1
Volume: 31
Year: 2000
X-DOI: 10.1080/00014788.2000.9729601
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9729601
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Handle: RePEc:taf:acctbr:v:31:y:2000:i:1:p:76-76
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729658
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729658
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 1
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729659
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729659
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:1:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Z. Degraeve
Author-X-Name-First: Z.
Author-X-Name-Last: Degraeve
Author-Name: Eva Labro
Author-X-Name-First: Eva
Author-X-Name-Last: Labro
Author-Name: F. Roodhooft
Author-X-Name-First: F.
Author-X-Name-Last: Roodhooft
Title: Constructing a Total Cost of Ownership supplier selection methodology based on Activity-Based Costing and mathematical programming
Abstract: In this paper we elaborate on a Total Cost of Ownership (TCO) supplier selection methodology that we have constructed using real life case studies of three different industrial components groups in a firm. These case studies are presented in this article. Analysing the value chain of the firm, data on the costs generated by the purchasing policy and on supplier performance are collected using Activity-Based Costing (ABC). Since a spreadsheet cannot encompass all these costs, let alone optimise the supplier selection and inventory management policy, a mathematical programming model is used. For a specific component group the combination of suppliers is selected that minimises the TCO. TCO takes into account all costs that the purchase and the subsequent use of a component entail in the entire value chain of the company. The TCO approach goes beyond minimising purchase price and studies all costs that occur during the entire life cycle of the item in the organisation. Possible savings of between 6% and 14% of the total cost of ownership of the current purchasing policy are obtained for the three cases. ABC is not an optimisation tool as such, but provides important accurate input to the optimising mathematical program, whereas the Operations Research literature usually only distinguishes between variable and fixed costs. We show that the integration of both delivers better results in the setting we have studied.
Journal: Accounting and Business Research
Pages: 3-27
Issue: 1
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729660
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729660
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:1:p:3-27
Template-Type: ReDIF-Article 1.0
Author-Name: Mahmoud Ezzamel
Author-X-Name-First: Mahmoud
Author-X-Name-Last: Ezzamel
Title: Accounting for the activities of funerary temples: the intertwining of the sacred and the profane
Abstract: This paper explores the role of accounting practices in the functioning of funerary temples (established to preserve the cult of important, dead individuals) from the Old Kingdom (2700–2181 BC), ancient Egypt. The paper identifies several roles played by accounting practices in this context, which involved the construction of various types of visibility: organisational, technical and dependency. Organisational visibility was manifest in the use of a combination of black and red ink in a grid, tabular format. Technical visibility involved the use of a noun- dominated limited vocabulary, various metrics of quantification and measurement, and a classification taxonomy. Dependency visibility clarified the linkages among various economic institutions and between them and the funerary temples as the latter drew on provisions supplied by the former. Accounting practices constructed funerary temples as both economic and spiritual institutions. There is also evidence to suggest that some abstract conceptualization of accounting was entertained by the ancient scribe who used accounting entries as a means of reconstructing activities into newly created realities. The paper concludes by arguing that accounting practices were part of an intertwined sacred/profane assemblage that did not recognize either dimension as discrete.
Journal: Accounting and Business Research
Pages: 29-51
Issue: 1
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729661
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729661
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:1:p:29-51
Template-Type: ReDIF-Article 1.0
Author-Name: Kevan Jensen
Author-X-Name-First: Kevan
Author-X-Name-Last: Jensen
Title: A basic study of agency-cost source and municipal use of internal versus external control
Abstract: This study examines the association between agency-cost source and the use of internal control versus external control in municipal control systems. Specifically, I focus on the differences between internal and external control to determine whether characteristics of underlying organisations might lead to differential demand for internal and external control. Differential demand is argued to be linked to the manager's position as principle or agent (or alternatively the presence of internal or external agency costs, respectively). Internal control is posited to be used specifically to address internal agency costs; external control is posited to be used specifically to address external agency costs. Results are consistent with these hypotheses. Cities facing high levels of agency costs from voters and creditors tend to hire Big 5 auditors or auditors with municipal experience, but generally do not employ internal auditors or certified finance officers. Also, cities facing high levels of agency costs from employees tend to employ internal auditors or certified finance officers, but generally do not hire Big 5 auditors or auditors with municipal experience. There does not appear to be widespread substitution of internal and external control to address agency problems in municipal organisations. For data availability contact the author.
Journal: Accounting and Business Research
Pages: 53-67
Issue: 1
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729662
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729662
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:1:p:53-67
Template-Type: ReDIF-Article 1.0
Author-Name: Norman Saleh
Author-X-Name-First: Norman
Author-X-Name-Last: Saleh
Author-Name: Kamran Ahmed
Author-X-Name-First: Kamran
Author-X-Name-Last: Ahmed
Title: Earnings management of distressed firms during debt renegotiation
Abstract: Empirical evidence on earnings management by financially distressed firms is very limited. This study examines discretionary accruals in distressed firms that have undertaken debt contract renegotiation subsequent to debt covenant violation with a view to determining whether managers adopt income-decreasing accruals during debt renegotiation. Using four established models for detecting discretionary accruals during the recent financial crisis in Malaysia, we find evidence that distressed firms manipulate earnings downward. The results show that the magnitude of discretionary accruals is statistically significantly negative during the year surrounding renegotiations with lenders, and that these accruals are significantly more negative than those of a control sample of firms which have not undertaken debt renegotiation during the same period but experienced similar financial performance. The results are robust after controlling for changes in top management, audit qualifications, audit firm size, as well as traditional measures such as firm size, performance, liquidity and leverage.
Journal: Accounting and Business Research
Pages: 69-86
Issue: 1
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729663
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729663
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:1:p:69-86
Template-Type: ReDIF-Article 1.0
Author-Name: Roger Simnett
Author-X-Name-First: Roger
Author-X-Name-Last: Simnett
Author-Name: Arnold Wright
Author-X-Name-First: Arnold
Author-X-Name-Last: Wright
Title: The portfolio of knowledge required by industry specialist auditors
Abstract: While a number of studies have shown the superior performance of industry specialist auditors, prior research has not examined the underlying knowledge categories reflective of a specialist. This study aims to identify the range of knowledge required to be a successful industry specialist auditor, and the ways in which this knowledge is and might best be acquired. A multi-method approach was employed, including the use of a free-list task to identify important categories of knowledge, and a structured questionnaire. The questionnaire examined several issues including current knowledge of specific items, extent to which specialist knowledge is reflected in the firm's support systems, and methods by which this knowledge was, and could be, acquired. Participants, designated insurance industry specialists from a Big 4 firm, identified a large range of knowledge items, and there was a large degree of consensus between the results arising from the two knowledge identification research methods utilised. The results also revealed a number of perceived deficiencies in the level of current knowledge and the extent to which specialised knowledge is reflected in support systems. Few differences were found in the knowledge requirements of the two industry sub-specialisations, life insurance, and property and casualty insurance. Except for industry and economic factors, on-the-job experience was found to be the most prevalent method of gaining industry specialist knowledge. However, there was support for greater formal training and improved firm support systems for several specific knowledge items.
Journal: Accounting and Business Research
Pages: 87-101
Issue: 1
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729664
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729664
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:1:p:87-101
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Archer
Author-X-Name-First: Simon
Author-X-Name-Last: Archer
Title: Book review
Journal:
Pages: 103-106
Issue: 1
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729665
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729665
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:1:p:103-106
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 2
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728927
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728927
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:2:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Barker
Author-X-Name-First: Richard
Author-X-Name-Last: Barker
Title: FRS3 and analysts' use of earnings
Abstract: This paper examines analysts' use of earnings information and draws implications for the stock market role of the financial reporting regulator. Evidence from participant observation and from interview research suggests that: first, analysts treat the announcement of earnings with immediacy and importance and, further, they make use of the components of FRS3 in extracting a measure of ‘normalised' earnings; second, analysts do not, however, have a rational economic incentive to regard accounting information as their exclusive (or even their primary) focus of interest, and therefore financial statement analysis is not necessarily their core competence; third, analysts’ interpretation and use of earnings information is rather superficial, and there is limited understanding of underlying issues of recognition and measurement, and also of the interactions between earnings and the balance sheet. Overall, the analysis suggests an important role for the financial reporting regulator in compensating for analysts' inherent ‘disinterest’ in accounting. Financial reporting standards must be designed such that their actual content is consistent with the analysts' (uninformed) expectations of this content, otherwise the analysts' limited understanding will generate false assumptions and, thereby, unintended real effects on share prices.
Journal: Accounting and Business Research
Pages: 95-109
Issue: 2
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728928
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728928
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:2:p:95-109
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Hussain
Author-X-Name-First: Simon
Author-X-Name-Last: Hussain
Title: Simultaneous determination of UK analyst following and institutional ownership
Abstract: This study examines analyst following for firms in the UK Top 350 as of January 1998, within a simultaneous equation framework. A major conclusion to be drawn from this investigation is that, contrary to prior UK evidence, analyst following and institutional ownership are positively associated. This relationship is identified once the endogenous nature of variable determination is acknowledged. This study also finds that analyst following is positively associated with firm size. This results from the greater economic incentives and potential rewards for analysts following firms with large market values. Analyst following is negatively associated with total risk, possibly indicating a concern for forecasting reputation. There is also evidence of an industry-sector effect. Where firms operate in sectors which have greater regulation of activities, demand for analysts' services is reduced. Thus, regulation may act as a substitute source of information for investors. The influence of insider ownership on analyst following appears to operate through its impact on institutional ownership. Contrary to the pre-experimental expectation, neither analyst following nor institutional ownership are significantly associated with trading activity. These conclusions appear robust to a number of sensitivity tests.
Journal: Accounting and Business Research
Pages: 111-124
Issue: 2
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728929
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728929
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:2:p:111-124
Template-Type: ReDIF-Article 1.0
Author-Name: Timothy Fogarty
Author-X-Name-First: Timothy
Author-X-Name-Last: Fogarty
Author-Name: Lawrence Kalbers
Author-X-Name-First: Lawrence
Author-X-Name-Last: Kalbers
Title: An empirical evaluation of the interpersonal and organisational correlates of professionalism in internal auditing
Abstract: This study was designed to evaluate the extent of professional attitudes in internal auditors and to identify their association with interpersonal and organisational conditions of internal auditing. For these purposes, the generic features of internal auditing jobs were used to evaluate how the internal audit function is designed, and role stressors were used to capture expectations of role senders. It was hypothesised that job characteristics would generally be negatively associated with role stress and positively related to professionalism. Furthermore, role stress was hypothesised to be negatively related to professionalism. At a practice level, the results indicate that autonomy, feedback, and task significance from the set of job characteristics, and role conflict and role ambiguity from role stress, are related to some of the dimensions of professionalism. Only the relationships between role conflict and two professionalism dimensions were not in the hypothesised direction. The strongest support for the hypothesised relationship between job characteristics and role stress was found for skill variety, autonomy, and feedback. All were significantly related to all dimensions of role stress. However, skill variety was positively related to each dimension of stress. The results indicate that a complex set of work design factors have selective importance for creating and maintaining professional attitudes and behaviours of internal auditors.
Journal: Accounting and Business Research
Pages: 125-136
Issue: 2
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728930
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728930
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:2:p:125-136
Template-Type: ReDIF-Article 1.0
Author-Name: Lokman Mia
Author-X-Name-First: Lokman
Author-X-Name-Last: Mia
Title: Just-in-time manufacturing, management accounting systems and profitability
Abstract: Managers working in just-in-time manufacturing environments have little or no slack resources available to them to cushion against the difficulties caused by defective raw materials, production errors, irregular supply and demand schedules or to mask inefficiencies (Griffin and Harrell, 1991). This makes the performance-related information provided by management accounting systems critical in such environments. This paper reports the results of a study that empirically tested the above statement. It was done by evaluating the impact of adoption of just-in-time manufacturing (JIT) and the information provided by the management accounting system on organisational performance (profitability). Data for the study were collected through personal interviews with financial controllers of 55 organisations located in Australia. Of these organisations, 28 adopted JIT at least three years prior to the study and the rest were non-adopters at the time of the study. The results suggest that the JIT adopter organisations with high (low) provision of the information earn high (low) profit. The study supports the argument that adoption of JIT and provision of the information together can assist an organisation in improving its profitability.
Journal: Accounting and Business Research
Pages: 137-151
Issue: 2
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728931
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728931
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:2:p:137-151
Template-Type: ReDIF-Article 1.0
Author-Name: David Heald
Author-X-Name-First: David
Author-X-Name-Last: Heald
Author-Name: George Georgiou
Author-X-Name-First: George
Author-X-Name-Last: Georgiou
Title: Consolidation principles and practices for the UK government sector
Abstract: Government accounting reform has in certain industrialised countries become a recognisable component of market-oriented New Public Management reforms. A key dimension is the conversion of accounting from the traditional cash basis to accruals, usually anchored in GAAP as developed for that country's private sector. Taking the UK proposals for Resource Accounting and Budgeting, this paper shows that issues concerning consolidation are proving both important and troublesome. After reviewing private sector experience with consolidation, the structure of UK central government is carefully mapped. The limited area for consolidation proposed by the UK Treasury as the basis for constructing Departmental Resource Accounts is criticised. Attention is paid to the complex structure of public service delivery, with much of that now done by quasi-public organisations outside both the proposed departmental boundary and the national accounts aggregate of general government. This paper does not examine the related topic of Whole-of-Government Accounts.
Journal:
Pages: 153-167
Issue: 2
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728932
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728932
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:2:p:153-167
Template-Type: ReDIF-Article 1.0
Author-Name: David Ashton
Author-X-Name-First: David
Author-X-Name-Last: Ashton
Author-Name: Margaret Woods
Author-X-Name-First: Margaret
Author-X-Name-Last: Woods
Author-Name: Pelham Gore
Author-X-Name-First: Pelham
Author-X-Name-Last: Gore
Title: Book Reviews
Journal:
Pages: 169-172
Issue: 2
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728933
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728933
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:2:p:169-172
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Index to Volume 32—2002
Journal:
Pages: 1-2
Issue: 4
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728968
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728968
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:4:p:1-2
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 4
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728969
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728969
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:4:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: A. Arnold
Author-X-Name-First: A.
Author-X-Name-Last: Arnold
Author-Name: S. McCartney
Author-X-Name-First: S.
Author-X-Name-Last: McCartney
Title: The beginnings of accounting for capital consumption: disclosure practices in the British railway industry, 1830–55
Abstract: Accounting for capital consumption has been one of the most vexed issues in the history of financial reporting. The early railway companies, whose ability to exploit the commercial opportunities available to them required unprecedented levels of capital expenditure, provided the first real arena for the development of possible solutions to the problem. Although accounting practices in the industry were subject to little regulation, some writers have asserted the existence of regularities in depreciation and replacement accounting practices (possibly driven by economic self-interest), although the evidential basis for these assertions has been slight. This paper provides the first assessment of the capital consumption accounting practices of companies in the railway industry, and of their regularities and patterns of change during the period 1830–55. to be derived from a substantial empirical base.
Journal: Accounting and Business Research
Pages: 195-208
Issue: 4
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728970
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728970
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:4:p:195-208
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Conyon
Author-X-Name-First: Martin
Author-X-Name-Last: Conyon
Author-Name: Annita Florou
Author-X-Name-First: Annita
Author-X-Name-Last: Florou
Title: Top executive dismissal, ownership and corporate performance
Abstract: This paper evaluates the empirical relationship between top executive turnover and firm performance. Based on a sample of the 460 largest UK listed companies during the period 1990–1998, we establish an inverse and robust statistical relation between the probability of a management change and a firm's performance: top executives are fired for poor performance. This can result from internal monitoring of management by the board or block share holders. Second, the data indicate that only very poor levels of performance affect significantly the turnover likelihood: corporate performance must fall dramatically to force a senior executive job separation. Third, the likelihood of managerial turnover for poor performance has not changed over time: today's senior managers face the same disciplining effects as those senior managers in earlier years. Finally, there seems to be no evidence that managerial stock ownership, measured as the proportion of ordinary shares owned by top managers, enables them to become entrenched.
Journal: Accounting and Business Research
Pages: 209-225
Issue: 4
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728971
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728971
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:4:p:209-225
Template-Type: ReDIF-Article 1.0
Author-Name: Ian Dobbs
Author-X-Name-First: Ian
Author-X-Name-Last: Dobbs
Author-Name: Anthony Miller
Author-X-Name-First: Anthony
Author-X-Name-Last: Miller
Title: Capital budgeting, valuation and personal taxes
Abstract: This paper examines the relationship between before tax and after tax valuation and uses this to examine the literature on capital budgeting and capital structure in the presence of corporate and personal taxes, a literature which features a bewildering array of valuation formulae. Some of the variation between such formulae naturally arises out of variations in underlying model assumptions; however, in several cases, it arises because there are (by no means obvious) internal inconsistencies. The potential magnitude of the errors that might arise in a capital budgeting context is then explored through sensitivity analysis.
Journal: Accounting and Business Research
Pages: 227-243
Issue: 4
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728972
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728972
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:4:p:227-243
Template-Type: ReDIF-Article 1.0
Author-Name: Raymond Donnelly
Author-X-Name-First: Raymond
Author-X-Name-Last: Donnelly
Author-Name: Caitriona Lynch
Author-X-Name-First: Caitriona
Author-X-Name-Last: Lynch
Title: The ownership structure of UK firms and the informativeness of accounting earnings
Abstract: This paper provides evidence that in the UK, a firm's ownership structure is related to the informativeness of its accounting earnings for price. Evidence is reported that concentrated outside ownership is negatively related to the contemporaneous price-earnings association. This is interpreted as indicative of more non-accounting information being collected and disseminated for firms whose ownership includes large outside (non-managerial) blocks and a consequential loss of informativeness of contemporaneous accounting earnings. Having controlled for the information environment, we provide evidence that the overall relation between return and earnings is attenuated for firms with diffuse outside ownership. This is interpreted as evidence of the market anticipating opportunistic managerial manipulation of earnings when outside ownership is diffuse.
Journal: Accounting and Business Research
Pages: 245-257
Issue: 4
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728973
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728973
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:4:p:245-257
Template-Type: ReDIF-Article 1.0
Author-Name: Aileen Pierce
Author-X-Name-First: Aileen
Author-X-Name-Last: Pierce
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Measurement of harmonisation: implications of non-disclosure for research planning and interpretation
Abstract: Index-based harmonisation measurement techniques using company accounts data have been developed in prior research. Although the results of applying such measures have been reported in the literature as indicating actual levels of financial reporting harmony, such conclusions have not always been justified. In the first instance, it can be argued that the limitations of the indices as measures of financial reporting harmony in situations of non-disclosure were not always appreciated or highlighted. Secondly, data used for the purpose of measuring harmony was not always sufficiently robust to support the conclusions drawn. In this study, a generalised formula is presented, combining different categories of non-disclosure. It is reconciled to special cases derived in previous research and is then applied to company accounts data, which is sufficiently refined in detail to form a basis for answering illustrative exploratory research questions relating to the level of harmony and harmonisation trends. The specific analysis relates to deferred tax accounting in Ireland and Denmark over a period of eight years. Statistical analysis reinforces a discussion that warns researchers of the potential variations in results. Conclusions are drawn that the state of harmony is better estimated when the data is analysed to distinguish applicable from not-applicable cases of non-disclosure, and the index formulae applied are adjusted appropriately in both the numerator and the denominator. However, caution remains necessary where the non-disclosure level is relatively high.
Journal: Accounting and Business Research
Pages: 259-273
Issue: 4
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728974
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728974
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:4:p:259-273
Template-Type: ReDIF-Article 1.0
Author-Name: W. Baxter
Author-X-Name-First: W.
Author-X-Name-Last: Baxter
Author-Name: Stephen Zeff
Author-X-Name-First: Stephen
Author-X-Name-Last: Zeff
Author-Name: Maurice Pendlebury
Author-X-Name-First: Maurice
Author-X-Name-Last: Pendlebury
Author-Name: Ira Solomon
Author-X-Name-First: Ira
Author-X-Name-Last: Solomon
Author-Name: John Holland
Author-X-Name-First: John
Author-X-Name-Last: Holland
Title: Book reviews
Journal:
Pages: 275-280
Issue: 4
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728975
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728975
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:4:p:275-280
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 2
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663322
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663322
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:2:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial
Journal:
Pages: 103-103
Issue: 2
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663323
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663323
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:2:p:103-103
Template-Type: ReDIF-Article 1.0
Author-Name: Divesh Sharma
Author-X-Name-First: Divesh
Author-X-Name-Last: Sharma
Author-Name: El'fred Boo
Author-X-Name-First: El'fred
Author-X-Name-Last: Boo
Author-Name: Vineeta Sharma
Author-X-Name-First: Vineeta
Author-X-Name-Last: Sharma
Title: The impact of non‐mandatory corporate governance on auditors’ client acceptance, risk and planning judgments
Abstract: We examine the effect of non‐mandatory corporate governance practices on a comprehensive set of audit judgments.1 We provide initial evidence on how auditors respond to corporate governance in an institutional environment where corporate governance is not mandated by law. Based on the agency and resource dependence theories, we hypothesise associations between corporate governance and auditors’ judgments relating to client acceptance, risk assessments, and the extent and timing of substantive testing. Sixty Big 4 audit managers from Singapore are randomly assigned to one of three experimental conditions comprising weak, moderate and strong corporate governance. Our results show auditors make more favourable client acceptance judgments when corporate governance is stronger. Clients with stronger corporate governance are assessed as having lower control environment risk. After controlling for control environment risk, we find that stronger corporate governance increases auditors’ reliance on the client's internal controls and reduces the extent of substantive tests. When corporate governance is stronger, we observe that auditors conduct more substantive testing during the interim period compared to the year‐end. Our findings suggest that audit strategies are responsive to the strength of a client's corporate governance.
Journal: Accounting and Business Research
Pages: 105-120
Issue: 2
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663324
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663324
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:2:p:105-120
Template-Type: ReDIF-Article 1.0
Author-Name: Chong Lau
Author-X-Name-First: Chong
Author-X-Name-Last: Lau
Author-Name: Kuan Wong
Author-X-Name-First: Kuan
Author-X-Name-Last: Wong
Author-Name: Ian Eggleton
Author-X-Name-First: Ian
Author-X-Name-Last: Eggleton
Title: Fairness of performance evaluation procedures and job satisfaction: The role of outcome‐based and non‐outcome‐based effects
Abstract: Prior management accounting studies on fairness perceptions have overlooked two important issues. First, no prior management accounting studies have investigated how procedural fairness, by itself, affects managers’ job satisfaction. Second, management accounting researchers have not demonstrated how conflicting theories on procedural fairness can be integrated and explained in a coherent manner. Our model proposes that fairness of procedures for performance evaluation affects job satisfaction through two distinct processes. The first is outcome‐ based through fairness of outcomes (distributive fairness). The second is non‐outcome‐based through trust in superior and organisational commitment. Based on a sample of 110 managers, the results indicate that while procedural fairness perceptions affect job satisfaction through both processes, the non‐outcome‐based process is much stronger than the outcome‐based process. These results may be used to develop a unified theory on procedural fairness effects.
Journal: Accounting and Business Research
Pages: 121-135
Issue: 2
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663325
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663325
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:2:p:121-135
Template-Type: ReDIF-Article 1.0
Author-Name: Jing Li
Author-X-Name-First: Jing
Author-X-Name-Last: Li
Author-Name: Richard Pike
Author-X-Name-First: Richard
Author-X-Name-Last: Pike
Author-Name: Roszaini Haniffa
Author-X-Name-First: Roszaini
Author-X-Name-Last: Haniffa
Title: Intellectual capital disclosure and corporate governance structure in UK firms
Abstract: This paper investigates the relationship between intellectual capital disclosure and corporate governance variables, controlling for other firm‐specific characteristics, for a sample of 100 UK listed firms. Intellectual capital disclosure is measured by a disclosure index score, supported by word count and percentage of word count metrics to assess the variety, volume and focus of intellectual capital disclosure respectively. The independent variables comprise various forms of corporate governance structure: board composition, ownership structure, audit committee size and frequency of audit committee meetings, and CEO role duality. Results of the analysis based on the three measures of intellectual capital disclosure indicate significant association with all the governance factors except for role duality. The influence of corporate governance mechanisms on human, structural and relational capital disclosure, based on all three metrics, is also explored.
Journal: Accounting and Business Research
Pages: 137-159
Issue: 2
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663326
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663326
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:2:p:137-159
Template-Type: ReDIF-Article 1.0
Author-Name: Pascal Dumontier
Author-X-Name-First: Pascal
Author-X-Name-Last: Dumontier
Author-Name: R.H. Parker
Author-X-Name-First: R.H.
Author-X-Name-Last: Parker
Title: Book Reviews
Abstract: Worldwide Financial Reporting – The Development and Future of Accounting Standards. George J. Benston, Michael Bromwich, Robert E. Litan and Alfred Wagenhofer. Oxford University Press (USA), 2006, vi and 326 pp. ISBN13: 978‐ 0–19–530583–8. £26.99. Financial Reporting and Global Capital Markets. A History of the International Accounting Standards Committee, 1973–2000. Kees Camfferman and Stephen A. Zeff. Oxford: Oxford University Press, 2007. xxiii + 676pp. ISBN‐13: 978–0–19–929629–3. £75.
Journal:
Pages: 161-164
Issue: 2
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663327
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663327
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:2:p:161-164
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663346
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663346
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Vasiliki Athanasakou
Author-X-Name-First: Vasiliki
Author-X-Name-Last: Athanasakou
Author-Name: Norman Strong
Author-X-Name-First: Norman
Author-X-Name-Last: Strong
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: Earnings management or forecast guidance to meet analyst expectations?
Abstract: We examine whether UK firms engage in earnings management or forecast guidance to ensure that their reported earnings meet analyst earnings expectations. We explore two earnings management mechanisms: (a) positive abnormal working capital accruals; and (b) classification shifting of core expenses to non‐recurring items. We find no evidence of a positive association between income‐increasing, abnormal working capital accruals and the probability of meeting analyst forecasts. Instead we find evidence consistent with a subset of larger firms shifting small core expenses to other non‐recurring items to just hit analyst expectations with core earnings. We also find that the probability of meeting analyst expectations increases with downward‐guided forecasts. Overall our results suggest that UK firms are more likely to engage in earnings forecast guidance or, for a subset of larger firms, in classification shifting rather than in accruals management to avoid negative earnings surprises.
Journal: Accounting and Business Research
Pages: 3-35
Issue: 1
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663347
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663347
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:1:p:3-35
Template-Type: ReDIF-Article 1.0
Author-Name: Khaled Hussainey
Author-X-Name-First: Khaled
Author-X-Name-Last: Hussainey
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: The effects of voluntary disclosure and dividend propensity on prices leading earnings
Abstract: We investigate the joint effects of dividend propensity (i.e. whether a firm pays cash dividends) and voluntary disclosure on the relationship between current stock returns and future earnings. We examine whether dividend propensity and voluntary disclosure act as substitutes or complements in the financial communication process. We also examine whether the effects of dividend propensity and voluntary disclosure vary between high‐ and lowgrowth firms. Consistent with prior studies, we find that share price anticipation of earnings improves with increasing levels of annual report narrative disclosure, and that firms that pay dividends exhibit higher levels of share price anticipation of earnings than non‐dividend‐paying firms. The paper adds to the literature on share price anticipation of earnings in two crucial respects. First we show that the associations of voluntary disclosure and dividend propensity with share price anticipation of earnings are statistically significant for high‐growth firms and insignificant for low‐growth firms. Second we show that the significant effects we find for dividend propensity and voluntary disclosure in high‐growth firms are not perfectly additive.
Journal: Accounting and Business Research
Pages: 37-55
Issue: 1
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663348
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663348
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:1:p:37-55
Template-Type: ReDIF-Article 1.0
Author-Name: Ali Ataullah
Author-X-Name-First: Ali
Author-X-Name-Last: Ataullah
Author-Name: Huw Rhys
Author-X-Name-First: Huw
Author-X-Name-Last: Rhys
Author-Name: Mark Tippett
Author-X-Name-First: Mark
Author-X-Name-Last: Tippett
Title: Non‐linear equity valuation
Abstract: We incorporate a real option component into the Ohlson (1995) equity valuation model and then use this augmented model to make assessments about the form and nature of the systematic biases that are likely to arise when empirical work is based on linear models of the relationship between the market value of equity and its determining variables. We also demonstrate how one can expand equity valuation models in terms of an infinite series of ‘orthogonal’ polynomials and thereby determine the relative contribution which the linear and non‐linear components of the relationship between equity value and its determining variables make to overall equity value. This procedure shows that non‐linearities in equity valuation can be large and significant, particularly for firms with low earnings‐to‐book ratios or where the undeflated book value of equity is comparatively small. Moreover, it is highly unlikely the simple linear models that characterise this area of accounting research can form the basis of meaningful statistical tests of the relationship between equity value and its determining variables.
Journal: Accounting and Business Research
Pages: 57-73
Issue: 1
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663349
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663349
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:1:p:57-73
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730024
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730024
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: 250-250
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730025
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730025
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:250-250
Template-Type: ReDIF-Article 1.0
Author-Name: Lisa Evans
Author-X-Name-First: Lisa
Author-X-Name-Last: Evans
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: In Memoriam: Sally Aisbitt
Journal:
Pages: 251-251
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730026
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730026
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:251-251
Template-Type: ReDIF-Article 1.0
Author-Name: Lynn Hodgkinson
Author-X-Name-First: Lynn
Author-X-Name-Last: Hodgkinson
Author-Name: Kevin Holland
Author-X-Name-First: Kevin
Author-X-Name-Last: Holland
Author-Name: Richard Jackson
Author-X-Name-First: Richard
Author-X-Name-Last: Jackson
Title: Dividend valuation, trading and transactions costs: the 1997 partial abolition of dividend tax credit repayments
Abstract: Although UK resident tax-exempt shareholders lost the right to repayment of tax credits on dividends paid by UK resident companies in July 1997, they could continue to receive tax credit repayments in respect of dividends received from Irish resident companies until December 1998. In July 1997 the rate of tax credit on Irish companies' dividends was 21%, and this was reduced to 11% in December 1997. We obtain insights into the incentives and behaviour of UK tax-exempt investors in response to these changes in the relative ‘tax attractiveness’ of investments in Irish resident companies. We find that only at its highest rate, 21%, was the level of dividend tax credit on Irish companies' dividends sufficient to induce changes in UK tax-exempt shareholders' investment strategies; and that the propensity for dividend capture by tax-exempt investors is heightened when the dividend tax credit yield is of the order of 0.8 or more and dividend yield is of the order of 2.6% or more.
Journal: Accounting and Business Research
Pages: 253-270
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730027
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730027
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:253-270
Template-Type: ReDIF-Article 1.0
Author-Name: Neil Robson
Author-X-Name-First: Neil
Author-X-Name-Last: Robson
Title: The road to uniformity: accounting change in UK voluntary hospitals
Abstract: This paper explores the development and spread of the uniform system of accounts in United Kingdom voluntary hospitals in the period 1880-1920. The antecedent contextual factors are first established and include the growth of hospital care, changes in its nature, together with the emergence of the concepts of managerialism and efficiency. These factors are identified as important in stimulating the interest of external groups and institutions that were influential in raising the issue of accounting change. However, powerful individuals and groups within the voluntary hospital movement were able to control accounting reform and negate the power of external institutions. thereby successfully excluding the accounting profession from the development of uniform accounts. The paper further examines the subsequent spread of the uniform accounts and finds that economic power and professional and technological forces interacted to achieve a high degree of conformity of accounting practice within voluntary hospitals. This was achieved without the direct intervention of the State. Finally, the paper suggests that hospitals in the US followed the UK with their own uniformity drive.
Journal: Accounting and Business Research
Pages: 271-288
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730028
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730028
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:271-288
Template-Type: ReDIF-Article 1.0
Author-Name: Charlie Weir
Author-X-Name-First: Charlie
Author-X-Name-Last: Weir
Author-Name: Mike Wright
Author-X-Name-First: Mike
Author-X-Name-Last: Wright
Title: Governance and takeovers: are public-to-private transactions different from traditional acquisitions of listed corporations?
Abstract: Using a unique hand-collected dataset comprising 96 public-to-private (PTP) transactions and 258 acquisitions of listed corporations by existing corporate groups completed during the period 1998 to 2000, this paper investigates the extent to which PTPs have different internal and external governance and other characteristics from traditional acquisitions of listed corporations by existing corporate groups. The paper analyses acquisition activity during a period in which three new features were present: the decline in hostile takeovers, the increase in the adoption of governance Codes of Best Practice and the growth in PTP activity. PTPs are usually a response to takeover threat (Lehn and Poulsen, 1989) and so the paper analyses the acquisition decision from two perspectives: first, takeovers as a disciplinary mechanism which substitute for weak internal governance and second, as part of a non-disciplinary perspective where takeovers are complementary to internal governance mechanisms. We find support for the argument that improved internal governance and non-disciplinary takeovers, that is takeovers where the motive is not as a response to under-performing management, are complementary. PTPs are more likely to have higher board ownership and are likely to have duality of CEO and chairman. They are also more likely to have lower growth prospects and lower valuations. However, they do not have sub-optimal internal corporate governance structures in terms of lower proportions of outside directors. With respect to external governance, they are not more likely to experience pressure from the market for corporate control in the form of greater takeover speculation and are also not more likely to suffer hostile threats. We find that PTPs involving management buy-outs (MBIs) have fewer non-executive directors and a greater incidence of duality. MBO also have higher board shareholdings. We find no evidence that management buy-ins (MBIs) have different characteristics. Our results suggest that going private by MBO may result from management's knowledge of private information that leads them to believe that the market has an incorrect perspective of the company's prospects.
Journal: Accounting and Business Research
Pages: 289-307
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730029
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730029
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:289-307
Template-Type: ReDIF-Article 1.0
Author-Name: John Hillier
Author-X-Name-First: John
Author-X-Name-Last: Hillier
Author-Name: Roger Willett
Author-X-Name-First: Roger
Author-X-Name-Last: Willett
Title: The impact of depreciation-type adjustments on the distribution of accounting earnings
Abstract: In this paper, experimental, computer simulation methods are used to demonstrate how a depreciation-type adjustment influences the distributional form of accounting earnings. The results confirm conjectures that earnings distributions generally, with or without depreciation adjustments, tend towards a normal form as a function of increasing ‘activity’ levels. They also indicate that depreciation is likely to accelerate the transition towards a normal form as activity levels increase and to transform a non-normal form to one that is significantly closer to the normal at relatively low activity levels. The impact of the fixed asset ‘impairment’ rules is also investigated. The results reported in the paper have implications for standard-setting, risk analysis and inference using accounting earnings and related numbers, including ratios based upon earnings.
Journal: Accounting and Business Research
Pages: 309-335
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730030
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730030
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:309-335
Template-Type: ReDIF-Article 1.0
Author-Name: Peter Walton
Author-X-Name-First: Peter
Author-X-Name-Last: Walton
Title: A research note
Abstract: The paper contributes to the research agenda of studies on accounting measurement by suggesting that incremental change is taking place in IFRS which has the effect of moving recognition of assets and liabilities to an earlier point in the transaction cycle. This is manifested in recognition of executory contracts and changes in economic state in some standards. The professional debate about fair value obscures the underlying boundary shift. Fair value is used to simulate completion of the transaction cycle. The use of fair value in this way is accompanied by a change in emphasis as to how reliability should be construed, with representational faithfulness being advanced over verifiability. The recognition of income and expense earlier in the cycle is corrected on final realization, so the overall profits or losses of the entity are not changed, although recognition may take place in different periods than under historical cost.
Journal: Accounting and Business Research
Pages: 337-343
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730031
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730031
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:337-343
Template-Type: ReDIF-Article 1.0
Author-Name: Kam Chan
Author-X-Name-First: Kam
Author-X-Name-Last: Chan
Author-Name: Carl Chen
Author-X-Name-First: Carl
Author-X-Name-Last: Chen
Author-Name: Louis Cheng
Author-X-Name-First: Louis
Author-X-Name-Last: Cheng
Title: A ranking of accounting research output in the European region: a correction
Journal: Accounting and Business Research
Pages: 345-348
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730032
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730032
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:345-348
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Archer
Author-X-Name-First: Simon
Author-X-Name-Last: Archer
Title: Book Review
Journal:
Pages: 349-351
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730033
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730033
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:349-351
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: 19th Annual Conference on Accounting, Business & Financial History at Cardiff Business School 12-13 September 2007
Journal:
Pages: 352-352
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730034
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730034
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:352-352
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: CALL FOR PAPERS
Journal:
Pages: 353-353
Issue: 4
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730035
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730035
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:4:p:353-353
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663391
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663391
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial
Journal:
Pages: 193-193
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663392
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663392
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:193-193
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal:
Pages: 195-196
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663393
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663393
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:195-196
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Power
Author-X-Name-First: Michael
Author-X-Name-Last: Power
Title: Fair value accounting, financial economics and the transformation of reliability
Abstract: This paper addresses the question of how and why the use of fair values in accounting acquired significance prior to 2007 despite widespread opposition. An answer is suggested in terms of four mutually supporting conditions of possibility which gave the proponents of fair value institutional support and strength which their opponents lacked. First, fair value enthusiasts could draw on the background cultural authority of financial economics. Second, the problem of accounting for derivatives provided a platform and catalyst for demands to expand the use of fair values to all financial instruments. Third, the transformation of the balance sheet by conceptual framework projects from a legal to an economic institution created a demand for asset and liability numbers to be economically meaningful, a demand which fair value could claim to satisfy. Fourth, fair value became important to the development of a professional, regulatory identity for standard‐setters. These four conditions, though not sufficient in themselves, added up to a weakening of a transactions‐based, realization‐focused conception of accounting reliability in favour of one aligned with markets and valuation models. An interesting consequence is that auditing standard‐setters found themselves forced into a reactive role.
Journal: Accounting and Business Research
Pages: 197-210
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663394
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663394
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:197-210
Template-Type: ReDIF-Article 1.0
Author-Name: Patricia McConnell
Author-X-Name-First: Patricia
Author-X-Name-Last: McConnell
Title: Response to ‘Fair value accounting, financial economics and the transformation of reliability’
Journal:
Pages: 211-213
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663395
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663395
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:211-213
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Moran
Author-X-Name-First: Michael
Author-X-Name-Last: Moran
Title: The political economy of regulation: Does it have any lessons for accounting research?
Abstract: The paper argues that regulation is at the heart of markets, and that regulation is itself an inherently political process. It explores how this insight works out by examining a range of real existing national regulatory systems ‐ notably the US, the UK and the European Union. It argues that political jurisdiction matters, because of the influence of institutional structure, political culture and historical trajectory. It suggests that these insights need to be central to accounting research, because at the heart of accounting research lie processes which are critical to the regulation of economic life.
Journal: Accounting and Business Research
Pages: 215-225
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663396
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663396
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:215-225
Template-Type: ReDIF-Article 1.0
Author-Name: Sir Carsberg
Author-X-Name-First: Sir
Author-X-Name-Last: Carsberg
Title: Discussion of ‘The political economy of regulation: Does it have any lessons for accounting research?’
Journal:
Pages: 227-228
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663397
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663397
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:227-228
Template-Type: ReDIF-Article 1.0
Author-Name: Christian Leuz
Author-X-Name-First: Christian
Author-X-Name-Last: Leuz
Title: Different approaches to corporate reporting regulation: How jurisdictions differ and why
Abstract: This paper discusses differences in countries’ approaches to reporting regulation and explores the reasons why they exist in the first place as well as why they are likely to persist. I first delineate various regulatory choices and discuss the trade‐offs associated with these choices. I also provide a framework that can explain differences in corporate reporting regulation. Next, I present descriptive and stylised evidence on regulatory and institutional differences across countries. There are robust institutional clusters around the world. I discuss that these clusters are likely to persist given the complementarities among countries’ institutions. An important implication of this finding is that reporting practices are unlikely to converge globally, despite efforts to harmonise reporting standards. Convergence of reporting practices is also unlikely due to persistent enforcement differences around the world. Given an ostensibly strong demand for convergence in reporting practices for globally operating firms, I propose a different way forward that does not require convergence of reporting regulation and enforcement across countries. The idea is to create a ‘global player segment’, in which member firms play by the same reporting rules and face the same enforcement. Such a segment could be created and administered by a supra‐national body like IOSCO.
Journal: Accounting and Business Research
Pages: 229-256
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663398
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663398
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:229-256
Template-Type: ReDIF-Article 1.0
Author-Name: Ken Wild
Author-X-Name-First: Ken
Author-X-Name-Last: Wild
Title: Discussion of ‘Different approaches to corporate reporting regulation: How jurisdictions differ and why’
Journal:
Pages: 257-258
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663399
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663399
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:257-258
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Bushman
Author-X-Name-First: Robert
Author-X-Name-Last: Bushman
Author-Name: Wayne Landsman
Author-X-Name-First: Wayne
Author-X-Name-Last: Landsman
Title: The pros and cons of regulating corporate reporting: A critical review of the arguments
Abstract: In this paper, we distil essential insights about the regulation of financial reporting from the academic literature. The key objective is to synthesise extant theory to provide a basis for evaluating implications of pressures on the regulation of financial accounting following the recent financial crisis. We succinctly lay out arguments put forth both for and against the regulation of corporate disclosure and standard‐setting. We then examine current developments suggesting that accounting standard‐setting is at risk of becoming entangled in a web of political forces with potentially significant consequences. The crisis has brought into sharp focus the reality that the regulation of corporate reporting is just one piece of a larger regulatory configuration, and that forces are at play that would subjugate accounting standard‐setting to broader regulatory demands. Recent actions by the European Commission relating to IFRS 9 and proposed legislation in the US Congress to create a systemic risk council serve to illustrate this point. We conclude by discussing in detail the recent fair value debate as a case study of the way in which bank regulatory policy and accounting standard‐setting decisions were jointly determined as a potentially socially optimal means to mitigate the effects of the financial crisis.
Journal: Accounting and Business Research
Pages: 259-273
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663400
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663400
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:259-273
Template-Type: ReDIF-Article 1.0
Author-Name: David Lindsell
Author-X-Name-First: David
Author-X-Name-Last: Lindsell
Title: Discussion of ‘The pros and cons of regulating corporate reporting: A critical review of the arguments’
Journal:
Pages: 275-277
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663401
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663401
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:275-277
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Zeff
Author-X-Name-First: Stephen
Author-X-Name-Last: Zeff
Title: The ICAEW's Recommendations on Accounting Principles and secrecy of process
Abstract: This article discusses the origin, operation, and impact of the ICAEW's programme of issuing a series of Recommendations on Accounting Principles from 1942 to 1969, and examines in particular the secrecy of process which prevailed in that era.
Journal: Accounting and Business Research
Pages: 279-285
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663402
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663402
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:279-285
Template-Type: ReDIF-Article 1.0
Author-Name: John Christensen
Author-X-Name-First: John
Author-X-Name-Last: Christensen
Title: Conceptual frameworks of accounting from an information perspective
Abstract: This paper analyses the benefits of accounting regulation and a conceptual framework using an information economics approach that allows consideration of uncertainty, multiple agents, demand for information, and multiple information sources. It also allows private information to enter the analysis. The analysis leads to a set of fundamental properties of accounting information. It is argued that the set of qualitative characteristics typically contained in conceptual frameworks does not adequately aggregate the information demands of users of accounting information. For example, the IASB's conceptual framework contains no guidelines for the trade‐off between relevance and reliability. Furthermore, neutrality might not be part of an optimal regulation. The statistical bias introduced by the stewardship use of accounting information is not necessarily undesirable and will always remain; stewardship is the characteristic of accounting information that provides incentives for management to act in the desired way. Accounting information is inherently late compared to other information sources but influences and constrains the content of more timely sources. The accounting system does not exist in a vacuum. Other information sources are present and the purpose of the accounting system cannot be analysed without considering the existence of other information sources. Finally, financial statements are audited by an independent auditor. This implies that accounting data are hard to manipulate.
Journal: Accounting and Business Research
Pages: 287-299
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663403
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663403
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:287-299
Template-Type: ReDIF-Article 1.0
Author-Name: Paul Boyle
Author-X-Name-First: Paul
Author-X-Name-Last: Boyle
Title: Discussion of ‘How do conceptual frameworks contribute to the quality of corporate reporting regulation?’
Journal:
Pages: 301-302
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663404
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663404
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:301-302
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Macve
Author-X-Name-First: Richard
Author-X-Name-Last: Macve
Title: Conceptual frameworks of accounting: Some brief reflections on theory and practice
Journal: Accounting and Business Research
Pages: 303-308
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663405
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663405
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:303-308
Template-Type: ReDIF-Article 1.0
Author-Name: Katherine Schipper
Author-X-Name-First: Katherine
Author-X-Name-Last: Schipper
Title: How can we measure the costs and benefits of changes in financial reporting standards?
Abstract: This paper first describes the components of a conventional cost‐benefit analysis, a decision tool that is widely used to evaluate large public‐sector projects such as dams. It then compares a conventional cost‐benefit analysis to the approaches used by financial reporting standard‐setters and others to evaluate the costs and benefits of changes in authoritative accounting guidance. The last portion of the paper describes how accounting research provides analyses of effects of changes in accounting standards and describes how these effects‐analyses differ from, and are similar to, a conventional cost‐benefit analysis.
Journal: Accounting and Business Research
Pages: 309-327
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663406
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663406
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:309-327
Template-Type: ReDIF-Article 1.0
Author-Name: Steven Maijoor
Author-X-Name-First: Steven
Author-X-Name-Last: Maijoor
Title: Discussion of ‘How can we measure the costs and benefits of changes in financial reporting standards?’
Journal:
Pages: 329-330
Issue: 3
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663407
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663407
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:329-330
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: 'How far does financial reporting allow us to judge whether M&A activity is successful?': A practitioner view
Journal: Accounting and Business Research
Pages: 500-500
Issue: 5
Volume: 46
Year: 2016
Month: 7
X-DOI: 10.1080/00014788.2016.1182707
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1182707
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:5:p:500-500
Template-Type: ReDIF-Article 1.0
Author-Name: Nieves Carrera
Author-X-Name-First: Nieves
Author-X-Name-Last: Carrera
Author-Name: Tashfeen Sohail
Author-X-Name-First: Tashfeen
Author-X-Name-Last: Sohail
Author-Name: Salvador Carmona
Author-X-Name-First: Salvador
Author-X-Name-Last: Carmona
Title: Audit committees’ social capital and financial reporting quality
Abstract:
We draw on social capital theory to examine the relationship between audit committee (AC) members’ social capital and financial reporting quality. Using US data for the period 2001–2010, our results suggest that non-AC directors’ social capital does not appear to be relevant to financial reporting quality. As far as AC members are concerned, our findings show a negative relationship between their social capital and financial reporting quality, suggesting a ‘dark side’ to social capital. Specifically, we find that sitting in multiple ACs (centrality) has a negative impact on reporting quality only for those AC members designated as financial experts. When other proxies for social capital are considered (connectedness, brokerage position and strong ties), our results show that the quality of financial reporting significantly decreases with the social capital of non-financial experts sitting in the AC. We contribute to prior research by: (i) relying on social capital theory, which is widely neglected in accounting research, (ii) using multiple metrics to capture the complex dimensions of social capital, and (iii) discriminating between the effects of financial and non-financial experts’ social capital on reporting quality. Our results suggest policy-makers might wish to limit financial experts’ multiple directorships as well as assess the actual contribution of non-financial experts to AC effectiveness.
Journal: Accounting and Business Research
Pages: 633-672
Issue: 6
Volume: 47
Year: 2017
Month: 9
X-DOI: 10.1080/00014788.2017.1299617
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1299617
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:6:p:633-672
Template-Type: ReDIF-Article 1.0
Author-Name: Ilia D. Dichev
Author-X-Name-First: Ilia D.
Author-X-Name-Last: Dichev
Title: On the conceptual foundations of financial reporting
Abstract:
Standard setters advocate a balance sheet approach to financial reporting, which views assets and liabilities as primary, and income as just the derivative change in net assets. This paper argues that income is conceptually and practically better described as ‘adjusted net cash flows,’ where the adjustments are the accounting accruals. One proof of that is seen in the existence of whole accounting systems like tax accounting and national income accounting, which emphasize the determination of income but have no balance sheets. The paper also argues that an income-based approach to financial reporting is by nature better suited to reflect the success of advancing cash to earn more cash, which defines what for-profit entities do. There are two main features of the income-based approach. One is attention on the cash flows as the natural foundation for financial reporting because they are precisely determined, and provide a clear link to firm valuation. The other is attention on the accounting accruals, which serve to adjust the raw cash flows to better show the current success of investing cash to ultimately earn more cash. Specifically, the paper argues for revenue recognition which is close to current practice, and for expense recognition which is aligned with the matching principle.
Journal: Accounting and Business Research
Pages: 617-632
Issue: 6
Volume: 47
Year: 2017
Month: 9
X-DOI: 10.1080/00014788.2017.1299620
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1299620
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:6:p:617-632
Template-Type: ReDIF-Article 1.0
Author-Name: Reggy Hooghiemstra
Author-X-Name-First: Reggy
Author-X-Name-Last: Hooghiemstra
Author-Name: Yu Flora Kuang
Author-X-Name-First: Yu Flora
Author-X-Name-Last: Kuang
Author-Name: Bo Qin
Author-X-Name-First: Bo
Author-X-Name-Last: Qin
Title: Does obfuscating excessive CEO pay work? The influence of remuneration report readability on say-on-pay votes
Abstract:
This paper assesses whether reducing ‘readability’ is an effective obfuscation strategy for influencing the level of shareholder say-on-pay voting dissent in firms with excessive CEO pay. Based on a sample of UK-listed firms, our results indicate that in cases of excessive CEO pay, a less readable remuneration report is associated with reduced say-on-pay voting dissent. However, the effect of the obfuscation strategy diminishes as institutional ownership increases. Using obscurely written remuneration reports may even backfire (i.e. associated with increased voting dissent) when a firm’s majority shares are held by institutional investors. Our results are robust to controlling for compensation contract complexity as well as other alternative explanations. The results are also robust to various controls for endogeneity including a two-stage instrumental variable approach and propensity-score matching. Our findings offer regulatory implications that regulators could minimize the use of ‘obfuscation’ in pay-related disclosures by prescribing how information is to be presented.
Journal: Accounting and Business Research
Pages: 695-729
Issue: 6
Volume: 47
Year: 2017
Month: 9
X-DOI: 10.1080/00014788.2017.1300516
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1300516
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:6:p:695-729
Template-Type: ReDIF-Article 1.0
Author-Name: Jessica H. Yang
Author-X-Name-First: Jessica H.
Author-X-Name-Last: Yang
Author-Name: Siwen Liu
Author-X-Name-First: Siwen
Author-X-Name-Last: Liu
Title: Accounting narratives and impression management on social media
Abstract:
In this paper, we examine the defensive and assertive impression management strategies and the impact of firm performance on accounting narratives by investigating the earnings disclosures of FTSE 100 companies on Twitter. Social media has become the prevailing venue for organisational self-presentation because it provides firms with more control over the image they intend to establish and maintain through the communication and content they deliver online. Our findings show that firms minimise the disclosures of negative information but employ various patterns and dissemination techniques to emphasise positive information. Specifically, improving performers are more willing to post and disseminate earnings-related tweets to achieve a higher degree of stakeholder engagement than declining performers. Based on these findings, we conclude that firms present themselves on social media opportunistically to construct a positive public image.
Journal: Accounting and Business Research
Pages: 673-694
Issue: 6
Volume: 47
Year: 2017
Month: 9
X-DOI: 10.1080/00014788.2017.1322936
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1322936
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:6:p:673-694
Template-Type: ReDIF-Article 1.0
Author-Name: Moritz Bassemir
Author-X-Name-First: Moritz
Author-X-Name-Last: Bassemir
Title: Why do private firms adopt IFRS?
Abstract:
Do private firms voluntarily adopt IFRS? If so, why? Answers to these questions have been very limited so far, mainly due to the absence of financial data on private firms. In this paper, I exploit the German setting where the financial statements of private firms are widely available. I estimate multi-period logit regressions on the choice between national GAAP and IFRS for the consolidated financial statements of nearly 3000 German private firms with more than 14,000 firm-years in the period 1998–2010. My results suggest that the expected net benefits of IFRS adoption vary substantially across the group of private firms, depending on their financing needs, governance system, and organizational and informational complexity. Specifically, I find that private firms using IFRS have more growth opportunities, are more leveraged, are externally rated, seek to raise external capital by issuing public bonds or equity, are registered as a stock corporation, are characterized by private equity (PE) involvement, have more international sales and operations, and have a Big Five auditor. These insights should be of great interest to both preparers and regulators in the current debate about the future of financial reporting in private firms.
Journal: Accounting and Business Research
Pages: 237-263
Issue: 3
Volume: 48
Year: 2018
Month: 4
X-DOI: 10.1080/00014788.2017.1357459
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1357459
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:3:p:237-263
Template-Type: ReDIF-Article 1.0
Author-Name: Like Jiang
Author-X-Name-First: Like
Author-X-Name-Last: Jiang
Author-Name: Paul André
Author-X-Name-First: Paul
Author-X-Name-Last: André
Author-Name: Chrystelle Richard
Author-X-Name-First: Chrystelle
Author-X-Name-Last: Richard
Title: An international study of internal audit function quality
Abstract:
We investigate organisational and environmental factors that influence firms’ incentives to develop high-quality internal audit functions (IAFs) by using a unique international sample formed by matching proprietary data from a global internal auditor survey with public data obtained from Worldscope. Concerning organisational factors, we find that a positive relationship exists between IAF quality and firm complexity and confirm that complex firms have a higher demand for monitoring and advising and, therefore, a greater need for formal controls. In addition, IAF quality is positively related to board monitoring and audit committee diligence but negatively associated with CEO power, which suggests that IAF quality is influenced by other key players in corporate governance. Regarding environmental factors, we document that IAF quality is positively associated with industry competition, which implies that a firm’s incentive for a high-quality IAF is enhanced when confronted with greater environmental uncertainty. Furthermore, IAF quality has a significantly positive relationship with our self-constructed index of IAF requirements included in national corporate governance codes, which indicates that strong home-country corporate governance codes play a role in fostering IAF development.
Journal: Accounting and Business Research
Pages: 264-298
Issue: 3
Volume: 48
Year: 2018
Month: 4
X-DOI: 10.1080/00014788.2017.1357461
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1357461
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:3:p:264-298
Template-Type: ReDIF-Article 1.0
Author-Name: Ozlem Arikan
Author-X-Name-First: Ozlem
Author-X-Name-Last: Arikan
Title: Financial estimates against investors’ preferences: anchoring, denial and spillover effects
Abstract:
This experimental study investigates how the characteristics of an estimate in a sensitivity disclosure and the level of threat it presents to investors’ preferences interact to influence investors’ risk judgments. Firstly, I predict and find that variation in an estimate affects not only investors’ judgment on a related issue but also their future judgments on an unrelated issue. Secondly, I predict and find that investors are more sensitive to variations in an estimate when information contained in the estimate presents less threat to their preferred conclusions than when it presents greater threat. Finally, I predict and find that investors perceive more uncertainty regarding the association between the disclosed risk factor and the estimated financial reporting item in the estimate when the information presents greater threat.
Journal: Accounting and Business Research
Pages: 299-320
Issue: 3
Volume: 48
Year: 2018
Month: 4
X-DOI: 10.1080/00014788.2017.1367915
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1367915
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:3:p:299-320
Template-Type: ReDIF-Article 1.0
Author-Name: Claus Holm
Author-X-Name-First: Claus
Author-X-Name-Last: Holm
Author-Name: Frank Thinggaard
Author-X-Name-First: Frank
Author-X-Name-Last: Thinggaard
Title: From joint to single audits – audit quality differences and auditor pairings
Abstract:
This study analyses audit quality differences between audits by a single big audit firm and joint audits with either one or two big audit firms. We exploit the unique situation in Denmark beginning on 1 January 2005, at which time a long-standing mandatory joint audit system for listed companies was replaced by a voluntary joint audit system. First, we report the results of a survey of Danish CFOs’ views on and their experiences with the choice of single or joint audits and their perceptions of audit quality. Second, based on data from the mandatory joint audit abolition year and the following two years, we test the audit quality differences using abnormal accruals. Most CFOs perceive that audit quality by a single big four audit firm is the same as it is in joint audits with either one or two big four audit firms. The results of our empirical analysis are in line with the perceptions. We find no evidence of audit quality differences between audits made by a single big four firm and those conducted by either of the two combinations of joint audits.
Journal: Accounting and Business Research
Pages: 321-344
Issue: 3
Volume: 48
Year: 2018
Month: 4
X-DOI: 10.1080/00014788.2017.1381910
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1381910
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:3:p:321-344
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 3
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729578
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729578
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:3:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: John Edwards
Author-X-Name-First: John
Author-X-Name-Last: Edwards
Author-Name: Roy Chandler
Author-X-Name-First: Roy
Author-X-Name-Last: Chandler
Author-Name: Malcolm Anderson
Author-X-Name-First: Malcolm
Author-X-Name-Last: Anderson
Title: The ‘public auditor’: an experiment in effective accountability
Abstract: Mutual associations were created to provide, through a system of self-help, for the welfare of members of the British working class increasingly separated from the family unit characteristic of an agricultural-based economy. The appropriate method for protecting the resources required at some future date by the poorly off in conditions of need produced a challenge for Parliament. This paper examines the development of the concept of the ‘public auditor’ to describe the individuals considered suitable to undertake the audit of mutual associations, and the increasing statutory emphasis on the desirability of appointing a person ‘carrying on publicly the business of an accountant’ to certify the annual returns made to the Registrar of Friendly Societies. This paper argues that statutory recognition of the accountant as a member of a skilled occupational group represents an important stage in the professionalisation process. This paper shows that the concept of the public auditor was rejected by most mutual associations, while the larger organisations made the voluntary decision to appoint professional accountants to undertake the audit function.
Journal: Accounting and Business Research
Pages: 183-197
Issue: 3
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729579
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729579
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:3:p:183-197
Template-Type: ReDIF-Article 1.0
Author-Name: Zahirul Hoque
Author-X-Name-First: Zahirul
Author-X-Name-Last: Hoque
Author-Name: Manzurul Alam
Author-X-Name-First: Manzurul
Author-X-Name-Last: Alam
Title: TQM adoption, institutionalism and changes in management accounting systems: a case study
Abstract: In recent years many organisations have moved towards a total quality management (TQM) path in their quest for quality. Accounting researchers have become interested in understanding how accounting systems are implicated within a TQM environment. This paper reports on a case study of TQM adoption and changes in management accounting systems (MAS) within a New Zealand construction company. It evaluates organizational approaches to implement TQM as a strategic option and the subsequent change in MAS. The paper suggests that an organisation may initiate TQM practices to promote ‘institutional’ and ‘quality’ culture rather than for purely technical reasons. It also suggests that when an organisation adopts new management practices such as TQM, it may lead to changes in the organisation's internal control mechanisms, such as management accounting and reporting processes.
Journal: Accounting and Business Research
Pages: 199-210
Issue: 3
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729580
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729580
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:3:p:199-210
Template-Type: ReDIF-Article 1.0
Author-Name: Hian Koh
Author-X-Name-First: Hian
Author-X-Name-Last: Koh
Author-Name: Sen Tan
Author-X-Name-First: Sen
Author-X-Name-Last: Tan
Title: A neural network approach to the prediction of going concern status
Abstract: The assessment of a firm's going concern status is not an easy task. To assist auditors, going concern prediction models based on statistical methods such as multiple discriminant analysis and logit/probit analysis have been explored with some success. This study attempts to look at a different and more recent approach—neural networks. In particular, a neural network model of the feedforward, backpropagation type was constructed to predict a firm's going concern status from six financial ratios, using a data set containing 165 non-going concerns and 165 matched going concerns. On an evenly distributed hold-out sample, the trained network model correctly predicted all 30 test cases. The results suggest that neural networks can be a promising avenue of research and application in the going concern area.
Journal: Accounting and Business Research
Pages: 211-216
Issue: 3
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729581
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729581
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:3:p:211-216
Template-Type: ReDIF-Article 1.0
Author-Name: Clive Lennox
Author-X-Name-First: Clive
Author-X-Name-Last: Lennox
Title: Are large auditors more accurate than small auditors?
Abstract: Theoretical research suggests that large auditors have more incentive to issue accurate reports compared to small auditors (DeAngelo, 1981; Dye, 1993). Controlling for the client characteristics of large and small auditors, this paper shows that large auditors issue reports that are more accurate and more informative signals of financial distress. These findings are consistent with the theoretical prediction of a positive relationship between auditor size and auditor accuracy.
Journal: Accounting and Business Research
Pages: 217-227
Issue: 3
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729582
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729582
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:3:p:217-227
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Makar
Author-X-Name-First: Stephen
Author-X-Name-Last: Makar
Author-Name: Jay DeBruin
Author-X-Name-First: Jay
Author-X-Name-Last: DeBruin
Author-Name: Stephen Huffman
Author-X-Name-First: Stephen
Author-X-Name-Last: Huffman
Title: The management of foreign currency risk: derivatives use and the natural hedge of geographic diversification
Abstract: This study investigates how large US multinational companies use foreign exchange derivatives (FXDs) to manage currency risk. The study tests whether a company's use of FXDs is associated with its exposure to changing exchange rates, and whether such risk management practices are affected by the company's degree of geographic diversification indicative of natural hedging. To date, the empirical evidence on the use of derivatives by large companies is limited, and the impact of geographic diversification on FXD use, in particular, has not been investigated. This study addresses such a gap in the literature and provides results that are consistent with expectations. Specifically, the evidence indicates that large companies' FXD use increases with the level of foreign currency exposure as well as with the degree of geographic concentration indicative of using less natural hedging. Evidence consistent with economies of scale in FXD use is also provided.
Journal: Accounting and Business Research
Pages: 229-237
Issue: 3
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729583
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729583
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:3:p:229-237
Template-Type: ReDIF-Article 1.0
Author-Name: David Alexander
Author-X-Name-First: David
Author-X-Name-Last: Alexander
Title: A benchmark for the adequacy of published financial statements
Abstract: This paper considers the problem of establishing a criterion against which auditors and others can judge the adequacy of financial reporting. Three types of criteria are considered: a general over-riding requirement (type A), an integrated coherent framework (type B), and detailed regulation (type C). Approaches, trends and arguments are presented from a number of contexts, such as UK, US and Europe. Where more than one type of criterion is present (all three exist in the UK for example) one must be superior to the others. There can only be one deciding benchmark of adequacy. It is argued that type B is inadequate as such a benchmark, as all attempted ‘conceptual’ frameworks are internally inconsistent. Types A and C are both theoretically possible, but it is argued that only Type A is consistent, as the ultimate benchmark of adequacy, with the provision of useful information in a dynamic economic world. The current IASC thinking as demonstrated in IAS1 (revised) (IASC 1977a) is discussed, and contrasted with the fundamentally different proposals in the earlier exposure draft E53 (IASC 1996). The arguments of the paper throw considerable light on this debate, and are consistent with the final content of IAS1 (revised).
Journal: Accounting and Business Research
Pages: 239-253
Issue: 3
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729584
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729584
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:3:p:239-253
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Brief
Author-X-Name-First: Richard
Author-X-Name-Last: Brief
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Author-Name: Mahmoud Ezzamel
Author-X-Name-First: Mahmoud
Author-X-Name-Last: Ezzamel
Author-Name: Richard Pike
Author-X-Name-First: Richard
Author-X-Name-Last: Pike
Author-Name: Robin Roslender
Author-X-Name-First: Robin
Author-X-Name-Last: Roslender
Title: Book Reviews
Journal:
Pages: 255-260
Issue: 3
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729585
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729585
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:3:p:255-260
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: The sixth interdisciplinary perspectives on accounting conference
Journal:
Pages: 261-261
Issue: 3
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729586
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729586
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:3:p:261-261
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: 2-2
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730076
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730076
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:2-2
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial
Journal:
Pages: 3-3
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730077
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730077
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:3-3
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal:
Pages: 5-6
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730078
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730078
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:5-6
Template-Type: ReDIF-Article 1.0
Author-Name: Mary Barth
Author-X-Name-First: Mary
Author-X-Name-Last: Barth
Title: Standard-setting measurement issues and the relevance of research
Journal: Accounting and Business Research
Pages: 7-15
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730079
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730079
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:7-15
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Cooper
Author-X-Name-First: Stephen
Author-X-Name-Last: Cooper
Title: Discussion of ‘Standard-setting measurement issues and the relevance of research’
Journal: Accounting and Business Research
Pages: 17-18
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730080
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730080
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:17-18
Template-Type: ReDIF-Article 1.0
Author-Name: Wayne Landsman
Author-X-Name-First: Wayne
Author-X-Name-Last: Landsman
Title: Is fair value accounting information relevant and reliable? Evidence from capital market research
Abstract: In financial reporting, US and international accounting standard-setters have issued several disclosure and measurement and recognition standards for financial instruments. The purpose of this paper is to review the extant capital market literature that examines the usefulness of fair value accounting information to investors. In conducting my review, I highlight findings that are of interest not just to academic researchers, but also to practitioners and standard setters as they assess how current fair value standards require modification, and issues future standards need to address. Taken together, evidence from the research suggests that disclosed and recognised fair values are informative to investors, but that the level of informativeness is affected by the amount of measurement error and source of the estimates - management or external appraisers. I also provide a discussion of implementation issues of determining asset and liability fair values.
Journal: Accounting and Business Research
Pages: 19-30
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730081
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730081
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:19-30
Template-Type: ReDIF-Article 1.0
Author-Name: Sarah Deans
Author-X-Name-First: Sarah
Author-X-Name-Last: Deans
Title: Discussion of ‘Is fair value accounting information relevant and reliable? Evidence from capital market research’
Journal: Accounting and Business Research
Pages: 31-32
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730082
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730082
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:31-32
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Penman
Author-X-Name-First: Stephen
Author-X-Name-Last: Penman
Title: Financial reporting quality: is fair value a plus or a minus?
Journal: Accounting and Business Research
Pages: 33-44
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730083
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730083
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:33-44
Template-Type: ReDIF-Article 1.0
Author-Name: Philip Broadley
Author-X-Name-First: Philip
Author-X-Name-Last: Broadley
Title: Discussion of ‘Financial reporting quality: is fair value a plus or a minus?’
Journal: Accounting and Business Research
Pages: 45-48
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730084
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730084
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:45-48
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Zeff
Author-X-Name-First: Stephen
Author-X-Name-Last: Zeff
Title: The SEC rules historical cost accounting: 1934 to the 1970s
Abstract: From its founding in 1934 until 1972 the SEC, and especially its chief accountant, disapproved of most upward revaluations and general price-level restatements of fixed assets as well as depreciation charges based thereon. This article is a historical study of the evolution of the SEC's policy on upward revaluations and restatements of non-financial assets. It treats episodes prior to 1972 when the private-sector bodies that established accounting principles sought to gain a degree of acceptance for such revaluations and restatements but were consistently rebuffed by the SEC. The SEC reversed its policy on upward revaluations during the period from 1972 to the end of the 1970s. Throughout the article, the author endeavours to explain the factors that influenced the successive positions taken by the SEC.
Journal: Accounting and Business Research
Pages: 49-62
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730085
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730085
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:49-62
Template-Type: ReDIF-Article 1.0
Author-Name: Anne Beatty
Author-X-Name-First: Anne
Author-X-Name-Last: Beatty
Title: How does changing measurement change management behaviour? A review of the evidence
Abstract: The effect of a change in accounting standards on reporting firms' economic behaviour is often a concern raised by those opposing the accounting change. Some view these changes in behaviour as an inevitable consequence of a rule change. Others are not persuaded by these arguments. Although the empirical evidence of changes in economic behaviour is not extensive, it is consistent with accounting changes resulting in firms changing both operating and financing decisions. The evidence of which economic incentives give rise to these changes is more limited. Changes in economic behaviour appear consistently to be related to the regulatory use of accounting numbers. In addition, some evidence related to incentives created by management compensation and by market discipline has been found. Evidence of the importance of debt covenants in inducing accounting changes is less convincing given limited examination of actual debt contracts and the use of poor proxies of covenant slack. The existing research does little to tell us whether any changes in behaviour are for the better or for the worse.
Journal: Accounting and Business Research
Pages: 63-71
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730086
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730086
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:63-71
Template-Type: ReDIF-Article 1.0
Author-Name: Neil Chisman
Author-X-Name-First: Neil
Author-X-Name-Last: Chisman
Title: Discussion of ‘How does changing measurement change management behaviour? A review of the evidence’
Journal: Accounting and Business Research
Pages: 73-74
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730087
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730087
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:73-74
Template-Type: ReDIF-Article 1.0
Author-Name: Lindsay Tomlinson
Author-X-Name-First: Lindsay
Author-X-Name-Last: Tomlinson
Title: Overview
Journal: Accounting and Business Research
Pages: 75-76
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730088
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730088
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:75-76
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Guide for Authors
Journal:
Pages: 77-77
Issue: S1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730089
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730089
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:S1:p:77-77
Template-Type: ReDIF-Article 1.0
Author-Name: Steven Toms
Author-X-Name-First: Steven
Author-X-Name-Last: Toms
Title: Financial scandals: a historical overview
Abstract:
I examine the incidence of fraud from c.1720 to 2009 and relate it to the occurrence of significant financial scandals. Focusing on the UK, and US prior to Enron, and using a detailed dataset of significant events and news content, underpinned by examination of specific watershed scandals, the paper highlights the regulatory response to scandals and the implications for accounting and financial reporting. The evidence reveals the incidence of fraud and financial scandal to be historically contingent and skewed towards certain sectors, particularly banking and finance, facilitated by complex group structures and international capital mobility, and mediated by managerial incentives and ownership concentration. Financial reporting and auditing can mitigate fraud opportunities in all sectors and businesses without complex group structures, and the accounting profession achieved some success in this respect up to the mid-1970s. Since then, the profession has been increasingly challenged by, and to some degree implicated in, the development of interconnected and international business networks, which, combined with wider financial deregulation, has led to a resurgence of fraud and financial scandal not previously experienced since the mid-nineteenth century.
Journal: Accounting and Business Research
Pages: 477-499
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1610591
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1610591
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:477-499
Template-Type: ReDIF-Article 1.0
Author-Name: Gillian Tett
Author-X-Name-First: Gillian
Author-X-Name-Last: Tett
Title: ‘Financial scandals: a historical overview’: a practitioner view
Journal: Accounting and Business Research
Pages: 500-502
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1611706
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1611706
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:500-502
Template-Type: ReDIF-Article 1.0
Author-Name: Bridget Gandy
Author-X-Name-First: Bridget
Author-X-Name-Last: Gandy
Title: ‘21st century scandals: towards a risk approach to financial reporting scandals’: a practitioner view
Journal: Accounting and Business Research
Pages: 536-539
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1611711
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1611711
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:536-539
Template-Type: ReDIF-Article 1.0
Author-Name: John C. Coffee
Author-X-Name-First: John C.
Author-X-Name-Last: Coffee
Title: Why do auditors fail? What might work? What won’t?
Abstract:
Auditing failures and scandals have become commonplace. In response, reformers (including the Kingman Review in the U.K. and a recent report of the U.K.’s Competition and Market Authority) have proposed a variety of remedies, including prophylactic bans on auditors providing consulting services to their clients in the belief that this will minimize the conflicts of interest that produce auditing failures. Although useful, such reforms are already in place to a considerable degree and may have reached the point of diminishing returns. Moreover, this strategy does not address the deeper problem that clients (or their managements) may not want aggressive auditing, but rather prefer a deferential and perfunctory audit. If so, auditors will realize that they are marketing a ‘commodity’ service and cannot successfully compete based on their quality of services. Rationally, they would respond to such a market by seeking to adopt a cost-minimization strategy, competing by reducing the cost of their services and not investing in new technology or higher-priced personnel.What could change this pattern? Gatekeepers, including auditors, serve investors, but are hired by corporate management. To induce gatekeepers to better serve investors, one needs to reduce the ‘agency costs’ surrounding this relationship by making gatekeepers more accountable to investors. This might be accomplished through litigation (as happens to some degree in the U.S.), but the U.K. and Europe have rules that discourage collective litigation. Thus, a more feasible approach would be to give investors greater ability to select and remove the auditor. This paper proposes a two part strategy to this end: (1) public ‘grading’ of the auditor by the audit regulator in an easily comparable fashion (and with a mandatory grading curve), and (2) enabling a minority of the shareholders (hypothetically, 10%) to propose a replacement auditor for a shareholder vote. It further argues that both activist shareholders and diversified shareholders might support such a strategy and undertake it under different circumstances. Absent such a focus on agency costs, however, reformers are likely only re-arranging the deck chairs on the Titanic.
Journal: Accounting and Business Research
Pages: 540-561
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1611715
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1611715
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:540-561
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Izza
Author-X-Name-First: Michael
Author-X-Name-Last: Izza
Title: ‘Why do auditors fail? What might work? What won't?’: a practitioner view
Journal: Accounting and Business Research
Pages: 562-564
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1611717
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1611717
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:562-564
Template-Type: ReDIF-Article 1.0
Author-Name: Lynne Oats
Author-X-Name-First: Lynne
Author-X-Name-Last: Oats
Author-Name: Penelope Tuck
Author-X-Name-First: Penelope
Author-X-Name-Last: Tuck
Title: Corporate tax avoidance: is tax transparency the solution?
Abstract:
Corporate tax avoidance has been a matter of considerable public attention, particularly since the 2008 global financial crisis. The nature of calls for tax reform and increased regulation, advocated most prominently by tax activists and NGOs, has revolved around transparency as a possible corrective to unacceptable tax avoidance, although there is no consensus as to what the term tax avoidance encompasses and when it becomes unacceptable. We examine two responses to calls for increased transparency about the tax affairs of multinational entities: firstly, country by country reporting that provides information to tax authorities, and secondly the UK requirement for publication of tax strategies, whereby large companies put information into the public domain. We find considerable misunderstanding about the benefits of transparency in this setting. By failing to consider the limits of transparency initiatives there is a risk of dysfunctional consequences, for example additional costs in providing and processing additional information, the prospect of increased disputes as new information generates new misinterpretations and uncertainty in determining the final tax position. There is a risk that greater disclosure will not effectively address concerns about unacceptable corporate tax avoidance.
Journal: Accounting and Business Research
Pages: 565-583
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1611726
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1611726
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:565-583
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Murphy
Author-X-Name-First: Richard
Author-X-Name-Last: Murphy
Title: ‘Corporate tax avoidance: is tax transparency the solution?’: a practitioner view
Journal: Accounting and Business Research
Pages: 584-586
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1611728
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1611728
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:584-586
Template-Type: ReDIF-Article 1.0
Author-Name: Craig Lewis
Author-X-Name-First: Craig
Author-X-Name-Last: Lewis
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: Fad or future? Automated analysis of financial text and its implications for corporate reporting
Abstract:
This paper describes the current state of natural language processing (NLP) as it applies to corporate reporting. We document dramatic increases in the quantity of verbal content that is an integral part of company reporting packages, as well as the evolution of text analytic approaches being employed to analyse this content. We provide intuitive descriptions of the leading analytic approaches applied in the academic accounting and finance literatures. This discussion includes key word searches and counts, attribute dictionaries, naïve Bayesian classification, cosine similarity, and latent Dirichlet allocation. We also discuss how increasing interest in NLP processing of the corporate reporting package could and should influence financial reporting regulation and note that textual analysis is currently more of an afterthought, if it is even considered. Opportunities for improving the usefulness of NLP processing are discussed, as well as possible impediments.
Journal: Accounting and Business Research
Pages: 587-615
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1611730
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1611730
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:587-615
Template-Type: ReDIF-Article 1.0
Author-Name: Sallie Pilot
Author-X-Name-First: Sallie
Author-X-Name-Last: Pilot
Title: ‘Fad or future? Automated analysis of financial text and its implications for corporate reporting’: a practitioner view
Journal: Accounting and Business Research
Pages: 616-618
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1611731
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1611731
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:616-618
Template-Type: ReDIF-Article 1.0
Author-Name: Kees Camfferman
Author-X-Name-First: Kees
Author-X-Name-Last: Camfferman
Author-Name: Jacco L. Wielhouwer
Author-X-Name-First: Jacco L.
Author-X-Name-Last: Wielhouwer
Title: 21st century scandals: towards a risk approach to financial reporting scandals
Abstract:
Financial reporting scandals in the 21st century have been followed by many changes in the regulatory framework of financial reporting. While it is natural to ask for research evidence on the effectiveness of these changes in preventing new scandals, we discuss some of the difficulties in conducting this type of research as well as limitations of commonly used approaches. We argue as the central point of this paper that both research and regulation should be based on an explicit acceptance of a permanent risk of financial reporting failure, rather than working on the assumption that this risk can and should be ever further reduced. Acceptance of this point of view can turn what is currently a scattering of unconnected research efforts into a coherent research agenda with potentially high relevance. Facing the existence of permanent financial reporting risk leads to a series of interconnected questions including the measurement of this risk, both actual and as perceived by various stakeholder groups, communication and education concerning these risks, and mechanisms to share or transfer these risks.
Journal: Accounting and Business Research
Pages: 503-535
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1614267
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1614267
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:503-535
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 475-476
Issue: 5
Volume: 49
Year: 2019
Month: 7
X-DOI: 10.1080/00014788.2019.1619656
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1619656
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:5:p:475-476
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 2
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663350
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663350
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:2:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Flora Muiño
Author-X-Name-First: Flora
Author-X-Name-Last: Muiño
Author-Name: Marco Trombetta
Author-X-Name-First: Marco
Author-X-Name-Last: Trombetta
Title: Does graph disclosure bias reduce the cost of equity capital?
Abstract: Firms widely use graphs in their financial reports. In this respect, prior research demonstrates that companies use graphs to provide a favourable outlook of performance, suggesting that they try to manage the impression created in users’ perceptions. This study tests whether by means of distorted graphs managers are able to influence users’ decisions in the capital market. By focusing on the effects of distorted graphs on the cost of equity capital, we provide preliminary evidence on one of the possible economic consequences of graph usage. The results of this investigation suggest that graph disclosure bias has a significant, but temporary, effect on the cost of equity. Moreover, our results highlight the important role played by the overall level of disclosure as a conditioning factor in the relationship between graphs and the cost of equity. Consequently, the results of the current study enhance our understanding of the complex interactions that take place in the stock market between information, information intermediaries and investors.
Journal: Accounting and Business Research
Pages: 83-102
Issue: 2
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663351
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663351
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:2:p:83-102
Template-Type: ReDIF-Article 1.0
Author-Name: Stella So
Author-X-Name-First: Stella
Author-X-Name-Last: So
Author-Name: Malcolm Smith
Author-X-Name-First: Malcolm
Author-X-Name-Last: Smith
Title: Value‐relevance of presenting changes in fair value of investment properties in the income statement: Evidence from Hong Kong
Abstract: This study investigates the value‐relevance of the revision introduced in HKAS 40 (2004) ‘Investment Property’ on the presentation of changes in the fair value of investment properties. The revision follows that introduced in IAS 40 (2000) as Hong Kong adopted the International Financial Reporting Standards in 2005. As introduced in IAS 40 (2000), HKAS 40 (2004) requires that companies choosing to adopt the fair value model have to present changes in the fair value of investment properties in the income statement. Previously under the Hong Kong accounting standard SSAP 13 (2000), such changes were presented primarily in the revaluation reserve. Using both a threeday short window centred around the earnings announcement date and a 12‐month long window, this study provides evidence that investors value the HKAS 40 (2004) revision in the presentation of the changes in fair value of investment properties. Based on a sample of listed property companies in Hong Kong during 2004–2006, the results of this study show a significantly higher market price reaction and returns association when changes in fair value of investment properties are presented in the income statement. The results of this study are of interest not only to academic researchers, but to practitioners and standard setters as they assess the decision usefulness of the revised presentation.
Journal: Accounting and Business Research
Pages: 103-118
Issue: 2
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663352
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663352
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:2:p:103-118
Template-Type: ReDIF-Article 1.0
Author-Name: Juan García Lara
Author-X-Name-First: Juan
Author-X-Name-Last: García Lara
Author-Name: Beatriz Osma
Author-X-Name-First: Beatriz
Author-X-Name-Last: Osma
Author-Name: Evi Neophytou
Author-X-Name-First: Evi
Author-X-Name-Last: Neophytou
Title: Earnings quality in ex‐post failed firms
Abstract: This paper analyses earnings quality in ex‐post failed firms. Using a large sample of UK bankrupt firms, we find that failed firms manage earnings upwards in the four years prior to failure. This manipulation is achieved in two ways: (1) through accounting (accruals) manipulation; and (2) by implementing real operating actions that deviate from normal practice. We show that these two types of manipulation lead to reduced earnings reliability. We use conditional conservatism as a proxy for reliability, as prior literature links conditional accounting conservatism to better governance and positive economic outcomes. Our results show that conditional conservatism decreases substantially in the years prior to failure. Finally, we show that accruals manipulation is more pronounced in ex‐post bankrupt firms with low ex‐ante probability of failure, and that ex‐post bankrupt firms with high ex‐ante failure probability, having likely exhausted the opportunities for accrual manipulation, manipulate real operations more aggressively.
Journal: Accounting and Business Research
Pages: 119-138
Issue: 2
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663353
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663353
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:2:p:119-138
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Clatworthy
Author-X-Name-First: Mark
Author-X-Name-Last: Clatworthy
Author-Name: Gerald Makepeace
Author-X-Name-First: Gerald
Author-X-Name-Last: Makepeace
Author-Name: Michael Peel
Author-X-Name-First: Michael
Author-X-Name-Last: Peel
Title: Selection bias and the Big Four premium: New evidence using Heckman and matching models
Abstract: Many prior studies have found that large auditors charge significantly higher fees for statutory audit services, potentially resulting from higher audit quality and/or a lack of competition in the audit market. However, recent research using a Heckman two‐step procedure attributes the large auditor premium to auditor selection bias. In this paper we examine the limitations of the Heckman model and estimate the large auditor (Big Four) premium using decomposition and matching methods on a large sample of UK private companies. Our analysis suggests that Heckman two‐step estimates are highly sensitive to changes in sample and model specification, particularly the presence of a valid identifying variable. In contrast, the propensity score and portfolio matching methods we employ point to a persistent large auditor premium, consistent with the majority of previous studies. Conclusions of the premium vanishing when selection bias is controlled for therefore appear premature. Since the Heckman model is increasingly used in auditing and other areas of accounting research, our discussion and findings are likely to be of more general interest.
Journal: Accounting and Business Research
Pages: 139-166
Issue: 2
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663354
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663354
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:2:p:139-166
Template-Type: ReDIF-Article 1.0
Author-Name: Brian West
Author-X-Name-First: Brian
Author-X-Name-Last: West
Title: Book Review
Abstract: The Routledge Companion to Accounting History. Editors: John Richard Edwards and Stephen P. Walker. Routledge, Taylor & Francis Group, London and New York. 2008. xvii and 619 pp. ISBN 9780415410946. £125.
Journal:
Pages: 167-168
Issue: 2
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663355
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663355
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:2:p:167-168
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 4
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729650
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729650
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:4:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 4
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729651
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729651
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:4:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Index to Volume 33—2003
Journal:
Pages: 1-2
Issue: 4
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729652
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729652
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:4:p:1-2
Template-Type: ReDIF-Article 1.0
Author-Name: Josep Argilés
Author-X-Name-First: Josep
Author-X-Name-Last: Argilés
Author-Name: E. Slof
Author-X-Name-First: E.
Author-X-Name-Last: Slof
Title: The use of financial accounting information and firm performance: an empirical quantification for farms
Abstract: Many firms that do not have a formal obligation to prepare financial statements do not produce any accounting information voluntarily, either. However, as accounting information is generally believed to be useful for decision making, the reasons for this behaviour are unclear. In this paper we try to shed some light on this question and provide empirical evidence on the relationship between the use of financial reports and financial performance. In particular, we collected data on the use a sample of Catalan farmers made of the financial reports that were provided to them free by the European Farm Accountancy Data Network. We matched these observations with different financial indicators and found that the financial performance of farmers using the reports for decision-making purposes was significantly better than those who did not use the reports. These results suggest that financial reports can indeed be of use to managers. However, firms will only benefit if the expected gain in performance is sufficiently large to offset the costs of obtaining the reports. Although for the average farm the performance gain was probably sufficiently large to make accounting worthwhile, this was not the case for the smallest farms in our sample.
Journal: Accounting and Business Research
Pages: 251-273
Issue: 4
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729653
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729653
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:4:p:251-273
Template-Type: ReDIF-Article 1.0
Author-Name: Khaled Hussainey
Author-X-Name-First: Khaled
Author-X-Name-Last: Hussainey
Author-Name: Thomas Schleicher
Author-X-Name-First: Thomas
Author-X-Name-Last: Schleicher
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: Undertaking large-scale disclosure studies when AIMR-FAF ratings are not available: the case of prices leading earnings
Abstract: The paper presents a new methodology for evaluating corporate voluntary disclosures in the annual report discussion section. Based on a new dataset of electronic annual reports and a standard text analysis software package, we text-search a large number of annual reports at minimal (marginal) cost. The resulting sample sizes are comparable to those employed in studies based on the AIMR-FAF database. A major advantage of our new scoring system is that it is adaptable to the particular requirements of the research project. We demonstrate the importance of this feature when applying our new disclosure scores to the case of ‘prices leading earnings’. While we are unable to find the predicted association with a broadly defined measure of disclosure quality, our results reverse once we focus on a more narrowly defined metric based on forward-looking profit statements.
Journal: Accounting and Business Research
Pages: 275-294
Issue: 4
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729654
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729654
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:4:p:275-294
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Author-Name: Evagelia Louvari
Author-X-Name-First: Evagelia
Author-X-Name-Last: Louvari
Title: The determinants of voluntary disclosure of adjusted earnings per share measures by UK quoted companies
Abstract: This study describes and explains the variety of disclosure practices employed by UK companies to report earnings per share measures following the introduction of FRS3. In addition to describing the practices of UK companies we construct an econometric model designed to explain the observed variation in the willingness of firms to disclose additional earnings per share measures. We conclude that the willingness of firms to disclose alternative earnings per share measures is driven by two main types of considerations. First, the general disclosure stance of the company: firms that generally exhibit high levels of disclosure are more likely to disclose alternative earnings per share measures. Second, except for firms in loss situations, firms generally appear to be motivated to present a more favourable earnings profile. Firms in loss situations seem to be concerned to divert investor attention away from reported losses either by reporting an alternative EPS that is positive when FRS3 EPS is negative, or by failing to report a negative alternative EPS when FRS3 EPS is positive. We find that the likelihood of a firm disclosing losses under FRS3 reporting a lower loss per share, is much smaller than the likelihood of a firm reporting profits under FRS3 reporting a higher alternative profit per share, perhaps because managers fear any alternative figure will be interpreted by the market as a measure of sustainable earnings. This finding is consistent with management not wanting to create the impression that a current loss is likely to be sustained.
Journal: Accounting and Business Research
Pages: 295-309
Issue: 4
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729655
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729655
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:4:p:295-309
Template-Type: ReDIF-Article 1.0
Author-Name: Lisa Evans
Author-X-Name-First: Lisa
Author-X-Name-Last: Evans
Title: The true and fair view and the ‘fair presentation’ override of IAS 1
Abstract: This paper examines the ‘fair presentation’ requirement and the override in International Accounting Standard 1. The paper's objective is to attempt an explication of the nature, role and status of the override and to make recommendations regarding its application. The author examines the wording of the relevant provisions in IAS 1 and compares and contrasts these with other regulation containing similar concepts, such as the European Union's fourth directive, UK and German law and US regulation. The ensuing discussion is centred around three interrelated themes: the hierarchies of (legal) rules in different legal systems, the relationship of ‘fair presentation’ to IASC/B pronouncements and the status of the override in IAS 1. It is argued that the override is considerably weaker than the true and fair view override in the EU's fourth directive and the UK's Companies Act, and that its role is not likely to go beyond that of a legal residual clause. The paper finally provides some initial evidence that the override is likely to be interpreted in this way in at least some countries, and recommends that a wider interpretation should not be sanctioned by the International Accounting Standards Board, nor by those charged with the enforcement of International Accounting Standards.
Journal: Accounting and Business Research
Pages: 311-325
Issue: 4
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729656
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729656
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:4:p:311-325
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Guide for Authors
Journal:
Pages: 326-326
Issue: 4
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729657
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729657
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:4:p:326-326
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 4
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9663310
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9663310
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:4:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Wilson
Author-X-Name-First: Mark
Author-X-Name-Last: Wilson
Author-Name: Greg Shailer
Author-X-Name-First: Greg
Author-X-Name-Last: Shailer
Title: Accounting manipulations and political costs: Tooth & Co Ltd, 1910–1965
Abstract: Positive accounting theory posits that political costs influence accounting choices by large firms. Most studies rely on cross‐sectional analyses of large samples using coarse data. We employ rich archival data to analyse the profit measurement and disclosure practices of Tooth & Co, a large Australian brewing company, from 1910 to 1965. This period provides considerable variation in scope and incentives to manipulate reported profit. Reporting discretion changed significantly from early voluntary disclosure through to the extensive scheduled disclosure requirements of the Companies Act 1961. Varying incentives include changes in excise duties levied on beer production, and dramatic company growth and market dominance resulting from takeovers of competitors and vertical integration. We examine the pattern of reported profit in relation to internal records and the pattern of accruals. We find that Tooth's profit‐smoothing practices and understatements were perceived by management as important in justifying dividend policy, while systematic understatements of reported profit were used to avoid potential political costs associated with high profitability and market dominance. The most significant relative increases in profit understatement are shown to occur where dividend policy and political cost motivations coincide.
Journal: Accounting and Business Research
Pages: 247-266
Issue: 4
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9663311
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9663311
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:4:p:247-266
Template-Type: ReDIF-Article 1.0
Author-Name: John O'Hanlon
Author-X-Name-First: John
Author-X-Name-Last: O'Hanlon
Author-Name: Paul Taylor
Author-X-Name-First: Paul
Author-X-Name-Last: Taylor
Title: The value relevance of disclosures of liabilities of equity‐accounted investees: UK evidence
Abstract: This study examines the value relevance of mandated disclosures by UK firms of the investor‐firm share of liabilities of equity‐accounted associate and joint venture investees. It does so for the six years following the introduction of FRS 9: Associates and Joint Ventures, which forced a substantial increase in such disclosures by UK firms. Since the increased disclosure requirements were partly motivated by concern that single‐line equity accounting concealed the level of group gearing, and in light of previous US results, it is predicted that the mandated investee‐liability disclosures have a negative coefficient in a value‐relevance regression. The study also examines whether value‐relevance regression coefficients on investee‐liability disclosures are more negative for joint ventures than for associates and whether they are more negative in the presence of investor‐firm guarantees of investee‐firm obligations than in the absence of such guarantees. The study reports that the coefficient on all investee‐liability disclosures taken together has the predicted negative sign, and is significantly different from zero. It finds little evidence that the negative valuation impact of liability disclosures is stronger for joint venture investees overall than for associate investees overall, or stronger for guarantee cases overall than for non‐guarantee cases overall. There is, however, some evidence that the impact for joint venture guarantee cases is stronger than that for joint venture non‐guarantee cases and stronger than that for associate guarantee cases.
Journal: Accounting and Business Research
Pages: 267-284
Issue: 4
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9663312
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9663312
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:4:p:267-284
Template-Type: ReDIF-Article 1.0
Author-Name: Vineet Agarwal
Author-X-Name-First: Vineet
Author-X-Name-Last: Agarwal
Author-Name: Richard Taffler
Author-X-Name-First: Richard
Author-X-Name-Last: Taffler
Title: Twenty‐five years of the Taffler z‐score model: Does it really have predictive ability?
Abstract: Although copious statistical failure prediction models are described in the literature, appropriate tests of whether such methodologies really work in practice are lacking. Validation exercises typically use small samples of non‐failed firms and are not true tests of ex ante predictive ability, the key issue of relevance to model users. This paper provides the operating characteristics of the well‐known Taffler (1983) UK‐based z‐score model for the first time and evaluates its performance over the 25‐year period since it was originally developed. The model is shown to have clear predictive ability over this extended time period and dominates more naïve prediction approaches. This study also illustrates the economic value to a bank of using such methodologies for default risk assessment purposes. Prima facie, such results also demonstrate the predictive ability of the published accounting numbers and associated financial ratios used in the z‐score model calculation.
Journal: Accounting and Business Research
Pages: 285-300
Issue: 4
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9663313
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9663313
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:4:p:285-300
Template-Type: ReDIF-Article 1.0
Author-Name: Kevin McMeeking
Author-X-Name-First: Kevin
Author-X-Name-Last: McMeeking
Author-Name: Ken Peasnell
Author-X-Name-First: Ken
Author-X-Name-Last: Peasnell
Author-Name: Peter Pope
Author-X-Name-First: Peter
Author-X-Name-Last: Pope
Title: The effect of large audit firm mergers on audit pricing in the UK
Abstract: This paper examines the effects on UK audit market concentration and pricing of mergers between the large audit firms and the demise of Andersen. Based on data over the period 1985–2002, it appears that mergers contributed to a rise in concentration ratios to levels that suggest concern about the potential for monopoly pricing. The high concentration ratios have not improved the level of price competition in the UK audit market. Our pooled models suggest that concentration ratios are associated with higher audit fees. The evidence suggests that the effects of mergers between big firms on brand name fee premium and on price competition vary depending on the particular circumstances. The brand name premium is strongest for the largest quartile of companies prior to the mergers. After the Big Six mergers, the premium increases for average‐sized companies but falls for the smallest and largest companies. Following the PricewaterhouseCoopers merger, the premium increases for below median‐sized clients but decreases for above‐median sized clients. For the Deloitte‐Andersen transaction, the premium falls for the smallest and largest companies but increases for those in the second quartile. Our results provide evidence that auditees are likely to pay higher fees if their auditor merges with a larger counterpart. We attribute merger‐related fee hikes to product differentiation, rather than anti‐competitive pricing.
Journal: Accounting and Business Research
Pages: 301-319
Issue: 4
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9663314
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:4:p:301-319
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663315
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663315
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial Board changes
Journal:
Pages: 3-3
Issue: 1
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663316
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663316
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:1:p:3-3
Template-Type: ReDIF-Article 1.0
Author-Name: Ali Al‐Attar
Author-X-Name-First: Ali
Author-X-Name-Last: Al‐Attar
Author-Name: Simon Hussain
Author-X-Name-First: Simon
Author-X-Name-Last: Hussain
Author-Name: Ling Zuo
Author-X-Name-First: Ling
Author-X-Name-Last: Zuo
Title: Earnings quality, bankruptcy risk and future cash flows
Abstract: Prior research suggests that the quality of accruals may be compromised where the magnitude of accruals is abnormally high, due to the presence of errors in the accruals‐estimation process (Dechow and Dichev, 2002; Richardson, 2003). A consequence of this is that abnormal accruals may not map into realised future cash flows to the extent that would normally be expected of accruals data. Indeed, the association may be insignificant if abnormal accruals consist primarily of estimation noise. Our study investigates whether abnormal accruals for UK firms provide incremental insight into future cash flows. In particular, our paper may be viewed as a development of Subramanyam (1996). We find a significant positive association between abnormal accruals and one‐year‐ahead operating cash flows. This provides a rationale for the pricing of abnormal accruals by the market (Subramanyam, 1996; Xie, 2001) and suggests that abnormal accruals are not merely the products of noise in the accruals‐estimation process. However, our results are conditional upon the probability of one‐year‐ahead bankruptcy risk (Charitou et al., 2004). We also find that abnormal accruals possess small but significant explanatory power for future cash flows even when controlling for the disaggregation of accruals into individual items (Barth et al., 2001).
Journal: Accounting and Business Research
Pages: 5-20
Issue: 1
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663317
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663317
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:1:p:5-20
Template-Type: ReDIF-Article 1.0
Author-Name: Claire Marston
Author-X-Name-First: Claire
Author-X-Name-Last: Marston
Title: Investor relations meetings: Evidence from the top 500 UK companies
Abstract: Meetings with analysts and investors are an important part of the investor relations process. I develop a two‐dimensional dynamic model of investor relations and derive five research questions about investor relations with particular emphasis on investor relations meetings. To answer the questions I obtain data in 2002 from company managers using a questionnaire survey of top UK companies. Comparative data from 1991 is used to establish whether company‐ or market‐side change drivers have led to changes over time. A key research question seeks an explanation for the differences in level of IR activity between companies. I develop a cross‐sectional model and test the model using survey data. Key findings are that one‐to‐one meetings were ranked as the most important communication channel with analysts and investors both in 2002 and 1991. Companies were positive about their relationship with analysts and investors with similar perceptions to those held in 1991. An explanation of recent results, the creation of shareholder value and discussion of company strategy were rated as the most important issues discussed at IR meetings. The level of investor relations activity, as measured by the number of one‐to‐one meetings and audience size, had increased over the period. Agreater number of one‐to‐one meetings were held by companies with a higher number of institutional investors, greater analyst following, foreign listings, extreme market‐to‐book values and recently issued share capital. The size of the audience for investor relations meetings of all types was largely driven by company size and analyst following in respect of sell‐side analysts. The existence of foreign listings was the most important explanatory variable for the size of the audience of buy‐side analysts and fund managers.
Journal: Accounting and Business Research
Pages: 21-48
Issue: 1
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663318
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663318
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:1:p:21-48
Template-Type: ReDIF-Article 1.0
Author-Name: Dennis Oswald
Author-X-Name-First: Dennis
Author-X-Name-Last: Oswald
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: Tax‐efficient irregular payout methods: The case of B share schemes and capital repayments via a court‐approved scheme of arrangement
Abstract: Advance corporation tax (ACT) increased the tax cost to UK firms of distributing cash to shareholders. We demonstrate how the tax cost arising from ACT payments affected the channels through which UK firms returned capital to shareholders. In particular, we document and describe two unconventional irregular payout methods that enabled firms to avoid paying ACT. Firms choosing these methods are associated with significantly greater ACT problems than a control sample of firms that opted for conventional self‐tender offers and special dividends. Event study tests indicate that the decision to adopt tax‐efficient payout methods created significant additional value for shareholders beyond the basic cash distribution decision.
Journal: Accounting and Business Research
Pages: 49-70
Issue: 1
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663319
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663319
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:1:p:49-70
Template-Type: ReDIF-Article 1.0
Author-Name: David Citron
Author-X-Name-First: David
Author-X-Name-Last: Citron
Author-Name: Mike Wright
Author-X-Name-First: Mike
Author-X-Name-Last: Wright
Title: Bankruptcy costs, leverage and multiple secured creditors: The case of management buy‐outs
Abstract: Using a unique, hand‐collected final dataset of 57 management buy‐outs in distress, this paper analyses the determinants of bankruptcy costs under the UK's receivership regime. We show that the direct costs of receivership consume a significant percentage of the receivership proceeds, with mean receivership costs equal to 30% of receivership proceeds. Importantly we find that while the average length of receivership was 3.0 years, 95% of repayments are made on average within 1.9 years. Our findings do not support the argument that multiple lenders create inefficiencies resulting in significantly lower secured creditor recovery rates. However, when there are multiple secured lenders, the senior secured lender gains at the expense of other secured creditors. We find that receivership costs are positively related to the proportion of secured debt repaid and that, consistent with the presence of a scale effect, the relative significance of receivership costs declines as firm size grows. Receiverships last longer the larger the amount of debt owed to the secured lenders.
Journal: Accounting and Business Research
Pages: 71-89
Issue: 1
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663320
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663320
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:1:p:71-89
Template-Type: ReDIF-Article 1.0
Author-Name: Andrea Coulson
Author-X-Name-First: Andrea
Author-X-Name-Last: Coulson
Author-Name: Robin Roslender
Author-X-Name-First: Robin
Author-X-Name-Last: Roslender
Author-Name: Thomas Lee
Author-X-Name-First: Thomas
Author-X-Name-Last: Lee
Author-Name: Niamh Brennan
Author-X-Name-First: Niamh
Author-X-Name-Last: Brennan
Title: Book Reviews
Abstract: Organized Uncertainty: Designing a World of Risk Management. Michael Power. Oxford University Press, 2007. xviii and 248pp. ISBN 978–0–9–925394–4. £24.99. Intellectual Capital Reporting: Lessons from Hong Kong and Australia. J. Guthrie, R. Petty and F. Ricceri. The Institute of Chartered Accountants of Scotland, 2007, vii and 118pp. ISBN 978–1–904574–27–9. £15 The Routledge Companion to Fair Value and Financial Reporting. P. Walton (ed.). Routledge, 2007. xviii and 404 pp. ISBN 978–0–415–42356–4. £95. UK Reporting of Intellectual Capital. Jeffrey Unerman, James Guthrie and Ludmila Striukova. ICAEW Centre for Business Performance, 2007. 68 pp. ISBN 978 1 84152 507 5. £20.
Journal:
Pages: 91-97
Issue: 1
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663321
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663321
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:1:p:91-97
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 1
Volume: 30
Year: 1999
X-DOI: 10.1080/00014788.1999.9728919
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9728919
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Handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: John Capstaff
Author-X-Name-First: John
Author-X-Name-Last: Capstaff
Author-Name: Krishna Paudyal
Author-X-Name-First: Krishna
Author-X-Name-Last: Paudyal
Author-Name: William Rees
Author-X-Name-First: William
Author-X-Name-Last: Rees
Title: The relative forecast accuracy of UK brokers
Abstract: In this study we examine whether there are differences in the accuracy of forecasts produced by brokers for a sample of almost 300,000 forecasts of the earnings per share of UK firms, over a period which spans accounting year ends from 1987–95. We report evidence of differential forecast accuracy which is contrary to much of the existing US research, in particular O'Brien (1985 and 1990). We use a forecast error that is controlled for the size of the firm being forecast, the industry to which the firm belongs, the accounting year being forecast, and the forecast horizon. There is evidence of short term persistence in the relative performance of the brokers across the full sample, and for some brokers there is evidence of forecast superiority over an extended period. We also find evidence that the relative accuracy of brokers differs between industries, which suggests that brokers tend to develop expertise in particular sectors. There are significant differences between brokers' accuracy in seven of the 11 industries in the sample, and in some industries there is evidence of persistently superior performance. Overall, these findings have implications for the construction of the earnings expectations proxies that are used in capital market research.
Journal: Accounting and Business Research
Pages: 3-16
Issue: 1
Volume: 30
Year: 1999
X-DOI: 10.1080/00014788.1999.9728920
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9728920
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Handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:3-16
Template-Type: ReDIF-Article 1.0
Author-Name: Bikki Jaggi
Author-X-Name-First: Bikki
Author-X-Name-Last: Jaggi
Author-Name: Judy Tsui
Author-X-Name-First: Judy
Author-X-Name-Last: Tsui
Title: Determinants of audit report lag: further evidence from Hong Kong
Abstract: This study examines whether the audit report lag (ARL) of Hong Kong companies is associated with auditor business risk and audit firm technology. The study is based on a sample of 393 Hong Kong companies for the 1991–1993 period. Financial condition and family ownership/control of a company are used as proxies for auditor business risk, and the structured/unstructured audit approach is used as a proxy for audit firm technology. Other variables, such as the number of subsidiaries, nature of client's business, company size, unexpected positive earnings news and nature of audit opinion, are included as control variables. Regression results show that there is a positive association between the audit report lag and the financial risk index for Hong Kong companies, suggesting that companies with a weak financial condition are associated with longer audit delays. The results also show that companies audited by audit firms using the structured audit approach have longer audit delays. The findings on the association between ARL and the company's family ownership and control suggest that family-owned/controlled companies may have shorter audit delays, though the results are statistically not significant. Larger companies appear to provide motivation for shorter audit delays.
Journal: Accounting and Business Research
Pages: 17-28
Issue: 1
Volume: 30
Year: 1999
X-DOI: 10.1080/00014788.1999.9728921
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9728921
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Handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:17-28
Template-Type: ReDIF-Article 1.0
Author-Name: Paul Mather
Author-X-Name-First: Paul
Author-X-Name-Last: Mather
Title: Financial covenants and related contracting processes in the Australian private debt market: an experimental study
Abstract: Private debt markets are characterised by covenant-restrictive but renegotiation-flexible debt contracts as financial intermediaries lending in private debt markets have a comparative advantage over investors in public debt markets in offering such contracts. The two research questions investigated in this paper are ‘Whether several borrower and contract-specific variables determine the restrictiveness of financial covenants in private debt contracts?’ and ‘Whether several borrower- and contract-specific variables are associated with loan officers' decisions to waive technical default on financial covenants?’ Two behavioural experiments involving loan officers examined these contracting processes in the Australian private debt market. The first experiment examined whether certain variables determine the restrictiveness of financial covenants in private debt contracts. Management reputation and security were found to be associated with the number and tightness of financial covenants, while high financial risk was associated with increased tightness, but not the number, of such covenants. The effect of the interaction management reputation x security, was also significant. The second experiment examined the association between certain variables and the likelihood of loan officers waiving technical default on financial covenants. Low financial risk, security and defaults caused solely by a change in accounting standards were found to be associated with the likelihood of the default being waived.
Journal: Accounting and Business Research
Pages: 29-42
Issue: 1
Volume: 30
Year: 1999
X-DOI: 10.1080/00014788.1999.9728922
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9728922
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Handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:29-42
Template-Type: ReDIF-Article 1.0
Author-Name: Thomas Plenborg
Author-X-Name-First: Thomas
Author-X-Name-Last: Plenborg
Title: An examination of the information content of Danish earnings and cash flows
Abstract: This study examines the information content of earnings and cash flows on the basis of Danish data. The study is motivated by the recent implementation of the Danish cash flow standard RV 11. No prior studies have examined the information content of Danish cash flows. In addition, the results of non-Danish cash flow studies are not consistent. Thus, there is no clear evidence as to whether cash flows have incremental information content beyond that of earnings. Finally, most cash flow studies focus only on cash flow from operations (CFO). This study also examines the information content of cash flow after investments (CFAI) and net cash flow (NCF). The results of the various tests are generally consistent with the following statements: (1) earnings are relatively more informative than cash flows; (2) the aggregated effect of cash flows has incremental information content beyond that of earnings; (3) after controlling for the effect of earnings, CFO (NCF) is negatively (positively) associated with the contemporaneous annual stock return at conventional significance levels. The coefficient on CFAI is not statistically different from zero; (4) over longer return intervals, the incremental information content of cash flows beyond earnings is maintained.
Journal: Accounting and Business Research
Pages: 43-55
Issue: 1
Volume: 30
Year: 1999
X-DOI: 10.1080/00014788.1999.9728923
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9728923
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Handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:43-55
Template-Type: ReDIF-Article 1.0
Author-Name: Gregory Shailer
Author-X-Name-First: Gregory
Author-X-Name-Last: Shailer
Title: The relevance of owner-manager signals and risk proxies to the pricing of bank loans
Abstract: This exploratory study, using a sample of 115 new bank loans to small owner-managed firms, demonstrates that a simple categorical pricing model can explain a substantial part of the variation in interest rate premia. It appears that loan term and size interact (in a categorical schema) in their association with interest rate premia. It is suggested that this is more likely a product of co-determination rather than causation. There appear to be significant categorical pricing effects attributable to human capital, industry, and collateral effects. The role of collateral remains ambiguous, although it appears that source matters as much as form. Although further testing of the model is warranted, the results generally indicate that a simple categorical model may be an appropriate representation of loan pricing for small firms and that this can be used to test the value to borrowers of investing in quality signals and information cues.
Journal: Accounting and Business Research
Pages: 57-72
Issue: 1
Volume: 30
Year: 1999
X-DOI: 10.1080/00014788.1999.9728924
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9728924
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Handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:57-72
Template-Type: ReDIF-Article 1.0
Author-Name: Trevor Hopper
Author-X-Name-First: Trevor
Author-X-Name-Last: Hopper
Author-Name: Tsutomu Koga
Author-X-Name-First: Tsutomu
Author-X-Name-Last: Koga
Author-Name: Jitsuo Goto
Author-X-Name-First: Jitsuo
Author-X-Name-Last: Goto
Title: Cost accounting in small and medium sized Japanese companies: an exploratory study
Abstract: Research on Japanese management accounting in the past decade has grown but knowledge of Japanese cost accounting, e.g. target costing, continuous cost reduction, has tended to be drawn from large, internationally successful firms rather than small and medium sized enterprises (SMEs). Moreover, Japanese practices are not static: changing socio-economic circumstances may be exerting significant pressures for cost management changes. The research was based on 13 company visits and semi-structured interviews in SMEs in Kyushu—mainly in manufacturing. Their costing systems proved to be similar to those of larger Japanese firms. Costing systems and cost management practices, though not uniform, emphasised simple routine accounting. They were not used extensively for decision-making or performance evaluation. However, sophisticated detailed processes of cost management, often centred on engineering and quality control, were the norm. The report closes with details of two contrasting companies. One was a traditional small subcontractor struggling to survive: the other was a scientific research-based organisation with unusual and innovative control systems. The paper speculates that there may be extremities representing the past and future in the wake of global competition and changes in the banking sector. Increased pressures within supply chains coupled to new pressures from capital markets are forcing SMEs to adopt the cost management systems of their larger counterparts and, at the margins, to experiment with new forms of control that are more profit oriented. Failure to do so may be a factor in the currently high mortality rate of SMEs.
Journal:
Pages: 73-86
Issue: 1
Volume: 30
Year: 1999
X-DOI: 10.1080/00014788.1999.9728925
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9728925
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Handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:73-86
Template-Type: ReDIF-Article 1.0
Author-Name: Salvador Carmona
Author-X-Name-First: Salvador
Author-X-Name-Last: Carmona
Title: Book Reviews
Journal:
Pages: 87-88
Issue: 1
Volume: 30
Year: 1999
X-DOI: 10.1080/00014788.1999.9728926
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9728926
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Handle: RePEc:taf:acctbr:v:30:y:1999:i:1:p:87-88
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 2
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729666
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729666
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Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 2
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729667
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Template-Type: ReDIF-Article 1.0
Author-Name: Mae Baker
Author-X-Name-First: Mae
Author-X-Name-Last: Baker
Author-Name: Michael Collins
Author-X-Name-First: Michael
Author-X-Name-Last: Collins
Title: Audit and control in the not-for-profit sector: an endowed charity case 1739–1853
Abstract: This paper reports on an investigation of an endowed charity, the Lady Elizabeth Hastings Trust, over the period 1739 to 1853. This period pre-dated the establishment of the permanent Board of Charity Commissioners, and was one in which the legal regulatory framework offered the trust's beneficiaries only limited redress against abuse by the managers of the trust. The safeguarding of the beneficiaries' interests depended heavily on the governance and control structures established by the trust's dead benefactress. Examination of the trust's Deed of Settlement, the accounting records and audit statements, show that from its inception this not-for-profit organisation employed a system of separation of powers, internal audit with documentary audit trail, and notably, an independent audit. The paper highlights the ‘progressive’ nature of the auditing mechanism adopted by this not-for- profit organisation, even when compared to the commercial sector of the period. Archival evidence is used to show that the governance system put in place by the foundress of the trust was successful in overcoming agency problems, in detecting abuse by the agents, and in ensuring the compliance of the agents with the wishes of the benefactress for more than a century after the benefactress's death in 1739. It is suggested that examination of the not-for-profit sector, so far largely ignored in the history of audit, can yield valuable insights into the development of auditins in the UK.
Journal: Accounting and Business Research
Pages: 111-128
Issue: 2
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729668
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:2:p:111-128
Template-Type: ReDIF-Article 1.0
Author-Name: D. Gwilliam
Author-X-Name-First: D.
Author-X-Name-Last: Gwilliam
Author-Name: R. Macve
Author-X-Name-First: R.
Author-X-Name-Last: Macve
Author-Name: G. Meeks
Author-X-Name-First: G.
Author-X-Name-Last: Meeks
Title: The costs and benefits of increased accounting regulation: a case study of Lloyd's of London
Abstract: While a valuable literature exists on theoretical considerations in cost-benefit analysis (cba) of accounting regulation, and although the regulators themselves acknowledge the need for cost-benefit appraisal of their work, empirical analysis of the costs and benefits of changes in accounting regulation is almost non-existent. This paper attempts such an analysis for a step change in accounting and audit regulation—at Lloyd's between 1982 and 1985. It aims both to advance the cba methodology, and to inform debate about the evolution of the Lloyd's market. While the estimates do not show whether the changes produced an optimal level or form of Lloyd's regulation, they do suggest that, comparing changes, the extra benefits exceeded the extra costs—whether the chosen accounting unit is a private one—Lloyd's Names—or a social one.
Journal: Accounting and Business Research
Pages: 129-146
Issue: 2
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729669
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:2:p:129-146
Template-Type: ReDIF-Article 1.0
Author-Name: Dineli Mather
Author-X-Name-First: Dineli
Author-X-Name-Last: Mather
Author-Name: Paul Mather
Author-X-Name-First: Paul
Author-X-Name-Last: Mather
Author-Name: Alan Ramsay
Author-X-Name-First: Alan
Author-X-Name-Last: Ramsay
Title: An investigation into the measurement of graph distortion in financial reports
Abstract: The Graph Discrepancy Index (GDI), which originates from the lie factor introduced by Tufte (1983), is the mechanism commonly used in the financial graphics literature to determine whether graphs are distorted and to quantify the extent of such distortion. Although the GDI is critical to the financial graphics literature, little or no attention has been paid to its robustness and accuracy. We critically examine the mathematical characteristics of the GDI and show its limitations as a measure of graph distortion. We review a number of cases to demonstrate these limitations and present an alternative measure of graph distortion—the Relative Graph Discrepancy index (RGD). Numerous simulations suggest that the RGD overcomes the problems associated with the GDI. The RGD is also tested on data presented in earlier research and the results are compared to those obtained using the GDI. In comparison with the GDI, we find that the RGD is more consistent and produces slightly stronger results. We stress, however, that this is not a best or definitive measure but is intended to start a research process that leads to a generally accepted measure.
Journal: Accounting and Business Research
Pages: 147-160
Issue: 2
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729670
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:2:p:147-160
Template-Type: ReDIF-Article 1.0
Author-Name: Noel O'Sullivan
Author-X-Name-First: Noel
Author-X-Name-Last: O'Sullivan
Title: Why do executives serve as non-executives? Pre-Cadbury evidence from UK non-financial companies
Abstract: This paper examines the extent to which executives in the largest UK non-financial companies served as non-executives in other companies prior to the governance reforms of the mid-1990s. The paper also seeks to identify factors that affected the holding of additional directorships by executives. The results reported here suggest that possession of non-executive directorships by executives was not widespread. The average number of additional directorships held by each executive was 0.15 with CEOs being the principal holder of such positions possessing an average of 0.33. Indeed, 89.5% of executives (76.4% of CEOs) held no additional directorships. The holding of additional directorships was positively related to the level of non-executive representation on the board of the executive's company, executive tenure and company size but negatively related to executive ownership. The presence of CEO duality had a positive impact on the holding of additional directorships by CEOs.
Journal: Accounting and Business Research
Pages: 161-176
Issue: 2
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729671
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729671
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:2:p:161-176
Template-Type: ReDIF-Article 1.0
Author-Name: John Holland
Author-X-Name-First: John
Author-X-Name-Last: Holland
Title: Book review
Journal:
Pages: 177-178
Issue: 2
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729672
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729672
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:2:p:177-178
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 2
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729602
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729602
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Sally Aisbitt
Author-X-Name-First: Sally
Author-X-Name-Last: Aisbitt
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: The true and fair view requirement in recent national implementations
Abstract: This note examines the implementation of the true and fair view requirement into the laws of Austria, Finland, Norway and Sweden. It builds on an earlier analysis of the 12 EU member states that had previously implemented the requirement. It is found that three of the four countries depart from the wording of the appropriate language versions of the Fourth Directive. Also, two of the countries do not implement the ‘override’, and the other two implement it in a way not done before, by reserving to the member state the specification of the allowed departures.
Journal: Accounting and Business Research
Pages: 83-90
Issue: 2
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729603
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:83-90
Template-Type: ReDIF-Article 1.0
Author-Name: Gaétan Breton
Author-X-Name-First: Gaétan
Author-X-Name-Last: Breton
Author-Name: Richard Taffler
Author-X-Name-First: Richard
Author-X-Name-Last: Taffler
Title: Accounting information and analyst stock recommendation decisions: a content analysis approach
Abstract: We explore the information set used by sell-side equity analysts in their stock recommendation decisions through content analysis of their company reports. In particular, we assess the relative importance of accounting measures compared with non-financial information items. We conclude that whereas accounting information is of fundamental importance to analysts, it is not the only, nor even the most important, source. Financial analysts are equally concerned with the firm's management and strategy and its trading environment in arriving at their investment recommendations. Our results have implications in terms of enhancing the relevance of financial reporting to key user constituencies.
Journal: Accounting and Business Research
Pages: 91-101
Issue: 2
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729604
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729604
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:91-101
Template-Type: ReDIF-Article 1.0
Author-Name: K. Chan
Author-X-Name-First: K.
Author-X-Name-Last: Chan
Author-Name: Lynne Chow
Author-X-Name-First: Lynne
Author-X-Name-Last: Chow
Title: Corporate environments and international transfer pricing: an empirical study of China in a developing economy framework
Abstract: This paper investigates the international transfer pricing methods adopted by multinational corporations (MNCs) in China and how their choices are affected by their specific corporate attributes in the context of the business environment in China. Empirical test results based on structured interviews indicate that MNCs having a local (Chinese) partner in management tend to adopt market-based transfer pricing methods. The influence of local partners on the choice of transfer pricing methods is modified by the impact of the source of foreign investment, as the analysis reveals that US-sourced MNCs are more likely to use cost-based pricing methods for international transfers. The influences of these two variables on the choice of transfer pricing methods are significant both directly and interactively. There is also some evidence that export-oriented enterprises are more likely to adopt cost-based transfer pricing than those aiming at China's domestic market. By providing empirical evidence on the impact of key corporate attributes on transfer pricing which have not been studied by prior research in the context of a developing economy, this research contributes to a more comprehensive understanding of transfer pricing in developing countries.
Journal: Accounting and Business Research
Pages: 103-118
Issue: 2
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729605
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729605
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:103-118
Template-Type: ReDIF-Article 1.0
Author-Name: Yi-Mien Lin
Author-X-Name-First: Yi-Mien
Author-X-Name-Last: Lin
Author-Name: Taychang Wang
Author-X-Name-First: Taychang
Author-X-Name-Last: Wang
Title: The effect of sequential information releases on trading volume and price behaviour
Abstract: This paper examines a two-period setting in which each trader receives a private signal, possibly different, in each period before he trades. The principal objectives are threefold. First, we describe the risky asset demands and price reactions in a noisy rational expectations equilibrium where the time 1 average private signal is not revealed by the price sequence but the time 2 average private signal is. Secondly, we analyse how informed trading volume is affected by the revealed information and supply shocks when pure noise trading volume is uncorrected with observable market variables. Our result indicates that no trade occurs for informed traders when net supply remains fixed across rounds of trade. And, when supply shocks are random, trading volume is induced by the informed and the noise traders, but noise trading is not predictable. Finally, we investigate these properties in the case when pure noise trading volume is correlated with observable market variables. It is shown that no informed trading takes place when there is no supply shock. However, when net supply contains random shocks, trading volume consists of noise and informed trading, both of which can be estimated.
Journal: Accounting and Business Research
Pages: 119-132
Issue: 2
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729606
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729606
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:119-132
Template-Type: ReDIF-Article 1.0
Author-Name: E-Sah Woo
Author-X-Name-First: E-Sah
Author-X-Name-Last: Woo
Author-Name: Hian Koh
Author-X-Name-First: Hian
Author-X-Name-Last: Koh
Title: Factors associated with auditor changes: a Singapore study
Abstract: The increasing concern over auditor independence makes auditor changes an important area of research. The purpose of this study is to identify the factors associated with auditor changes. The sample comprises 54 auditor-change SES (Stock Exchange of Singapore) companies and 54 non-auditor-change SES companies, matched by year and country of incorporation over a 10-year period from 1986 to 1995. Descriptive statistics and logit analysis are used to analyse the data and 16 auditor-change variables. The findings provide support to the belief that auditor changes are more likely in cases where firms engage smaller audit firms, change their management composition, experience a lower diffusion of ownership, experience an increase in income manipulation opportunities, have higher leverage, have many subsidiaries, or have more rapid growth. Further analysis also indicates that firm characteristics can explain the direction of auditor changes.
Journal: Accounting and Business Research
Pages: 133-144
Issue: 2
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729607
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729607
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:133-144
Template-Type: ReDIF-Article 1.0
Author-Name: David Alexander
Author-X-Name-First: David
Author-X-Name-Last: Alexander
Title: The over-riding importance of internationalism: a reply to Nobes
Abstract: I deal with the truth. I leave facts to subordinates' caption from 3i calendar, 1995
Journal:
Pages: 145-149
Issue: 2
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729608
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729608
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:145-149
Template-Type: ReDIF-Article 1.0
Author-Name: T. Lee
Author-X-Name-First: T.
Author-X-Name-Last: Lee
Author-Name: Michael Mumford
Author-X-Name-First: Michael
Author-X-Name-Last: Mumford
Author-Name: Stephen Zeff
Author-X-Name-First: Stephen
Author-X-Name-Last: Zeff
Title: Book reviews
Journal:
Pages: 151-155
Issue: 2
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729609
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729609
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:151-155
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: CALL FOR PAPERS
Journal:
Pages: 156-156
Issue: 2
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729610
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729610
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:2:p:156-156
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729946
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729946
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: ii-ii
Issue: 1
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729947
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729947
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:1:p:ii-ii
Template-Type: ReDIF-Article 1.0
Author-Name: Trevor Boyns
Author-X-Name-First: Trevor
Author-X-Name-Last: Boyns
Author-Name: Mark Matthews
Author-X-Name-First: Mark
Author-X-Name-Last: Matthews
Author-Name: John Edwards
Author-X-Name-First: John
Author-X-Name-Last: Edwards
Title: The development of costing in the British chemical industry, c.1870-c.1940
Abstract: In order to add to a steadily growing body of knowledge on the development of costing in British firms during the late 19th and early 20th centuries, this paper focuses on the chemical industry, one of the ‘new’ industries of the ‘second industrial revolution’. Through an examination of the archival records of a small sample of firms, the development of costing practice is examined and contrasted with the issues surrounding costing discussed in the relevant contemporary literature. The paper therefore throws light on the nature of the process of accounting change and, by examining an industry outside of the staple trades, such as coal or iron and steel, and mechanical engineering, provides a different perspective on the source of ideas surrounding certain costing techniques in Britain — not least, standard costing.
Journal: Accounting and Business Research
Pages: 3-24
Issue: 1
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729948
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729948
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:1:p:3-24
Template-Type: ReDIF-Article 1.0
Author-Name: Reggy Hooghiemstra
Author-X-Name-First: Reggy
Author-X-Name-Last: Hooghiemstra
Author-Name: Jaap Manen
Author-X-Name-First: Jaap
Author-X-Name-Last: Manen
Title: Non-executive directors in the Netherlands: another expectations gap?
Abstract: Notwithstanding the importance of non-executives as a control mechanism to reduce the potential divergence between corporate management and shareholders and the increasing attention they receive from both regulators as well as the media, research concerning non-executives is still in its infancy. This dearth of knowledge may account for the unrealistic expectations the public is said to have of non-executive directors. However, no study has previously looked into possible expectations gaps regarding non-executive directors. This study fills that lacuna and reports the results of a survey sent to more than 1,000 non-executive directors, employee representatives, and institutional investors from the Netherlands. Although we do not find an expectations gap regarding nonexecutive directors' main function, gaps are found with respect to stakeholders' satisfaction with current functioning of non-executive directors and non-executives' roles concerning directors' remuneration. Furthermore, a gap is also present with respect to the interests non-executive directors should serve. The results indicate that, notwithstanding the Cadbury and Peters Committees, the public's confidence in corporate governance has not yet been fully restored.
Journal: Accounting and Business Research
Pages: 25-41
Issue: 1
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729949
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729949
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:1:p:25-41
Template-Type: ReDIF-Article 1.0
Author-Name: Stergios Leventis
Author-X-Name-First: Stergios
Author-X-Name-Last: Leventis
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Timeliness of financial reporting: applicability of disclosure theories in an emerging capital market
Abstract: This study examines the timeliness with which financial statements are issued by companies in an emerging capital market (Greece). We find that, while all companies meet the regulatory deadline, there is a wide variation between the financial year end and the date of first issue of the financial statements. Significant factors identified by regression analysis are linked to disclosure theories of proprietary costs (using surrogate variables of barriers to entry and industry competition), information cost savings (using surrogate variables of trading volume and public issue) and relative good news or bad news (using surrogate variables of comment in the audit report, and annual change in return on equity). Our results support the predictions of Diamond (1985) and Verrecchia (1983, 1990).
Journal: Accounting and Business Research
Pages: 43-56
Issue: 1
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729950
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729950
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:1:p:43-56
Template-Type: ReDIF-Article 1.0
Author-Name: Ross Taplin
Author-X-Name-First: Ross
Author-X-Name-Last: Taplin
Title: A unified approach to the measurement of international accounting harmony
Abstract: Many indices, including the Herfindahl H index, the C index, the I index, and variants of these, have been proposed to measure the level of harmony of accounting practices. These indices can be viewed as having different properties based on several criteria and in practice choosing an index because it has a desirable property by one criterion can require accepting an undesirable property by another criterion. This paper provides a unified treatment of possible indices, which includes the commonly used indices. This clarifies the relationship between the previously proposed indices by placing them in a unified framework and provides new indices that are superior to existing ones for some situations. It also allows the user to choose an index with the desired properties based on several criteria without sacrificing one desirable property in order to achieve another desirable property. It also shows how the generalisations of the I index for more than two countries are flawed and suggests an alternative index from within this unified framework. The main criteria used to arrive at a particular index within this unified framework are (1) the weighting given to companies/countries, (2) international focus (within country, between country, or overall), (3) the treatment of multiple accounting policies, and (4) the treatment of non-disclosure. Specifying the desired properties under these criteria provides more flexibility by allowing an index to be tailored to a particular problem and more clearly articulates the consequences of using a particular index. These consequences are discussed with the assistance of an example for the accounting policy choice for goodwill.
Journal: Accounting and Business Research
Pages: 57-73
Issue: 1
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729951
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729951
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:1:p:57-73
Template-Type: ReDIF-Article 1.0
Author-Name: John Grinyer
Author-X-Name-First: John
Author-X-Name-Last: Grinyer
Author-Name: Robert Sterling
Author-X-Name-First: Robert
Author-X-Name-Last: Sterling
Author-Name: Stephen Walker
Author-X-Name-First: Stephen
Author-X-Name-Last: Walker
Title: Book reviews
Journal:
Pages: 75-78
Issue: 1
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729952
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729952
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:1:p:75-78
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Minnis
Author-X-Name-First: Michael
Author-X-Name-Last: Minnis
Author-Name: Nemit Shroff
Author-X-Name-First: Nemit
Author-X-Name-Last: Shroff
Title: Why regulate private firm disclosure and auditing?
Abstract:
Private firms face differing financial disclosure and auditing regulations around the world. In the US and Canada, for example, private firms are generally neither required to disclose their financial results nor have their financial statements audited. By contrast, many firms with limited liability in most other countries are required to file at least some financial information publicly and are also required to have their financial statements audited. This paper discusses and analyzes the reasons for differential financial reporting regulation of private firms. We first discuss various definitions of a private firm. Next, we examine theoretical arguments for regulating the financial reporting of these firms, particularly related to public disclosure and auditing. We then provide new survey-based evidence of firms’ and standard setters’ views of regulation. We conclude by identifying future research opportunities.
Journal: Accounting and Business Research
Pages: 473-502
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1303962
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1303962
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:473-502
Template-Type: ReDIF-Article 1.0
Author-Name: Ole-Kristian Hope
Author-X-Name-First: Ole-Kristian
Author-X-Name-Last: Hope
Author-Name: Dushyantkumar Vyas
Author-X-Name-First: Dushyantkumar
Author-X-Name-Last: Vyas
Title: Private company finance and financial reporting
Abstract:
This article provides a comprehensive assessment of private firms’ financing sources and their relation with financial reporting practices. We consider debt financing (bank financing, leasing, and government guarantees), equity financing (family ownership, government ownership, employee ownership, and private-equity financing), and trade credit (supplier credit and factoring). Our primary conclusions are that there is significant heterogeneity in the way in which private companies are financed that is influenced by their specific business contexts, and that this heterogeneity in financing is associated with differential demand for and supply of financial reporting.
Journal: Accounting and Business Research
Pages: 506-537
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1303963
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1303963
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:506-537
Template-Type: ReDIF-Article 1.0
Author-Name: Ann Vanstraelen
Author-X-Name-First: Ann
Author-X-Name-Last: Vanstraelen
Author-Name: Caren Schelleman
Author-X-Name-First: Caren
Author-X-Name-Last: Schelleman
Title: Auditing private companies: what do we know?
Abstract:
The purpose of this article is to provide an overview of the literature on what we currently know about the costs and benefits of auditing private company accounts. Our main conclusions are the following. First, there is much heterogeneity in factors driving audit demand in private companies and the value derived from the audit. Second, research provides support for improved financial reporting quality due to, and real economic benefits from, private company audits. Third, the cost–benefit analysis for private company audits is firm-specific and mandating the audit does not seem to be cost-effective and thus economically optimal for all private companies. Alternative services may better meet the needs of especially smaller private companies. Furthermore, mandating the audit is not necessarily an optimal solution since private companies with low demand for a high-quality audit are able to find an auditor that meets their requirements even under a mandatory regime. Hence, having a mandatory audit in place is no guarantee for universally high-quality audits and this seems most salient for private companies where auditors may be more prone to independence issues. We conclude by providing a number of directions for future research.
Journal: Accounting and Business Research
Pages: 565-584
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1314104
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1314104
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:565-584
Template-Type: ReDIF-Article 1.0
Author-Name: Joachim Gassen
Author-X-Name-First: Joachim
Author-X-Name-Last: Gassen
Title: The effect of IFRS for SMEs on the financial reporting environment of private firms: an exploratory interview study
Abstract:
I investigate how the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) contributes to the development of private firm financial reporting. I interview a sample of leading accounting experts from 24 jurisdictions around the globe to understand the role of private firm financial reporting and financial transparency in their jurisdiction as well as the importance of IFRS for SMEs. I find significant variation across jurisdictions in my sample and document that IFRS for SMEs predominantly influenced private firm financial reporting and transparency by serving as a blueprint for national regulatory reforms. In some jurisdictions, IFRS for SMEs has also been adopted as an optional reporting framework. Direct firm-level adoption of IFRS for SMEs has been low in these jurisdictions with the exception of South Africa where it seems to be used relatively widely. Based on my response data, I suggest some potential rationales for my findings and discuss potential reasons for the observed cross-jurisdiction variation in private firm financial transparency and IFRS for SMEs adoption.
Journal: Accounting and Business Research
Pages: 540-563
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1314105
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1314105
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:540-563
Template-Type: ReDIF-Article 1.0
Author-Name: Tristan Price
Author-X-Name-First: Tristan
Author-X-Name-Last: Price
Title: Embracing ambiguity in management control and decision-making processes: a response
Journal: Accounting and Business Research
Pages: 613-615
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1314106
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1314106
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:613-615
Template-Type: ReDIF-Article 1.0
Author-Name: Danielle Stewart
Author-X-Name-First: Danielle
Author-X-Name-Last: Stewart
Title: ‘Auditing private companies’: a practitioner view
Journal: Accounting and Business Research
Pages: 585-587
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1314107
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1314107
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:585-587
Template-Type: ReDIF-Article 1.0
Author-Name: David Blair
Author-X-Name-First: David
Author-X-Name-Last: Blair
Title: ‘Private company finance and financial reporting: what do we know?’: a practitioner’s view
Journal: Accounting and Business Research
Pages: 538-539
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1318513
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1318513
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:538-539
Template-Type: ReDIF-Article 1.0
Author-Name: Filippo Poli
Author-X-Name-First: Filippo
Author-X-Name-Last: Poli
Title: ‘Different approaches to regulating private company financial reporting’: a practitioner’s view
Journal: Accounting and Business Research
Pages: 503-505
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1318514
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1318514
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:503-505
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: ‘The effect of IFRS for SMEs on the financial reporting of private firms: an exploratory interview study’: a practitioner’s view
Journal: Accounting and Business Research
Pages: 564-564
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1318515
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1318515
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:564-564
Template-Type: ReDIF-Article 1.0
Author-Name: Paolo Quattrone
Author-X-Name-First: Paolo
Author-X-Name-Last: Quattrone
Title: Embracing ambiguity in management controls and decision-making processes: On how to design data visualisations to prompt wise judgement
Abstract:
Making decisions when managing organisations always involves the constant management of ambiguity and a great deal of complexity due to uncertainties and the intrinsic political nature of every decision-making processes. This paper argues that in order for management accounting to deal effectively with this ambiguity and uncertainty, both must be embraced, not suppressed, by the design of data visualisations produced by management controls as aids to the decision-making processes. Drawing on studies in rhetoric, alongside others on the rhetorical and communicative power of images and visualisations, this paper identifies a series of principles that can contribute to the development of a visual rhetorical framework to inform the design of data visualisation (e.g. dashboards, business reports). The need to conceive of data visualisations beyond their representational function, and the principles that are identified, are then illustrated through the visual rhetorical analysis of a complex dashboard utilised in the programme management of the construction of a large airport terminal. The paper ends with an outline of a research agenda for the future design of data visualisation in accounting, and beyond.
Journal: Accounting and Business Research
Pages: 588-612
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1320842
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1320842
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:588-612
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 471-472
Issue: 5
Volume: 47
Year: 2017
Month: 7
X-DOI: 10.1080/00014788.2017.1324245
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1324245
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:5:p:471-472
Template-Type: ReDIF-Article 1.0
Author-Name: Jochen Bigus
Author-X-Name-First: Jochen
Author-X-Name-Last: Bigus
Title: Optimism and auditor liability
Abstract:
There is strong evidence that individuals are optimistic in the sense that they underrate the probability of a negative event occurring. This paper provides a positive theoretical analysis of how auditor optimism affects their incentives to take care under two liability rules: strict liability and a negligence rule. Under strict liability, auditors are held liable when they cause damages to investors. Under a negligence rule, auditors are held liable when they cause damages and in addition, act negligently, that is, fail to meet the standard of due care specified in legal and professional rules. I find the following results. (1) If due care is sufficiently close to the efficient level, a negligence rule distorts auditors’ incentives less than strict liability. Under strict liability, optimism makes the auditor overestimate the chances of finding material mistakes and thus induces suboptimal care. (2) If due care is too strict, the auditor will not exert due care but the same level of suboptimal care under either liability rule. (3) With increasing optimism and in the absence of punitive damages, strict liability becomes less preferable to a precise negligence rule. This statement also holds for vaguely defined standards of due care if due care is sufficiently strict or if auditor optimism is sufficiently high. (4) Punitive damages counteract suboptimal incentives generated by auditor optimism, especially under strict liability.
Journal: Accounting and Business Research
Pages: 577-600
Issue: 6
Volume: 46
Year: 2016
Month: 9
X-DOI: 10.1080/00014788.2015.1133275
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1133275
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:6:p:577-600
Template-Type: ReDIF-Article 1.0
Author-Name: Shamima Haque
Author-X-Name-First: Shamima
Author-X-Name-Last: Haque
Author-Name: Craig Deegan
Author-X-Name-First: Craig
Author-X-Name-Last: Deegan
Author-Name: Robert Inglis
Author-X-Name-First: Robert
Author-X-Name-Last: Inglis
Title: Demand for, and impediments to, the disclosure of information about climate change-related corporate governance practices
Abstract:
Based on a survey of climate change experts in different stakeholder groups and interviews with corporate climate change managers, this study provides insights into the gap between what information stakeholders expect, and what Australian corporations disclose. This paper focuses on annual reports and sustainability reports with specific reference to the disclosure of climate change-related corporate governance practices. The findings culminate in the refinement of a best practice index for the disclosure of climate change-related corporate governance practises. Interview results indicate that the low levels of disclosures made by Australian companies may be due to a number of factors. A lack of proactive stakeholder engagement and an apparent preoccupation with financial performance and advancing shareholders interest, coupled with a failure by managers to accept accountability, seems to go a long way to explaining low levels of disclosure.
Journal: Accounting and Business Research
Pages: 620-664
Issue: 6
Volume: 46
Year: 2016
Month: 9
X-DOI: 10.1080/00014788.2015.1133276
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1133276
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:6:p:620-664
Template-Type: ReDIF-Article 1.0
Author-Name: Bakhtiar Alrazi
Author-X-Name-First: Bakhtiar
Author-X-Name-Last: Alrazi
Author-Name: Charl de Villiers
Author-X-Name-First: Charl
Author-X-Name-Last: de Villiers
Author-Name: Chris J. Van Staden
Author-X-Name-First: Chris J.
Author-X-Name-Last: Van Staden
Title: The environmental disclosures of the electricity generation industry: a global perspective
Abstract:
The electricity generation industry has been under close regulatory and public scrutiny for decades for the significant impacts its activities have on the environment. The industry is responsible for a large proportion of greenhouse gas (GHG) emissions, which has intensified public and regulatory scrutiny of late. Therefore, electricity generation firms face immense pressure to show environmental responsibility. Firms respond with environmental disclosures in their annual reports, in stand-alone-reports, and on websites. In this study, we use comprehensive disclosure indices to measure the quality (or comprehensiveness) of the CO2 emissions related disclosure and the overall environmental disclosure of 205 electricity generation firms in 35 countries. We find that firms in countries with a high commitment towards the environment and a carbon emissions trading scheme (measures of social concern for environmental protection and emissions), are likely to disclose more comprehensive environmental information. In addition, we find that firm size, age of the assets, listing status, and media exposure influence disclosure. Environmental performance, measured by CO2 emissions, is not significantly related to environmental disclosure among our sample firms. The theoretical implication of these findings is that social beliefs (that are different in different countries) prompt a legitimating disclosure response from firms that is not significantly affected by their performance against that social belief.
Journal: Accounting and Business Research
Pages: 665-701
Issue: 6
Volume: 46
Year: 2016
Month: 9
X-DOI: 10.1080/00014788.2015.1135781
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1135781
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:6:p:665-701
Template-Type: ReDIF-Article 1.0
Author-Name: Warwick Funnell
Author-X-Name-First: Warwick
Author-X-Name-Last: Funnell
Author-Name: Margaret Wade
Author-X-Name-First: Margaret
Author-X-Name-Last: Wade
Author-Name: Robert Jupe
Author-X-Name-First: Robert
Author-X-Name-Last: Jupe
Title: Stakeholder perceptions of performance audit credibility
Abstract:
This paper examines the credibility of performance audit at the micro-level of practice using the general framework of Birnbaum and Stegner's theory of source credibility in which credibility is dependent upon perceptions of the independence of the auditors, their technical competence and the usefulness of audit findings. It reports the results of a field study of a performance audit by the Australian National Audit Office conducted in a major government department. The paper establishes that problems of auditor independence, technical competence and perceived audit usefulness continue to limit the credibility of performance auditing.
Journal: Accounting and Business Research
Pages: 601-619
Issue: 6
Volume: 46
Year: 2016
Month: 9
X-DOI: 10.1080/00014788.2016.1157680
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1157680
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:6:p:601-619
Template-Type: ReDIF-Article 1.0
Author-Name: Fernando Penalva
Author-X-Name-First: Fernando
Author-X-Name-Last: Penalva
Author-Name: Alfred Wagenhofer
Author-X-Name-First: Alfred
Author-X-Name-Last: Wagenhofer
Title: Conservatism in debt contracting: theory and empirical evidence
Abstract:
This paper surveys both the theoretical and the empirical archival literature on conservatism when accounting information is used for debt contracting. The theoretical literature shows mixed results whether conservative accounting is desirable, which depends on the underlying agency problem, the information available, and the contracting space. The empirical literature takes a more holistic view in measuring the degree of conservatism. It studies a broad array of possible effects of conservatism in debt financing, but also beyond. The results overwhelmingly support the view that conservatism plays a useful role in debt contracting, although there are also some mixed results. We describe key results and empirical designs, and we provide suggestions for future research.
Journal: Accounting and Business Research
Pages: 619-647
Issue: 6
Volume: 49
Year: 2019
Month: 9
X-DOI: 10.1080/00014788.2019.1609899
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1609899
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:6:p:619-647
Template-Type: ReDIF-Article 1.0
Author-Name: Michael J. Peel
Author-X-Name-First: Michael J.
Author-X-Name-Last: Peel
Title: The impact of filing micro-entity accounts and the disclosure of reporting accountants on credit scores: an exploratory study
Abstract:
There is a dearth of evidence regarding the potential costs incurred by small private companies that opt to publish only an unaudited abbreviated balance sheet. This paper provides new evidence regarding whether UK companies that publish reduced balance sheet information in micro-entity annual accounts are allocated lower credit scores by a credit rating agency. Recently, for the smallest companies, a new exemption category for ‘micro-entities’ was introduced. Qualifying companies may elect to file even less unaudited balance sheet information than their small company counterparts. Consistent with the conjecture that publishing micro accounts conveys a negative signal to the credit scorer, there is systematic evidence that micro-entities are assigned worse credit scores. This result is robust to the employment of statistical methods that account for observed and unobserved bias. Based on both assurance and signalling tenets, the second novel conjecture examined in this study is that companies which disclose their annual accounts are prepared by an accountancy firm (reporting accountant) will attract higher credit scores. Contrary to extant research which reports that companies that opt for voluntary audits receive higher credit scores, there is no evidence that the credit scorer rewards companies whose accounts bear the imprimatur of a reporting accountant.
Journal: Accounting and Business Research
Pages: 648-681
Issue: 6
Volume: 49
Year: 2019
Month: 9
X-DOI: 10.1080/00014788.2018.1493374
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1493374
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:6:p:648-681
Template-Type: ReDIF-Article 1.0
Author-Name: Noor Hashim
Author-X-Name-First: Noor
Author-X-Name-Last: Hashim
Author-Name: Weijia Li
Author-X-Name-First: Weijia
Author-X-Name-Last: Li
Author-Name: John O'Hanlon
Author-X-Name-First: John
Author-X-Name-Last: O'Hanlon
Title: Reflections on the development of the FASB’s and IASB’s expected-loss methods of accounting for credit losses
Abstract:
After the financial and banking crisis of the late 2000s, the FASB and the IASB aimed to develop methods of accounting for credit losses that would give more timely recognition of those losses. The IASB (in 2009) and the FASB (in 2010) each initially issued its own exposure draft proposing separate approaches to achieving this. They then attempted to agree a converged expected-loss-based method for accounting for credit losses, but failed to achieve convergence. They then each issued an accounting standard that included its own expected-loss method, with effective dates of 2018 for the IASB and 2020/21 for the FASB. This paper provides an overview of the development of proposals and standards in relation to accounting for credit losses issued by the standard setters from 2009 to 2016. It then offers reflections on difficulties that the standard setters faced in this area and on problems that might arise after the new standards become effective. It raises the question of whether a route based on ‘expected loss’, which in relation to credit losses is a concept that originally became prominent for the purpose of setting banks’ capital requirements, was helpful to the process of improving the accounting for credit losses.
Journal: Accounting and Business Research
Pages: 682-725
Issue: 6
Volume: 49
Year: 2019
Month: 9
X-DOI: 10.1080/00014788.2018.1526665
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1526665
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:6:p:682-725
Template-Type: ReDIF-Article 1.0
Author-Name: Begoña Giner
Author-X-Name-First: Begoña
Author-X-Name-Last: Giner
Author-Name: Araceli Mora
Author-X-Name-First: Araceli
Author-X-Name-Last: Mora
Title: Bank loan loss accounting and its contracting effects: the new expected loss models
Abstract:
As a result of the recent financial crisis, several key institutions urged the IASB and the FASB to re-evaluate their models for loan loss accounting and use more forward-looking information. The paper examines the principal features of the new expected loss approach, taking into account the tensions between accounting and prudential objectives with respect to credit losses. We discuss the rationales for the change introduced by IFRS 9 and explore the differences between the IASB and the FASB models. Based on the notions of accounting conservatism and earnings management, we discuss the potential consequences of the new models. While both the FASB and the IASB model are more conservative than the incurred loss approach, each portrays a different type of conservatism, whose ability to provide information will depend on the bank’s business model. We also argue that the differences in business models that prevail in different jurisdictions might help to explain the existence of two expected loss models. Besides, we identify new avenues for further research within the financial sector.
Journal: Accounting and Business Research
Pages: 726-752
Issue: 6
Volume: 49
Year: 2019
Month: 9
X-DOI: 10.1080/00014788.2019.1609898
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1609898
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:6:p:726-752
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663356
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663356
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial
Journal:
Pages: 173-173
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663357
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663357
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:173-173
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal:
Pages: 175-176
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663358
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663358
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:175-176
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Cowton
Author-X-Name-First: Christopher
Author-X-Name-Last: Cowton
Title: Accounting and the ethics challenge: Re‐membering the professional body
Abstract: This paper looks beyond recent financial reporting ‘scandals’ to consider the ‘standing challenge’ that ethics represents for accountants and the professional bodies that represent them. It examines the notion of a profession and argues for a position that recognises both the potential benefits of professionalisation and the self‐serving tendencies to which professions can be prone. Such a position entails a view that the outcome of professionalisation for society is a contingent matter rather than an inevitability (whether positive or negative) and therefore something that is worth attempting to influence. In developing the argument, two major areas from the business ethics/corporate social responsibility literature, oriented towards business enterprises but also of relevance to professional bodies, are reviewed: whether being ethical ‘pays’ in financial terms; and whether formal codes are useful in promoting ethical behaviour. The paper concludes by positing three models of the professional body and contending for a renewed notion of membership if professional bodies are to function as effective ‘moral communities’.
Journal: Accounting and Business Research
Pages: 177-189
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663359
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663359
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:177-189
Template-Type: ReDIF-Article 1.0
Author-Name: Geoff Meeks
Author-X-Name-First: Geoff
Author-X-Name-Last: Meeks
Author-Name: G.M. Peter Swann
Author-X-Name-First: G.M. Peter
Author-X-Name-Last: Swann
Title: Accounting standards and the economics of standards
Abstract: The paper draws on the economics of standards to inform current debates on international accounting standards. It traces the benefits claimed for standards – their contribution to the division of labour, innovation, trust, etc.; and the costs, including entry barriers and compliance costs. It illustrates these benefits and costs with cases from accounting regulation. It adopts two approaches to the question whether accounting regulation is best achieved by a single set of standards for the world, or by competing systems. The first approach focuses on contributions in economics, including the theory of standards races and of optimal variety. In these analyses, only in special circumstances has a single standard emerged as the superior outcome. The second approach introduces evidence from accounting and finance on the problems of translation with globalised financial markets, and on the relative costs and benefits of multiple standard‐setters or a single global scheme. The most compelling net benefits of harmonisation arise for small economies moving from idiosyncratic to international standards.
Journal: Accounting and Business Research
Pages: 191-210
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663360
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663360
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:191-210
Template-Type: ReDIF-Article 1.0
Author-Name: Nicholas Barr
Author-X-Name-First: Nicholas
Author-X-Name-Last: Barr
Title: International trends in pension provision
Abstract: This paper considers international trends in pension arrangements, starting with lessons from economic theory. The analysis includes recent developments in the economics of information and behavioural economics, developments which call into question conventional arguments in favour of voluntarism and free competition. Section 3 of the paper considers why pension systems are developing the way they are – largely a response to a series of long‐term trends. In light of the discussion in Sections 2 and 3, Section 4 of the paper describes pension systems in a range of countries, and illustrates the wide range of options available to a developed country. Section 5 reflects briefly on accounting standards. The paper offers a number of key messages. Pension systems have multiple objectives. Second, and, in part, a consequence, there is no single best pension system. Third, policy design is not enough – the design of pension systems must be compatible with a country's capacity to implement the design effectively.
Journal: Accounting and Business Research
Pages: 211-225
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663361
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663361
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:211-225
Template-Type: ReDIF-Article 1.0
Author-Name: Manuel Peraita
Author-X-Name-First: Manuel
Author-X-Name-Last: Peraita
Title: Discussion of ‘International trends in pension provision’
Journal:
Pages: 227-229
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663362
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663362
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:227-229
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Napier
Author-X-Name-First: Christopher
Author-X-Name-Last: Napier
Title: The logic of pension accounting
Abstract: Accounting for pensions has been a problem for standard‐setters for over 30 years. Early attempts to develop accounting standards were based on a cost orientation and reflected funding considerations. More recently, a balance sheet focus has led to issues over identification and measurement of pension liabilities and assets. Accounting standards that permit enterprises to ignore, spread or segregate elements of pension cost, or to create artificial cost measures, are open to criticism and are gradually disappearing. The aim of a principle‐based pension accounting system will be to ‘tell it as it is’, fairly reflecting the rights and obligations of employers, employees and funding vehicles. This means, though, that these complex rights and obligations must be properly understood. By focusing on pension liabilities, this paper illustrates how accounting standards translate rights and obligations into numbers in financial statements.
Journal: Accounting and Business Research
Pages: 231-249
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663363
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663363
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:231-249
Template-Type: ReDIF-Article 1.0
Author-Name: Peter Elwin
Author-X-Name-First: Peter
Author-X-Name-Last: Elwin
Title: Discussion of ‘The logic of pension accounting’
Journal:
Pages: 251-253
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663364
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663364
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:251-253
Template-Type: ReDIF-Article 1.0
Author-Name: Paraskevi Kiosse
Author-X-Name-First: Paraskevi
Author-X-Name-Last: Kiosse
Author-Name: Ken Peasnell
Author-X-Name-First: Ken
Author-X-Name-Last: Peasnell
Title: Have changes in pension accounting changed pension provision? A review of the evidence
Abstract: The present paper reviews the research evidence on the impact of changes in pension accounting methods on pension provision. We show that decisions to freeze, terminate or convert defined benefit (DB) plans have been driven primarily by a desire to limit contributions, though financial reporting has played a part as well. The introduction of accrual accounting requirements for post‐retirement health care benefits in the US similar in character to those required for DB pension liabilities appear to have motivated some firms to curtail health care provision. Changes in accounting for DB schemes have affected how firms allocate pension plan assets. We conclude that accounting matters, though perhaps not as much as is sometimes claimed. Increased costs of providing DB pensions, coupled with the greater volatility of employers’ cash contributions, have undoubtedly played the major part in the decline of DB schemes.
Journal: Accounting and Business Research
Pages: 255-267
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663365
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663365
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:255-267
Template-Type: ReDIF-Article 1.0
Author-Name: Paul Rangecroft
Author-X-Name-First: Paul
Author-X-Name-Last: Rangecroft
Title: Discussion of ‘Have changes in pension accounting changed pension provision? A review of the evidence’
Journal:
Pages: 269-272
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663366
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663366
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:269-272
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Glaum
Author-X-Name-First: Martin
Author-X-Name-Last: Glaum
Title: Pension accounting and research: A review
Abstract: This paper provides a review of empirical research on pension accounting. Empirical research on pension accounting has focused mainly on two issues, the value‐relevance of pension accounting information and earnings management in pension accounting. Further work has been done on the information efficiency of capital markets with regard to pension accounting information. I outline how research in these areas has evolved over the past decades and discuss the results that have been obtained. I also point out methodological issues. Furthermore, this review reveals that almost all existing studies on pension accounting are based on US accounting and capitalmarket data. I therefore discuss which effects national or regional differences in, for instance, pension regulation, taxation and funding, have on the production of pension accounting information by preparers, and on the processing of this information by analysts, investors and other users. Finally, I highlight that national institutional differences as well as ongoing changes to pension accounting standards raise interesting opportunities for future empirical research on pension accounting.
Journal: Accounting and Business Research
Pages: 273-311
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663367
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663367
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:273-311
Template-Type: ReDIF-Article 1.0
Author-Name: Carsten Zielke
Author-X-Name-First: Carsten
Author-X-Name-Last: Zielke
Title: Discussion: Pensions accounting and the investor
Journal:
Pages: 313-315
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663368
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663368
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:313-315
Template-Type: ReDIF-Article 1.0
Author-Name: Wayne Landsman
Author-X-Name-First: Wayne
Author-X-Name-Last: Landsman
Title: Issues for preparers when there are changes in accounting standards
Abstract: The conference organisers asked Professor Landsman to provide reflections from an academic researcher's perspective on observations by practitioners made during the conference discussion. Professor Landsman's reflections also provide guidance to policy‐relevant questions of interest for future researchers in the field.
Journal:
Pages: 317-318
Issue: 3
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663369
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663369
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:3:p:317-318
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial
Journal:
Pages: ebi-ebi
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730036
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730036
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: 2-2
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730037
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730037
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:2-2
Template-Type: ReDIF-Article 1.0
Author-Name: Ken Peasnell
Author-X-Name-First: Ken
Author-X-Name-Last: Peasnell
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Editorial
Journal:
Pages: 3-3
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730038
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730038
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:3-3
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 4-4
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730039
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730039
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:4-4
Template-Type: ReDIF-Article 1.0
Author-Name: Ray Ball
Author-X-Name-First: Ray
Author-X-Name-Last: Ball
Title: International Financial Reporting Standards (IFRS): pros and cons for investors
Abstract: Accounting in shaped by economic and political forces. It follows that increased worldwide integration of both markets and politics (driven by reductions in communications and information processing costs) makes increased integration of financial reporting standards and practice almost inevitable. But most market and political forces will remain local for the foreseeable future, so it is unclear how much convergence in actual financial reporting practice will (or should) occur. Furthermore, there is little settled theory or evidence on which to build an assessment of the advantages and disadvantages of uniform accounting rules within a country, let alone internationally. The pros and cons of IFRS therefore are somewhat conjectural, the unbridled enthusiasm of allegedly altruistic proponents notwithstanding. On the ‘pro’ side of the ledger, I conclude that extraordinary success has been achieved in developing a comprehensive set of ‘high quality’ IFRS standards, in persuading almost 100 countries to adopt them, and in obtaining convergence in standards with important non-adopters (notably, the US). On the ‘con’ side. I envisage problems with the current fascination of the IASB (and the FASB) with ‘fair value accounting’. A deeper concern is that there inevitably will be substantial differences among countries in implementation of IFRS, which now risk being concealed by a veneer of uniformity. The notion that uniform standards alone will produce uniform financial reporting seems naive. In addition, I express several longer run concerns. Time will tell.
Journal: Accounting and Business Research
Pages: 5-27
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730040
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730040
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:5-27
Template-Type: ReDIF-Article 1.0
Author-Name: David Damant
Author-X-Name-First: David
Author-X-Name-Last: Damant
Title: Discussion of ‘International Financial Reporting Standards (IFRS): pros and cons for investors’
Journal: Accounting and Business Research
Pages: 29-30
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730041
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730041
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:29-30
Template-Type: ReDIF-Article 1.0
Author-Name: Christine Botosan
Author-X-Name-First: Christine
Author-X-Name-Last: Botosan
Title: Disclosure and the cost of capital: what do we know?
Abstract: Whether firms receive cost of capital benefits from greater disclosure is an important and controversial question. This paper reviews the relevant academic research that can provide insights into this question. In conducting this review, my primary objectives are to highlight the implications of existing research for accounting practitioners, standard setters, and academicians, and to address not only the question what do we know, but also the question what do we not know, yet? The overriding conclusion of existing theoretical and empirical research is that greater disclosure reduces cost of capital. Even so, several avenues for future research exist.
Journal: Accounting and Business Research
Pages: 31-40
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730042
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730042
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:31-40
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Cooper
Author-X-Name-First: Stephen
Author-X-Name-Last: Cooper
Title: Discussion of ‘Disclosure and the cost of capital: what do we know?’
Journal: Accounting and Business Research
Pages: 41-42
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730043
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730043
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:41-42
Template-Type: ReDIF-Article 1.0
Author-Name: Russell Lundholm
Author-X-Name-First: Russell
Author-X-Name-Last: Lundholm
Author-Name: Matt Van Winkle
Author-X-Name-First: Matt
Author-X-Name-Last: Van Winkle
Title: Motives for disclosure and non-disclosure: a framework and review of the evidence
Abstract: We develop und utilise a theoretical framework for the purpose of summarising the existing empirical work in the voluntary disclosure area. This theoretical framework posits that the primary goal of voluntary disclosure is reduction of information asymmetry (between managers and investors) and thereby cost of capital. We start with a basic or frictionless market where firms choose to disclose all news except worst possible outcomes. The literature supporting this basic economic setting is then discussed. The bulk of our review discusses results that describe disclosure outcomes when frictions do exist. We organise the empirical findings around three categories of frictions: management a) does not know of any information to disclose, b) can not tell information without incurring a cost, or c) does not care about their firm's current stock price.
Journal: Accounting and Business Research
Pages: 43-48
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730044
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730044
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:43-48
Template-Type: ReDIF-Article 1.0
Author-Name: Ken Lever
Author-X-Name-First: Ken
Author-X-Name-Last: Lever
Title: Discussion of ‘Motives for disclosure and non-disclosure: a review of the evidence’
Journal: Accounting and Business Research
Pages: 49-50
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730045
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730045
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:49-50
Template-Type: ReDIF-Article 1.0
Author-Name: Ross Watts
Author-X-Name-First: Ross
Author-X-Name-Last: Watts
Title: What has the invisible hand achieved?
Abstract: This paper was commissioned for the Institute of Chartered Accountants in England and Wales Information for Better Capital Markets Conference held on 19-20 December 2005. It evaluates the effect of the market on financial reporting recognising that financial reporting and accounting are only parts of a general reporting. financing and governance equilibrium. That equilibrium is affected by the political process, as well as by capital and other markets. 1 explain how and why both market and political forces have influenced accounting and financial reporting and provide examples of those influences. Further. I draw implications for accounting standard-setting bodies that desire to change the nature of accounting and financial outcomes. Finally. I predict the effects of the radical standard-setting changes proposed by the FASB and IASB.
Journal: Accounting and Business Research
Pages: 51-61
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730046
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730046
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:51-61
Template-Type: ReDIF-Article 1.0
Author-Name: Ian Mackintosh
Author-X-Name-First: Ian
Author-X-Name-Last: Mackintosh
Title: Discussion of ‘What has the invisible hand achieved?’
Journal: Accounting and Business Research
Pages: 63-63
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730047
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730047
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:63-63
Template-Type: ReDIF-Article 1.0
Author-Name: Rob Gray
Author-X-Name-First: Rob
Author-X-Name-Last: Gray
Title: Does sustainability reporting improve corporate behaviour?: Wrong question? Right time?
Abstract: This paper takes its starting point from the ICAEW's ‘Sustainability: the role of accountants’ - one of the outputs from the Institute's Information for Better Markets initiative. In particular, an important series of questions arise around the extent to which (if at all) accountants can encourage - and should be encouraging ? the development of substantive social, environmental and sustainability reporting by large organisations and the extent to which such reporting should be governed by financial market principles and exigencies. The relationship(s) between social, environmental and financial performance and reporting are of increasing significance in this context and this significance is reflected in considerable growing interest in the business, accounting and political communities. At the heart of the matter, there is the tantalising suggestion that social responsibility, financial performance and voluntary sustainability reporting may be mutually constitutive and mutually reinforcing. That such a suggestion is, a priori, highly implausible seems to attract less interest. This paper seeks to investigate these matters in some detail by considering. in turn, what is meant by ‘sustainability’. the current state of affairs in ‘sustainability reporting’? and the extent to which social disclosure can be said to be related to the social and/or financial performance of organisations. The analysis suggests that the question set for this paper is mis-specified, that ‘sustainability’? reporting consistently fails to address sustainability and the increasing claims that financial and social performance are mutually determined and determining is probably incorrect and founded upon a tautology. The central theme of the paper is that sustainability is a matter of such concern that it must be treated as at least as important as any other criteria currently facing business, that sustainability reporting needs to be developed in a mandatory context as urgently as possible and that continuing focus upon the tautologies of social responsibility is a particularly foolish and dangerous enterprise.
Journal: Accounting and Business Research
Pages: 65-88
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730048
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730048
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:65-88
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Moody-Stuart
Author-X-Name-First: Mark
Author-X-Name-Last: Moody-Stuart
Title: Discussion of ‘Does sustainabililty reporting improve corporate behavior?: Wrong question? Right time?’
Journal: Accounting and Business Research
Pages: 89-94
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730049
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730049
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:89-94
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: How can business reporting be improved? A research perspective
Abstract: This paper provides a commentary on the four main papers presented at the 2006 Information for Better Market's Conference. Since the purpose of the conference is to encourage policy relevant research, this commentary discusses some of the key policy issues raised by the papers, and it identifies areas where either further work is needed or where a change in the orientation of academic research may be appropriate in order to increase its policy relevance. A particular theme of this paper is the need to think about corporate accounting and financial disclosure policy issues in a realistic economic context which allows for: moral hazard (investors cannot observe managers' decisions), adverse selection (managers have insider information), significant proprietary costs of disclosure. and the possibility that the market has value relevant information that is not observed by managers.
Journal: Accounting and Business Research
Pages: 95-105
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730050
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730050
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:95-105
Template-Type: ReDIF-Article 1.0
Author-Name: Lindsay Tomlinson
Author-X-Name-First: Lindsay
Author-X-Name-Last: Tomlinson
Title: Discussion of ‘How can business reporting be improved? A research perspective’
Journal: Accounting and Business Research
Pages: 107-108
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730051
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730051
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:107-108
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Guide for Authors
Journal:
Pages: 109-109
Issue: S1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730052
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730052
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:S1:p:109-109
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Article
Journal:
Pages: i-i
Issue: 3
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729611
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729611
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:3:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Houston
Author-X-Name-First: Richard
Author-X-Name-Last: Houston
Author-Name: Michael Peters
Author-X-Name-First: Michael
Author-X-Name-Last: Peters
Title: The effect of a potential borrower's reporting reputation and financial condition on commercial loan officers' estimates of forecast bias and subsequent loan recommendations
Abstract: This paper investigates whether a potential borrower's reporting reputation and financial condition affect commercial loan officers' loan judgments and recommendations after receiving an earnings forecast that predicts improved financial performance. The results suggest that the earnings forecast is perceived as more credible in the presence of (1) a reputation for objective reporting, and (2) strong financial condition. Also, a reputation for objective reporting allowed the borrower to more credibly convey the expected improvement in performance when financial condition was weak. However, while financial condition predictably affects loan recommendations (likelihood of granting the loan, interest rate), reporting reputation does not. While we find that commercial loan officers discount forecasts under similar circumstances as stock analysts, results suggest that the consequences of developing a reputation for aggressive reporting (e.g., aggressive selection of accounting methods and estimates within GAAP) may be greater in a stock valuation setting (prior research documents lower stock prices) than in a loan setting.
Journal: Accounting and Business Research
Pages: 163-174
Issue: 3
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729612
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729612
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:3:p:163-174
Template-Type: ReDIF-Article 1.0
Author-Name: J. Toms
Author-X-Name-First: J.
Author-X-Name-Last: Toms
Title: Information content of earnings in an unregulated market: the co-operative cotton mills of Lancashire, 1880–1900
Abstract: This paper analyses the relationship between earnings and dividend announcements and contemporaneous stock returns. Many previous studies have examined this association, although few address its social and historical context. In late 19th century Lancashire, there was an unusual coincidence of co-operative ownership and the trading of ownership rights on a liquid stock market. Using stock market numbers extracted from the local financial press in conjunction with other relevant archives, this paper examines the usefulness of accounting information provided in circumstances without regulatory duress and where its disclosure was subject to the scrutiny of a well-informed, and socially diverse, shareholding class. Results suggest that employee involvement via ownership rights is likely to improve the information content of accounting reports.
Journal: Accounting and Business Research
Pages: 175-190
Issue: 3
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729613
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729613
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:3:p:175-190
Template-Type: ReDIF-Article 1.0
Author-Name: Nikos Vafeas
Author-X-Name-First: Nikos
Author-X-Name-Last: Vafeas
Title: Reverse stock splits and earnings performance
Abstract: This paper presents evidence that reverse stock splits are preceded by significantly poorer earnings performance for splitting firms compared to a sample of matched control firms. Interestingly, the overall earnings-returns relationship becomes significantly stronger following the reverse stock split. I interpret this as evidence that reverse splits communicate to market participants that sub-par earnings performance before the split is not transitory and that it is expected to persist in the future. Together, the evidence in this paper provides an explanation as to why reverse splits, which are employed for reasons that are seemingly beneficial to shareholders, are assessed negatively, on balance, by market participants.
Journal: Accounting and Business Research
Pages: 191-202
Issue: 3
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729614
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729614
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:3:p:191-202
Template-Type: ReDIF-Article 1.0
Author-Name: Geoffrey Whittington
Author-X-Name-First: Geoffrey
Author-X-Name-Last: Whittington
Author-Name: Stephen Zeff
Author-X-Name-First: Stephen
Author-X-Name-Last: Zeff
Title: Mathews, Gynther and Chambers: three pioneering Australian theorists
Abstract: This paper reviews the professional careers and contributions of three distinguished Australian academics, Russell Mathews, Reg Gynther and Ray Chambers, each of whom died recently. Particular attention is paid to their contributions to the debate on price change accounting, including the exchanges that took place between them on this subject. Price change accounting was a central issue in academic and professional debates of the 1960s and 1970s, when the trio were at the peak of their activity as academics. The paper also records the wide range of their contributions to accounting research, education, standard setting and public policy.
Journal:
Pages: 203-233
Issue: 3
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729615
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729615
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:3:p:203-233
Template-Type: ReDIF-Article 1.0
Author-Name: Harold Bierman
Author-X-Name-First: Harold
Author-X-Name-Last: Bierman
Author-Name: Janette Rutterford
Author-X-Name-First: Janette
Author-X-Name-Last: Rutterford
Title: Book reviews
Journal:
Pages: 235-237
Issue: 3
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729616
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729616
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:3:p:235-237
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Author-Name: The Editors
Title: CALL FOR PAPERS
Journal:
Pages: 238-238
Issue: 3
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729617
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729617
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:3:p:238-238
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 3
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729985
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729985
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:3:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: ii-ii
Issue: 3
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729986
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729986
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:3:p:ii-ii
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Bowe
Author-X-Name-First: Michael
Author-X-Name-Last: Bowe
Author-Name: Konstantinos Vonatsos
Author-X-Name-First: Konstantinos
Author-X-Name-Last: Vonatsos
Author-Name: Stephanos Zarkos
Author-X-Name-First: Stephanos
Author-X-Name-Last: Zarkos
Title: Decision rules for allocating a limiting factor across products in a stochastic production environment: a real options approach
Abstract: This paper develops a real option framework to extend the current class of managerial decision rules appropriate for selecting a multi-product firm's optimal product mix in the presence of a limiting factor of production. The rules are relevant for both tactical and strategic decision making when managers are operating in an environment of earnings uncertainty. The analysis makes several contributions. The central result derives a decision rule for allocating a limiting factor across products based upon the ranking of the different products' real option values per unit of the limiting factor. This rule is shown to give a more efficient allocation of the limiting factor than other potential methods for dealing with uncertainty, for example, an allocation rule based upon a product's expected profit contribution per unit of limiting factor. Furthermore, the paper extends the results to an environment of generalised production uncertainty, clarifying the relevance of two important, but often neglected sources of production flexibility, namely intra-product and inter-product flexibility. Intra-product flexibility denotes the ability of the firm to vary the time at which a given amount of the limiting factor is dedicated to the production of a specific product, depending upon the resolution of uncertainty over the deferral period. Inter-product flexibility enables the firm to re-allocate productive capacity across products, hence alter the composition of the final product mix, for similar reasons. The analysis reveals that the value to the firm of such production flexibility depends critically upon both the revealed value of the option to defer, and the nature and extent of any correlation of price and cost changes across products.
Journal: Accounting and Business Research
Pages: 183-205
Issue: 3
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729987
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729987
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:3:p:183-205
Template-Type: ReDIF-Article 1.0
Author-Name: Jane Broadbent
Author-X-Name-First: Jane
Author-X-Name-Last: Broadbent
Author-Name: Richard Laughlin
Author-X-Name-First: Richard
Author-X-Name-Last: Laughlin
Title: Government concerns and tensions in accounting standard-setting: the case of accounting for the Private Finance Initiative in the UK
Abstract: The setting of accounting standards in the UK has always and will always be surrounded by tensions due to the different interests of those who are involved either in the production or operation of the resulting standards. While some interests come and go, the UK's governments, over time and of all political persuasions, have a continuing concern that the actions of the accounting profession more generally, and the content of accounting standards specifically, should be perceived to be in the public interest. Although the views on what is in the public interest change over time, what is clear is that where this public interest is perceived not to be upheld, then tension between the government of the time and (primarily) the accounting standard-setting bodies is inevitable. At these times various forms of questioning of the actions of accounting standard-setting bodies occur. However, it is important to stress that when the public interest is perceived to be upheld, no overt tension is apparent, but this does not mean that this underlying concern does not exist. This paper's main focus is on one of the most recent points of overt tension related to accounting for the Private Finance Initiative (PFI). It locates this specific tension in an historical analysis of the battles that have led to and challenged the accounting profession's hard-won ability to regulate itself. It also compares and contrasts the disagreement surrounding accounting for PFI with a not dissimilar point of tension surrounding accounting for inflation in the 1970s and 1980s. This comparison is used to provide a richer historical understanding of what is argued to be a general and ongoing watching brief by any UK government (of any political persuasion) over the self-regulatory processes of the UK's accounting profession that they are working in the public interest.
Journal: Accounting and Business Research
Pages: 207-228
Issue: 3
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729988
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729988
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:3:p:207-228
Template-Type: ReDIF-Article 1.0
Author-Name: John Edwards
Author-X-Name-First: John
Author-X-Name-Last: Edwards
Author-Name: Malcolm Anderson
Author-X-Name-First: Malcolm
Author-X-Name-Last: Anderson
Author-Name: Roy Chandler
Author-X-Name-First: Roy
Author-X-Name-Last: Chandler
Title: How not to mount a professional project: the formation of the ICAEW in 1880
Abstract: This study addresses ‘the inevitable dilemma facing [leaders of] an occupation’ seeking to progress the professionalisation process through organisational formation, namely that ‘if too many are included as eligible, it may downgrade the whole membership, while if the line is drawn too narrowly, those left out may be of sufficient ability to form a rival body’ (Macdonald, 1995: 192). It examines this dilemma in the context of the formation of the Institute of Chartered Accountants in England and Wales (ICAEW) in 1880 through the merger of five accounting societies formed during the previous decade. We show that creation of the ICAEW was engineered by London City-based accountants, primarily those who had directed the affairs of the ICAEW's elite predecessor body, the Institute of Accountants. We will argue that, through organisational fusion, the ICAEW's leaders expected to achieve organisational closure of the public accountancy profession in England and Wales, but this endeavour was flawed because of their failure either to adopt a sufficiently inclusive strategy at the date of formation or to address that deficiency in the years that immediately followed. This created an alienated population of ‘country accountants’ and left available a substantial reservoir of public accountants from which the first competitor organisation formed—the Society of Accountants—was able successfully to recruit.
Journal: Accounting and Business Research
Pages: 229-248
Issue: 3
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729989
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729989
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:3:p:229-248
Template-Type: ReDIF-Article 1.0
Author-Name: John Holland
Author-X-Name-First: John
Author-X-Name-Last: Holland
Title: A grounded theory of corporate disclosure
Abstract: This paper outlines a grounded theory of corporate disclosure comprising, disclosure choices, the story of value creation and intangibles, managerial optimism and opportunism, benchmarking, and of continuous corporate interaction with stock and information markets. The disclosure activity led to cumulative corporate learning about perceived market outcomes and their ‘fragility’. This was reinforced by fund managers during subsequent one to one meetings. The interaction and learning fed back into cumulative corporate understandings and experiences (priors) of their disclosure behaviour which then became drivers of subsequent disclosure. These interactions and the corporate responses revealed the dynamic element to corporate disclosure behaviour. The emphasis on choice, private disclosure, knowledge intensive intangibles, stories, benchmarking, feedback, learning, outcomes, response and many other elements in the theory are interpreted as tentative means to deal with a new enhanced information asymmetry which can be considered to be at the heart of the disclosure and valuation crises observed in financial markets in the period 1997–2003. The research was conducted through case interview field work in 25 large UK companies during 2000 and use was made of archival sources. A grounded theory approach was employed in processing the data. The results were discussed relative to relevant literature and to previous grounded theory of corporate disclosure behaviour. Areas for further research were identified.
Journal: Accounting and Business Research
Pages: 249-267
Issue: 3
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729990
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729990
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:3:p:249-267
Template-Type: ReDIF-Article 1.0
Author-Name: Ravi Lonkani
Author-X-Name-First: Ravi
Author-X-Name-Last: Lonkani
Author-Name: Michael Firth
Author-X-Name-First: Michael
Author-X-Name-Last: Firth
Title: The accuracy of IPO earnings forecasts in Thailand and their relationships with stock market valuation
Abstract: In order to help reduce information asymmetry between managers and prospective investors, IPO prospectuses in Thailand are required to publish managers' forecasts of the forthcoming year's earnings. This type of direct disclosure is especially important in a developing economy such as Thailand where financial intermediaries and information vendors are relatively sparse, and where investors are rarely professionals. Our results demonstrate that managers' earnings forecasts are much more accurate than extrapolations of historical earnings. We show that forecast accuracy is related to underpricing, and it has a directional, but not statistical, association with one-year stock returns and one-year wealth relatives.
Journal: Accounting and Business Research
Pages: 269-286
Issue: 3
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729991
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729991
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:3:p:269-286
Template-Type: ReDIF-Article 1.0
Author-Name: Niamh Brennan
Author-X-Name-First: Niamh
Author-X-Name-Last: Brennan
Author-Name: Michael Mumford
Author-X-Name-First: Michael
Author-X-Name-Last: Mumford
Title: Book Reviews
Journal:
Pages: 287-289
Issue: 3
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729992
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729992
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:3:p:287-289
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: CALL FOR PAPERS
Journal:
Pages: 290-290
Issue: 3
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729993
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729993
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:3:p:290-290
Template-Type: ReDIF-Article 1.0
Author-Name: Mário Marques
Author-X-Name-First: Mário
Author-X-Name-Last: Marques
Author-Name: Carlos Pinho
Author-X-Name-First: Carlos
Author-X-Name-Last: Pinho
Title: Is transfer pricing strictness deterring profit shifting within multinationals? Empirical evidence from Europe
Abstract:
This paper examines the extent to which the introduction and tightening of transfer pricing frameworks deter income shifting strategies by European multinational companies. To do so, we have built an index that measures the transfer pricing framework strictness by host country and year. Then, tax rate differentials are used to capture profit-shifting incentives and are interacted with the strictness index to assess whether the host country's transfer pricing framework impacts profit-shifting behaviour. The index is shown to increase significantly over the sample period, indicating that the scrutiny of related party transactions by European governments has increased over the period 2001–2009. Using a sample of European foreign subsidiaries, the results suggest that the stricter the transfer pricing framework the lower the tax rate difference sensitivity of reported earnings. This indicates that tightening the transfer pricing framework is capable of dissuading multinational companies from shifting profits from higher- to lower-tax countries.
Journal: Accounting and Business Research
Pages: 703-730
Issue: 7
Volume: 46
Year: 2016
Month: 11
X-DOI: 10.1080/00014788.2015.1135782
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1135782
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:7:p:703-730
Template-Type: ReDIF-Article 1.0
Author-Name: Dominic Detzen
Author-X-Name-First: Dominic
Author-X-Name-Last: Detzen
Title: From compromise to concept? – a review of ‘other comprehensive income’
Abstract:
This paper reviews how ‘other comprehensive income’ (OCI) entered financial reporting by tracing major Financial Accounting Standard Board (FASB) and International Accounting Standards Board (IASB) projects that required direct entries to equity and describing recent efforts to make sense of the practice. It was the fixation on net income that brought about departures from all-inclusive income, which were repeatedly made over the years without decidedly devoting attention to developing a conceptual basis. OCI was used as a compromise to incorporate current values in the balance sheet, while retaining historical cost principles in the income statement. When the practice was labeled as OCI, it became institutionalized without a clear meaning. A sense-making of the practice then replaced the debates on the adequacy of using OCI and standard setters have realized that additional layers of theory became necessary to explain, for example, reclassification adjustments. Yet, the IASB has made clear in its recent Exposure Draft of a revised conceptual framework that it does not intend to pursue a fresh start in performance reporting that appears to be needed conceptually. Instead, practical considerations, primarily on International Financial Reporting Standards adoption in Japan, seem to lead to another ex-post rationalization of OCI, this time around a conceptually vacuous use of the relevance characteristic.
Journal: Accounting and Business Research
Pages: 760-783
Issue: 7
Volume: 46
Year: 2016
Month: 11
X-DOI: 10.1080/00014788.2015.1135783
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1135783
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:7:p:760-783
Template-Type: ReDIF-Article 1.0
Author-Name: Alisdair Dobie
Author-X-Name-First: Alisdair
Author-X-Name-Last: Dobie
Title: Aiming for global accounting standards: the international accounting standards board, 2001–2011
Journal: Accounting and Business Research
Pages: 784-785
Issue: 7
Volume: 46
Year: 2016
Month: 11
X-DOI: 10.1080/00014788.2016.1157920
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1157920
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:7:p:784-785
Template-Type: ReDIF-Article 1.0
Author-Name: Laura Dobbins
Author-X-Name-First: Laura
Author-X-Name-Last: Dobbins
Author-Name: Martin Jacob
Author-X-Name-First: Martin
Author-X-Name-Last: Jacob
Title: Do corporate tax cuts increase investments?
Abstract:
This paper studies the effect of corporate taxes on investment. Since firms with a foreign parent have more cross-country profit shifting opportunities than domestically owned firms do, their effective tax rate and, consequently, their tax-induced costs to investment are lower. We therefore expect capital investment responses to a corporate tax cut to be heterogeneous across firms. Using firm-level data on German corporations, we exploit the 2008 tax reform, which substantially cut corporate taxes as an exogenous policy shock and expect domestically owned firms' investments to be more responsive to the reform. We show exactly this in a difference-in-differences setting. We find that the reduction in corporate tax payments led to a one-to-one increase in the real investments of domestic firms. The effect is stronger for domestic firms relying more on internal funds. Correspondingly, labor investment increased more for domestic firms, ensuring a constant mix of input factors. In addition, we show that domestic firms' sales grew faster after the tax cut than the sales of foreign-owned firms. Our results imply that corporate tax changes can increase corporate investment but that domestic firms benefit more than foreign-owned firms from a tax cut through higher investment responses resulting in greater sales growth.
Journal: Accounting and Business Research
Pages: 731-759
Issue: 7
Volume: 46
Year: 2016
Month: 11
X-DOI: 10.1080/00014788.2016.1192985
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1192985
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:7:p:731-759
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal: Accounting and Business Research
Pages: ebi-ebi
Issue: 7
Volume: 46
Year: 2016
Month: 11
X-DOI: 10.1080/00014788.2016.1222935
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1222935
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:7:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: Robert Henry Parker, 1932–2016
Journal: Accounting and Business Research
Pages: 786-788
Issue: 7
Volume: 46
Year: 2016
Month: 11
X-DOI: 10.1080/00014788.2016.1235090
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1235090
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Handle: RePEc:taf:acctbr:v:46:y:2016:i:7:p:786-788
Template-Type: ReDIF-Article 1.0
Author-Name: Chau Duong
Author-X-Name-First: Chau
Author-X-Name-Last: Duong
Author-Name: Gioia Pescetto
Author-X-Name-First: Gioia
Author-X-Name-Last: Pescetto
Title: Overvaluation and earnings management: Does the degree of overvaluation matter?
Abstract:
We examine whether the choice of earnings management strategies employed by managers of overvalued firms depends on the degree of market overvaluation. By distinguishing between substantially overvalued (SOV) and relatively overvalued (ROV) firms, we find that SOV firms significantly inflate earnings using both accruals-based and real earnings management. In contrast, managers of ROV firms do not engage in accruals-based earnings management and their firms’ accounts tend to report higher discretionary expenses. The reported higher discretionary expenses of ROV firms are comparable to the discretionary expenses of firms in the expanding stage of their business life cycle, a pattern consistent with ROV firms increasing discretionary expenses to finance growth and hence justify the high market valuation. Overall, we show that the existing evidence on income-increasing earnings management by overvalued firms is mainly driven by the pressure to sustain the high market valuation of firms that are substantially overvalued.
Journal: Accounting and Business Research
Pages: 121-146
Issue: 2
Volume: 49
Year: 2019
Month: 2
X-DOI: 10.1080/00014788.2018.1451737
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1451737
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:2:p:121-146
Template-Type: ReDIF-Article 1.0
Author-Name: Paula Hill
Author-X-Name-First: Paula
Author-X-Name-Last: Hill
Author-Name: Adriana Korczak
Author-X-Name-First: Adriana
Author-X-Name-Last: Korczak
Author-Name: Shuo Wang
Author-X-Name-First: Shuo
Author-X-Name-Last: Wang
Title: The use of earnings and operations management to avoid credit rating downgrades
Abstract:
Firms placed on negative credit watch face the threat of a credit rating downgrade. At the same time, they are given the opportunity to put recovery efforts in place to retain their current credit rating. In this paper, we test to what extent firms use earnings management as a short-term recovery strategy. We find that both accruals-based and real earnings management are associated with firms avoiding credit rating downgrades, and that these alternative earnings management strategies tend to be complements rather than substitutes. However, following the passage of the Sarbanes–Oxley Act, only real earnings management is significantly associated with the credit watch outcome. We find evidence that firms which maintain their rating via earnings management are better able to afford the inevitable earnings reversals, and that in the year following the credit watch period, the credit rating performance of these firms is significantly better than firms which undergo a downgrade, with fewer downgrades and more upgrades in this period. Our results also imply that credit rating agencies are not misled by earnings management but rather allow for some discretion in reporting earnings that facilitates the dissemination of private information about future firm performance.
Journal: Accounting and Business Research
Pages: 147-180
Issue: 2
Volume: 49
Year: 2019
Month: 2
X-DOI: 10.1080/00014788.2018.1479630
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1479630
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:2:p:147-180
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Felix
Author-X-Name-First: Robert
Author-X-Name-Last: Felix
Author-Name: Amanda Wilford
Author-X-Name-First: Amanda
Author-X-Name-Last: Wilford
Title: Does it pay to remediate? An analysis of the internal and external benefits of remediation
Abstract:
We examine the internal and external benefits associated with the remediation, or correction, of material weaknesses in internal controls over financial reporting. We document that firms that remediate material weaknesses exhibit higher performance and reporting quality than firms that never reported any weaknesses. These results suggest that the remediation of material weaknesses, an indication of an improved internal control system, is associated with internal benefits. Moreover, we find that remediating firms experience significantly lower audit fees and betas (i.e. external costs) than non-material weakness firms. However, these lower external costs are contingent on a firm's level of performance and information quality. These results suggest that remediation offers firms a chance to re-examine and correct their internal controls and this leads to better performance and information quality. Furthermore, external stakeholders are not necessarily swayed by remediation alone but need to observe tangible evidence of the corrected internal control system before reassessing a firm's risk downward.
Journal: Accounting and Business Research
Pages: 181-205
Issue: 2
Volume: 49
Year: 2019
Month: 2
X-DOI: 10.1080/00014788.2018.1485091
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1485091
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:2:p:181-205
Template-Type: ReDIF-Article 1.0
Author-Name: Sylvain Durocher
Author-X-Name-First: Sylvain
Author-X-Name-Last: Durocher
Author-Name: Anne Fortin
Author-X-Name-First: Anne
Author-X-Name-Last: Fortin
Author-Name: Alessandra Allini
Author-X-Name-First: Alessandra
Author-X-Name-Last: Allini
Author-Name: Claudia Zagaria
Author-X-Name-First: Claudia
Author-X-Name-Last: Zagaria
Title: Users’ legitimacy perceptions about standard-setting processes
Abstract:
Standard-setting institutions require legitimacy to survive. Prior research infers their legitimacy mainly from the characteristics of standard-setting processes rather than from the legitimacy judgments of important constituencies. Using a survey of financial analysts, we quantitatively assess users’ perceptions about the characteristics of standard-setting processes, the relationships between these characteristics and legitimacy perceptions, and users’ legitimacy perceptions. Our first contribution is to use a sample of sophisticated financial statement users to empirically examine the theoretical proposition that users’ legitimacy perceptions could be a function of the perceived characteristics of standard-setting processes. We find that users’ perceptions about the characteristics of standard-setting processes affect the legitimacy they attribute to these processes. A combination of pragmatic, moral and cognitive legitimacies are at play in such legitimacy assessments. Our second contribution is to point out the importance of separately investigating various types of legitimacy, as users’ perceptions about them vary. Lastly, our third contribution is to highlight that the distinction between users’ perceptions of the characteristics of standard-setting processes and their legitimacy perceptions is not always clear-cut and that there are multiple interrelations among these concepts.
Journal: Accounting and Business Research
Pages: 206-243
Issue: 2
Volume: 49
Year: 2019
Month: 2
X-DOI: 10.1080/00014788.2018.1526664
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1526664
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:2:p:206-243
Template-Type: ReDIF-Article 1.0
Author-Name: Stefan F. Schantl
Author-X-Name-First: Stefan F.
Author-X-Name-Last: Schantl
Title: Analyst information acquisition and the relative informativeness of analyst forecasts and managed earnings
Abstract:
Mixed empirical evidence exists on whether equity analyst forecasts complement (‘interpretation role’) or rather substitute for (‘information role’) the informativeness of corporate earnings. This paper develops a theoretical model in which an analyst acquires costly information to forecast the fundamental information contained in a subsequently released and strategically manipulated earnings announcement. The manager is assumed to manipulate earnings such that his objectives – an uncertain price interest and meeting-or-beating the analyst forecast incentives – are optimized. The model shows that the manager’s incentives are the source of the two roles of the analyst information in the valuation of earnings. In a theoretical regression of share price on earnings and the analyst forecast, it can be shown that a positive forecast response coefficient, and thus the dominance of the information role of analyst forecasts, is only obtained if the analyst’s information acquisition costs are sufficiently low.
Journal: Accounting and Business Research
Pages: 62-76
Issue: 1
Volume: 48
Year: 2018
Month: 1
X-DOI: 10.1080/00014788.2016.1204215
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1204215
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:1:p:62-76
Template-Type: ReDIF-Article 1.0
Author-Name: Xiaomeng Chen
Author-X-Name-First: Xiaomeng
Author-X-Name-Last: Chen
Author-Name: Sue Wright
Author-X-Name-First: Sue
Author-X-Name-Last: Wright
Author-Name: Hai Wu
Author-X-Name-First: Hai
Author-X-Name-Last: Wu
Title: Exploration intensity, analysts’ private information development and their forecast performance
Abstract:
This study examines whether analysts in the extractive industries in Australia adjust their private information searching and processing in response to the complexity of information about a firm’s exploration and evaluation (E&E) activities. We find that both the proportion of private information in their forecasts and the accuracy of their forecasts increase with the intensity of E&E activities. Additional analyses reveal that this effect is more pronounced for firms with substantial E&E activities but limited production activities, and that analysts’ private information development activities are mainly related to the capitalized E&E expenditures. Our results provide guidance for both investors and future standard setters. They show that investors can benefit from analysts’ expertise in situations of high information asymmetry. They also provide evidence of the advantage of distinguishing successful from unsuccessful investments in resource exploration when accounting for E&E expenditures, which may inform future decisions about accounting for intangible assets.
Journal: Accounting and Business Research
Pages: 77-107
Issue: 1
Volume: 48
Year: 2018
Month: 1
X-DOI: 10.1080/00014788.2016.1204216
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1204216
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:1:p:77-107
Template-Type: ReDIF-Article 1.0
Author-Name: Tuan Q. Ho
Author-X-Name-First: Tuan Q.
Author-X-Name-Last: Ho
Author-Name: Norman Strong
Author-X-Name-First: Norman
Author-X-Name-Last: Strong
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: Modelling analysts’ target price revisions following good and bad news?
Abstract:
We study the relation between analysts’ target price revisions and recent market returns, excess stock returns, and other analysts’ target price revisions. Empirical results show that, after controlling for earnings forecast and recommendation revisions, target price revisions are associated with each of these information sources. We also find that target price revisions are more sensitive to negative than to positive excess stock returns. We conjecture that firms’ tendency to withhold bad news, while releasing good news promptly, drives this effect and, using proxies for firms’ withholding of bad news, we report evidence supporting this hypothesis.
Journal: Accounting and Business Research
Pages: 37-61
Issue: 1
Volume: 48
Year: 2018
Month: 1
X-DOI: 10.1080/00014788.2016.1230485
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1230485
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:1:p:37-61
Template-Type: ReDIF-Article 1.0
Author-Name: Yuan Yin
Author-X-Name-First: Yuan
Author-X-Name-Last: Yin
Author-Name: Ken Peasnell
Author-X-Name-First: Ken
Author-X-Name-Last: Peasnell
Author-Name: Herbert G. Hunt
Author-X-Name-First: Herbert G.
Author-X-Name-Last: Hunt
Title: How do sell-side analysts obtain price-earnings multiples to value firms?
Abstract:
Previous studies of analysts’ valuation methods show that sell-side analysts often rely on multiples-based relative valuation methods in deriving target price forecasts, predominantly earnings-based multiples. However, little is known about how analysts actually arrive at the earnings multiples that they apply in their valuations. Based on extant valuation theory, we analyse three benchmarks/reference points that analysts use to select these multiples using U.S. data. By mimicking analysts’ relative valuation processes, we show that analysts tend to assign earnings multiple premiums (discounts) to those firms expected to have growth premiums (higher risk levels) relative to comparable firms. We provide evidence that analysts use firms’ historical earnings multiples as benchmarks, and assign firms that are expected to have more (less) attractive fundamentals than they have had in the past earnings multiples that are at a premium (discount) relative to the average historical earnings multiples at which they traded. The forward price-earnings multiple for the broad U.S. market index signals the market’s expectations about the growth prospects of the U.S. economy and future economic conditions and we also find that changes in this multiple affect analysts’ choices of firm-specific earnings multiples.
Journal: Accounting and Business Research
Pages: 108-135
Issue: 1
Volume: 48
Year: 2018
Month: 1
X-DOI: 10.1080/00014788.2016.1230486
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1230486
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:1:p:108-135
Template-Type: ReDIF-Article 1.0
Author-Name: Catherine Salzedo
Author-X-Name-First: Catherine
Author-X-Name-Last: Salzedo
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Author-Name: Mahmoud El-Haj
Author-X-Name-First: Mahmoud
Author-X-Name-Last: El-Haj
Title: Does equity analyst research lack rigour and objectivity? Evidence from conference call questions and research notes
Abstract:
Doubts have been raised about the rigour and objectivity of sell-side analysts’ research due to institutional structures that promote pro-management behaviour. However, research in psychology stresses the importance of controlling for biases in individuals’ inherent cognitive processing behaviour when drawing conclusions about their propensity to undertake careful scientific analysis. Using social cognition theory, we predict that the rigour and objectivity evident in analyst research is more pronounced following unexpected news in general and unexpected bad news in particular. We evaluate this prediction against the null hypothesis that analyst research consistently lacks rigour and objectivity to maintain good relations with management. Using U.S. firm earnings surprises as our conditioning event, we examine the content of analysts’ conference call questions and research notes to assess the properties of their research. We find that analysts’ notes and conference call questions display material levels of rigour and objectivity when earnings news is unexpectedly positive, and that these characteristics are more pronounced in response to unexpectedly poor earnings news. Results are consistent with analysts’ innate cognitive processing response counteracting institutional considerations when attributional search incentives are strong. Exploratory analysis suggests that studying verbal and written outputs provides a more complete picture of analysts’ work.
Journal: Accounting and Business Research
Pages: 5-36
Issue: 1
Volume: 48
Year: 2018
Month: 1
X-DOI: 10.1080/00014788.2016.1230487
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1230487
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Template-Type: ReDIF-Article 1.0
Author-Name: Mike Jones
Author-X-Name-First: Mike
Author-X-Name-Last: Jones
Author-Name: Stuart Cooper
Author-X-Name-First: Stuart
Author-X-Name-Last: Cooper
Title: Financial reporting and business communication 22nd annual conference University of Bristol, 5th–6th July 2018
Journal: Accounting and Business Research
Pages: 136-137
Issue: 1
Volume: 48
Year: 2018
Month: 1
X-DOI: 10.1080/00014788.2018.1386751
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1386751
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:1:p:136-137
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Clatworthy
Author-X-Name-First: Mark
Author-X-Name-Last: Clatworthy
Author-Name: Edward Lee
Author-X-Name-First: Edward
Author-X-Name-Last: Lee
Title: Financial analysts’ role in valuation and stewardship
Journal: Accounting and Business Research
Pages: 1-4
Issue: 1
Volume: 48
Year: 2018
Month: 1
X-DOI: 10.1080/00014788.2017.1394607
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1394607
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:1:p:1-4
Template-Type: ReDIF-Article 1.0
Author-Name: Weipeng Yuan
Author-X-Name-First: Weipeng
Author-X-Name-Last: Yuan
Author-Name: Richard Macve
Author-X-Name-First: Richard
Author-X-Name-Last: Macve
Author-Name: Debin Ma
Author-X-Name-First: Debin
Author-X-Name-Last: Ma
Title: The development of Chinese accounting and bookkeeping before 1850: insights from the Tŏng Tài Shēng business account books (1798–1850)
Abstract:
Claims have repeatedly been made for the importance of double-entry bookkeeping (‘DEB’) for capitalism’s development in the West, so it is valuable to explore the bookkeeping and accounting practices of economically successful organisations elsewhere. Our paper reports our exploration into the original account books contained in the archive of Tŏng Tài Shēng (‘TTS’), a substantial Chinese ‘grocery/merchant-banking’ business whose surviving books span a period from the late eighteenth century to the middle of the nineteenth century. The TTS archive is the most complete and integrated surviving merchant archive from before China’s forced opening to the West in the mid-nineteenth century. Our findings about its accounting processes and records (of which we give illustrations) shed critical light on the nature of indigenous Chinese bookkeeping and business organisation and on the larger questions about Chinese commercial culture and the path of its development, for comparison with those about the West. We find no evidence in the surviving account books of TTS to support previous arguments in the literature that at this period Chinese accounting practice for successful businesses (must have) had its own ‘Chinese DEB’ comparable to Western DEB.
Journal: Accounting and Business Research
Pages: 401-430
Issue: 4
Volume: 47
Year: 2017
Month: 6
X-DOI: 10.1080/00014788.2016.1263182
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1263182
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:4:p:401-430
Template-Type: ReDIF-Article 1.0
Author-Name: Stephan Fuhrmann
Author-X-Name-First: Stephan
Author-X-Name-Last: Fuhrmann
Author-Name: Christian Ott
Author-X-Name-First: Christian
Author-X-Name-Last: Ott
Author-Name: Elisabeth Looks
Author-X-Name-First: Elisabeth
Author-X-Name-Last: Looks
Author-Name: Thomas W. Guenther
Author-X-Name-First: Thomas W.
Author-X-Name-Last: Guenther
Title: The contents of assurance statements for sustainability reports and information asymmetry
Abstract:
This paper investigates how the assurance of sustainability reports enhances the credibility of such reports in the eyes of the investors and, thus, results in lower information asymmetries, as measured by bid-ask spreads. We measure the assurance of sustainability reports based on a content analysis of the assurance statements in which the assurance providers describe the design of the assurance process. For a matched sample of 442 STOXX 600 Europe companies with and without assured sustainability reports, our results indicate that a high-quality design of the assurance process reduces the level of information asymmetry. While an assurance process substantiating a high assurance level decreases information asymmetries, an assurance process that ensures only a moderate assurance level is insufficient. If an assurance provider performs tests of details of numerical data, this further reduces information asymmetries. For countries without regulations on sustainability reporting, we provide evidence that analytical tests of aggregated indicators, the description of the assurance provider’s competencies and the description of the sustainability assurance-specific work steps also contribute to a reduction of information asymmetries.
Journal: Accounting and Business Research
Pages: 369-400
Issue: 4
Volume: 47
Year: 2017
Month: 6
X-DOI: 10.1080/00014788.2016.1263550
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1263550
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:4:p:369-400
Template-Type: ReDIF-Article 1.0
Author-Name: Andreas Hellmann
Author-X-Name-First: Andreas
Author-X-Name-Last: Hellmann
Author-Name: Chiing Yeow
Author-X-Name-First: Chiing
Author-X-Name-Last: Yeow
Author-Name: Lurion De Mello
Author-X-Name-First: Lurion
Author-X-Name-Last: De Mello
Title: The influence of textual presentation order and graphical presentation on the judgements of non-professional investors
Abstract:
The aim of this study is to examine the influence of textual presentation order and graphical presentation on the judgements of non-professional investors. Adopting an experimental approach and drawing on the belief-adjustment model, the study captures whether a recency effect prevails and whether this effect can be moderated by the inclusion of a graph. Additionally, the study utilises eye-tracking to provide a novel insight into the processes individuals use to assess financial information and form judgements. The results reveal that non-professional investors are susceptible to recency effects due to the strategic presentation ordering of narrative information. Non-professional investors give a lower performance rating if the negative information is presented last. The recency effect is not reduced through the inclusion of a graph.
Journal: Accounting and Business Research
Pages: 455-470
Issue: 4
Volume: 47
Year: 2017
Month: 6
X-DOI: 10.1080/00014788.2016.1271737
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1271737
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:4:p:455-470
Template-Type: ReDIF-Article 1.0
Author-Name: Lei Dong
Author-X-Name-First: Lei
Author-X-Name-Last: Dong
Title: Understanding investors’ reliance on disclosures of nonfinancial information and mitigating mechanisms for underreliance
Abstract:
This study uses two experiments to examine whether nonprofessional investors rely on voluntarily disclosed nonfinancial information (NFI) and the factors that affect their reliance on such information. Results from experiment one suggest that nonfinancial disclosure affects high-experience (long-term) investors more than low-experience (short-term) investors. In addition, more investing experience seems to compensate the insensitivity to NFI caused by a short-term investment horizon. Results from experiment two suggest that merely requiring participants to evaluate firms’ performance separately based on the financial and nonfinancial measures (NFMs) – or merely presenting the NFMs in a more readable format – does not significantly alter the reliance on the nonfinancial disclosure for low-experience and short-term investors. However, when the two interventions are implemented simultaneously, NFI significantly affects the amount invested by those investors.
Journal: Accounting and Business Research
Pages: 431-454
Issue: 4
Volume: 47
Year: 2017
Month: 6
X-DOI: 10.1080/00014788.2016.1277969
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1277969
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:4:p:431-454
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663381
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663381
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Ann Jorissen
Author-X-Name-First: Ann
Author-X-Name-Last: Jorissen
Author-Name: David Otley
Author-X-Name-First: David
Author-X-Name-Last: Otley
Title: The management of accounting numbers: Case study evidence from the ‘crash’ of an airline
Abstract: Financial misrepresentation has usually been analysed by large‐scale empirical research. However, the generality gained from such an approach is at the cost of understanding the rich and complex nature of financial misrepresentation in real organisations.We adopt a case study approach to gain more insight into the incentives, embedded in contracts, which trigger decisions to engage in financial misrepresentation and the underlying elements of discretion in these processes. In particular, we examine whether contractual incentives should be considered as endogenous or exogenous and we take a more integrated and dynamic perspective than is typical. Our findings demonstrate that in order to understand the decision processes of real managers it is necessary to distinguish between negotiable and non‐negotiable contracts of the firm. Using a multi‐theory perspective we observe that the direction of the causation assumed in the agency framework (i.e. contracts influence behaviour) is often reversed in the case of negotiable contracts (i.e. managers influence contracts). The case findings also provide insights into a number of additional variables which enlarge the discretion of a senior manager to engage in financial misrepresentation. The manipulation of accounting numbers can be achieved by many mechanisms which traditional methods based on accruals would not detect. The use of a wider range of research methods is therefore desirable.
Journal: Accounting and Business Research
Pages: 3-38
Issue: 1
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663382
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663382
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:1:p:3-38
Template-Type: ReDIF-Article 1.0
Author-Name: Raf Orens
Author-X-Name-First: Raf
Author-X-Name-Last: Orens
Author-Name: Nadine Lybaert
Author-X-Name-First: Nadine
Author-X-Name-Last: Lybaert
Title: Determinants of sell‐side financial analysts’ use of non‐financial information
Abstract: This paper aims to research the context within which sell‐side financial analysts make decisions to use corporate non‐financial information. Prior research has demonstrated that financial analysts take into account non‐financial information in their analyses of firms, but knowledge is scarce about what determines their use of this information. Based on a survey conducted among Belgian financial analysts, we observe a significant negative association between the financial analysts’ use of non‐financial information and the earnings informativeness of a firm's financial statement information proxied by leverage and stock return volatility. We also find that a higher amount of non‐financial information is used by less experienced financial analysts and by financial analysts covering a higher number of firms.
Journal: Accounting and Business Research
Pages: 39-53
Issue: 1
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663383
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663383
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:1:p:39-53
Template-Type: ReDIF-Article 1.0
Author-Name: Mahmoud Al‐Akra
Author-X-Name-First: Mahmoud
Author-X-Name-Last: Al‐Akra
Author-Name: Ian Eddie
Author-X-Name-First: Ian
Author-X-Name-Last: Eddie
Author-Name: Muhammad Ali
Author-X-Name-First: Muhammad
Author-X-Name-Last: Ali
Title: The association between privatisation and voluntary disclosure: Evidence from Jordan
Abstract: This paper investigates the impact of privatisation on the extent of corporate voluntary disclosure in Jordan.We conduct a longitudinal examination using 243 annual reports of 27 privatised firms in Jordan over a period of nine years from 1996 to 2004. Employing univariate and pooled regression models our results show that privatisation is positively associated with voluntary disclosure. Specifically, we find that accounting regulation reforms and foreign investments accompanying privatisation have a significant impact on the levels of accounting disclosure in Jordan. Our study provides evidence on the role of privatisation in improving the disclosure culture as an important pre‐condition for the development of active capital markets.
Journal: Accounting and Business Research
Pages: 55-74
Issue: 1
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663384
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663384
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:1:p:55-74
Template-Type: ReDIF-Article 1.0
Author-Name: Ross Taplin
Author-X-Name-First: Ross
Author-X-Name-Last: Taplin
Title: Statistical inference using the T index to quantify the level of comparability between accounts
Abstract: The extent to which the accounts of companies are comparable is considered important to users and regulators. However, prior research has been restricted by a lack of appropriate statistical methods for testing comparability indices. This has made it difficult to assess the true level of comparability from sample data and to test research hypotheses such as whether the level of comparability (a) differs by policy, (b) differs by country, and (c) changes over time. This paper fills this gap by exploring the statistical properties of the T index. The T index generalises the H, C, I and various modifications of these indices and represents a unified framework for the measurement of the extent to which the accounts of companies are comparable. Formulae for the bias and standard error for any index under this framework are provided and proved. The bias is shown to equal zero or be negligible in most practical situations. Using historical data, the standard error is used to illustrate the accuracy with which comparability is estimated and to perform formal statistical inference using confidence intervals and p‐values. Furthermore, the sampling distribution of the T index is assessed for normality. Implications for research design and sample size determination are also discussed.
Journal: Accounting and Business Research
Pages: 75-103
Issue: 1
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663385
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663385
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:1:p:75-103
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 1
Volume: 29
Year: 1998
X-DOI: 10.1080/00014788.1998.9729562
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9729562
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Handle: RePEc:taf:acctbr:v:29:y:1998:i:1:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Barker
Author-X-Name-First: Richard
Author-X-Name-Last: Barker
Title: The market for information—evidence from finance directors, analysts and fund managers
Abstract: The theoretical distinction between information efficiency and fundamental efficiency suggests an important question for accounting research, which is whether (and to what extent) there exists an equilibrium mechanism whereby fund managers investment decisions can be fully informed. This question is approached in this paper by means of developing a grounded theory of the market for information. The theory is derived from a (mostly interview-based) empirical analysis of the economic incentives of finance directors, analysts and fund managers with respect to stock market information flows. The evidence suggests a two-part theory. First, it is argued that ‘raw’ data flowing directly from companies is of considerably greater importance to fund managers than ‘processed’ data generated by analysts. Second, analysts are nevertheless argued to play an important role in the market for information, as both mechanisms of information efficiency and as providers of benchmarks for consensus valuation. This theory implies that the research literature has paid insufficient attention to the role of accounting information in direct communication between companies and fund managers and, related to this, that the role of analysts in share price determination has been overstated and only superficially understood.
Journal: Accounting and Business Research
Pages: 3-20
Issue: 1
Volume: 29
Year: 1998
X-DOI: 10.1080/00014788.1998.9729563
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9729563
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Handle: RePEc:taf:acctbr:v:29:y:1998:i:1:p:3-20
Template-Type: ReDIF-Article 1.0
Author-Name: Noel Brown
Author-X-Name-First: Noel
Author-X-Name-Last: Brown
Author-Name: Craig Deegan
Author-X-Name-First: Craig
Author-X-Name-Last: Deegan
Title: The public disclosure of environmental performance information—a dual test of media agenda setting theory and legitimacy theory
Abstract: This paper documents the results of an empirical study undertaken within Australia of the relationship between the print media coverage given to various industries' environmental effects, and the levels of annual report environmental disclosures made by a sample of firms within those industries. The paper draws upon previous studies in media agenda setting theory and legitimacy theory to develop two testable hypotheses. Nine industries are reviewed across the period from 1981–1994. Drawing upon two theories, it is argued that the media can be particularly effective in driving the community's concern about the environmental performance of particular organisations (from media agenda setting theory). Where such concern is raised, organisations will respond by increasing the extent of disclosure of environmental information within the annual report (from legitimacy theory). The results indicate that for the majority of the industries studied, higher levels of media attention (as determined by a review of a number of print media newspapers and journals) are significantly associated with higher levels of annual report environmental disclosures.
Journal: Accounting and Business Research
Pages: 21-41
Issue: 1
Volume: 29
Year: 1998
X-DOI: 10.1080/00014788.1998.9729564
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9729564
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Handle: RePEc:taf:acctbr:v:29:y:1998:i:1:p:21-41
Template-Type: ReDIF-Article 1.0
Author-Name: Kees Camfferman
Author-X-Name-First: Kees
Author-X-Name-Last: Camfferman
Title: Perceptions of the Royal Mail case in the Netherlands
Abstract: The 1931 Royal Mail case, as a landmark event in the history of British accountancy, did not go unnoticed in the Netherlands. Awareness of the case is reflected by a fairly wide scattering of references in contemporary Dutch documentary sources, notably in the literature of the auditing profession. Because of this, the case provides a convenient opening for studying the comparative development of accounting and auditing in Britain and the Netherlands. This paper documents Dutch references to the Royal Mail case from the 1930s to the early 1950s and it presents an interpretation of the pattern and nature of these references. The materials brought together in this paper show that in interpreting the Royal Mail case, Dutch auditors paid more attention to general issues of auditor responsibility than to the issue of secret reserve accounting with which the case is traditionally associated. The case provided support for those who argued with Limperg that the Dutch profession was ahead of Britain in its views on auditor responsibility.
Journal: Accounting and Business Research
Pages: 43-55
Issue: 1
Volume: 29
Year: 1998
X-DOI: 10.1080/00014788.1998.9729565
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9729565
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Handle: RePEc:taf:acctbr:v:29:y:1998:i:1:p:43-55
Template-Type: ReDIF-Article 1.0
Author-Name: Ranko Jelic
Author-X-Name-First: Ranko
Author-X-Name-Last: Jelic
Author-Name: Brahim Saadouni
Author-X-Name-First: Brahim
Author-X-Name-Last: Saadouni
Author-Name: Richard Briston
Author-X-Name-First: Richard
Author-X-Name-Last: Briston
Title: The accuracy of earnings forecasts in IPO prospectuses on the Kuala Lumpur Stock Exchange
Abstract: This paper examines the accuracy of earnings forecasts made by managers of Malaysian initial public offerings (IPOs) during the period 1984–1995. It is a mandatory requirement for Malaysian IPOs to furnish earnings forecasts together with the opinions thereon of the auditors and the lead underwriter in their prospectuses. Their accuracy is measured by forecast errors, absolute forecast errors, squared forecast errors and standardised forecast errors. The results suggest that, on average, managers under-forecast earnings by 33.37%. A comparison with the naive no change model in earnings suggests that 96 out of 122 companies outperform this model. A number of company specific characteristics (size, age, forecast interval, gearing, proportion of shares retained by owners, auditor reputation and industry) are tested. The results reveal that both the age and industry classification of the company are statistically significant, and that management earnings forecasts are particularly inaccurate where firms experience a decline in earnings. Key words: accuracy of prospectus earnings forecasts, initial public offerings, accounting in Malaysia.
Journal: Accounting and Business Research
Pages: 57-72
Issue: 1
Volume: 29
Year: 1998
X-DOI: 10.1080/00014788.1998.9729566
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9729566
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Handle: RePEc:taf:acctbr:v:29:y:1998:i:1:p:57-72
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Morris
Author-X-Name-First: Richard
Author-X-Name-Last: Morris
Author-Name: R. Parker
Author-X-Name-First: R.
Author-X-Name-Last: Parker
Title: International harmony measures of accounting policy: comparative statistical properties
Abstract: Van der Tas's (1988) I index and the between-country C index introduced by Archer et al. (1995) are competing measures of international harmony. We present comparative statistical properties of these indices, via a simulation study covering three accounting methods in 10 countries, with uniform, bimodal and unimodal distributions of companies across accounting methods. The indices are also adjusted for non-disclosures using techniques developed by Archer and McLeay (1995) and Archer et al. (1995). The I index and the between-country C index are mathematically equivalent in the two-country case even in the presence of non-disclosures. As more countries are compared, the two indices diverge. The means and standard deviations of the I index, with a correction proposed by Archer and McLeay (1995), decrease and there is little skewness or kurtosis. In contrast, as more countries are compared, the between-country C index exhibits more stability in means, lower standard deviations, higher skewness and kurtosis. The between-country C index may be superior to the corrected I index because (i) between-country C index means approximate their ‘expected values’ (where all observations equal expected values) more closely than do corrected I index means: and (ii) between-country C index means are more stable than corrected I index means where the data come from stable distributions.
Journal: Accounting and Business Research
Pages: 73-86
Issue: 1
Volume: 29
Year: 1998
X-DOI: 10.1080/00014788.1998.9729567
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9729567
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Handle: RePEc:taf:acctbr:v:29:y:1998:i:1:p:73-86
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Zeff
Author-X-Name-First: Stephen
Author-X-Name-Last: Zeff
Author-Name: David Hatherly
Author-X-Name-First: David
Author-X-Name-Last: Hatherly
Author-Name: T. Cooke
Author-X-Name-First: T.
Author-X-Name-Last: Cooke
Author-Name: Colin Clubb
Author-X-Name-First: Colin
Author-X-Name-Last: Clubb
Title: Book Reviews
Journal:
Pages: 87-92
Issue: 1
Volume: 29
Year: 1998
X-DOI: 10.1080/00014788.1998.9729568
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9729568
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Handle: RePEc:taf:acctbr:v:29:y:1998:i:1:p:87-92
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: FINANCIAL REPORTING AND BUSINESS COMMUNICATION RESEARCH UNIT
Journal:
Pages: 93-93
Issue: 1
Volume: 29
Year: 1998
X-DOI: 10.1080/00014788.1998.9729569
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9729569
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Handle: RePEc:taf:acctbr:v:29:y:1998:i:1:p:93-93
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Special issue of the British Accounting Review on Corporate Governance
Journal:
Pages: 94-94
Issue: 1
Volume: 29
Year: 1998
X-DOI: 10.1080/00014788.1998.9729570
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9729570
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Handle: RePEc:taf:acctbr:v:29:y:1998:i:1:p:94-94
Template-Type: ReDIF-Article 1.0
Author-Name: Marwa Elnahass
Author-X-Name-First: Marwa
Author-X-Name-Last: Elnahass
Author-Name: Leonidas Doukakis
Author-X-Name-First: Leonidas
Author-X-Name-Last: Doukakis
Title: Market valuations of bargain purchase gains: are these true gains under IFRS?
Abstract:
This study investigates stock market valuations for bargain purchase gains (BPGs) in the context of International Financial Reporting Standards (IFRS) between 2005 and 2014. Motivated by the increased frequency and high concentration of BPGs in Europe, we study a sample of acquirers listed on the London Stock Exchange to assess the value relevance of BPGs (a) under discrepant disclosure practices (i.e. disclosure versus non- disclosure of the reasons for the gains), (b) before and after the revision of IFRS 3, and (c) considering different income classifications for BPGs (operating or non-operating earnings). BPGs, on average, are not significantly valued by the stock market. However, the post-IFRS 3 revision period, marked by stricter measurement criteria and additional disclosure requirements, witnessed a significant shift in firm valuations. BPGs for which the reason for the gain is disclosed are positively valued only in the post-IFRS 3 revision period. BPGs are consistently perceived as value irrelevant for those firms which fail to comply with mandated IFRS 3 disclosure requirements regarding the reason for the gain. Finally, BPGs classified as a component of non-operating income with sufficient note disclosure on the reason for the gain are significantly associated with prices and returns.
Journal: Accounting and Business Research
Pages: 753-784
Issue: 7
Volume: 49
Year: 2019
Month: 11
X-DOI: 10.1080/00014788.2019.1609345
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1609345
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:7:p:753-784
Template-Type: ReDIF-Article 1.0
Author-Name: Guanming He
Author-X-Name-First: Guanming
Author-X-Name-Last: He
Author-Name: David Marginson
Author-X-Name-First: David
Author-X-Name-Last: Marginson
Author-Name: Xixi Dai
Author-X-Name-First: Xixi
Author-X-Name-Last: Dai
Title: Do voluntary disclosures of product and business expansion plans impact analyst coverage and forecasts?
Abstract:
We investigate whether voluntary disclosures of product and business expansion plans affect analyst coverage and forecasts. We find that the level of analyst coverage is positively associated with the incidence of disclosures of product and business expansion plans. We also find that product and business expansion disclosures increase the informativeness of analyst earnings forecasts. We find no evidence that product and business expansion disclosures increase analyst forecast errors. Overall, our study contributes to understanding the role of product and business expansion disclosures in analyst forecast behaviour.
Journal: Accounting and Business Research
Pages: 785-817
Issue: 7
Volume: 49
Year: 2019
Month: 11
X-DOI: 10.1080/00014788.2018.1559717
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1559717
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:7:p:785-817
Template-Type: ReDIF-Article 1.0
Author-Name: Ying Guo
Author-X-Name-First: Ying
Author-X-Name-Last: Guo
Author-Name: Boochun Jung
Author-X-Name-First: Boochun
Author-X-Name-Last: Jung
Author-Name: Yanhua Sunny Yang
Author-X-Name-First: Yanhua Sunny
Author-X-Name-Last: Yang
Title: On the nonlinear relation between product market competition and earnings quality
Abstract:
The literature documents conflicting results regarding the influence of product market competition on earnings quality. We extend this stream of literature by incorporating competition’s effect on both the opportunities and the incentives to manage earnings. The combination of both effects results in a nonlinear relation between product market competition and earnings quality. At low competition levels, additional information associated with one more rival helps reveal earnings irregularity and deter earnings management to a larger extent than its effect on the incentives to manage earnings, suggesting a positive relation between competition and earnings quality. At high competition levels, the latter effect dominates the former. We thus predict a positive (negative) relation between competition and earnings quality at low (high) competition levels. Consistent with our hypothesis, we document an inverted U-shaped relation between earnings quality and product market competition.
Journal: Accounting and Business Research
Pages: 818-846
Issue: 7
Volume: 49
Year: 2019
Month: 11
X-DOI: 10.1080/00014788.2019.1586515
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1586515
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:7:p:818-846
Template-Type: ReDIF-Article 1.0
Author-Name: Xing Huan
Author-X-Name-First: Xing
Author-X-Name-Last: Huan
Author-Name: Antonio Parbonetti
Author-X-Name-First: Antonio
Author-X-Name-Last: Parbonetti
Title: Financial derivatives and bank risk: evidence from eighteen developed markets
Abstract:
We examine the relationship between equity risk and the use of financial derivatives with a sample of 555 banks from eighteen developed markets from 2006 to 2015. Our main findings suggest that banks’ use of financial derivatives increased their risk. This increase in risk can be driven by banks’ use of derivatives for speculative purposes, by suboptimal hedging to obtain hedge accounting status, or from accounting mismatches that generate volatility in earnings. We also show that this relationship is nonlinear. Too-Big-To-Fail banks and those that employ a traditional retail banking business model are subject to lower idiosyncratic risk. We address endogeneity concerns using instrumental variables capturing the use of derivatives with portfolio ranking. Overall, our study contributes to understanding the impact of derivatives use on bank risk and the risk consequences of a bank’s business model choice.
Journal: Accounting and Business Research
Pages: 847-874
Issue: 7
Volume: 49
Year: 2019
Month: 11
X-DOI: 10.1080/00014788.2019.1618695
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1618695
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:7:p:847-874
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Clatworthy
Author-X-Name-First: Mark
Author-X-Name-Last: Clatworthy
Author-Name: Juan Manuel García Lara
Author-X-Name-First: Juan Manuel
Author-X-Name-Last: García Lara
Author-Name: Edward Lee
Author-X-Name-First: Edward
Author-X-Name-Last: Lee
Title: 50 years of Accounting and Business Research
Journal: Accounting and Business Research
Pages: 1-5
Issue: 1
Volume: 50
Year: 2020
Month: 1
X-DOI: 10.1080/00014788.2020.1690742
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1690742
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:1:p:1-5
Template-Type: ReDIF-Article 1.0
Author-Name: Mahmoud El-Haj
Author-X-Name-First: Mahmoud
Author-X-Name-Last: El-Haj
Author-Name: Paulo Alves
Author-X-Name-First: Paulo
Author-X-Name-Last: Alves
Author-Name: Paul Rayson
Author-X-Name-First: Paul
Author-X-Name-Last: Rayson
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: Retrieving, classifying and analysing narrative commentary in unstructured (glossy) annual reports published as PDF files
Abstract:
We provide a methodological contribution by developing, describing and evaluating a method for automatically retrieving and analysing text from digital PDF annual report files published by firms listed on the London Stock Exchange (LSE). The retrieval method retains information on document structure, enabling clear delineation between narrative and financial statement components of reports, and between individual sections within the narratives component. Retrieval accuracy exceeds 95% for manual validations using a random sample of 586 reports. Large-sample statistical validations using a comprehensive sample of reports published by non-financial LSE firms confirm that report length, narrative tone and (to a lesser degree) readability vary predictably with economic and regulatory factors. We demonstrate how the method is adaptable to non-English language documents and different regulatory regimes using a case study of Portuguese reports. We use the procedure to construct new research resources including corpora for commonly occurring annual report sections and a dataset of text properties for over 26,000 U.K. annual reports.
Journal: Accounting and Business Research
Pages: 6-34
Issue: 1
Volume: 50
Year: 2020
Month: 1
X-DOI: 10.1080/00014788.2019.1609346
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1609346
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:1:p:6-34
Template-Type: ReDIF-Article 1.0
Author-Name: Jennifer Howard
Author-X-Name-First: Jennifer
Author-X-Name-Last: Howard
Author-Name: Praveen Sinha
Author-X-Name-First: Praveen
Author-X-Name-Last: Sinha
Title: Analysts’ earnings forecasting behavior surrounding uncertain regulatory events: evidence from the Tax Reform Act of 1986
Abstract:
This study examines analysts’ forecasting behaviour in the presence of significant tax policy uncertainty. The Tax Reform Act of 1986 (TRA86) was preceded by a lengthy debate, allowing us to investigate how tax policy uncertainty evolves over time. Our results are generally consistent with the intuition that uncertainty precedes the enactment of a proposed tax law while complexity manifests afterwards. Using the repeal of the investment tax credit to identify highly impacted firms, we find that the onset of disagreement among analysts during the debate occurred sooner for highly impacted firms than other firms. We also find that disagreement among analysts was concentrated among highly impacted firms before and after enactment. Given that our sample period precedes Regulation Fair Disclosure, our evidence suggests that analysts relied on private information from management to resolve the uncertainty associated with TRA86 but only for highly impacted firms.
Journal: Accounting and Business Research
Pages: 35-60
Issue: 1
Volume: 50
Year: 2020
Month: 1
X-DOI: 10.1080/00014788.2019.1574548
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1574548
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:1:p:35-60
Template-Type: ReDIF-Article 1.0
Author-Name: Catriona Paisey
Author-X-Name-First: Catriona
Author-X-Name-Last: Paisey
Author-Name: Nick Paisey
Author-X-Name-First: Nick
Author-X-Name-Last: Paisey
Author-Name: Heather Tarbert
Author-X-Name-First: Heather
Author-X-Name-Last: Tarbert
Author-Name: Betty (H. T.) Wu
Author-X-Name-First: Betty (H. T.)
Author-X-Name-Last: Wu
Title: Deprivation, social class and social mobility at Big Four and non-Big Four firms
Abstract:
Using the work of Bourdieu and Savage, this paper investigates social class and social mobility among chartered accountants who qualified with The Institute of Chartered Accountants of Scotland in 2009. We find that these accountants tend to come from privileged backgrounds and that those who qualified with Big Four firms possess more economic, social and cultural capital than those who qualify with other firms. Our study provides fresh insights into how elements of social class interact with social background. In contrast with the prevailing view that there is limited social mobility in the accountancy profession, we find some evidence of social mobility, suggesting that current debates are based on contestable assumptions. We also find that chartered accountants from more deprived backgrounds as indicated by childhood postcode often have a father who has a professional or managerial occupation, so are not deprived on all measures. Where those from more deprived backgrounds accessed chartered accountancy careers, this was at the expense of people whose parents held lower rather than higher professional or managerial jobs. This suggests that the most advantaged maintain access to chartered accountancy but those from more middling professional homes are displaced when those from more deprived backgrounds gain access.
Journal: Accounting and Business Research
Pages: 61-109
Issue: 1
Volume: 50
Year: 2020
Month: 1
X-DOI: 10.1080/00014788.2019.1647127
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1647127
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:1:p:61-109
Template-Type: ReDIF-Article 1.0
Author-Name: Andreas Charitou
Author-X-Name-First: Andreas
Author-X-Name-Last: Charitou
Author-Name: Irene Karamanou
Author-X-Name-First: Irene
Author-X-Name-Last: Karamanou
Author-Name: Anastasia Kopita
Author-X-Name-First: Anastasia
Author-X-Name-Last: Kopita
Title: The determinants and valuation effects of classification choice on the statement of cash flows
Abstract:
In this paper we exploit the choice allowed by International Financial Reporting Standards (IFRS) regarding the presentation of interest payments on the cash flow statement to answer two related questions: First, whether the classification choice is explained by firm reporting incentives and second, whether it is value relevant. Using a UK sample, we find that firms reporting losses, with a greater proportion of their debt stemming from public sources, with CFO-based covenants and greater increases in leverage in the year of adoption are less likely to report interest payments in cash flows from operating activities (CFOA). Results also suggest that the incentive to meet or beat analyst CFO forecasts decreases, but strong corporate governance increases the probability of including interest payments in CFOA. Based on the assumption that the decision not to classify interest payments in CFOA captures lower disclosure quality or poor future expected performance, we posit that these firms should also exhibit lower valuations. Results obtained after correcting for self-selection bias confirm this assertion. We conclude that managers’ decision not to classify interest payments in CFOA is consistent with the opportunistic use of the choice allowed by IFRS.
Journal: Accounting and Business Research
Pages: 613-650
Issue: 6
Volume: 48
Year: 2018
Month: 9
X-DOI: 10.1080/00014788.2017.1407626
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1407626
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:6:p:613-650
Template-Type: ReDIF-Article 1.0
Author-Name: Lukas Goretzki
Author-X-Name-First: Lukas
Author-X-Name-Last: Goretzki
Author-Name: Kari Lukka
Author-X-Name-First: Kari
Author-X-Name-Last: Lukka
Author-Name: Martin Messner
Author-X-Name-First: Martin
Author-X-Name-Last: Messner
Title: Controllers’ use of informational tactics
Abstract:
Controllers typically have a ‘dual accountability’ towards the finance function and operational management, respectively. This dual accountability at times confronts them with conflicting expectations. In this paper, we suggest that ‘informational tactics’ constitute an important resource which controllers rely on so as to handle these expectations and to successfully present themselves vis-à-vis their different internal stakeholders. Drawing upon interview data, we demonstrate that informational tactics relate to different dimensions of information control (i.e. ‘when’, ‘how’ and ‘what’ information is to be exchanged) and that they depend on the respective room for manoeuvre a controller has in a given situation. Overall, our analysis adds a more nuanced picture to the literature on controllers’ handling of information and demonstrates the fundamental role of informational tactics for their everyday work.
Journal: Accounting and Business Research
Pages: 700-726
Issue: 6
Volume: 48
Year: 2018
Month: 9
X-DOI: 10.1080/00014788.2017.1407627
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1407627
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:6:p:700-726
Template-Type: ReDIF-Article 1.0
Author-Name: David Ashton
Author-X-Name-First: David
Author-X-Name-Last: Ashton
Author-Name: Chau (Ruby) Trinh
Author-X-Name-First: Chau (Ruby)
Author-X-Name-Last: Trinh
Title: Evaluating the information content of earnings forecasts
Abstract:
This study develops a framework to compare the ability of alternative earnings forecast approaches to capture the market expectation of future earnings. Given prior evidence of analysts’ systematic optimistic bias, we decompose earnings surprises into analysts’ earnings surprises and adjustments based on alternative forecasting models. An equal market response to these two components indicates that the associated earnings forecast is a sufficient estimate of the market expectation of future earnings. To apply our framework, we examine four recent regression-based earnings forecasting models, alongside a simple earnings-based random walk model and analysts’ forecasts. Using the earnings forecasts of the model that satisfies our sufficiency condition, we identify a set of stocks for which the market is unduly pessimistic about future earnings. The investment strategy of buying and holding these stocks generates statistically significant abnormal returns. We offer an explanation as to why this and similar strategies might be successful.
Journal: Accounting and Business Research
Pages: 674-699
Issue: 6
Volume: 48
Year: 2018
Month: 9
X-DOI: 10.1080/00014788.2017.1415800
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1415800
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:6:p:674-699
Template-Type: ReDIF-Article 1.0
Author-Name: Tristan Roger
Author-X-Name-First: Tristan
Author-X-Name-Last: Roger
Title: The coverage assignments of financial analysts
Abstract:
Previous studies document that forecast accuracy impacts analyst career outcomes. This paper investigates the influence of forecast accuracy on coverage assignments. I show that brokerage houses reward accurate analysts by assigning them to high-profile firms and penalise analysts exhibiting poor accuracy by assigning them to smaller firms. The coverage of high-profile firms increases the potential for future compensation linked to investment banking and trading commissions. In addition, covering such firms increases analysts' recognition from buy-side investors, which, in turn, increases the likelihood of obtaining broker votes and votes for the Institutional Investor star ranking. Overall, my results indicate that high forecast accuracy leads to increased future compensation.
Journal: Accounting and Business Research
Pages: 651-673
Issue: 6
Volume: 48
Year: 2018
Month: 9
X-DOI: 10.1080/00014788.2017.1416452
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1416452
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:6:p:651-673
Template-Type: ReDIF-Article 1.0
Author-Name: Francesco Mazzi
Author-X-Name-First: Francesco
Author-X-Name-Last: Mazzi
Author-Name: Paul André
Author-X-Name-First: Paul
Author-X-Name-Last: André
Author-Name: Dionysia Dionysiou
Author-X-Name-First: Dionysia
Author-X-Name-Last: Dionysiou
Author-Name: Ioannis Tsalavoutas
Author-X-Name-First: Ioannis
Author-X-Name-Last: Tsalavoutas
Title: Compliance with goodwill-related mandatory disclosure requirements and the cost of equity capital
Abstract:
Theory suggests that increased levels of corporate disclosure lead to a decrease in cost of equity via the reduction of estimation risk. We examine compliance levels with International Financial Reporting Standard 3 Business Combinations and International Accounting Standard 36 Impairments of Assets mandated goodwill-related disclosure and their association with firms’ implied cost of equity capital (ICC). Using a sample of European firms for the period 2008–2011, we find a median compliance level of about 83% and significant differences in compliance levels across firms and time. Non-compliance relates mostly to proprietary information and information that reveals managers’ judgement and expectations. Overall, we find a statistically significant negative relationship between the ICC and compliance with mandated goodwill-related disclosure. Further, we split the sample between firms meeting (or not) market expectations about the recognition of a goodwill impairment loss in a given year to study whether variation in compliance levels mainly plays a confirmatory or a mediatory role. We find the latter: higher compliance levels matter only for the sub-sample of firms that do not meet market expectations regarding goodwill impairment. Finally, our results hold only in countries where enforcement is strong.
Journal: Accounting and Business Research
Pages: 268-312
Issue: 3
Volume: 47
Year: 2017
Month: 4
X-DOI: 10.1080/00014788.2016.1254593
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1254593
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:3:p:268-312
Template-Type: ReDIF-Article 1.0
Author-Name: Emer Curtis
Author-X-Name-First: Emer
Author-X-Name-Last: Curtis
Author-Name: Breda Sweeney
Author-X-Name-First: Breda
Author-X-Name-Last: Sweeney
Title: Managing different types of innovation: mutually reinforcing management control systems and the generation of dynamic tension
Abstract:
Using a single case study of a highly innovative medical device company engaged in two types of innovation (technological and customer-oriented), this paper examines the nature of the relationship between mutually reinforcing management control systems (MCSs) and the generation of dynamic tension between the different types of innovation. Findings show how mutually reinforcing MCSs create a push for consistency but fail to generate a dynamic tension between different types of innovation, thus crowding out one type of innovation. While the literature to date has been unclear on how mutual reinforcement and the generation of dynamic tension are related, this study makes a distinction between mutually reinforcing control systems that support each other in driving momentum around a particular strategic objective (consistent reinforcement), and control systems which are reinforcing in creating dynamic tension, thus reducing momentum in one particular direction (countervailing reinforcement). It also contributes to the literature by highlighting the protective role that MCSs can play in the management of innovation. Feedback and measurement systems reduce the vulnerability of resources to diversion to other areas by stimulating action on projects, driving accountability around the use of the resources, and commanding management attention.
Journal: Accounting and Business Research
Pages: 313-343
Issue: 3
Volume: 47
Year: 2017
Month: 4
X-DOI: 10.1080/00014788.2016.1255585
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1255585
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:3:p:313-343
Template-Type: ReDIF-Article 1.0
Author-Name: Sarfraz A. Khan
Author-X-Name-First: Sarfraz A.
Author-X-Name-Last: Khan
Author-Name: Gerald Lobo
Author-X-Name-First: Gerald
Author-X-Name-Last: Lobo
Author-Name: Emeka T. Nwaeze
Author-X-Name-First: Emeka T.
Author-X-Name-Last: Nwaeze
Title: Public re-release of going-concern opinions and market reaction
Abstract:
This paper examines the market reaction to the public announcement of going-concern (GC) opinions through the news media. In the early 2000s, NASDAQ and AMEX required firms listed on their exchanges to publicly announce previously disclosed information, such as the issuance of a GC opinion, through a press release or the news media. We examine the stock market reaction to the re-release of GC opinions. We find significant abnormal stock return volatility and trading volume at the re-release of this information. Further, based on an analysis of intraday transactions, we find higher abnormal trading activity in small trades around the re-release of the GC opinion, but largely no changes in large trades during the same period. In this respect, the investors that initiate the small trades act as if they are surprised by the information contained in the press release of GC opinions. Such an action, in turn, can be viewed as evidence of a delayed response to the information in GC opinions by a section of investors.
Journal: Accounting and Business Research
Pages: 237-267
Issue: 3
Volume: 47
Year: 2017
Month: 4
X-DOI: 10.1080/00014788.2016.1255586
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1255586
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:3:p:237-267
Template-Type: ReDIF-Article 1.0
Author-Name: Venkateshwaran Narayanan
Author-X-Name-First: Venkateshwaran
Author-X-Name-Last: Narayanan
Author-Name: Carol A. Adams
Author-X-Name-First: Carol A.
Author-X-Name-Last: Adams
Title: Transformative change towards sustainability: the interaction between organisational discourses and organisational practices
Abstract:
This paper adopts a case study approach to explore the complex process of organisational change towards greater social and environmental sustainability. The case study of a major global financial services organisation involved interviews and examination of company documents, and their website over the period 2000–2014. The rare longitudinal empirical evidence from different sources provides important insights to how companies are responding to increasing demands for sustainable development. Using Laughlin’s [1991. Environmental disturbances and organizational transitions and transformations: some alternative models. Organization Studies, 12 (2), 209–232] pathways of change model, the study investigates the interaction between organisational discourses (i.e. its interpretive schemes) and organisational practices (i.e. design archetypes). The findings demonstrate the centrality of organisational discourses, especially those relating to accounting calculative practices, to radical change towards sustainable development. The paper also contributes to the literature on institutional logics, particularly multiple institutional logics, and how these are implicated in change processes.
Journal: Accounting and Business Research
Pages: 344-368
Issue: 3
Volume: 47
Year: 2017
Month: 4
X-DOI: 10.1080/00014788.2016.1257930
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1257930
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:3:p:344-368
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Article
Journal:
Pages: i-i
Issue: 4
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729618
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729618
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:4:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Alan Goodacre
Author-X-Name-First: Alan
Author-X-Name-Last: Goodacre
Author-Name: Ken Pratt
Author-X-Name-First: Ken
Author-X-Name-Last: Pratt
Author-Name: Joanna Stevenson
Author-X-Name-First: Joanna
Author-X-Name-Last: Stevenson
Title: The determinants of audit fees—evidence from the voluntary sector
Abstract: Given the growing demand for accountability in the public sector, there is a need to begin to investigate audit pricing issues in this sector. This study makes three contributions. First, it develops and estimates, for the first time, a model of audit fee determinants for the charity sector. As in previous private sector company studies, size, organisational complexity and audit firm location are the major determinants. A positive association between audit fees and fees for non-audit services is also observed. Charity sector factors of empirical significance include the nature of the charity (i.e., grant-making or fund-raising), its area of activity and the importance of trading income. Separate models for grant-making and fund-raising charities reflect the relative complexity of the audit of fund-raising charities. Second, the lower auditor concentration in the charity sector market, compared to the private sector market, permits a more powerful test of whether large firms and/or auditor expertise are rewarded with a fee premium. In the more complex audit environment of fund-raising charities, the results show that Big Six audit firms receive higher audit fees (18.5%, on average) than non-Big Six firms. Also, non-Big Six audit firms with charity expertise are rewarded with a fee premium over other non-Big Six firms. Finally, the study demonstrates that the charity audit fee rate is significantly lower than that of private sector companies; in fact it is approximately half. A change in the reporting of charity audit fees is proposed to reflect any element of ‘charitable giving’ by the audit firm.
Journal: Accounting and Business Research
Pages: 243-274
Issue: 4
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729619
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729619
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:4:p:243-274
Template-Type: ReDIF-Article 1.0
Author-Name: Alpa Dhanani
Author-X-Name-First: Alpa
Author-X-Name-Last: Dhanani
Author-Name: Roger Groves
Author-X-Name-First: Roger
Author-X-Name-Last: Groves
Title: The management of strategic exchange risk: evidence from corporate practices
Abstract: Using a qualitative research methodology, this paper examines the responses of multinational companies (MNCs), their organisational structures, systems and managers to strategic exchange rate risk, a risk resulting from long-term movements in exchange rates. While strategic exchange risk has been categorised as the most important form of exchange rate risk in the academic literature, there appears to be a paucity of examples of the risk actually being managed in practice. This paper seeks to address this inconsistency. Findings from case study research suggest that contrary to results of prior research, companies do attempt to manage the risk, often aligning various organisational factors such as staff and systems to optimise the risk management process. The management of exchange rate risk as a whole appears to have been an evolutionary process with companies progressing gradually from the management of translation risk in the 1970s to that of transaction risk in the 1980s, and more recently to strategic exchange rate risk management.
Journal: Accounting and Business Research
Pages: 275-290
Issue: 4
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729620
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729620
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:4:p:275-290
Template-Type: ReDIF-Article 1.0
Author-Name: K. Peasnell
Author-X-Name-First: K.
Author-X-Name-Last: Peasnell
Author-Name: P. Pope
Author-X-Name-First: P.
Author-X-Name-Last: Pope
Author-Name: S. Young
Author-X-Name-First: S.
Author-X-Name-Last: Young
Title: The characteristics of firms subject to adverse rulings by the Financial Reporting Review Panel
Abstract: This study presents evidence on the characteristics of firms judged by the Financial Reporting Review Panel (FRRP) as having published defective financial statements. Relative to a pairwise-matched control sample, FRRP firms are associated with weak performance in the defect year. In contrast, their performance in the post-defect period is indistinguishable from that of the control sample, suggesting that rather than being perennial underachieves, FRRP firms are average performers suffering temporary performance difficulties. FRRP firms are also less likely to have a Big Five auditor. Weaker evidence is also presented that FRRP firms are less likely to have an audit committee and a high proportion of outside directors. In contrast, their remaining governance characteristics are largely indistinguishable from those of the control sample. Moreover, there is no evidence that public censure by the FRRP leads to a higher incidence of executive turnover in subsequent years.
Journal: Accounting and Business Research
Pages: 291-311
Issue: 4
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729621
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729621
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:4:p:291-311
Template-Type: ReDIF-Article 1.0
Author-Name: D. Citron
Author-X-Name-First: D.
Author-X-Name-Last: Citron
Title: Book review
Journal:
Pages: 313-314
Issue: 4
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729622
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729622
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:4:p:313-314
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: CALL FOR PAPERS
Journal:
Pages: 315-315
Issue: 4
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729623
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729623
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:4:p:315-315
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: CONFERENCE ANNOUNCEMENT FINANCIAL REPORTING AND BUSINESS COMMUNICATION
Journal:
Pages: 316-316
Issue: 4
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729624
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729624
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:4:p:316-316
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Accounting, Business & Financial History Conference 17–18 September 2002
Journal:
Pages: 317-317
Issue: 4
Volume: 31
Year: 2001
X-DOI: 10.1080/00014788.2001.9729625
File-URL: http://hdl.handle.net/10.1080/00014788.2001.9729625
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Handle: RePEc:taf:acctbr:v:31:y:2001:i:4:p:317-317
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial
Journal:
Pages: ebi-ebi
Issue: 4
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729994
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729994
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:4:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: ii-ii
Issue: 4
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729995
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729995
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:4:p:ii-ii
Template-Type: ReDIF-Article 1.0
Author-Name: Adebayo Agbejule
Author-X-Name-First: Adebayo
Author-X-Name-Last: Agbejule
Title: The relationship between management accounting systems and perceived environmental uncertainty on managerial performance: a research note
Abstract: This study draws on both contingency and contracting theory to examine the moderating effect of perceived environmental uncertainty (PEU) on the relationship between the use of management accounting system (MAS) and managerial performance in Finnish companies. The responses of 69 managers, drawn from Finnish companies, to a questionnaire survey were analysed using a moderated regression analysis (MRA). The results found support for the hypothesis that the effects of MAS on performance were dependent on PEU. Under high levels of PEU, sophisticated MAS had a positive effect on performance, but under low levels it had a negative effect. Additional analysis showed that PEU interacts with different variations of MAS to influence performance.
Journal: Accounting and Business Research
Pages: 295-305
Issue: 4
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729996
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729996
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:4:p:295-305
Template-Type: ReDIF-Article 1.0
Author-Name: Warwick Funnell
Author-X-Name-First: Warwick
Author-X-Name-Last: Funnell
Title: Accounting on the frontline: cost accounting, military efficiency and the South African War
Abstract: The South African War (1899–1902) exposed significant defects in the administration of the British army which precipitated several parliamentary inquiries. The findings of these inquiries convinced the British Government that army administrators, but especially those responsible for supplying the army, had given insufficient attention to the military benefits which might be obtained from the methods and experience of business. The absence of cost accounting systems throughout the War Office and on the field of battle, resulting in problems for financial management and military efficiency, was given particular prominence by the War Office (Reconstitution) Committee (Esher Committee) and the Royal Commission on War Stores in South Africa. The paper broadens the compass of the debate about the evolution of cost accounting in the latter decades of the 19th and early 20th centuries by demonstrating how the advantages of cost accounting were clearly established and accepted by many senior civilian military administrators and politicians as a result of British experience during the South African War.
Journal: Accounting and Business Research
Pages: 307-326
Issue: 4
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729997
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729997
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:4:p:307-326
Template-Type: ReDIF-Article 1.0
Author-Name: Musa Mangena
Author-X-Name-First: Musa
Author-X-Name-Last: Mangena
Author-Name: Richard Pike
Author-X-Name-First: Richard
Author-X-Name-Last: Pike
Title: The effect of audit committee shareholding, financial expertise and size on interim financial disclosures
Abstract: In recent years, corporate failures and accounting irregularities have led to concerns about the effectiveness of audit committees in the financial reporting process. In response, corporate governance committees in different countries have made specific recommendations designed to enhance the role of the audit committee in executing its financial reporting oversight duties. We investigate in this study, the effect of some of these recommendations by empirically examining the relationship between selected audit committee characteristics and the level of disclosure in interim reports of a sample of 262 UK listed companies. Specifically, the audit committee characteristics examined are shareholding of audit committee members (as a proxy for audit committee independence), audit committee size and audit committee financial expertise. Employing both a weighted and unweighted index to measure interim disclosure, the results indicate a significant negative association between shareholding of audit committee members and interim disclosure. Our results provide evidence of a significant positive association between interim disclosure and audit committee financial expertise. We find no significant relationship between audit committee size and the extent of disclosure in interim reports. Overall, however, our results suggest that audit committee characteristics have an impact on its monitoring effectiveness of the financial reporting process. These results have important implications for corporate governance policy-makers who have a responsibility to prescribe appropriate corporate governance structures to ensure that shareholders are protected.
Journal: Accounting and Business Research
Pages: 327-349
Issue: 4
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729998
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729998
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:4:p:327-349
Template-Type: ReDIF-Article 1.0
Author-Name: Jane Broadbent
Author-X-Name-First: Jane
Author-X-Name-Last: Broadbent
Author-Name: Richard Pike
Author-X-Name-First: Richard
Author-X-Name-Last: Pike
Author-Name: Jane Broadbent
Author-X-Name-First: Jane
Author-X-Name-Last: Broadbent
Title: Book Reviews
Journal:
Pages: 351-353
Issue: 4
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9729999
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9729999
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:4:p:351-353
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Guide for Authors
Journal:
Pages: 353-353
Issue: 4
Volume: 35
Year: 2005
X-DOI: 10.1080/00014788.2005.9730000
File-URL: http://hdl.handle.net/10.1080/00014788.2005.9730000
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Handle: RePEc:taf:acctbr:v:35:y:2005:i:4:p:353-353
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 1
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728950
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728950
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:1:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: A. Arnold
Author-X-Name-First: A.
Author-X-Name-Last: Arnold
Author-Name: D. Matthews
Author-X-Name-First: D.
Author-X-Name-Last: Matthews
Title: Corporate financial disclosures in the UK, 1920–50: the effects of legislative change and managerial discretion
Abstract: During the period 1920–50, the legislative approach to corporate financial disclosure in the UK was transformed. Although the changes have been well covered in the literature, the actual levels and patterns of change in UK corporate disclosures, which reflect the effects of both legislative requirements and managerial discretion, have attracted relatively little attention. The main purpose of this paper is to provide a sound empirical basis for conclusions about disclosure practices in the UK across the second quarter of the last century. To that end, the paper provides a structured discussion of changes in corporate disclosures in the UK, based upon detailed analysis of a substantial and broadly based body of corporate data for the years 1920, 1935 and 1950. These dates provide, respectively, a starting point that falls within the coverage of the main existing studies of UK disclosures of the first quarter of the twentieth century, a mid-point that allows for evaluation of the effects of the Companies Acts 1928–9 and the Royal Mail case of 1931 and a closing date that incorporates the effects of the 1948 Act. The relationship between the state and the financial community and its various agencies are clearly of importance, and particular attention has been paid to the effects of managerial discretion on disclosures, given Edwards' view that criticisms aroused by the revelations of the Royal Mail case of 1931, ‘probably had a greater impact on the quality of published data than all the Companies Acts passed up to that date’.
Journal: Accounting and Business Research
Pages: 3-16
Issue: 1
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728951
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728951
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:1:p:3-16
Template-Type: ReDIF-Article 1.0
Author-Name: Mahmoud Ezzamel
Author-X-Name-First: Mahmoud
Author-X-Name-Last: Ezzamel
Title: Accounting working for the state: tax assessment and collection during the New Kingdom, ancient Egypt
Abstract: This paper examines the relationship between accounting and taxation in antiquity. It draws upon complete translations of original documents from the New Kingdom (1552–1080 BC), ancient Egypt, to examine the accounting practices used in the various stages of the ‘cycle of taxation’, beginning with identifying taxable subjects, through the estimation and final assessment of taxes, to the collection, transportation and storage of taxes. The paper argues that these accounting practices were sufficiently fine-tuned for an ancient system of human accountability to function. Accounting practices used in these ancient documents embodied several key characteristics: designation of precise time and space, the identification of individuals responsible, and the naming, itemisation, enumeration, valuation and attribution of responsibility for different objects. Extrinsic relative valuations of different objects collected as tax in kind could be derived because the ancient scribes used a money of account system that allowed inter-translatability across different monies. This evidence points to the centrality of the role of accounting in the economy of ancient Egypt.
Journal: Accounting and Business Research
Pages: 17-39
Issue: 1
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728952
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728952
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:1:p:17-39
Template-Type: ReDIF-Article 1.0
Author-Name: Fiona Anderson-Gough
Author-X-Name-First: Fiona
Author-X-Name-Last: Anderson-Gough
Author-Name: Christopher Grey
Author-X-Name-First: Christopher
Author-X-Name-Last: Grey
Author-Name: Keith Robson
Author-X-Name-First: Keith
Author-X-Name-Last: Robson
Title: Accounting professionals and the accounting profession: linking conduct and context
Abstract: Recent years have seen an upsurge in published research concerned with the daily conduct of accounting professionals in Big Five firms. However, in general, these studies have given scant consideration to the institutional setting within which accountants work. In this paper we analyse the UK accounting profession in terms of the fragmentation of its professional bodies and the diversification of its markets, and link this to empirical findings from a detailed qualitative research project examining the professional socialisation of trainees in the UK regional offices of two Big Five firms. These findings confirm earlier studies in terms of the key relationship between professionalism and forms of self-conduct, but extend the earlier studies by exploring trainees' accounts of their professional expertise, qualification and examination. We conclude by arguing that these conceptions reinforce, albeit in unintended ways, the changing institutional context of the accounting profession.
Journal: Accounting and Business Research
Pages: 41-56
Issue: 1
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728953
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728953
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:1:p:41-56
Template-Type: ReDIF-Article 1.0
Author-Name: Jane Broadbent
Author-X-Name-First: Jane
Author-X-Name-Last: Broadbent
Author-Name: Pelham Gore
Author-X-Name-First: Pelham
Author-X-Name-Last: Gore
Title: Book reviews
Journal:
Pages: 57-59
Issue: 1
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728954
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728954
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:1:p:57-59
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: 94-94
Issue: 2
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730062
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730062
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:2:p:94-94
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Macve
Author-X-Name-First: Richard
Author-X-Name-Last: Macve
Title: In Memoriam: Harold Edey
Journal:
Pages: 95-95
Issue: 2
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730063
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730063
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:2:p:95-95
Template-Type: ReDIF-Article 1.0
Author-Name: Andrew Higson
Author-X-Name-First: Andrew
Author-X-Name-Last: Higson
Author-Name: Yoshikatsu Shinozawa
Author-X-Name-First: Yoshikatsu
Author-X-Name-Last: Shinozawa
Author-Name: Mark Tippett
Author-X-Name-First: Mark
Author-X-Name-Last: Tippett
Title: IAS 29 and the cost of holding money under hyperinflationary conditions
Abstract: Empirical evidence is presented on the efficacy of procedures summarised in IAS 29: Financial Reporting in Hyperinflationary Economies for estimating the loss in purchasing power from holding monetary items during hyperinflationary periods. Our empirical analysis encompasses 32 hyperinflationary economies covering a wide variety of hyperinflationary conditions and spanning a period of more than 80 years. While the estimation procedures summarised in IAS 29 perform poorly under all the hyperinflationary conditions encompassed by our sample, they are especially poor when the rate of inflation accelerates towards the end of a relatively short hyperinflationary period. For these latter economies, our best estimate of the actual purchasing power loss is typically only a small fraction of the figure obtained under the IAS 29 procedures. For hyperinflations of longer duration, the IAS 29 procedures return estimated purchasing power losses that are typically around 10% larger than our best estimate of the actual losses. We also derive and empirically test a general class of ‘two point’ estimation formulae that make more efficient use of the sparse information set on which the IAS 29 estimation procedures are based. The results obtained from this procedure are encouraging and suggest it is possible to obtain reliable estimates of purchasing power losses using only sparse information sets provided realistic assumptions are made about the way monetary holdings respond to variations in the purchasing power of the currency.
Journal: Accounting and Business Research
Pages: 97-121
Issue: 2
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730064
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730064
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:2:p:97-121
Template-Type: ReDIF-Article 1.0
Author-Name: Pelham Gore
Author-X-Name-First: Pelham
Author-X-Name-Last: Gore
Author-Name: Peter Pope
Author-X-Name-First: Peter
Author-X-Name-Last: Pope
Author-Name: Ashni Singh
Author-X-Name-First: Ashni
Author-X-Name-Last: Singh
Title: Earnings management and the distribution of earnings relative to targets: UK evidence
Abstract: In this paper we provide new evidence on discontinuities in the distribution of reported earnings, using a large sample of UK firms. We examine the discontinuity phenomenon in the context of earnings management. We report that the empirical distribution of earnings before discretionary working capital accruals does not reflect the unusually high frequencies of small surpluses and unusually low frequencies of small deficits relative to targets found in the distribution of actual (reported) earnings, i.e. after discretionary working capital accruals. We find that discretionary working capital accruals have the effect of significantly increasing the frequencies of firms achieving earnings targets both overall and by small margins. Thus, we document an explicit link between working capital accruals-based earnings management and the discontinuities observed in the empirical distribution of earnings relative to targets. We also examine earnings management before and after the issuance of FRS 3 ‘Reporting Financial Performance’ and find evidence that FRS 3 altered earnings management strategies adopted by companies.
Journal: Accounting and Business Research
Pages: 123-149
Issue: 2
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730065
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730065
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:2:p:123-149
Template-Type: ReDIF-Article 1.0
Author-Name: Lance Moir
Author-X-Name-First: Lance
Author-X-Name-Last: Moir
Author-Name: Sudi Sudarsanam
Author-X-Name-First: Sudi
Author-X-Name-Last: Sudarsanam
Title: Determinants of financial covenants and pricing of debt in private debt contracts: the UK evidence
Abstract: This paper presents details of financial covenants given by a sample drawn from the largest 200 non-financial quoted firms in the UK in private debt contracts and analyses these data to see whether there are relationships between the nature of the covenants given and firm characteristics. Data were obtained from 72 firms, of which 17 gave no financial covenants. Firm size was found to be the only significant factor influencing whether firms did or did not give covenants as well as the only factor which influenced the margin given on debt. Some types of covenants given were found to be different from those found in previous research. In particular, there is greater use of EBITDA as a base for both interest cover and gearing covenants. This shows the importance of cash flow based lending as opposed to asset based lending for general financing for large firms.
Journal: Accounting and Business Research
Pages: 151-166
Issue: 2
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730066
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730066
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:2:p:151-166
Template-Type: ReDIF-Article 1.0
Author-Name: Sam McKinstry
Author-X-Name-First: Sam
Author-X-Name-Last: McKinstry
Author-Name: David Molyneaux
Author-X-Name-First: David
Author-X-Name-Last: Molyneaux
Title: Book Reviews
Journal:
Pages: 167-169
Issue: 2
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730067
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730067
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:2:p:167-169
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Call for papers for a special issue of Accounting, Auditing and Accountability Journal: “Accounting and the Visual”
Journal:
Pages: 170-170
Issue: 2
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730068
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730068
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:2:p:170-170
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Bursaries for PhD students
Journal:
Pages: 171-171
Issue: 2
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730069
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730069
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:2:p:171-171
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 2
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729635
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729635
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:2:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 2
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729636
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729636
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:2:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Chong Lau
Author-X-Name-First: Chong
Author-X-Name-Last: Lau
Author-Name: Ian Eggleton
Author-X-Name-First: Ian
Author-X-Name-Last: Eggleton
Title: The influence of information asymmetry and budget emphasis on the relationship between participation and slack
Abstract: Propensity to create slack may be influenced by the subordinates ‘reactions to budgetary participation. Prior research indicates that subordinates react favourably to high budgetary participation when it serves some useful purposes for them. Participation may be useful to them in a low information asymmetry situation, when they do not have more information than their superiors, because it enables them to gain from an exchange of information with their superiors. It may also be useful to them in a high budget emphasis situation, when meeting budgeted targets is important, because it enables them to influence the levels of budget targets. Prospect theory suggests that subordinates who find participation useful may have a low propensity to create slack for fear of jeopardising their participation privileges. Hence, subordinates’ propensity to create slack is likely to be low when high participation is allowed in a low information asymmetry situation. When information asymmetry is high, propensity to create slack is also likely to be low when high participation is allowed in a high budget emphasis situation. The results, based on a sample of 103 manufacturing managers, provide support for these expectations.
Journal: Accounting and Business Research
Pages: 91-104
Issue: 2
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729637
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729637
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:2:p:91-104
Template-Type: ReDIF-Article 1.0
Author-Name: Sheila Ellwood
Author-X-Name-First: Sheila
Author-X-Name-Last: Ellwood
Title: Bridging the GAAP across the UK public sector
Abstract: Most of the UK public sector has made the transition to accruals based accounting e.g. central government departments, local government and the National Health Service. All have claimed an adherence to UK GAAP and it is intended to produce Whole of Government Accounts 2005/06 on a GAAP basis. This paper questions whether UK public sector accounting is really converging on GAAP and the extent to which there is comparability between the various parts of the public sector and between the public sector and the private sector. Using illustrations from the MoD, a local authority and a NHS trust, the compliance of public sector accounting practice with the Accounting Standard Board's Statement of Principles and reporting standards is investigated. The reasons for modifications to UK GAAP are then considered. It is concluded that the UK public sector is making unique and ad hoc adaptations to GAAP. These adaptations have been fragmentary and lack uniformity across the public sector. Furthermore, in its extensive use of current values the UK public sector could be argued to be ahead of the private sector rather than in alignment. Much work needs to be undertaken on an underpinning theoretical framework to enable accounting within and between the sectors to be bridged.
Journal: Accounting and Business Research
Pages: 105-121
Issue: 2
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729638
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729638
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:2:p:105-121
Template-Type: ReDIF-Article 1.0
Author-Name: Divesh Sharma
Author-X-Name-First: Divesh
Author-X-Name-Last: Sharma
Author-Name: Errol Iselin
Author-X-Name-First: Errol
Author-X-Name-Last: Iselin
Title: The decision usefulness of reported cash flow and accrual information in a behavioural field experiment
Abstract: While recent capital market studies tend to reveal some information content in cash flows, their results may not be generalisable to other contexts such as the assessment of solvency. Mandated accounting standards on cash flow emphasise the relevance of cash flow data for assessing solvency. However, there is a paucity of research that specifically investigates this contention. Accordingly, this study investigates the decision usefulness of reported cash flow and accrual information in a behavioural field solvency assessment experiment. Using a two-group between-subjects field experiment design, bankers with at least three years corporate lending experience made solvency judgments using either cash flow cues or accrual cues. We found that, as hypothesised, judgments based on cash flow information were more accurate than judgments based on accrual information. The difference in judgment accuracy was more pronounced for insolvent (failed) companies than for solvent (non-failed) companies. This observation suggests that cash flow information is more decision useful for firms experiencing financial distress. Our results therefore imply that cash flow information has greater decision usefulness than accrual information for assessing corporate solvency and support the mandate of the Statement of Cash Flows. Our results also support the normative arguments of proponents of cash flow reporting.
Journal: Accounting and Business Research
Pages: 123-135
Issue: 2
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729639
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729639
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:2:p:123-135
Template-Type: ReDIF-Article 1.0
Author-Name: Derek Matthews
Author-X-Name-First: Derek
Author-X-Name-Last: Matthews
Author-Name: Michael Peel
Author-X-Name-First: Michael
Author-X-Name-Last: Peel
Title: Audit fee determinants and the large auditor premium in 1900
Abstract: In recent years there has been increasing interest among researchers in the accounting field in the issue of audit fees. This article applies the methodology of these studies to a set of UK company data for the year 1900. The problems of collecting the historical data are discussed, and a descriptive treatment of the audit market 100 years ago and the similarities and differences with today are outlined. A sample of 121 quoted companies in 1900, which declared their audit fees along with other data in their published accounts, is utilised and the determination of these fees is modelled. The results with regard to the importance of size, complexity, industrial sector, the profitability of the auditee and the start-up costs of the first years of the audit were found to be in line with contemporary findings. The main factor out of step with existing research is that the leading auditors in 1900 did not charge a premium as the present day Big 4 (formerly 6) appear to do. This is explained by the fact that big firms today offer a wider, international, and therefore perhaps more valuable set of audit services than did the largest firms in 1900.
Journal: Accounting and Business Research
Pages: 137-155
Issue: 2
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729640
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729640
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:2:p:137-155
Template-Type: ReDIF-Article 1.0
Author-Name: David Alexander
Author-X-Name-First: David
Author-X-Name-Last: Alexander
Author-Name: Clive Emmanuel
Author-X-Name-First: Clive
Author-X-Name-Last: Emmanuel
Author-Name: Michael Jones
Author-X-Name-First: Michael
Author-X-Name-Last: Jones
Author-Name: Rowan Jones
Author-X-Name-First: Rowan
Author-X-Name-Last: Jones
Title: Book Reviews
Journal:
Pages: 157-161
Issue: 2
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729641
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729641
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:2:p:157-161
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: SIXTH INTERNATIONAL MANAGEMENT CONTROL SYSTEMS RESEARCH CONFERENCE
Journal:
Pages: 162-162
Issue: 2
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729642
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729642
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:2:p:162-162
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730001
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730001
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730002
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730002
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:1:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Kam Chan
Author-X-Name-First: Kam
Author-X-Name-Last: Chan
Author-Name: Carl Chen
Author-X-Name-First: Carl
Author-X-Name-Last: Chen
Author-Name: Louis Cheng
Author-X-Name-First: Louis
Author-X-Name-Last: Cheng
Title: A ranking of accounting research output in the European region
Abstract: This study provides a ranking in accounting research output in Europe during 1991-2002. We use a set of 19 accounting journals to rank accounting programmes for 253 European universities. UK universities are overwhelmingly represented in the top ranking. Over the entire period, the top three universities are the University of Manchester. London School of Economics and the University of Edinburgh. Some leading European accounting programmes made good progress in research output during the 12-year period. The distribution of publication is highly skewed. The top-5, top-10, and top-25 universities account for 21%, 30%. and 54% of the total weighted number of articles, respectively.
Journal: Accounting and Business Research
Pages: 3-17
Issue: 1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730003
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730003
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:1:p:3-17
Template-Type: ReDIF-Article 1.0
Author-Name: Sheila Ellwood
Author-X-Name-First: Sheila
Author-X-Name-Last: Ellwood
Author-Name: Sue Newbury
Author-X-Name-First: Sue
Author-X-Name-Last: Newbury
Title: A bridge too far: a common conceptual framework for commercial and public benefit entities
Abstract: Writers and standard setters have propounded the adoption of private sector frameworks for the public sector. Ellwood (2003) examined the apparent ‘bridge’ between and across the sectors provided by UK GAAP and concluded that much work needed to be undertaken on the theoretical underpinning of Whole of Government Accounts, but WGA is progressing presuming the commercial model. There has been recent debate in the Antipodes as to whether conceptual frameworks can be common for the private and the public and not-for-profit sectors or whether such claimed commonality is a sham (Newberry, 2002). In the UK. the Accounting Standards Board (ASB) has produced a reinterpretation of the Statement of Principles for public benefit entities. This paper investigates the proposed Statement of Principles for public benefit entities (SoPpbe). There appears to be an inherent unsuitability of the current private sector framework for transference to ‘public benefit entities’. The balance sheet focus and the assumed objective of wealth creation are incomprehensible in a public or not-for-profit context. Changes in public service management embodied within New Public Management (NPM) led to the ascendancy of accruals accounting but this does not necessarily permit the adoption of a (reinterpreted) private sector conceptual framework. It is concluded that the differences are so fundamental that it is misleading to claim the adoption of a common bridging framework and it is misguided to struggle to achieve one. The differences will always make such an endeavour ‘a bridge too far’.
Journal: Accounting and Business Research
Pages: 19-32
Issue: 1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730004
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730004
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:1:p:19-32
Template-Type: ReDIF-Article 1.0
Author-Name: Steven Maijoor
Author-X-Name-First: Steven
Author-X-Name-Last: Maijoor
Author-Name: Ann Vanstraelen
Author-X-Name-First: Ann
Author-X-Name-Last: Vanstraelen
Title: Earnings management within Europe: the effects of member state audit environment, audit firm quality and international capital markets
Abstract: This paper studies earnings management in a European context. More specifically, the effects of three factors on earnings management within Europe are studied: member state audit environment, audit firm quality and presence in international capital markets. The national audit environments within Europe vary strongly in terms of independence rules and auditor liability. Hence, it can be expected that the restrictions imposed by national audit environments on earnings management vary. However, there are two factors that can mitigate the national audit environment effect: Big Four audit firm quality and a company's reliance on international capital markets. Using data for the period 1992–2000 from listed firms in three EU countries with clearly distinct audit environments (France, Germany and the UK), we have the following main findings. First, a stricter audit environment reduces the magnitude of earnings management, irrespective of the type of auditor (Big Four audit firm or non-Big Four audit firm). Second, there is no evidence of an international Big Four audit quality effect in Europe. Third, a company's reliance on international capital markets does not limit its earnings management. The evidence provided in this study is relevant for the current debate in the European Union on the harmonisation of auditing. For the comparability of earnings, not only is the standardisation of financial reporting important but also the standardisation of enforcement mechanisms, as embodied in the national audit environment and the quality of audit firms. The results of this study suggest that the enforcement of financial reporting still varies strongly across member states of the EU.
Journal: Accounting and Business Research
Pages: 33-52
Issue: 1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730005
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730005
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:1:p:33-52
Template-Type: ReDIF-Article 1.0
Author-Name: Mike Jones
Author-X-Name-First: Mike
Author-X-Name-Last: Jones
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: Book Reviews
Journal:
Pages: 53-55
Issue: 1
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730006
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730006
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:1:p:53-55
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 4
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663370
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663370
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:4:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Nuno Soares
Author-X-Name-First: Nuno
Author-X-Name-Last: Soares
Author-Name: Andrew Stark
Author-X-Name-First: Andrew
Author-X-Name-Last: Stark
Title: The accruals anomaly – can implementable portfolio strategies be developed that are profitable net of transactions costs in the UK?
Abstract: In this paper, we provide evidence related to the existence, or otherwise, of the accruals anomaly in the UK stock market. Specifically, we find that average annual abnormal returns generally decline as prior period accruals move from low to high. This outcome can be interpreted as broadly consistent with the accruals anomaly via which investors overweight the persistence of accruals and underweight the persistence of cash flows in predicting next period's earnings. Our results suggest that to make money out of any mispricing based upon ranking firms by accruals generally requires a portfolio strategy with long and, in particular, short positions in portfolios featuring relatively small capitalisation firms. When taking into account conservative estimates of trading costs, the investment strategy is seen to generate losses if an initially equally‐weighted investment approach is used or positive, but not statistically significant, abnormal returns if a value‐weighted approach is followed. Overall, we conclude that, whilst there is evidence of mispricing consistent with the accruals anomaly, the profitable exploitation of the anomaly is not necessarily possible when transactions costs are taken into account. Thus, the accruals anomaly is not so egregious in the UK as to challenge the semi‐strong version efficient markets hypothesis.
Journal: Accounting and Business Research
Pages: 321-345
Issue: 4
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663371
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663371
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:4:p:321-345
Template-Type: ReDIF-Article 1.0
Author-Name: Demetris Christodoulou
Author-X-Name-First: Demetris
Author-X-Name-Last: Christodoulou
Author-Name: Stuart McLeay
Author-X-Name-First: Stuart
Author-X-Name-Last: McLeay
Title: Bounded variation and the asymmetric distribution of scaled earnings
Abstract: This paper proposes a finite limits distribution for scaled accounting earnings. The probability density function of earnings has been the subject of a great deal of attention, indicating an apparent ‘observational discontinuity’ at zero. Paradoxically, the customary research design used in such studies is built on the implied assumption that the distribution of scaled accounting earnings should approximate a continuous normal variable at the population level. This paper shows that such assumptions may be unfounded, and, using large samples from both the US and the EU, the study provides alternative evidence of a consistently asymmetric frequency of profits and losses. This casts further doubt on the interpretation of the observed discontinuity in the distribution of earnings as prima facie evidence of earnings management. A particular innovation in this paper is to scale the earnings variable by the magnitude of its own components, restricting the standardised range to [–1,1]. Nonparametric descriptions are provided that improve upon the simple histogram, together with non‐normal parametric probability estimates that are consistent with the scalar that is proposed. A notable advantage of this approach is that it avoids some of the statistical shortcomings of commonly used scalars, such as influential outliers and infinite variances.
Journal: Accounting and Business Research
Pages: 347-372
Issue: 4
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663372
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663372
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:4:p:347-372
Template-Type: ReDIF-Article 1.0
Author-Name: Nandini Chandar
Author-X-Name-First: Nandini
Author-X-Name-Last: Chandar
Author-Name: Paul Miranti
Author-X-Name-First: Paul
Author-X-Name-Last: Miranti
Title: Integrating accounting and statistics: Forecasting, budgeting and production planning at the American Telephone and Telegraph Company during the 1920s
Abstract: Drawing on the scholarly perspectives of James R. Beniger and Alfred D. Chandler, we examine a long‐term process of firm‐specific learning at the American Telephone and Telegraph Company (AT&T). Extensive archival records reveal the firm's efforts to improve its informational resources for market planning, capital budgeting and production scheduling in the 1920s. These initiatives were meant to minimise the likelihood of a repetition of the financial crisis that nearly drove AT&T into bankruptcy in 1906–07. The informational innovation was costly as it required specialised human capital, the identification of suitable metrics corresponding to underlying business processes and the integration of these metrics within the elements of a complex firm. Such a transformation developed more reliable forecasting of future demand for telecommunication services. Central to this process was the adaptation of new econometric methodologies for predicting business cycle fluctuations and the integration of these findings into operational plans. Reforms of this sort helped to quantify risk and reduce internal asymmetries that threatened to undermine the smooth, integrative management of AT&T's corporate headquarters unit, its regional operating subsidiaries and Western Electric, its captive manufacturing arm. Our study contributes to a deeper understanding of the historical evolution of management accounting by studying firm‐specific learning to combat external uncertainties and internal information asymmetries in the coordination and control of a giant business enterprise.
Journal: Accounting and Business Research
Pages: 373-395
Issue: 4
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663373
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663373
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:4:p:373-395
Template-Type: ReDIF-Article 1.0
Author-Name: Mahfud Sholihin
Author-X-Name-First: Mahfud
Author-X-Name-Last: Sholihin
Author-Name: Richard Pike
Author-X-Name-First: Richard
Author-X-Name-Last: Pike
Title: Fairness in performance evaluation and its behavioural consequences
Abstract: A recent paper in Accounting and Business Research by Lau et al. (2008) offers systematic evidence to explain whether managers’ perceptions on fairness of performance evaluation procedures affect attitudes such as job satisfaction; and if it does, the different behavioural processes involved. Our paper re‐examines Lau et al.’s model and hypotheses to assess the external validity of their findings, based on a very different sample of managers. Drawing on recent organisational justice literature, it further develops the model and examines the potential interaction effects of fairness of performance evaluation procedures and other variables on job satisfaction. Finally, it extends the outcome variable to include manager performance. Using survey responses from 165 managers, supported by 24 interviews, drawn from three major organisations in the manufacturing and financial services sectors, we find that Lau et al.’s results on the indirect effects of fairness of performance evaluation procedures on job satisfaction are generalisable to other organisational settings and managerial levels. However, using their model we do not find support for the outcome‐based effects through distributive fairness. Developing a revised model we observe that the effects of distributive fairness on job satisfaction are indirect via organisational commitment. When the model is further developed to incorporate performance as the outcome variable, we observe similar findings.
Journal: Accounting and Business Research
Pages: 397-413
Issue: 4
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663374
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663374
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:4:p:397-413
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: The importance of being fair: An analysis of IFRS regulation and practice – a Comment
Abstract: This paper examines the ‘present fairly’ (PF) requirement in IFRS. There were eight relevant developments from 2005 to 2008, and these are mostly not yet considered in the academic literature. The paper synthesises the resulting regulatory position, especially for UK companies. Contrary to official guidance, it is suggested here that the PF requirement and the conditions for using it as an override in IFRS are not the same as for a true and fair view. Examples of the use of the PF override in practice are critically examined, as is a recent Opinion on PF by legal Counsel. Developments in US regulation make US opposition to a PF override clearer. The implications for financial reporting and for research into it are examined.
Journal:
Pages: 415-427
Issue: 4
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663375
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663375
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:4:p:415-427
Template-Type: ReDIF-Article 1.0
Author-Name: Seraina C. Anagnostopoulou
Author-X-Name-First: Seraina C.
Author-X-Name-Last: Anagnostopoulou
Author-Name: Andrianos E. Tsekrekos
Author-X-Name-First: Andrianos E.
Author-X-Name-Last: Tsekrekos
Title: The effect of financial leverage on real and accrual-based earnings management
Abstract:
Past research has documented a substitution effect between real earnings management (RM) and accrual-based earnings management (AM), depending on relative costs. This study contributes to this research by examining whether levels of (and changes in) financial leverage have an impact on this empirically documented trade-off. We hypothesise that in the presence of high leverage, firms that engage in earnings manipulation tactics will exhibit a preference for RM due to a lower possibility – and subsequent costs – of getting caught. We show that leverage levels and increases positively and significantly affect upward RM, with no significant effect on income-increasing AM, while our findings point towards a complementarity effect between unexpected levels of RM and AM for firms with very high leverage levels and changes. This is interpreted as an indication that high leverage could attract heavy outsider scrutiny, making it necessary for firms to use both forms of earnings management in order to achieve earnings targets. Furthermore, we document that equity investors exhibit a significantly stronger penalising reaction to AM vs. RM, indicating that leverage-induced RM is not as easily detectable by market participants as debt-induced AM, despite the fact that the former could imply deviation from optimal business practices.
Journal: Accounting and Business Research
Pages: 191-236
Issue: 2
Volume: 47
Year: 2017
Month: 2
X-DOI: 10.1080/00014788.2016.1204217
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1204217
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:2:p:191-236
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Billings
Author-X-Name-First: Mark
Author-X-Name-Last: Billings
Author-Name: Christopher O’Brien
Author-X-Name-First: Christopher
Author-X-Name-Last: O’Brien
Author-Name: Margaret Woods
Author-X-Name-First: Margaret
Author-X-Name-Last: Woods
Author-Name: Dev Vencappa
Author-X-Name-First: Dev
Author-X-Name-Last: Vencappa
Title: Discretion in accounting for pensions under IAS 19: using the ‘magic telescope’?
Abstract:
We use a panel data set of UK-listed companies over the period 2005–2009 to analyse the actuarial assumptions used to value pension plan liabilities under IAS 19. The valuation process requires companies to make assumptions about financial and demographic variables, notably discount rate, price inflation, salary inflation and mortality/life expectancy of plan members/beneficiaries. We use regression analysis to analyse the relationships between these key assumptions (except mortality, where disclosures are limited) and company-specific factors such as the pension plan funding position and duration of pension liabilities. We find evidence of selective ‘management’ of the three assumptions investigated, although the nature of this appears to differ from the findings of US authors. We conclude that IAS 19 does not prevent the use of managerial discretion, particularly by companies whose pension plan funding positions are weak, thereby reducing the representational faithfulness of the reported pension figures. We also highlight that the degree of discretion used reflects the extent to which IAS 19 defines how the assumptions are to be determined. We therefore suggest that companies should be encouraged to justify more explicitly their choice of assumptions.
Journal: Accounting and Business Research
Pages: 123-143
Issue: 2
Volume: 47
Year: 2017
Month: 2
X-DOI: 10.1080/00014788.2016.1205967
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1205967
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:2:p:123-143
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Burkert
Author-X-Name-First: Michael
Author-X-Name-Last: Burkert
Author-Name: Franz Michael Fischer
Author-X-Name-First: Franz Michael
Author-X-Name-Last: Fischer
Author-Name: Florian Hoos
Author-X-Name-First: Florian
Author-X-Name-Last: Hoos
Author-Name: Karl Schuhmacher
Author-X-Name-First: Karl
Author-X-Name-Last: Schuhmacher
Title: The relationship between lack of controllability and proactive work behaviour: an empirical analysis of competing theoretical explanations
Abstract:
The controllability principle suggests evaluating managers solely based on performance measures they can control. In practice, however, companies often disregard this principle. Therefore, our study addresses organisational benefits linked to the lack of controllability in measures used for managers’ performance evaluations. We draw on important case-based findings to establish a positive ‘base relationship’ between lack of controllability and proactive work behaviour. We test this base relationship with a large-scale sample and find that companies encourage higher levels of proactive work behaviour when they rely on less controllable performance measures. Drawing on recent developments in role theory, we advance previous research and extend the base model by including the theoretical construct of flexible role orientation. We examine different mechanisms through which flexible role orientation potentially impacts the base model. Using survey responses from 432 managers, we find evidence for a mediation model as opposed to an interaction model. Specifically, we find that lack of controllability enhances role conflict, which in turn induces more flexible role orientations ultimately resulting in higher levels of proactive work behaviour.
Journal: Accounting and Business Research
Pages: 144-171
Issue: 2
Volume: 47
Year: 2017
Month: 2
X-DOI: 10.1080/00014788.2016.1222262
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1222262
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:2:p:144-171
Template-Type: ReDIF-Article 1.0
Author-Name: A.J. Arnold
Author-X-Name-First: A.J.
Author-X-Name-Last: Arnold
Title: Capital reduction case law decisions and the development of the capital maintenance doctrine in late-nineteenth-century England
Abstract:
Incorporation with limited liability enabled companies to ‘lock-in’ their financial capital’ and then invest in the long-term, highly specific investments on which the modern industrial economy would be based. The level of benefit varied from country to country, according to the way that the concept of capital lock-in, or maintenance, was defined in the legal systems concerned.In the UK, the concept was not well defined in early company legislation and challenges were raised through the courts during the late nineteenth century. Some of these, the ‘dividend cases’, have been quite widely considered in the literature but direct reductions of share capital, or capital reduction schemes, have received far less attention, even though they raised fundamental issues concerning long-term dividend positions, the accounting treatment of accumulated losses, depreciation and asset values and had important effects on the development of the capital maintenance doctrine and on shareholder class rights.The purpose of this paper is to question whether this literature adequately captures judicial influences on the development of the capital maintenance doctrine in England during the latter part of the nineteenth century, given the limited attention that has been paid to date to the leading capital reduction cases.
Journal: Accounting and Business Research
Pages: 172-190
Issue: 2
Volume: 47
Year: 2017
Month: 2
X-DOI: 10.1080/00014788.2016.1233388
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1233388
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:2:p:172-190
Template-Type: ReDIF-Article 1.0
Author-Name: Oveis Madadian
Author-X-Name-First: Oveis
Author-X-Name-Last: Madadian
Author-Name: Walter Aerts
Author-X-Name-First: Walter
Author-X-Name-Last: Aerts
Author-Name: Tom Van Caneghem
Author-X-Name-First: Tom
Author-X-Name-Last: Van Caneghem
Title: Social comparison of cost behaviour and financial analysts
Abstract:
We investigate whether social comparison of a firm’s reported selling, general and administrative (SG&A) expenses affects financial analysts’ information uncertainty (and their behaviour). Based on a sample of US firms, we examine whether similarity of a firm’s SG&A to an industry-specific peer-based benchmark (or social benchmark) is associated with analyst forecast dispersion, forecast error and coverage. For external observers, the SG&A relative to sales (SG&A ratio) is a key diagnostic of a firm’s cost behaviour, but interpretational ambiguity of the SG&A signal is likely to incentivise search for information-relevant external cues to set expectations about and assess a firm’s SG&A ratio. Higher similarity to the social benchmark is expected to attenuate information asymmetry between analysts and firms regarding firms’ ability to effectively control overheads, decreasing analyst information uncertainty about cost behaviour and performance. In line with a varying weights model for social comparison, we observe a negative association between SG&A similarity and both forecast dispersion and error of one-year-ahead earnings for firms with a prior SG&A ratio exceeding the social benchmark. Our findings also show a negative relationship between SG&A similarity and analyst coverage, especially for firms with a prior SG&A ratio exceeding the social benchmark.
Journal: Accounting and Business Research
Pages: 805-839
Issue: 7
Volume: 48
Year: 2018
Month: 11
X-DOI: 10.1080/00014788.2018.1428524
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1428524
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:7:p:805-839
Template-Type: ReDIF-Article 1.0
Author-Name: David Heald
Author-X-Name-First: David
Author-X-Name-Last: Heald
Author-Name: Ron Hodges
Author-X-Name-First: Ron
Author-X-Name-Last: Hodges
Title: Accounting for government guarantees: perspectives on fiscal transparency from four modes of accounting
Abstract:
Government guarantees are increasingly important as a policy instrument in public infrastructure investment and to assist the banking and financial sectors following the global financial crisis. This paper analyses how different modes of accounting characterize such guarantees in the contexts of public sector financial reporting, statistical accounting, budgeting and long-term fiscal projections. Guarantees are difficult to specify for accounting treatment and consistent conceptualization of liabilities. These difficulties make it attractive for governments to treat obligations as off-budget and off-balance sheet contingent liabilities, rather than recognize them in financial statements and statistical accounts. Miller and Power’s territorializing, mediating, adjudicating and subjectivizing roles of accounting are utilized to analyse the reporting of UK government guarantees. Provisioning for guarantees is complex in financial reporting statements and often absent in national accounts, a deficiency which Eurostat has attempted to address by devising the concept of standardized guarantees and by securing more disclosure of contingent liabilities. There is potential for future research especially where there is greater mediation between the four modes of government accounting.
Journal: Accounting and Business Research
Pages: 782-804
Issue: 7
Volume: 48
Year: 2018
Month: 11
X-DOI: 10.1080/00014788.2018.1428525
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1428525
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:7:p:782-804
Template-Type: ReDIF-Article 1.0
Author-Name: Michiel De Meyere
Author-X-Name-First: Michiel
Author-X-Name-Last: De Meyere
Author-Name: Heidi Vander Bauwhede
Author-X-Name-First: Heidi
Author-X-Name-Last: Vander Bauwhede
Author-Name: Philippe Van Cauwenberge
Author-X-Name-First: Philippe
Author-X-Name-Last: Van Cauwenberge
Title: The impact of financial reporting quality on debt maturity: the case of private firms
Abstract:
We examine whether the debt maturity structure of privately held firms is associated with the quality of their earnings numbers. We argue that earnings numbers that are better able to predict future cash flows lower information asymmetry between privately held firms and their creditors, improving privately held firms’ access to long-term debt. Furthermore, we examine whether the relationship between privately held firms’ earnings quality and their debt maturity differs between small and medium-sized enterprises (SMEs) and larger privately held firms. Using detailed financial statement information from a sample of privately held Belgian firms, we find that earnings quality is positively associated with the likelihood of having long-term debt and with the proportion of long-term debt in total debt. Further, we report evidence that these associations are more pronounced for SMEs than for larger privately held firms, which is consistent with smaller firms entailing more fundamental risk for creditors.
Journal: Accounting and Business Research
Pages: 759-781
Issue: 7
Volume: 48
Year: 2018
Month: 11
X-DOI: 10.1080/00014788.2018.1431103
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1431103
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:7:p:759-781
Template-Type: ReDIF-Article 1.0
Author-Name: Deen Kemsley
Author-X-Name-First: Deen
Author-X-Name-Last: Kemsley
Author-Name: Padmakumar Sivadasan
Author-X-Name-First: Padmakumar
Author-X-Name-Last: Sivadasan
Author-Name: Venkat Subramaniam
Author-X-Name-First: Venkat
Author-X-Name-Last: Subramaniam
Title: The composite dividend tax rate
Abstract:
Dividends often impose taxes on investors. However, as certain prior financial models indicate, they also can produce a tax gain from leverage. Hence the composite marginal dividend tax rate can be specified as the nominal rate minus the offsetting tax gain from leverage. Although this principle has been embedded in theoretical models for more than 40 years, no prior study has examined empirically whether the dividend-induced tax gain from leverage influences dividend policy. We address this empirical void and find dividends decrease in the nominal dividend tax rate and increase in the offsetting tax gain from leverage. In addition, we find the composite tax rate outperforms traditional measures in explaining dividend policy for our full sample of firms. Consistent with prior theory, we also find the composite rate varies in influence according to the financing source for a dividend.
Journal: Accounting and Business Research
Pages: 727-758
Issue: 7
Volume: 48
Year: 2018
Month: 11
X-DOI: 10.1080/00014788.2018.1433526
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1433526
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:7:p:727-758
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 5
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663376
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663376
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:5:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Sidney Gray
Author-X-Name-First: Sidney
Author-X-Name-Last: Gray
Author-Name: Cheryl Linthicum
Author-X-Name-First: Cheryl
Author-X-Name-Last: Linthicum
Author-Name: Donna Street
Author-X-Name-First: Donna
Author-X-Name-Last: Street
Title: Have ‘European’ and US GAAP measures of income and equity converged under IFRS? Evidence from European companies listed in the US
Abstract: The EU's adoption of IFRS, combined with the SEC's removal of the US GAAP reconciliation requirement for non‐US registrants reporting under IFRS, signifies a major shift towards the acceptance of global standards. Based on 20‐F reconciliations provided by the population of US listed European companies filing IFRS‐based statements with the SEC in 2005, we examine whether ‘European’ and US GAAP measures of income and equity converged under IFRS. We find that during the period immediately preceding IFRS, for our sample companies, European and US GAAP measures are generally comparable in respect of income and equity. However, as an exception to the latter, we find that UK GAAP yielded significantly lower measures of equity than US GAAP For companies adopting IFRS for the first time in 2005, we find a significant gap between IFRS and US GAAP measures of income, thereby, signifying de facto divergence from US GAAP in regard to income determination. Furthermore, we find that, following IFRS adoption, significant differences with US GAAP equity persisted for companies that previously reported using UK GAAP. Our findings, thus, support critics’ claims that standard‐setters, most notably the IASB and FASB, have more work to do to achieve a sufficient degree of convergence between IFRS and US GAAP that will convince the SEC to require US companies to use IFRS.
Journal: Accounting and Business Research
Pages: 431-447
Issue: 5
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663377
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663377
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:5:p:431-447
Template-Type: ReDIF-Article 1.0
Author-Name: Paulo Alves
Author-X-Name-First: Paulo
Author-X-Name-Last: Alves
Author-Name: Peter Pope
Author-X-Name-First: Peter
Author-X-Name-Last: Pope
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: Cross‐border information transfers: Evidence from profit warnings issued by European firms
Abstract: This paper reports evidence on cross‐border accounting information transfers associated with profit warning announcements. Using a sample of firms from 29 European countries, we find that negative earnings surprises disclosed by firms in one country affect investors’ perceptions of comparable non‐announcing firms in other countries. The form and magnitude of cross‐border effects is consistent with domestic transfers. Tests explaining variation in cross‐border information transfers provide some (albeit rather limited) evidence that effects vary according to a range of firm‐, industryand country‐level characteristics.
Journal: Accounting and Business Research
Pages: 449-472
Issue: 5
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663378
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663378
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:5:p:449-472
Template-Type: ReDIF-Article 1.0
Author-Name: Yi Ma
Author-X-Name-First: Yi
Author-X-Name-Last: Ma
Author-Name: Mike Tayles
Author-X-Name-First: Mike
Author-X-Name-Last: Tayles
Title: On the emergence of strategic management accounting: An institutional perspective
Abstract: Strategic management accounting (SMA) has been presented as an efficacious approach to strategy formulation and implementation. It also suggests accountants move away from purely financial concerns to give consideration to wider business issues. Management accounting change has attracted significant research attention in recent years. This case study explores the issues which surround change and which enable the adoption of SMA and the repositioning of management accountants to become more strategic. The empirical enquiry is based in one company through a prolonged series of interviews and meetings which enabled activities over a number of years to be reviewed. This revealed an increasing strategic role for management accountants in informing strategic decision‐making and how this role came into being. The research is informed by institutional theories and neoinstitutionalism in particular, to interpret the external and internal influences on the change in roles of some management accountants and the outputs of their work.
Journal: Accounting and Business Research
Pages: 473-495
Issue: 5
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663379
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663379
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:5:p:473-495
Template-Type: ReDIF-Article 1.0
Author-Name: Heidi Bauwhede
Author-X-Name-First: Heidi
Author-X-Name-Last: Bauwhede
Title: On the relation between corporate governance compliance and operating performance
Abstract: Better corporate performance has been cited as one of the main benefits of adopting good corporate governance structures within organisations. However, in contrast to theory, a prior European study (Bauer et al., 2004) reports evidence of a negative relationship between corporate governance and corporate performance. This study re‐examines this relationship, and reports evidence of a positive relationship between the extent of compliance with international best practices concerning board structure and functioning and operating performance when operating performance is measured by the return on assets (ROA). This result is robust to controlling for the firms’ compliance with best practices in other governance areas, and holds for some other governance dimensions, namely disclosure of corporate governance and the range of takeover defences. Further tests indicate that greater compliance with international best practices concerning board structure and functioning is significantly associated with reporting less income from asset disposals and that studying a performance measure that includes this item obscures the inherently positive relationship between operating performance and the extent of compliance with international best practices regarding board structure and functioning. The results provide some support for an oftencited motivation for the adoption of good governance practices, and provide explicit evidence that the measure of operating performance is crucial in examining firm‐level operating performance.
Journal: Accounting and Business Research
Pages: 497-513
Issue: 5
Volume: 39
Year: 2009
X-DOI: 10.1080/00014788.2009.9663380
File-URL: http://hdl.handle.net/10.1080/00014788.2009.9663380
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Handle: RePEc:taf:acctbr:v:39:y:2009:i:5:p:497-513
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 3
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729643
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729643
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:3:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 3
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729644
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729644
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:3:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Clatworthy
Author-X-Name-First: Mark
Author-X-Name-Last: Clatworthy
Author-Name: Michael Jones
Author-X-Name-First: Michael
Author-X-Name-Last: Jones
Title: Financial reporting of good news and bad news: evidence from accounting narratives
Abstract: Accounting narratives are an increasingly important medium of financial communication. In particular, they play a crucial role in the corporate annual report, allowing company management to present annual performance to users in a readily accessible manner. Research suggests that such narratives are widely used and considered important in the investment decisions of private and institutional investors. However, accounting narratives are unaudited and thus may be subject to impression management. This paper focuses on the chairman's narratives of the top 50 and bottom 50 listed UK companies ranked by percentage change in profit before taxation. The research examines whether companies with improving and declining performance report good and bad news in different ways. The findings suggest that both groups of companies prefer to emphasise the positive aspects of their performance. In addition, both groups prefer to take credit for good news themselves, while blaming the external environment for bad news. Thus, despite reporting on markedly different financial performance, management approach it in the same self-serving way. The results of this and previous research have important policy implications for financial reporting. The current auditing regulations could usefully be extended so that the narratives are more rigorously reviewed.
Journal: Accounting and Business Research
Pages: 171-185
Issue: 3
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729645
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729645
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:3:p:171-185
Template-Type: ReDIF-Article 1.0
Author-Name: Miles Gietzmann
Author-X-Name-First: Miles
Author-X-Name-Last: Gietzmann
Author-Name: Marco Trombetta
Author-X-Name-First: Marco
Author-X-Name-Last: Trombetta
Title: Disclosure interactions: accounting policy choice and voluntary disclosure effects on the cost of raising outside capital
Abstract: In this research we consider how disclosure of accounting policy interacts with subsequent choice over voluntary disclosure of a non-financial performance metric. We compare and contrast regimes. In the first, firms are free to choose between a conservative or an aggressive accounting policy before they decide whether to make additional voluntary disclosures. In the other regime, all firms either voluntarily or via mandation use the same accounting policy. We then investigate the cost of raising capital for firms under the two regimes. We show that communication via voluntary disclosure need not be a simple substitute for communication via accounting policy choice.
Journal: Accounting and Business Research
Pages: 187-205
Issue: 3
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729646
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729646
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:3:p:187-205
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Peel
Author-X-Name-First: Michael
Author-X-Name-Last: Peel
Author-Name: Roydon Roberts
Author-X-Name-First: Roydon
Author-X-Name-Last: Roberts
Title: Audit fee determinants and auditor premiums: evidence from the micro-firm sub-market
Abstract: Despite the growing literature on the market for audit services, to date no study has examined the determinants of audit fees for the smallest auditees in the market. This study therefore provides some new theory and evidence on the determinants of the audit fees of micro-firms operating in the UK manufacturing sector. A key finding of the study is that in the highly competitive market under consideration, independent small auditees willingly paid a premium to be audited by a mid-tier or a (then) Big Six auditor, with the latter commanding the higher premium. It is concluded that these findings are consistent with Big Six (and, to a lesser extent, mid-tier) auditors commanding a brand premium stemming from the (perceived) higher quality audit conducted by large auditors, for which small firms are willing to pay a premium in order to benefit from associated ‘reputational’ and ‘signalling’ effects. The common finding that the explanatory power of audit fee models declines as a function of firm size is also examined. The empirical analysis confirms this effect, but evidence is offered that, rather than resulting from model misspecification, it is likely that audit prices of the smallest auditees are relatively insensitive to variations in corporate size, which may result from lower incremental economies of scale and minimum pricing.
Journal: Accounting and Business Research
Pages: 207-233
Issue: 3
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729647
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729647
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:3:p:207-233
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Author-Name: Pengguo Wang
Author-X-Name-First: Pengguo
Author-X-Name-Last: Wang
Title: Towards an understanding of profitability analysis within the residual income valuation framework
Abstract: This paper argues that there is a mis-match between formal theoretical accounting valuation models, and practical approaches to profitability analysis and valuation. In particular, none of the linear information models published to date exhibit an obvious role for profitability analysis. For example, in the standard Ohlson model, earnings and book value apparently summarise all the value relevant information available from the firm's financial statements and there is no apparent need for any further investigation of the accounting numbers beyond these specific line items. The purpose of this paper is to attempt to investigate potential analytical links between formal valuation models and practical profitability analysis. Specifically, we attempt to show how key features of practical profitability analysis might be incorporated into formal valuation models. In this respect there are two particular aspects of valuation practice to which the formal models published to date have paid no attention. First, in practice we often see explicit reference made to the demand side (sales), and supply side (costs) of the business. Second, we often see attempts to benchmark the financial ratios of one firm against the corresponding ratios of firms in the same industry. The purpose of this paper is to attempt to explain why such practices make sense in the context of an attempt to model the principal determinants of firm value within a residual income valuation framework.
Journal: Accounting and Business Research
Pages: 235-246
Issue: 3
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729648
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729648
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:3:p:235-246
Template-Type: ReDIF-Article 1.0
Author-Name: David Hatherly
Author-X-Name-First: David
Author-X-Name-Last: Hatherly
Title: Book review
Journal:
Pages: 247-248
Issue: 3
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729649
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729649
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:3:p:247-248
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: 174-174
Issue: 3
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730070
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730070
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:3:p:174-174
Template-Type: ReDIF-Article 1.0
Author-Name: Joanne Horton
Author-X-Name-First: Joanne
Author-X-Name-Last: Horton
Title: The value relevance of ‘realistic reporting’: evidence from UK life insurers
Abstract: Even under the International Financial Reporting Standard 4 (IFRS 4), the current accounting regime for UK life insurance companies is oriented towards delaying the recognition and distribution of profit, and still remains largely rooted in traditional requirements for statutory solvency reporting. This paper tests empirically the value relevance of the alternative ‘realistic reporting regime’ of voluntary embedded value (EV) disclosures that has been generally adopted by leading UK and Continental European insurers. In recent years, EVs have also been used internally (but not disclosed) by many US life insurers. The results found here are consistent with value relevance and some implications for standard-setters are explored.
Journal: Accounting and Business Research
Pages: 175-197
Issue: 3
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730071
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730071
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:3:p:175-197
Template-Type: ReDIF-Article 1.0
Author-Name: Stuart Ogden
Author-X-Name-First: Stuart
Author-X-Name-Last: Ogden
Author-Name: Robert Watson
Author-X-Name-First: Robert
Author-X-Name-Last: Watson
Title: The influence of comparative pay, customer service measures and accounting profits upon CEO pay in the UK privatised water industry
Abstract: The paper investigates the influence of comparative CEO pay levels, customer service measures and accounting profits upon CEO pay in the UK privatised water industry over the period from 1992 to 2001. We argue that political and regulatory considerations can be expected to constrain CEO pay levels and to motivate remuneration committees to link CEO pay awards to simultaneous improvements in both profits and customer service improvements. The empirical results indicate that the most important drivers of CEO pay changes are sales growth and a partial adjustment to comparable UK CEO pay levels. Customer service improvements and accounting profits are also significantly related to CEO pay awards. However, consistent with regulatory incentives that mitigate the inherent financial conflicts between the two performance measures, the results suggest that the influence of customer service improvements upon CEO pay is largely indirect and stems from the impact it has upon the benchmark profit used for performance-related pay purposes.
Journal: Accounting and Business Research
Pages: 199-215
Issue: 3
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730072
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730072
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:3:p:199-215
Template-Type: ReDIF-Article 1.0
Author-Name: Marleen Willekens
Author-X-Name-First: Marleen
Author-X-Name-Last: Willekens
Author-Name: Dan Simunic
Author-X-Name-First: Dan
Author-X-Name-Last: Simunic
Title: Precision in auditing standards: effects on auditor and director liability and the supply and demand for audit services
Abstract: This paper analyses the economic implications for a company's directors and its auditors of variations in the degree of precision (or, conversely, the degree of vagueness) in generally accepted auditing standards (GAAS), as well as variations in the degree of precision in legal standards of due care faced by directors. Directors and auditors are assumed to be jointly and severally liable to investors and creditors for unintentional misstatements in audited financial statements that are not detected because of either or both parties' negligence. Directors choose expected cost minimising levels of audit quality and internal control quality, which together define the quality of a firm's financial reporting system. Auditors choose a level of effort, given the level of audit quality demanded by directors. The interaction between directors and auditors is modelled in a leader-follower framework, where the directors' demand decisions reflect their own vague legal standards as well as a conjecture of the auditor's production behaviour as a function of the degree of precision in GAAS. We show that decreasing the precision of GAAS initially induces an auditor to produce higher audit quality by exerting more effort. But beyond a certain critical value, decreasing precision leads to decreasing effort and auditors gamble on violating GAAS. When vagueness exceeds a second critical value, auditors exert no effort at all. The demand decisions of directors with respect to the overall quality of a firm's financial reporting system are more complex. We show that when legal due care standards are precise, or somewhat imprecise, directors will demand levels of financial reporting system quality that comply with due care standards. But as legal standards become more imprecise, the precision of GAAS becomes important and affects the quality of internal control and audit quality demanded. Initially, directors will gamble on violating due care standards, and if the degree of vagueness in legal standards becomes sufficiently large, directors will have no demand for financial reporting system quality. In the final section, we develop hypotheses concerning the effects of decreasing precision in GAAS and suggest ways in which these hypotheses could be tested using international, inter-industry, and inter-temporal comparisons of the Big 4 audit firms' market shares, audit fees, and litigation rates.
Journal: Accounting and Business Research
Pages: 217-232
Issue: 3
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730073
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730073
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:3:p:217-232
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Comments on deprivai value and standard setting in measurement: from a symposium to celebrate the work of Professor William T. Baxter
Journal: Accounting and Business Research
Pages: 233-242
Issue: 3
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730074
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730074
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:3:p:233-242
Template-Type: ReDIF-Article 1.0
Author-Name: C. Baker
Author-X-Name-First: C.
Author-X-Name-Last: Baker
Title: Book Review
Journal:
Pages: 243-244
Issue: 3
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730075
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730075
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:3:p:243-244
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Article
Journal:
Pages: i-i
Issue: 1
Volume: 27
Year: 1996
X-DOI: 10.1080/00014788.1996.9729527
File-URL: http://hdl.handle.net/10.1080/00014788.1996.9729527
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:1:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: M. Ezzamel
Author-X-Name-First: M.
Author-X-Name-Last: Ezzamel
Author-Name: D. Gwilliam
Author-X-Name-First: D.
Author-X-Name-Last: Gwilliam
Author-Name: K. Holland
Author-X-Name-First: K.
Author-X-Name-Last: Holland
Title: Some Empirical Evidence from Publicly Quoted UK Companies on the Relationship Between the Pricing of Audit and Non-audit Services
Abstract: Using data obtained from a sample of 314 UK quoted companies (excluding financial sector companies), this paper examines three aspects of the relationship between fees for audit and non-audit services: (a) the extent and nature of the provision of non-audit services to audit clients; (b) whether the positive association between the level of audit fees and non-audit services fees found in the majority of non-UK studies holds in the UK; and (c) whether it is possible to throw further light on the nature of the relationship between audit fees and non-audit services fees by exploring the interaction between non-audit services and other factors that appear to affect audit pricing. Our results suggest that: (i) income earned by audit firms from non-audit work for quoted clients averaged nearly 90% of the levels of audit fee earnings in 1992/93 (and more than a quarter of clients paid more for non-audit services than for the audit); (ii) the extent of voluntary disclosure of the breakdown of non-audit services was limited and the existing disclosure requirement allowed considerable variety in the manner in which non-audit services fees incurred or paid abroad were disclosed; (iii) there was a significant positive association between fees for audit and non-audit services similar to that reported in the majority of US and Australian studies; and (iv) four of the nine interaction terms introduced were significant, implying that non-audit services fees may moderate the association between other explanatory variables and audit fees.
Journal: Accounting and Business Research
Pages: 3-16
Issue: 1
Volume: 27
Year: 1996
X-DOI: 10.1080/00014788.1996.9729528
File-URL: http://hdl.handle.net/10.1080/00014788.1996.9729528
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:1:p:3-16
Template-Type: ReDIF-Article 1.0
Author-Name: M. Gietzmann
Author-X-Name-First: M.
Author-X-Name-Last: Gietzmann
Author-Name: A. Ostaszewski
Author-X-Name-First: A.
Author-X-Name-Last: Ostaszewski
Title: Optimal Disbursement of a Sunk Resource and Decentralised Cost Allocation
Abstract: We consider whether the allocation of the sunk cost of a central resource to operating divisions can be consistent with economically optimal resource consumption decisions. When it is recognised that the central resource is scarce, one may, in principle, defend the allocation of sunk cost, if it measures the opportunity cost of usage. However, typically it has been proposed that such allocations are, at best, a proxy for opportunity cost. Applying classical control theory techniques in a wide range of operating environments, we are able to identify cost allocations that exactly equal opportunity cost. Hence, for our model environment, we provide a rationale for sunk cost allocation in terms of guiding optimal decisions, in contrast to the traditional defence in terms of providing a proxy for opportunity cost. We demonstrate clearly how cost allocations are related to opportunity costs, and identify the circumstances under which the allocation of full costs or alternatively a fixed proportion (related to acquisition conditions) of costs, results in the implementation of economically optimal resource consumption decisions.
Journal: Accounting and Business Research
Pages: 17-40
Issue: 1
Volume: 27
Year: 1996
X-DOI: 10.1080/00014788.1996.9729529
File-URL: http://hdl.handle.net/10.1080/00014788.1996.9729529
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:1:p:17-40
Template-Type: ReDIF-Article 1.0
Author-Name: Nace Magner
Author-X-Name-First: Nace
Author-X-Name-Last: Magner
Author-Name: Robert Welker
Author-X-Name-First: Robert
Author-X-Name-Last: Welker
Author-Name: Terry Campbell
Author-X-Name-First: Terry
Author-X-Name-Last: Campbell
Title: Testing a Model of Cognitive Budgetary Participation Processes in a Latent Variable Structural Equations Framework
Abstract: Previous accounting research has suggested that subordinate participation in the budgetary process has two cognitive aspects: (1) participation enhances budget quality, and hence the utility of budgets, by allowing subordinates to introduce private knowledge into the budgetary process, and (2) participation enables subordinates to obtain information that is relevant to performing their jobs. This study tests a model that encompasses both cognitive aspects of budgetary participation. Data were gathered with a questionnaire distributed to managers from a variety of different national origins who were working in many different global locations. The data were analysed with latent variable structural equation modelling, which provides several advantages over more conventional analytic methods generally used in budgetary participation and other behavioural accounting research. The results indicated that participation enhances budget quality and that budget quality, in turn, has a positive effect on budget utility. Participation was also found to have a direct and positive effect on job-relevant information. The results failed to support a proposed indirect effect of participation on job-relevant information through the enhancement of budget quality.
Journal: Accounting and Business Research
Pages: 41-50
Issue: 1
Volume: 27
Year: 1996
X-DOI: 10.1080/00014788.1996.9729530
File-URL: http://hdl.handle.net/10.1080/00014788.1996.9729530
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:1:p:41-50
Template-Type: ReDIF-Article 1.0
Author-Name: John Pointon
Author-X-Name-First: John
Author-X-Name-Last: Pointon
Title: Inflation, Taxation and the Valuation of Shares
Abstract: A share valuation model is developed that takes account of the possibility of shareholding periods extending beyond one year, income taxes, capital gains taxes paid on realised gains and indexation for inflation. For an infinite dividend series, an optimal shareholding period is derived, which is shown to be related to the level of the after-tax risky rate, discounted at the growth rate, vis-à-vis the after-tax riskless rate, deflated for the general rate of inflation. In turn, this determines whether or not the value of the share is indifferent to the capital gains tax rate and the rate of inflation.
Journal: Accounting and Business Research
Pages: 51-57
Issue: 1
Volume: 27
Year: 1996
X-DOI: 10.1080/00014788.1996.9729531
File-URL: http://hdl.handle.net/10.1080/00014788.1996.9729531
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:1:p:51-57
Template-Type: ReDIF-Article 1.0
Author-Name: Arnold Wright
Author-X-Name-First: Arnold
Author-X-Name-Last: Wright
Author-Name: Sally Wright
Author-X-Name-First: Sally
Author-X-Name-Last: Wright
Title: The Relationship Between Assessments of Internal Control Strength and Error Occurrence, Impact and Cause
Abstract: Planning judgments concerning the nature, extent and timing of evidence are critical to an audit's effectiveness and efficiency. The auditing literature suggests that knowledge of the strength of a client's internal controls in various cycles is an important consideration in such judgments, since the controls' strength is expected to affect the likelihood and nature of financial statement errors. This study examines the occurrence, financial impact and cause of detected misstatements as related to the assessed strength of internal controls. Data on detected errors were gathered from a random, cross-sectional sample of 186 audit agreements. Auditors reported detailed information on 368 audit adjustments, representing 731 misstatements to individual accounts. The results indicated that as assessed internal controls weakened, the frequency of adjustments increased and adjustments were more likely to have an effect on income. However, error magnitude did not differ across control strength settings. Errors were more likely to reflect understatement of assets and liabilities when controls deteriorated, while when controls were strong, assets and liabilities were more frequently overstated. Finally, the causes of adjustments reflect a greater frequency of ‘routine’ errors as controls deteriorate, although cut-off errors were relatively common across all control settings. These results suggest that different audit strategies are appropriate in response to variations in controls.
Journal: Accounting and Business Research
Pages: 58-71
Issue: 1
Volume: 27
Year: 1996
X-DOI: 10.1080/00014788.1996.9729532
File-URL: http://hdl.handle.net/10.1080/00014788.1996.9729532
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:1:p:58-71
Template-Type: ReDIF-Article 1.0
Author-Name: R. Schattke
Author-X-Name-First: R.
Author-X-Name-Last: Schattke
Author-Name: R. Vergoossen
Author-X-Name-First: R.
Author-X-Name-Last: Vergoossen
Title: Barriers to Interpretation—A Case Study of Philips Electronics NV
Abstract: Philips Electronics NV, a very large European company, went through considerable upheaval in the period 1980 to 1994. Accounting disclosures did not seem to be very helpful to statement readers who wanted to evaluate Philips' progress and position. The company's financial condition and income results deteriorated significantly during most of the period, and large losses were shown in 1990 and 1992. Prior to the huge loss recorded in 1990, there were few indications in the annual reports that troubles were mounting. In earlier periods a series of accounting changes were made, the effect of which typically was to increase income. The most significant change came in 1992, when Philips abandoned current cost accounting. We investigated financial analysts' reactions to company disclosures and found that they had problems interpreting the effects of Philips' accounting changes. In addition to accounting changes, Philips also used a somewhat arbitrary restructuring charge (or credit) to adjust income amounts. Finally, the absence of full explanations from the directors at some points could have resulted in users of the annual report being misled. Over the period studied, Philips lost a significant portion of its stockholders' equity. The effect of its reporting practices was to obscure the impact of the unfavorable economic events that affected the company. Financial reporting, at least for this company, fell short of providing disclosures that told a clear story of what was taking place. In the periods before large losses were recorded, few hints were provided of impending disasters. Overall, the results of this study are disturbing. Although the study is restricted to one company, the results deserve the thoughtful consideration of both academics and practising accountants.
Journal:
Pages: 72-84
Issue: 1
Volume: 27
Year: 1996
X-DOI: 10.1080/00014788.1996.9729533
File-URL: http://hdl.handle.net/10.1080/00014788.1996.9729533
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:1:p:72-84
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Watson
Author-X-Name-First: Robert
Author-X-Name-Last: Watson
Author-Name: W. Baxer
Author-X-Name-First: W.
Author-X-Name-Last: Baxer
Author-Name: Philip Bell
Author-X-Name-First: Philip
Author-X-Name-Last: Bell
Author-Name: Joel Demski
Author-X-Name-First: Joel
Author-X-Name-Last: Demski
Title: Book Reviews
Journal:
Pages: 85-88
Issue: 1
Volume: 27
Year: 1996
X-DOI: 10.1080/00014788.1996.9729534
File-URL: http://hdl.handle.net/10.1080/00014788.1996.9729534
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Handle: RePEc:taf:acctbr:v:27:y:1996:i:1:p:85-88
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Index to Volume 28—1997/98
Journal:
Pages: 1-2
Issue: 4
Volume: 28
Year: 1998
X-DOI: 10.1080/00014788.1998.9728912
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728912
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:4:p:1-2
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Keith Edwards
Author-X-Name-First: Keith
Author-X-Name-Last: Edwards
Author-Name: Alan Goodacre
Author-X-Name-First: Alan
Author-X-Name-Last: Goodacre
Title: The impact of constructive operating lease capitalisation on key accounting ratios
Abstract: Current UK lease accounting regulation does not require operating leases to be capitalised in the accounts of lessees, although this is likely to change with the publication of FRS 5. This study conducts a prospective analysis of the effects of such a change. The potential magnitude of the impact of lease capitalisation upon individual users' decisions, market valuations, company cash flows, and managers' behaviour can be indicated by the effect on key accounting ratios, which are employed in decision-making and in financial contracts. The capitalised value of operating leases is estimated using a method similar to that suggested by Imhoff, Lipe and Wright (1991), adapted for the UK accounting and tax environment, and developed to incorporate company-specific assumptions. Results for 1994 for a random sample of 300 listed UK companies show that, on average, the unrecorded long-term liability represented 39% of reported long-term debt, while the unrecorded asset represented 6% of total assets. Capitalisation had a significant impact (at the 1% level) on six of the nine selected ratios (profit margin, return on assets, asset turnover, and three measures of gearing). Moreover, the Spearman rank correlation between each ratio before and after capitalisation revealed that the ranking of companies changed markedly for gearing measures in particular. There were significant inter-industry variations, with the services sector experiencing the greatest impact. An analysis of the impact of capitalisation over the five-year period from 1990 to 1994 showed that capitalisation had the greatest impact during the trough of the recession. Results were shown to be robust with respect to key assumptions of the capitalisation method. These findings contribute to the assessment of the economic consequences of a policy change requiring operating lease capitalisation. Significant changes in the magnitude of key accounting ratios and a major shift in company performance rankings suggest that interested parties' decisions and company cash flows are likely to be affected.
Journal: Accounting and Business Research
Pages: 233-254
Issue: 4
Volume: 28
Year: 1998
X-DOI: 10.1080/00014788.1998.9728913
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728913
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:4:p:233-254
Template-Type: ReDIF-Article 1.0
Author-Name: J. Holland
Author-X-Name-First: J.
Author-X-Name-Last: Holland
Title: Private disclosure and financial reporting
Abstract: This article describes how large UK companies communicate with their institutional shareholders, and investigates how this private disclosure process relates to financial reporting. The article draws from case studies based on interviews with senior executives in 33 UK companies. Four insights into corporate disclosure arise from this case data. Firstly, a private disclosure process to institutional shareholders is outlined. Secondly, the private disclosure activity is recognised as a significant part of a larger corporate decision concerning public versus private voluntary disclosure. Thirdly, a range of factors are identified as encouraging private disclosure. These include the perceived limitations of financial reports (annual reports and interims), both as a disclosure mechanism in their own right and by comparison with private disclosure channels. Finally, despite these limitations, financial reports are recognised as a central component of a larger corporate disclosure system. The article therefore provides a novel insight in the role of financial reports in the larger corporate disclosure process, and ends by exploring new directions for research in financial reporting, including how the wider corporate disclosure system can be reformed in a systematic manner.
Journal: Accounting and Business Research
Pages: 255-269
Issue: 4
Volume: 28
Year: 1998
X-DOI: 10.1080/00014788.1998.9728914
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728914
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:4:p:255-269
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Hussain
Author-X-Name-First: Simon
Author-X-Name-Last: Hussain
Title: Lead indicator models and UK analysts' earnings forecasts
Abstract: This study examines the predictive ability of models which adjust random walk forecasts of corporate earnings, to incorporate past changes in economic lead indicators. The results suggest that changes in the broad money supply measure M4 contain predictive ability, beyond equivalent changes in other lead indicators or an individual firm's earnings. When forecasts from the broad-money model are compared with forecasts generated by financial analysts a size effect is evident: the superiority of analysts' forecasts is apparent much earlier for large firms than for small firms. This result is consistent with studies suggesting a size-related differential in the collection and dissemination of information by market participants.
Journal: Accounting and Business Research
Pages: 271-280
Issue: 4
Volume: 28
Year: 1998
X-DOI: 10.1080/00014788.1998.9728915
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728915
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:4:p:271-280
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Luther
Author-X-Name-First: Robert
Author-X-Name-Last: Luther
Title: The development of fixed asset accounting in South African gold mining companies: confronting the issues of prudence, matching, periodicity and capital maintenance
Abstract: The ‘Appropriation Method’ of accounting applied by South African gold mining companies is fundamentally different from mine accounting elsewhere and results in reported earnings and asset values that are not comparable with those of mining companies in other countries. This paper traces the development of the Method, in an historical context, in an attempt to understand why, and how, it emerged and became established. Particular attention is paid to 19th century writings of local accountants, ‘transactions’ of professional bodies, and to the special characteristics of the South African gold mining industry. Transitional processes are illustrated by reference to the published accounts of the Crown Reef Gold Mining Company. The persistence of the Appropriation Method is a reminder that while assumptions of uniform accounting periods, matching, business continuity and the need for capital maintenance underpin most conventional accounting, nevertheless useful accountings can exist without these assumptions.
Journal: Accounting and Business Research
Pages: 281-295
Issue: 4
Volume: 28
Year: 1998
X-DOI: 10.1080/00014788.1998.9728916
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728916
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:4:p:281-295
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Archer
Author-X-Name-First: Simon
Author-X-Name-Last: Archer
Title: Mattessich's Critique of Accounting: a review article
Abstract: Mattessich's Critique of Accounting sums up and brings together his work over four decades in accounting theory, though with most emphasis on the period since 1970. Its publication is a significant event which constitutes a serious claim for him to be ranked among the pre-eminent accounting thinkers of this half-century. This essay does not attempt directly to evaluate that claim, but focuses on reviewing the book in some detail. One may (and, as this paper argues, should) recognise and value Mattessich's contributions as an accounting thinker without necessarily agreeing with all or even most of his philosophical positions. The paper takes the position that, for the purpose of a Critique of Accounting, a more fruitful development of his ontological and epistemological positions (following his publication of Instrumental Reasoning and Systems Methodology (Mattessich, 1978)) would have lain in the direction of the philosophy of social science—or more generally, of post-positivist and post-empiricist approaches in epistemology. These are perspectives from which Mattessich's Conditional-Normative Accounting Methodology (CoNAM), and his philosophical position as a whole, confront a number of important questions that are examined in this paper. Because of Mattessich's standing as an accounting thinker, and his book's focus on fundamental issues in accounting thought, it deserves to be considered as essential reading for all those interested in such issues.
Journal:
Pages: 297-316
Issue: 4
Volume: 28
Year: 1998
X-DOI: 10.1080/00014788.1998.9728917
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728917
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:4:p:297-316
Template-Type: ReDIF-Article 1.0
Author-Name: Mike Dempsey
Author-X-Name-First: Mike
Author-X-Name-Last: Dempsey
Title: Capital gains tax: Implications for the firm's cost of capital, share valuation and investment decision-making
Journal:
Pages: 317-317
Issue: 4
Volume: 28
Year: 1998
X-DOI: 10.1080/00014788.1998.9728918
File-URL: http://hdl.handle.net/10.1080/00014788.1998.9728918
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Handle: RePEc:taf:acctbr:v:28:y:1998:i:4:p:317-317
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Humphrey
Author-X-Name-First: Christopher
Author-X-Name-Last: Humphrey
Author-Name: Brendan O’Dwyer
Author-X-Name-First: Brendan
Author-X-Name-Last: O’Dwyer
Author-Name: Jeffrey Unerman
Author-X-Name-First: Jeffrey
Author-X-Name-Last: Unerman
Title: Re-theorizing the configuration of organizational fields: the IIRC and the pursuit of ‘Enlightened’ corporate reporting
Abstract:
This paper studies the emergence of the International Integrated Reporting Council (IIRC) and its attempts to institutionalize integrated reporting as a practice that is critical to the relevance and value of corporate reporting. Informed by Suddaby and Viale’s [(2011). Professionals and field-level change: institutional work and the professional project. Current Sociology, 59, 423–442] theorization of how professionals reconfigure organizational fields, the paper delineates the strategies and mechanisms through which the IIRC has sought to enroll the support of a wide range of stakeholder groups for the idea of integrated reporting in order to deliver a fundamental reconfiguration of the corporate reporting field. The paper’s analysis reinforces the significance to any such field reconfiguration of the reciprocal and mutual arrangements between influential professionals and other powerful actors but does so in a way that (a) refines Suddaby and Viale’s theorization of processes of field-level change and (b) pinpoints the fundamental policy challenges facing the IIRC. Gieryn’s [(1983). Boundary work and the demarcation of science from non-science: strains and interests in professional ideologies of scientists. American Sociological Review, 48 (6), 781–795] notion of boundary work is operationalized to capture some of the complexity and dynamism of the change process that is not sufficiently represented by Suddaby and Viale’s more sequentialist theorization. From a policy perspective, the paper demonstrates just how much the IIRC’s prospects for success in reconfiguring the corporate reporting field depend on its ability to reconfigure the mainstream investment field. Ultimately, this serves to question whether the IIRC’s conceptualization of ‘enlightened’ corporate reporting is sufficiently powerful and persuasive to stimulate ‘enlightened’ investment behavior focused on the medium and long term – and, more generally stresses the theoretical significance of considering connections across related organizational fields in institutional analyses of field reconfiguration efforts.
Journal: Accounting and Business Research
Pages: 30-63
Issue: 1
Volume: 47
Year: 2017
Month: 1
X-DOI: 10.1080/00014788.2016.1198683
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1198683
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Template-Type: ReDIF-Article 1.0
Author-Name: Christoph Pelger
Author-X-Name-First: Christoph
Author-X-Name-Last: Pelger
Author-Name: Nicole Spieß
Author-X-Name-First: Nicole
Author-X-Name-Last: Spieß
Title: On the IASB’s construction of legitimacy – the case of the agenda consultation project
Abstract:
As an expertise-based private standard-setter, the International Accounting Standards Board (IASB) needs to work continuously to maintain its position as the uncontested rule-making authority of financial reporting in the international regulatory arena. The present paper analyses how the IASB constructs legitimacy in interaction with its constituents. We focus on the specific case of the IASB’s agenda consultation in 2011/2012 as this project was explicitly introduced by the IASB to promote its legitimacy. We carry out a comprehensive study of the agenda consultation that takes into account all board meetings, comment letters and public board activities. We show that the consultation activities in this project were used by the IASB to pronounce its user (investor) orientation, which, however, might be formal rather than substantial, and to integrate a loyal circle of constituents further. It is also shown that the IASB increasingly tried to portray agenda-setting (and standard-setting) as an objective and evidence-based procedure that resonates with constituents’ demands, although it might in fact enlarge the discretionary leeway of IASB (and staff) members.
Journal: Accounting and Business Research
Pages: 64-90
Issue: 1
Volume: 47
Year: 2017
Month: 1
X-DOI: 10.1080/00014788.2016.1198684
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1198684
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:1:p:64-90
Template-Type: ReDIF-Article 1.0
Author-Name: Annita Florou
Author-X-Name-First: Annita
Author-X-Name-Last: Florou
Author-Name: Urska Kosi
Author-X-Name-First: Urska
Author-X-Name-Last: Kosi
Author-Name: Peter F. Pope
Author-X-Name-First: Peter F.
Author-X-Name-Last: Pope
Title: Are international accounting standards more credit relevant than domestic standards?
Abstract:
We examine whether the credit relevance of financial statements, defined as the ability of accounting numbers to explain credit ratings, is higher after firms are required to report under International Financial Reporting Standards (IFRS). We find an improvement in credit relevance for firms in 17 countries after mandatory IFRS reporting is introduced in 2005; this increase is higher than that reported for a matched sample of US firms. The increase in credit relevance is particularly pronounced for higher risk speculative-grade issuers, where accounting information is predicted to be more important; and for IFRS adopters with large first-time reconciliations, where the impact of IFRS is expected to be greater. These tests provide reassurance that the overall enhancement in estimated credit relevance is driven by accounting changes related to IFRS adoption. Our results suggest that credit rating analysts’ views of economic fundamentals are more closely aligned with IFRS numbers, and that analysts anticipate at least some of the effects of the IFRS transition.
Journal: Accounting and Business Research
Pages: 1-29
Issue: 1
Volume: 47
Year: 2017
Month: 1
X-DOI: 10.1080/00014788.2016.1224968
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1224968
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Template-Type: ReDIF-Article 1.0
Author-Name: Elisabetta Ipino
Author-X-Name-First: Elisabetta
Author-X-Name-Last: Ipino
Author-Name: Antonio Parbonetti
Author-X-Name-First: Antonio
Author-X-Name-Last: Parbonetti
Title: Mandatory IFRS adoption: the trade-off between accrual-based and real earnings management
Abstract:
This paper examines whether firms substituted real earnings management for accrual-based earnings management after the International Financial Reporting Standards (IFRS) became mandatory. Using a sample of 101,331 firm-year observations from 33 countries between 2000 and 2010, we show that IFRS adoption came with the unintended consequence of certain firms substituting real earnings management for accrual-based earnings management, especially among firms in countries with strict enforcement regimes. Furthermore, we document that the trade-off is confined to EU countries in which strong firm-level characteristics (i.e. the firm-level mechanism of control, the market’s level of scrutiny, and firm-specific incentives to provide transparency) are coupled with strong enforcement. We also show that IFRS had an effect in countries outside the EU, albeit at a different time. Overall, the results suggest that accounting regulators’ efforts to increase earnings quality might have had the unintended consequence of increasing real earnings management activities.
Journal: Accounting and Business Research
Pages: 91-121
Issue: 1
Volume: 47
Year: 2017
Month: 1
X-DOI: 10.1080/00014788.2016.1238293
File-URL: http://hdl.handle.net/10.1080/00014788.2016.1238293
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Handle: RePEc:taf:acctbr:v:47:y:2017:i:1:p:91-121
Template-Type: ReDIF-Article 1.0
Author-Name: Ahsan Habib
Author-X-Name-First: Ahsan
Author-X-Name-Last: Habib
Author-Name: Mostafa Monzur Hasan
Author-X-Name-First: Mostafa Monzur
Author-X-Name-Last: Hasan
Author-Name: Ahmed Al-Hadi
Author-X-Name-First: Ahmed
Author-X-Name-Last: Al-Hadi
Title: Money laundering and audit fees
Abstract:
We investigate the association between state-level money laundering sentences and audit fees in the US. Money laundering measures a broad category of offenses involving financial transactions using funds or monetary instruments gained through criminal activities and tax evasion. We find that firms headquartered in US states with high rates of money laundering sentences pay more audit fees. Our results suggest that auditors incorporate, as a fee premium, the higher risks involved when clients operate in those states. Our result remains robust to alternative specifications of money laundering proxies, and to the inclusion of a number of firm-level and state-level control variables. We also conduct two-stage least squares and propensity score matching analysis to mitigate the endogeneity problem that might arise from omitted variables, reverse causality, or model misspecification problems.
Journal: Accounting and Business Research
Pages: 427-459
Issue: 4
Volume: 48
Year: 2018
Month: 6
X-DOI: 10.1080/00014788.2017.1392842
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1392842
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:4:p:427-459
Template-Type: ReDIF-Article 1.0
Author-Name: Henri Akono
Author-X-Name-First: Henri
Author-X-Name-Last: Akono
Author-Name: Emeka T. Nwaeze
Author-X-Name-First: Emeka T.
Author-X-Name-Last: Nwaeze
Title: Why and how firms use operating cash flow in compensation
Abstract:
This study considers the choice of operating cash flow (OCF) in contracts and further examines the sensitivity of the CFO's and CEO's compensation to OCF performance, conditional on our stylized indicator of the importance of working capital management (WCM). The analysis depicts OCF as conveying distinct information about WCM, and predicts that firms for which WCM is an important source of value are more likely to contract on OCF. The importance of WCM is instrumented by firm conditions that create strong demand for WCM, including large working capital, rapid growth in working capital, highly volatile working capital, and large debt relative to total assets. Using a sample of firms whose incentive plans explicitly include OCF measures and a control sample of firms without such plans, we show that all four indicators of the importance of WCM have positive association with the likelihood of contracting upon OCF, individually and collectively. In compensation regressions, we find that WCM importance has a pronounced positive effect on the weight of OCF, but muted effect on the weight of accrual earnings. The results suggest that firms include measures of OCF performance in contracts largely to provide incentives for WCM and internal cash generation.
Journal: Accounting and Business Research
Pages: 400-426
Issue: 4
Volume: 48
Year: 2018
Month: 6
X-DOI: 10.1080/00014788.2017.1404441
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1404441
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:4:p:400-426
Template-Type: ReDIF-Article 1.0
Author-Name: Ole-Kristian Hope
Author-X-Name-First: Ole-Kristian
Author-X-Name-Last: Hope
Author-Name: Wuyang Zhao
Author-X-Name-First: Wuyang
Author-X-Name-Last: Zhao
Title: Market reactions to the closest peer firm’s analyst revisions
Abstract:
Prior analyst literature focuses on the impact of financial analysts on the firms they cover, and prior information-transfer literature concentrates on the externalities of information provided by management. This paper fills gaps in both streams of literature by examining the focal firm’s market reactions to the closest peer firm’s (identified by product similarity) analyst revisions. We find that the focal firm’s stock price reacts to the closest peer’s analyst revisions made by analysts who are not covering the focal firm. The focal firm’s cumulative abnormal return for a five-day window centered on the revision date is 0.54% higher if the peer firm’s analyst revision magnitude is in the top decile than if it is in the bottom decile. Cross-sectional tests show that the sensitivity of the focal firm’s market reactions to the peer firm’s revisions increases with the revision informativeness and the similarity between the focal firm and the peer firm. In addition, we find that focal firms do not react to peer firms’ revisions in industries with strong competition where the competitive effects cancel out the spillover effects. Finally, we find that the focal firm’s market reactions can predict its own future analyst revisions, suggesting that the reactions are at least partially rational.
Journal: Accounting and Business Research
Pages: 345-372
Issue: 4
Volume: 48
Year: 2018
Month: 6
X-DOI: 10.1080/00014788.2017.1407628
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1407628
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:4:p:345-372
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Thank you to reviewers
Journal: Accounting and Business Research
Pages: 460-461
Issue: 4
Volume: 48
Year: 2018
Month: 6
X-DOI: 10.1080/00014788.2018.1429363
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1429363
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:4:p:460-461
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 4
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663408
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663408
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:4:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Paul Guest
Author-X-Name-First: Paul
Author-X-Name-Last: Guest
Author-Name: Magnus Bild
Author-X-Name-First: Magnus
Author-X-Name-Last: Bild
Author-Name: Mikael Runsten
Author-X-Name-First: Mikael
Author-X-Name-Last: Runsten
Title: The effect of takeovers on the fundamental value of acquirers
Abstract: This paper develops a new methodology to examine the financial impact of acquisitions, designed to address whether takeovers yield a positive net present value for the acquiring company. Specifically, we employ the residual income valuation method to compare the fundamental value of the acquiring company before acquisition with the fundamental value after acquisition.We apply this methodology to 303 UK acquisitions completed during 1985–1996, and compare the results with the effects of takeover on profitability and short‐ and long‐run share returns. We find that the impact of acquisition on fundamental value is slightly negative but statistically insignificant. This result differs from the effect of takeover on profitability, which is significantly positive, and the effect of takeover on share returns, which is significantly negative.
Journal: Accounting and Business Research
Pages: 333-352
Issue: 4
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9663409
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9663409
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:4:p:333-352
Template-Type: ReDIF-Article 1.0
Author-Name: David Marginson
Author-X-Name-First: David
Author-X-Name-Last: Marginson
Author-Name: Laurie McAulay
Author-X-Name-First: Laurie
Author-X-Name-Last: McAulay
Author-Name: Melvin Roush
Author-X-Name-First: Melvin
Author-X-Name-Last: Roush
Author-Name: Tony Van Zijl
Author-X-Name-First: Tony
Author-X-Name-Last: Van Zijl
Title: Performance measures and short‐termism: An exploratory study
Abstract: We examine the relationship between performance measurement systems and short‐termism. Hypotheses are tested on a sample of senior managers drawn from a major telecommunications company to determine the extent to which the diagnostic and interactive uses of financial and non‐financial measures give rise to short‐termism. We find no evidence to suggest that the use of financial measures, either diagnostically or interactively, leads to short‐term behaviour. In contrast, we find a significant association between the use of non‐financial measures and short‐termism. Results suggest that the diagnostic use of non‐financial measures leads managers to make inter‐temporal trade‐off choices that prioritise the short term to the detriment of the long term, while we find interactive use is negatively associated with short‐termism. We find an imbalance in favour of the diagnostic use over the interactive use of non‐financial performance measures is associated with short‐termism. Overall, findings highlight the importance of considering the specific use of performance measures in determining the causes of short‐termism.
Journal: Accounting and Business Research
Pages: 353-370
Issue: 4
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9995317
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9995317
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:4:p:353-370
Template-Type: ReDIF-Article 1.0
Author-Name: Thomas Schleicher
Author-X-Name-First: Thomas
Author-X-Name-Last: Schleicher
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: Bias in the tone of forward‐looking narratives
Abstract: We extend the prior literature on biased disclosure decisions by examining whether, when and how managers bias the tone of forward‐looking narratives. In order to measure tone we employ techniques of manual content analysis and we aggregate positive, neutral and negative statements into an overall measure of tone.We then analyse the frequency of positive and negative statements for firms with large impending year‐on‐year changes in sales and operating profit margin, and we regress tone cross‐sectionally on four managerial incentive variables that are unrelated to the private signal about future trading, namely loss status, sign of earnings change, business risk, and the existence of an analyst earnings forecast. We find that firms with large impending performance declines bias the tone in the outlook section upwards. Also, we find that loss firms, risky firms and firms with an analyst earnings forecast provide a more positive tone, while firms with an earnings decline provide a more negative tone. Finally, we observe that for a majority of our managerial incentive variables the main vehicle of biasing the tone is to change the number of negative statements, not the number of positive statements. Overall, our findings are difficult to reconcile with predictions from signalling models, but they are consistent with the alternative view of impression management. Our results have policy implications. In particular, they suggest that there is a need to reconsider the current largely unregulated nature of forward‐looking narratives.
Journal: Accounting and Business Research
Pages: 371-390
Issue: 4
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9995318
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9995318
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:4:p:371-390
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Barker
Author-X-Name-First: Richard
Author-X-Name-Last: Barker
Title: The operating‐financing distinction in financial reporting
Abstract: This paper addresses an important issue of presentation in the financial statements, namely the distinction between, on the one hand, the obligations and associated flows arising from the provision of finance to an entity ('financing') and, on the other hand, all other activities of the entity ('operating'). This operating‐financing distinction has been wellestablished in the finance literature since the work of Miller and Modigliani (1958, 1961) and is ubiquitous and of considerable importance in practice in financial markets (e.g. Koller et al., 2005; CFA Institute, 2005; Penman, 2006). Yet accounting standards are underdeveloped in this area, and there are gaps and inconsistencies in both IFRS and US GAAP. Drawing upon the distinction between nature and function in the presentation of financial statement information, the paper contributes, first, to enhance our theoretical understanding of the operating‐financing distinction, which is currently defined in different and unreconciled ways in the literature and, second, to propose a practical basis for accounting standard‐setters to determine requirements for the reporting of financing activity in the financial statements.
Journal: Accounting and Business Research
Pages: 391-403
Issue: 4
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9995319
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9995319
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:4:p:391-403
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 3
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728962
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728962
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:3:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Gongmeng Chen
Author-X-Name-First: Gongmeng
Author-X-Name-Last: Chen
Author-Name: Michael Firth
Author-X-Name-First: Michael
Author-X-Name-Last: Firth
Author-Name: Jeong-Bon Kim
Author-X-Name-First: Jeong-Bon
Author-X-Name-Last: Kim
Title: The use of accounting information for the valuation of dual-class shares listed on China's stock markets
Abstract: This study examines whether accounting data are useful in helping explain the market value of listed firms in China. In particular, we focus our investigation on companies that have issued dual-class shares sold to domestic investors (A-shares) and foreigners (B-shares). Domestic accounting standards (DAS) are used for the financial statements of A-shares while international accounting standards (IAS) are used for B-shares. Our results show that IAS earnings information is incorporated in the prices and returns of B-shares. In contrast, A-share investors appear to place most weight on DAS earnings and only recently has there been an association with IAS information. Book values are value relevant for B-share prices but not for A-share prices. Sensitivity tests show that accounting information is more likely to be impounded in share prices and returns for firms with high individual (i.e. non-government) share ownership. Based on our results, we argue that China's move towards the adoption of IAS will be useful for A-share investors, especially in light of the country's recent accession to the WTO and the consequent opening-up of the economy.
Journal: Accounting and Business Research
Pages: 123-131
Issue: 3
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728963
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728963
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:3:p:123-131
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Fleischman
Author-X-Name-First: Richard
Author-X-Name-Last: Fleischman
Author-Name: Richard Macve
Author-X-Name-First: Richard
Author-X-Name-Last: Macve
Title: Coals from Newcastle: an evaluation of alternative frameworks for interpreting the development of cost and management accounting in Northeast coal mining during the British Industrial Revolution
Abstract: How have the power and organisational effects of modern accounting systems developed? What is the appropriate theoretical framework for interpreting that development? Researchers in the ‘Neoclassical’ tradition of ‘economic rationalism’ focus on tracing how efficiently developments in accounting techniques, from the British Industrial Revolution (BIR) to the present, have been engineered to match the demands for new forms of rational economic management of emergent big business, while those adopting a ‘Foucauldian’ approach emphasise how it was that the emergence of new practices and knowledge-based discourses for calculating human performance, and for establishing new forms of human accountability, engendered the creation of the modern kind of business organisations through ‘disciplinary power’. To evaluate the relative merits of these two frameworks, we re-examine the primary archival evidence about managerial practices in the Northeast BIR coal mines. We focus on two unique features—the cadre of professional managers/consultants (the ‘viewers’) and the form of direct labour contract—since comparable features have been held to be significant in the rational economic development of sophisticated cost and management accounting techniques in other industries. We find that, while the records include sophisticated valuations of mines and calculations of technological efficiency, surprisingly absent, as compared with ‘modern’ accounting and managerialism, is any detailed measurement of human performance for setting piece rates and controlling production. Although our particular findings here could be explained within both the ‘Neoclassical’ and ‘Foucauldian’ theoretical frameworks, their consistency with the evidence being obtained from other historical sites further questions the adequacy of ‘economic rationalism’ to explain fully the genesis of modern management and the development of accounting's modern power.
Journal: Accounting and Business Research
Pages: 133-152
Issue: 3
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728964
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728964
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:3:p:133-152
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Hussain
Author-X-Name-First: Simon
Author-X-Name-Last: Hussain
Title: UK brokers' characteristics: does size matter?
Abstract: This study provides one of the first insights into how UK brokers' institutional characteristics may impact on the forecasting performance of their financial analysts. The study focuses on brokerage house size and finds it to be a significant factor explaining cross sectional variation in forecasting performance. This is consistent with evidence from several recent US studies (Jacob et al. 1997; Clement, 1999). It is likely that this broker-size effect reflects the resources (human, IT) available to brokers' analysts to support them in their activities. It may also reflect larger brokers' superior access to company managers and information. However, this broker-size effect appears to be significant only for forecasts made at horizons of one year or less. The sign of the earnings change being predicted also has a significant impact: for observations where earnings changes are negative, the broker-size effect is larger than for positive changes, though the effect is significant for both cases. In addition, the form of the model employed here suggests diminishing marginal returns to broker size. More generally, this study reiterates the importance of controlling for the most commonly cited explanatory variables for forecast accuracy, and there is evidence that the heavy industry sectors may be more difficult to forecast, echoing the conclusions of UK studies from the 1980s.
Journal: Accounting and Business Research
Pages: 153-170
Issue: 3
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728965
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728965
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:3:p:153-170
Template-Type: ReDIF-Article 1.0
Author-Name: Ann Vanstraelen
Author-X-Name-First: Ann
Author-X-Name-Last: Vanstraelen
Title: Auditor economic incentives and going-concern opinions in a limited litigious Continental European business environment: empirical evidence from Belgium
Abstract: Theory predicts that auditor reporting behaviour may be influenced by the perceived consequences of disclosing going-concern uncertainty in the audit report (DeAngelo 1981, Watts and Zimmerman 1986). Krishnan and Krishnan (1996) and Louwers (1998) have addressed this issue empirically in a US context. The results of Krishnan and Krishnan (1996) suggested that one of the important factors in the auditor's opinion decision is the risk of litigation. The purpose of this study is to examine the relationship between auditor economic incentives and the propensity to issue going-concern opinions in a limited litigious business environment, Belgium. In spite of the low risk of litigation and the fact that most Belgian companies are privately held, various regulations have been put into effect to safeguard audit quality in Belgium. However, the results suggest that the auditor's going-concern opinion decision in Belgium is associated with factors relating to the perceived consequences of disclosing a going-concern opinion. Specifically, the results suggest that auditors in Belgium are significantly less likely to issue going-concern opinions to clients that pay higher audit fees, and when the audit firm has lost a relatively high proportion of its clients in the preceding year. The auditor's going-concern opinion does not appear to be significantly influenced by the length of the auditor-client relationship, year of the auditor engagement period, and auditor type. The results of this study are to some extent different from the study by Louwers (1998), in which none of the incentive variables related to the auditor's loss function was significant.
Journal: Accounting and Business Research
Pages: 171-186
Issue: 3
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728966
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728966
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:3:p:171-186
Template-Type: ReDIF-Article 1.0
Author-Name: A. Arnold
Author-X-Name-First: A.
Author-X-Name-Last: Arnold
Author-Name: Roger Mills
Author-X-Name-First: Roger
Author-X-Name-Last: Mills
Author-Name: Markus Milne
Author-X-Name-First: Markus
Author-X-Name-Last: Milne
Title: Book reviews
Journal:
Pages: 187-191
Issue: 3
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728967
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728967
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:3:p:187-191
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 3
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730016
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Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: 134-134
Issue: 3
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730017
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:3:p:134-134
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Obituary
Journal:
Pages: 135-136
Issue: 3
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730018
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:3:p:135-136
Template-Type: ReDIF-Article 1.0
Author-Name: Holger Daske
Author-X-Name-First: Holger
Author-X-Name-Last: Daske
Author-Name: Günther Gebhardt
Author-X-Name-First: Günther
Author-X-Name-Last: Gebhardt
Author-Name: Stuart McLeay
Author-X-Name-First: Stuart
Author-X-Name-Last: McLeay
Title: The distribution of earnings relative to targets in the European Union
Abstract: This paper provides evidence on the distribution of reported earnings relative to targets in the Member States of the European Union (EU). For a large sample of over 60,000 firm-years between 1986 and 2001, we find that more firms than expected (i) report small positive earnings, (ii) report small positive earnings changes and (iii) have zero or small positive forecast errors. These discontinuities are much more pronounced in the EU compared to the US, and the distributions of reported earnings and earnings changes are characterised by lower dispersion and more clustering around zero, consistent with higher income smoothing in Europe. Across the EU, we find that the avoidance of a loss or an earnings decrease is more common in those Member States which do not have a long history of accounting standard setting, and particularly in those which, until recently, were almost entirely law-based. The earnings distributions and earnings change distributions of UK firms resemble more those of their counterparts in the US. and differ from the rest of the EU. despite the various EU harmonisation efforts that have taken place.
Journal: Accounting and Business Research
Pages: 137-167
Issue: 3
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730019
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:3:p:137-167
Template-Type: ReDIF-Article 1.0
Author-Name: Begoña Giner
Author-X-Name-First: Begoña
Author-X-Name-Last: Giner
Author-Name: Raul Iñiguez
Author-X-Name-First: Raul
Author-X-Name-Last: Iñiguez
Title: An empirical assessment of the Feltham-Ohlson models considering the sign of abnormal earnings
Abstract: This paper provides an empirical assessment of the Feltham-Ohlson models, distinguishing between firms with positive and negative abnormal earnings. Abnormal earnings persistence and conservatism parameters differ for these two groups; this implies different earnings prediction models and valuation functions for both profit-making and loss-making firms. The analysis refers to the period 1991-1999 and uses a sample of Spanish firms quoted on the Madrid S.E. The results suggest that our contextual approach is more useful than the non-contextual one to predict future abnormal earnings and explain current prices. Although the Ohlson (1995) model is accurate in forecasting future abnormal earnings and stock prices, the results improve when firms with negative abnormal earnings are valued using a temporary model and firms with positive abnormal earnings using a more permanent one. The Feltham and Ohlson (1995) model generates the lowest forecast errors in the prediction of positive abnormal earnings, but it produces the least accurate results in forecasting prices.
Journal: Accounting and Business Research
Pages: 169-190
Issue: 3
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730020
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:3:p:169-190
Template-Type: ReDIF-Article 1.0
Author-Name: Brian Main
Author-X-Name-First: Brian
Author-X-Name-Last: Main
Title: The ABI guidelines for share-based incentive schemes: setting the hurdle too high?
Abstract: This paper examines, from (he perspective of the pay-performance connection, the guideline principles issued since 1984 by the Association of British Insurers (ABI) in connection with the operation of share-based incentive schemes for executives. In particular, attention is paid to the marked change in emphasis that emerged in the 1999 guidelines. The four main dimensions to these guidelines concern: (i) phasing of issue by use of regular awards; (ii) setting of performance criteria (hurdles) against a peer group or bench-mark; (iii) restricting any re-testing of satisfaction of such performance criteria; and (iv) instituting a sliding scale of reward contingent on the performance out-turn against criteria. Results are derived from a simulation over a 14 year period of the implementation of such guidelines in a sample of companies traded on the London Stock Exchange. Empirical results suggest that the pay-performance connection is not always made stronger by setting the hurdle ever higher, and that higher hurdles are best tempered by some latitude in terms of re-testing. The results also highlight the importance of the choice of method of reporting the performance of Executive Share Options when communicating with shareholders and other stakeholders.
Journal: Accounting and Business Research
Pages: 191-205
Issue: 3
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730021
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:3:p:191-205
Template-Type: ReDIF-Article 1.0
Author-Name: K. McMeeking
Author-X-Name-First: K.
Author-X-Name-Last: McMeeking
Author-Name: K. Peasnell
Author-X-Name-First: K.
Author-X-Name-Last: Peasnell
Author-Name: P. Pope
Author-X-Name-First: P.
Author-X-Name-Last: Pope
Title: The determinants of the UK Big Firm premium
Abstract: Our study attempts to determine whether, and if so why, the large auditing firms are able to earn a premium on their audit work in the UK. We start by confirming the apparent existence of a Big Firm premium during the period 1985-2002. We examine industry specialisation, non-audit service fee and monopoly pricing explanations for the premium. The results of our tests of industry specialisation are mixed. There is little evidence that this premium is associated with industry specialisation when specialists are defined at the national level. Significant premia are observed if specialisation is defined at the city level, particularly if the auditor is the industry leader. However, when appropriate allowance is made for endogeneity. by modelling both audit and non-audit fees in a simultaneous equations framework, the Big Firm premium disappears. We find evidence to suggest that non-audit fees earned by auditors from their audit clients are positively related to the size of the audit fee and vice versa. Finally, when the sample is stratified by the size of audit client, we find no systematic evidence of anti-competitive pricing.
Journal: Accounting and Business Research
Pages: 207-231
Issue: 3
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730022
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730022
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:3:p:207-231
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: The survival of international differences under IFRS: towards a research agenda
Abstract: The compulsory use of IFRS for the consolidated statements of listed companies in the EU and elsewhere, and the convergence of IFRS with US GAAP, might imply the end of ‘international accounting’ as an important field of study. However, there are motives and opportunities for international differences of practice to exist within IFRS usage. Some of the original motives for international accounting differences may still be effective in an IFRS context, though in different ways. The opportunities for different IFRS practices are divided into eight types. Hypotheses relating to each of these are proposed, and some ways of testing them are suggested. Some implications of the existence of different national versions of IFRS are noted.
Journal: Accounting and Business Research
Pages: 233-245
Issue: 3
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730023
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730023
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:3:p:233-245
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 4
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729587
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729587
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Template-Type: ReDIF-Article 1.0
Author-Name: Christian Chan
Author-X-Name-First: Christian
Author-X-Name-Last: Chan
Author-Name: Markus Milne
Author-X-Name-First: Markus
Author-X-Name-Last: Milne
Title: Investor reactions to corporate environmental saints and sinners: an experimental analysis
Abstract: Following Dierkes and Antal's (1985) model, this study examines the decision usefulness of narrative disclosures on firms' environmental performance by focusing on how investors allocate their investment funds. Using an experimental design, the study examines investors' reactions to two states of corporate environmental performance: one in which the company discloses it is performing badly with respect to the environment, and another in which the company discloses it is a leader in environmental management. The results indicate that investors, as expected, react strongly and negatively to the poor environmental performer, while somewhat less expected, there is no significant reaction to the better environmental performer. Sub-analyses, however, reveal ‘environmental clientele’ effects. For the poor environmental performer, investors who specifically mention environmental performance react even more strongly and negatively than those who make no mention of environmental performance. In the case of the better environmental performer, the reactions are more complex. For those investors who specifically mention the firm's environmental performance, two opposite reactions result. While one group positively invests in the company for its environmental leadership, the other group avoids investing in the company for what it appears to consider excessive and unnecessary expenditure. The results from this study are consistent with the widespread observation that firms will rarely disclose poor environmental performance unless required to do so. Moreover, the mixed reactions to the better environmental performer could also partly explain why firms appear willing to report their positive environmental achievements in only vague and general terms.
Journal: Accounting and Business Research
Pages: 265-279
Issue: 4
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729588
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729588
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:4:p:265-279
Template-Type: ReDIF-Article 1.0
Author-Name: Andreas Charitou
Author-X-Name-First: Andreas
Author-X-Name-Last: Charitou
Author-Name: George Panagiotides
Author-X-Name-First: George
Author-X-Name-Last: Panagiotides
Title: Financial analysis, future earnings and cash flows, and the prediction of stock returns: evidence for the UK
Abstract: This study examines empirically whether fundamental analysis in the UK identifies equity values not currently reflected in stock prices and thus predicts excess returns. Similar to Ou and Penman (1989), the fundamental analysis undertaken combines a large set of financial statement information into one summary measure which indicates the direction of one-year-ahead earnings changes. Positions are taken in UK stocks on the basis of this measure during the period 1991–95, which involve cancelling long and short positions with zero net investment. This analysis is repeated i) for cash flows and ii) for earnings and cash flows together. The results of this study indicate that financial information predicts one year ahead earnings and cash flow changes, and that future earnings and cash flows are not fully impounded in stock prices. Results also indicate that an earnings-based trading strategy earns higher excess returns than a cash flow-based trading strategy.
Journal: Accounting and Business Research
Pages: 281-298
Issue: 4
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729589
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729589
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:4:p:281-298
Template-Type: ReDIF-Article 1.0
Author-Name: Debra Jeter
Author-X-Name-First: Debra
Author-X-Name-Last: Jeter
Author-Name: Lakshmanan Shivakumar
Author-X-Name-First: Lakshmanan
Author-X-Name-Last: Shivakumar
Title: Cross-sectional estimation of abnormal accruals using quarterly and annual data: effectiveness in detecting event-specific earnings management
Abstract: This paper addresses certain methodological issues that arise in estimating abnormal (or discretionary) accruals for detection of event-specific earnings management. Unlike prior studies (e.g., Dechow, Sloan, and Sweeney, 1995; Guay, Kothari, and Watts, 1996) that rely primarily on time-series models, we focus on the specification of cross-sectional models of expected accruals using quarterly as well as annual data. Perhaps more importantly, we present a variation of the Jones model that is shown to be well specified for all cash flow levels. We show that the cross-sectional Jones model yields systematically positive (negative) estimates of abnormal accruals for firms whose cash flows are below (above) their industry median. Using mean squared prediction errors as well as simulation analysis, we show that our model is more powerful than the cross-sectional Jones model in detecting earnings management. In addition, we examine differences in the power of current accrual models in detecting earnings management across audited and unaudited quarters.
Journal: Accounting and Business Research
Pages: 299-319
Issue: 4
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729590
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:4:p:299-319
Template-Type: ReDIF-Article 1.0
Author-Name: Thomas Schleicher
Author-X-Name-First: Thomas
Author-X-Name-Last: Schleicher
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: Share price anticipation of earnings and management's discussion of operations and financing
Abstract: This paper combines research on the measurement of disclosure quality and the measurement of share price anticipation of earnings to produce a new test of the usefulness of the information disclosed in management discussions of operations and financing for predicting future earnings. Market-Based Accounting Research has shown that earnings changes are anticipated and impounded in prices well before the financial year for which earnings are reported. This price anticipation leads to downward biased earnings response coefficients (ERCs) in the commonly estimated regression model of returns on contemporaneous earnings changes. We exploit predictable differences in the biasedness of the ERC estimate across firm-years to test the hypothesis that share prices are better informed when the annual report contains a detailed discussion of the firm's operations and financing. Our results suggest that such voluntary disclosure may have been useful in predicting future earnings changes. The effect would appear to be strongest (1) in models that examine one-period-ahead and two-period-ahead share price anticipation and (2) when we employ a disclosure index that captures forward-looking information.
Journal: Accounting and Business Research
Pages: 321-335
Issue: 4
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729591
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:4:p:321-335
Template-Type: ReDIF-Article 1.0
Author-Name: Helen Short
Author-X-Name-First: Helen
Author-X-Name-Last: Short
Author-Name: Kevin Keasey
Author-X-Name-First: Kevin
Author-X-Name-Last: Keasey
Author-Name: Mike Wright
Author-X-Name-First: Mike
Author-X-Name-Last: Wright
Author-Name: Alison Hull
Author-X-Name-First: Alison
Author-X-Name-Last: Hull
Title: Corporate governance: from accountability to enterprise
Abstract: This paper discusses the development of the corporate governance debate in the UK since the formation of the Cadbury Committee to the recent reports of the Hampel Committee within the context of a general corporate governance framework. It identifies the changing emphasis in this period between accountability and enterprise aspects of governance. The literature relating to accountability and enterprise is reviewed in terms of the key areas of governance (board structure, directors' remuneration, directors' ownership, institutional shareholders; auditors, auditing and accounting information; and the market for corporate control). Issues of substitutability and complementarity of governance mechanisms are also examined. The paper argues that although there has been a shift in emphasis towards enterprise, there is a need for further rigorous UK-based research to underpin this development. Areas for future research are identified.
Journal: Accounting and Business Research
Pages: 337-352
Issue: 4
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729592
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729592
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:4:p:337-352
Template-Type: ReDIF-Article 1.0
Author-Name: Mike Wright
Author-X-Name-First: Mike
Author-X-Name-Last: Wright
Author-Name: B. Rutherford
Author-X-Name-First: B.
Author-X-Name-Last: Rutherford
Author-Name: Michael Jones
Author-X-Name-First: Michael
Author-X-Name-Last: Jones
Author-Name: Andrew Higson
Author-X-Name-First: Andrew
Author-X-Name-Last: Higson
Title: Book Reviews
Journal:
Pages: 353-358
Issue: 4
Volume: 29
Year: 1999
X-DOI: 10.1080/00014788.1999.9729593
File-URL: http://hdl.handle.net/10.1080/00014788.1999.9729593
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Handle: RePEc:taf:acctbr:v:29:y:1999:i:4:p:353-358
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 2
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729535
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729535
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:2:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Charles Cullinan
Author-X-Name-First: Charles
Author-X-Name-Last: Cullinan
Title: Audit Pricing in the Pension Plan Audit Market
Abstract: The economic determinants of audit fees have been examined extensively among public companies, both in the US (e.g. Simunic, 1980; Gist, 1992) and internationally (e.g. Anderson and Zhégal, 1994). These studies have been based on audits of publicly-traded firms, which were surveyed to determine the audit fees. In the US pension plan audit market, audit fees are publicly disclosed, eliminating the potential for response bias present in most other audit fee studies. Additionally, unlike the public company audit market, the pension plan audit market is not dominated by the Big Six accounting firms, and audit fees in the pension plan audit market are smaller than in the public company audit market. This study examines the generalisability of the audit fee model by applying the model in the pension plan audit context. In accord with other audit fee studies, results indicate that client characteristics, including client size and risk, are associated with pension plan audit fees. In contrast with other studies, findings regarding market factors do not suggest a difference in fee structures between Big Six and non-Big Six firms, and the results indicate that auditor changes do not affect pension plan audit fees.
Journal: Accounting and Business Research
Pages: 91-98
Issue: 2
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729536
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729536
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:2:p:91-98
Template-Type: ReDIF-Article 1.0
Author-Name: Pascal Frantz
Author-X-Name-First: Pascal
Author-X-Name-Last: Frantz
Title: Discretionary Accounting Choices: A Debt covenants Based Signalling Approach
Abstract: This paper seeks to explain the discretionary accounting choices made by managers in a world characterised by asymmetric information between managers and investors. It considers a firm whose capital structure consists of both debt and equity, a manager who protects the interests of the firm's existing shareholders, and a financial market. The manager is committed to engage in an investment opportunity and needs to raise some equity to finance it. He is furthermore endowed with some private information about his firm's future earnings. The paper shows how, under certain conditions, the manager may credibly communicate his private information to investors through his accounting choices. In this equilibrium, the selection of balance sheet strengthening and income increasing accounting choices signals unfavourable information while the use of balance-sheet weakening and income- decreasing accounting choices signals favourable private information. The latter firms should thus experience positive abnormal returns around the announcement dates of their accounting choices.
Journal: Accounting and Business Research
Pages: 99-110
Issue: 2
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729537
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729537
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:2:p:99-110
Template-Type: ReDIF-Article 1.0
Author-Name: Andrew Goddard
Author-X-Name-First: Andrew
Author-X-Name-Last: Goddard
Title: Organisational Culture and Budgetary Control in a UK Local Government Organisation
Abstract: This paper is an attempt to explore the possibilities of working within the functional paradigm to understand the relationship between organisational culture and financial control. More specifically, the research is an empirical study informed by contingency theory. The research uses canonical correlation analysis to investigate the complex contingent relationship, as suggested by Williams, Mcintosh and Moore (1990). The research was carried out within a local government organisation in the UK, and used a questionnaire to determine managers' perceptions of organisational culture and budget-related behaviour. A correlation was found between organisational culture and budget-related behaviour, particularly with respect to budgetary participation and the usefulness of budgets to support the managerial role. However, the relationship was not straightforward, and the analysis indicated some tension between culture and the financial control system in operation.
Journal: Accounting and Business Research
Pages: 111-123
Issue: 2
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729538
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729538
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:2:p:111-123
Template-Type: ReDIF-Article 1.0
Author-Name: Zahirul Hoque
Author-X-Name-First: Zahirul
Author-X-Name-Last: Hoque
Author-Name: Trevor Hopper
Author-X-Name-First: Trevor
Author-X-Name-Last: Hopper
Title: Political and Industrial Relations Turbulence, Competition and Budgeting in the Nationalised Jute Mills of Bangladesh
Abstract: This paper reports an empirical investigation, based on triangulation methods, of how a set of environmental facts affect budgeting characteristics in the nationalised jute mills of Bangladesh. The key factors were derived from intensive fieldwork. Five external factors (political climate, industrial relations, competition, aid agencies and government regulations) were deemed to affect budget-related factors (such as participation, accountability for budget, budget evaluation, budget analysis, interactions among managers and budget flexibility). Data from 38 state-owned jute mills within the Bangladesh Jute Mills Corporation (BJMC) are used to test the propositions. The analyses of data reveal a significant relationship between environmental factors and budget-related behaviour. Political factors, industrial relations and market competition were major influences on how budgeting systems were perceived. The study shows how political volatility and industrial relations can render the formal systems of budgeting and controls ineffective for internal management despite worthy intentions. On the other hand, when managers believed external competition on their mill to be great, they perceived budgeting more positively.
Journal: Accounting and Business Research
Pages: 125-143
Issue: 2
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729539
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729539
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:2:p:125-143
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Hussain
Author-X-Name-First: Simon
Author-X-Name-Last: Hussain
Title: The Impact of Segment Definition on the Accuracy of Analysts' Earnings Forecasts
Abstract: This study investigates forecast error determinants for a set of forecasts of annual corporate earnings, generated by UK analysts 22 months prior to the announcement dates. This study is particularly concerned with the impact of segmental data on forecast errors; the hypothesis under test is whether finer segment definitions provide market participants with improved insight. If segments are too broad or vague (e.g. rest of the world) it is unlikely that data for such segments will provide analysts with any additional information regarding the current corporate position or future prospects. The results of this study provide evidence of predictive gains to both line- of-business data and geographic data, although these gains appear to be concentrated within a sub-sample of firms for which analysts appear to have specific difficulty in forecasting earnings, i.e. those experiencing negative changes in earnings. The results also indicate that forecast errors are: negatively related to firm size; positively related to the magnitude of the change in earnings which the analyst must predict; and not significantly affected by the number of reported segments.
Journal: Accounting and Business Research
Pages: 145-156
Issue: 2
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729540
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729540
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:2:p:145-156
Template-Type: ReDIF-Article 1.0
Author-Name: Howard Mellett
Author-X-Name-First: Howard
Author-X-Name-Last: Mellett
Title: The Role of Resource Accounting in the UK Government's Quest for ‘Better Accounting’
Abstract: The UK government intends to introduce resource accounting to central government departments under the banner of ‘Better Accounting for the Taxpayer's Money’. Under the proposed system of resource accounting, as outlined in a White Paper, an annual depreciation charge is to be incorporated in the cost statement and fixed assets included in a balance sheet at their depreciated replacement cost. This paper locates the proposed changes in accounting method for government departments in the general spread of accruals accounting through the public sector, and explores the relevance of accruals as a basis for measuring the results of activity undertaken by government departments. It goes on to examine the impact of the specific accounting change envisaged in the White Paper from both theoretical and practical aspects. The benefits envisaged in the White Paper are considered along with the extent to which they are likely to be realised, together with any consequences not explicitly foreseen. The conclusion is that, while the revised accounting techniques may be different, the proposition implicit in the White Paper's title that they re better is not proven by the evidence presented.
Journal:
Pages: 157-168
Issue: 2
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729541
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729541
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:2:p:157-168
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Archer
Author-X-Name-First: Simon
Author-X-Name-Last: Archer
Author-Name: John Courtis
Author-X-Name-First: John
Author-X-Name-Last: Courtis
Author-Name: Don Egginton
Author-X-Name-First: Don
Author-X-Name-Last: Egginton
Author-Name: Robin Roslender
Author-X-Name-First: Robin
Author-X-Name-Last: Roslender
Author-Name: Miles Gietzmann
Author-X-Name-First: Miles
Author-X-Name-Last: Gietzmann
Title: Book Reviews
Journal:
Pages: 170-176
Issue: 2
Volume: 27
Year: 1997
X-DOI: 10.1080/00014788.1997.9729542
File-URL: http://hdl.handle.net/10.1080/00014788.1997.9729542
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Handle: RePEc:taf:acctbr:v:27:y:1997:i:2:p:170-176
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 463-464
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470135
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470135
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:463-464
Template-Type: ReDIF-Article 1.0
Author-Name: Baruch Lev
Author-X-Name-First: Baruch
Author-X-Name-Last: Lev
Title: The deteriorating usefulness of financial report information and how to reverse it
Abstract:
There is a wide-spread and growing dissatisfaction with the relevance and usefulness of financial report information, particularly among investors and corporate executives. The dissatisfaction is corroborated by extensive research which consistently documents a growing gap between capital market indicators and financial information, more so for reported earnings. The reported earnings of most firms no longer reflect enterprise performance. I trace the deterioration of the usefulness of financial information to: (1) the abandonment by accounting standard-setters of the traditional income statement (matching) model in favour of a balance sheet (asset valuation) model, and (2) standard-setters’ failure to adjust asset recognition rules to the fundamental shift in corporate value-creating resources from tangible to intangible assets. I conclude this paper with change proposals to restore the usefulness of financial information to investors.
Journal: Accounting and Business Research
Pages: 465-493
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470138
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470138
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:465-493
Template-Type: ReDIF-Article 1.0
Author-Name: Paul Druckman
Author-X-Name-First: Paul
Author-X-Name-Last: Druckman
Title: ‘Corporate reporting and accounting for externalities’: a practitioner view
Journal: Accounting and Business Research
Pages: 523-524
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470140
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470140
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:523-524
Template-Type: ReDIF-Article 1.0
Author-Name: Hervé Stolowy
Author-X-Name-First: Hervé
Author-X-Name-Last: Stolowy
Author-Name: Luc Paugam
Author-X-Name-First: Luc
Author-X-Name-Last: Paugam
Title: The expansion of non-financial reporting: an exploratory study
Abstract:
We investigate how non-financial reporting (NFR) is defined and has expanded in recent years. First, we explore the heterogeneity in definitions and current NFR practices. We find a lack of convergence between regulators and standard-setters, as well as leading sustainable firms. Second, we examine the changes in the extent and type of NFR reported by firms over the period 2006–2016. Based on a sample of firms in South Africa, we document a significant increase in the amount of NFR, particularly between 2006 and 2011. This change appears to be driven by new environmental, human capital, performance and strategic disclosures. The relative importance of financial information in corporate reporting decreased substantially over the same period. Third, we compare reporting practices for corporate social responsibility (CSR)/sustainability information between constituents of the S&P 500 index and the EuroStoxx 600 index. We find that overall, the percentage of firms issuing CSR/sustainability reports increased dramatically between 2002 and 2015. Constituents of the U.S. stock index and growth firms are less likely to report CSR/sustainability information, whereas firms in the European stock index in environmentally sensitive industries, with high capital intensity and good CSR performance, larger and with better financial performance, are more likely to report CSR/sustainability information.
Journal: Accounting and Business Research
Pages: 525-548
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470141
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470141
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:525-548
Template-Type: ReDIF-Article 1.0
Author-Name: Niamh M. Brennan
Author-X-Name-First: Niamh M.
Author-X-Name-Last: Brennan
Author-Name: Doris M. Merkl-Davies
Author-X-Name-First: Doris M.
Author-X-Name-Last: Merkl-Davies
Title: Do firms effectively communicate with financial stakeholders? A conceptual model of corporate communication in a capital market context
Abstract:
We identify what constitutes effective communication between firms and their financial stakeholders in a capital market context and establish criteria against which effectiveness can be evaluated. To do this, we introduce the concept of connectivity from the communication studies literature. We conceptualise connectivity as comprising three components: textual connectivity, intertextual connectivity, and relational connectivity. Connectivity refers to the ability to connect different sections of a text (textual connectivity), to connect texts of different time periods or different genres (intertextual connectivity), and to connect firms with their audiences (relational connectivity). We then propose criteria for judging effective corporate communication in a capital market context. Finally, we assess how digital communication and social media provide opportunities for improving connectivity in corporate communication for a broader range of shareholders.
Journal: Accounting and Business Research
Pages: 553-577
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470143
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470143
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:553-577
Template-Type: ReDIF-Article 1.0
Author-Name: Janice Lingwood
Author-X-Name-First: Janice
Author-X-Name-Last: Lingwood
Title: ‘Do firms effectively communicate with financial stakeholders?’: a practitioner view
Journal: Accounting and Business Research
Pages: 578-581
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470150
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470150
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:578-581
Template-Type: ReDIF-Article 1.0
Author-Name: Christian Leuz
Author-X-Name-First: Christian
Author-X-Name-Last: Leuz
Title: Evidence-based policymaking: promise, challenges and opportunities for accounting and financial markets research
Abstract:
The use of evidence and economic analysis in policymaking is on the rise, and accounting standard setting and financial regulation are no exception. This article discusses the promise of evidence-based policymaking in accounting and financial markets as well as the challenges and opportunities for research supporting this endeavour. In principle, using sound theory and robust empirical evidence should lead to better policies and regulations. But despite its obvious appeal and substantial promise, evidence-based policymaking is easier demanded than done. It faces many challenges related to the difficulty of providing relevant causal evidence, lack of data, the reliability of published research and the transmission of research findings. Overcoming these challenges requires substantial infrastructure investments for generating and disseminating relevant research. To illustrate this point, I draw parallels to the rise of evidence-based medicine. The article provides several concrete suggestions for the research process and the aggregation of research findings if scientific evidence is to inform policymaking. I discuss how policymakers can foster and support policy-relevant research, chiefly by providing and generating data. The article also points to potential pitfalls when research becomes increasingly policy-oriented.
Journal: Accounting and Business Research
Pages: 582-608
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470151
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470151
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:582-608
Template-Type: ReDIF-Article 1.0
Author-Name: Melanie McLaren
Author-X-Name-First: Melanie
Author-X-Name-Last: McLaren
Title: ‘Evidence-based policy-making’: a practitioner view
Journal: Accounting and Business Research
Pages: 609-611
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470153
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470153
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:609-611
Template-Type: ReDIF-Article 1.0
Author-Name: Hilary Eastman
Author-X-Name-First: Hilary
Author-X-Name-Last: Eastman
Title: ‘The expansion of non-financial reporting’: a practitioner view
Journal: Accounting and Business Research
Pages: 549-552
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470154
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470154
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:549-552
Template-Type: ReDIF-Article 1.0
Author-Name: Jeffrey Unerman
Author-X-Name-First: Jeffrey
Author-X-Name-Last: Unerman
Author-Name: Jan Bebbington
Author-X-Name-First: Jan
Author-X-Name-Last: Bebbington
Author-Name: Brendan O’dwyer
Author-X-Name-First: Brendan
Author-X-Name-Last: O’dwyer
Title: Corporate reporting and accounting for externalities
Abstract:
Externalities comprise economic, social and/or environmental impacts arising from the activities of an entity that are borne by others, at least in the short term. As they do not feedback directly into immediate financial consequences for the entity, they tend to be outside the remit of financial reporting. A dispersed academic accounting literature on externalities has hitherto developed separately from concerns about what information is appropriate to report on corporate performance. This paper develops insights into accounting for, and reporting of, externalities that are intended to improve the use of externalities information in breaking down silos between the traditionally discrete domains of financial reporting and sustainability reporting, and between silos within sustainability reporting. Challenges in such use of externalities information are explored, including difficulties inherent in the quantification of externalities. The paper also highlights ways in which externalities can progressively become internalised, thereby bringing them more readily within the domain of economically focused financial reporting practices. An agenda for further research to help enhance the accounting for, and reporting of, externalities is also proposed.
Journal: Accounting and Business Research
Pages: 497-522
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1470155
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1470155
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:497-522
Template-Type: ReDIF-Article 1.0
Author-Name: Nick Anderson
Author-X-Name-First: Nick
Author-X-Name-Last: Anderson
Title: ‘The deteriorating usefulness of financial report information and how to reverse it’: a practitioner view
Journal: Accounting and Business Research
Pages: 494-496
Issue: 5
Volume: 48
Year: 2018
Month: 7
X-DOI: 10.1080/00014788.2018.1473827
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1473827
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:494-496
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 5
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9995320
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9995320
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:5:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Marc Jegers
Author-X-Name-First: Marc
Author-X-Name-Last: Jegers
Title: The effect of board‐manager agency conflicts on non‐profit organisations’ earnings and cost allocation manipulations
Abstract: Taking into account agency problems between board and management within non‐profit organisations, for the first time a comprehensive formal model of earnings manipulations is developed. Both organisational earnings as well as disaggregated financial performance indicators are looked at, the last ones being affected by possible indirect cost allocation manipulations. The model takes into consideration the impact of disclosed earnings and performance indicators on externally raised funds, and assumes risk‐neutral managers. In the last section, it is generalised by introducing risk‐averse managers. The conditions for optimal manipulation levels (from a managerial point of view) are derived. Depending on the (dis) utility parameters involved, different solutions emerge. As to the agency problems, it is shown that, at least for all interior solutions, a single mechanism is at work in all the situations analysed: more agency problems lead to more manipulations, both at the organisational level and the disaggregated level.
Journal: Accounting and Business Research
Pages: 407-419
Issue: 5
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9995321
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9995321
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:5:p:407-419
Template-Type: ReDIF-Article 1.0
Author-Name: Walter Aerts
Author-X-Name-First: Walter
Author-X-Name-Last: Aerts
Author-Name: Ann Tarca
Author-X-Name-First: Ann
Author-X-Name-Last: Tarca
Title: Financial performance explanations and institutional setting
Abstract: The aim of this study is to investigate whether country differences in the institutional setting for financial reporting affect the attributes of managers’ explanations of performance in management commentary reports. We include 172 listed companies from five industries (building materials, food processors, pharmaceuticals, biotechnology and retail) in the UK, Australia, the USA and Canada in 2003. We find significant country differences in attributional properties of performance explanations in management commentary reports. The US and Canadian companies are generally less assertive and less defensive in causal explanations offered compared to their counterparts in the UK and Australia. The North American companies are also more extensive and formal in their explanations, relying more heavily on technical‐accounting language. These tendencies are most pronounced in the USA, where the aggregate of private and public enforcement is greatest. Taken together, our evidence suggests that higher expected regulatory and litigation costs induce a more elaborative, but risk‐averse explanatory stance that may well reduce the overall incremental value of the explanations offered.
Journal: Accounting and Business Research
Pages: 421-450
Issue: 5
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9995322
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9995322
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:5:p:421-450
Template-Type: ReDIF-Article 1.0
Author-Name: Brendan O'Dwyer
Author-X-Name-First: Brendan
Author-X-Name-Last: O'Dwyer
Author-Name: Jeffrey Unerman
Author-X-Name-First: Jeffrey
Author-X-Name-Last: Unerman
Title: Enhancing the role of accountability in promoting the rights of beneficiaries of development NGOs
Abstract: This paper identifies and assesses the extent to which downward accountability mechanisms in nongovernmental development organisations (NGDOs) have had the potential in practice to contribute to the effectiveness of rights‐based approaches to development. The paper draws on evidence gathered from a detailed documentary analysis and a series of in‐depth interviews undertaken with senior individuals working in the Irish NGDO sector. The analysis indicates variations in practice with regard to the substantive implementation of key downward accountability mechanisms. The accountability‐in‐practice revealed suggests that challenges to substantive implementation have arisen due to: insufficient Irish NGDO attention to oversight of downward accountability within locally based partner NGDOs; a reluctance and/or inability to transfer influence to locally based partner NGDOs by allowing them some influence on Irish NGDO governance and strategy; the perceived control of locally based partner NGDOs by local elites who may be distant from, and unrepresentative of, local communities; and a perception that locally based partner NGDOs may not require downward accountability. Drawing on these findings, the paper makes some suggestions aimed at helping to transform the rhetorical NGDO commitment to downward accountability into real practices that can contribute substantively to the realisation of the key elements of the rights‐based approach to development.
Journal: Accounting and Business Research
Pages: 451-471
Issue: 5
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9995323
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9995323
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:5:p:451-471
Template-Type: ReDIF-Article 1.0
Author-Name: Anne Stafford
Author-X-Name-First: Anne
Author-X-Name-Last: Stafford
Author-Name: Basilio Acerete
Author-X-Name-First: Basilio
Author-X-Name-Last: Acerete
Author-Name: Pam Stapleton
Author-X-Name-First: Pam
Author-X-Name-Last: Stapleton
Title: Making concessions: Political, commercial and regulatory tensions in accounting for European roads PPPs
Abstract: Governments increasingly use private finance to fund roads infrastructure. In particular the European Commission has promoted the use of public private partnerships (PPPs) to deliver the projects forming the trans‐European Network. This use of private finance raises important questions about how public monies and assets are accounted for. The paper examines, first, accounting in both public and private sectors for roads PPPs in Spain and the UK, countries which not only have considerable experience in the use of private finance for the provision of roads but also act as exemplars of a number of differences which may be significant from an international perspective in terms of financial reporting and economic outcomes. Second, it examines the tensions between national, European Union and international accounting pronouncements. Our findings suggest that the business environment has influenced the development of accounting policy. In Spain a powerful toll sector presence within the legal framework has led to substantial variations, having real economic impact. In the UK, the accounting regulator has prevailed over political concerns. For European public sector accounting, conflict remains between political choice and technical accounting. These findings may have global relevance, as the adoption of international accounting pronouncements will not remove these conflicts.
Journal: Accounting and Business Research
Pages: 473-493
Issue: 5
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9995324
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9995324
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:40:y:2010:i:5:p:473-493
Template-Type: ReDIF-Article 1.0
Author-Name: Ingrid Jeacle
Author-X-Name-First: Ingrid
Author-X-Name-Last: Jeacle
Title: Book review
Abstract: Accounting, Organizations, & Institutions: Essays in Honour of Anthony Hopwood. Christopher S. Chapman, David J. Cooper and Peter B. Miller (Eds.). Oxford University Press, 2009. 441pp. ISBN 978–0–19–954635–0. £60.
Journal:
Pages: 495-497
Issue: 5
Volume: 40
Year: 2010
X-DOI: 10.1080/00014788.2010.9995325
File-URL: http://hdl.handle.net/10.1080/00014788.2010.9995325
File-Format: text/html
File-Restriction: Access to full text is restricted to subscribers.
Handle: RePEc:taf:acctbr:v:40:y:2010:i:5:p:495-497
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 2
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730007
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730007
File-Format: text/html
File-Restriction: Access to full text is restricted to subscribers.
Handle: RePEc:taf:acctbr:v:36:y:2006:i:2:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: 62-62
Issue: 2
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730008
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730008
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:2:p:62-62
Template-Type: ReDIF-Article 1.0
Author-Name: Ken Peasnell
Author-X-Name-First: Ken
Author-X-Name-Last: Peasnell
Author-Name: Mahmoud Ezzamel
Author-X-Name-First: Mahmoud
Author-X-Name-Last: Ezzamel
Author-Name: Peter Moizer
Author-X-Name-First: Peter
Author-X-Name-Last: Moizer
Title: Farewell
Journal:
Pages: 63-63
Issue: 2
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730009
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730009
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:2:p:63a-63a
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: A word from the new editor
Journal:
Pages: 63-63
Issue: 2
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730010
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730010
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:2:p:63b-63b
Template-Type: ReDIF-Article 1.0
Author-Name: Vivien Beattie
Author-X-Name-First: Vivien
Author-X-Name-Last: Beattie
Author-Name: Alan Goodacre
Author-X-Name-First: Alan
Author-X-Name-Last: Goodacre
Title: A new method for ranking academic journals in accounting and finance
Abstract: Given the many and varied uses to which journal rankings are put. interest in ranking journal ‘quality’ is likely to persist. Unfortunately, existing methods of constructing such rankings all have inherent limitations. This paper proposes a new (complementary) approach, based on submissions to RAE 2001. which is not restricted to a pre-defined journal set and, importantly, is based on quality choice decisions driven by economic incentives. For three metrics, submissions to RAE 2001 are compared with the available set of publications to provide evidence on the perception of journal quality, a fourth metric is based on the overall RAE grades, and an overall ranking is produced.
Journal: Accounting and Business Research
Pages: 65-91
Issue: 2
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730011
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730011
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:2:p:65-91
Template-Type: ReDIF-Article 1.0
Author-Name: Edward Lee
Author-X-Name-First: Edward
Author-X-Name-Last: Lee
Author-Name: Konstantinos Stathopoulos
Author-X-Name-First: Konstantinos
Author-X-Name-Last: Stathopoulos
Author-Name: Mark Hon
Author-X-Name-First: Mark
Author-X-Name-Last: Hon
Title: Investigating the return predictability of changes in corporate borrowing
Abstract: This study investigates the return predictability of changes in corporate borrowing by conditioning it on equity styles. state of market, and earnings expectation to determine whether it is due to unidentified sources of risk or mispricing. We observe that increases in borrowing are indeed followed by declines in operating and risk-adjusted return performance. However, the return underperformance exists only in small-cap growth companies experiencing negative earnings surprise, irrespective of the market state. We extend previous studies by demonstrating that the phenomenon is not pervasive over the entire cross-section of the stock market and is likely to be a manifestation of negative price response against the earnings disappointment of small-cap growth companies. Our results have implications for market efficiency and stock selection.
Journal: Accounting and Business Research
Pages: 93-107
Issue: 2
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730012
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730012
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:2:p:93-107
Template-Type: ReDIF-Article 1.0
Author-Name: Gnanakumar Visvanathan
Author-X-Name-First: Gnanakumar
Author-X-Name-Last: Visvanathan
Title: An empirical investigation of ‘closeness to cash’ as a determinant of earnings response coefficients
Abstract: ‘Closeness-to-cash,’ specified in terms of the extent that earnings approximate operating cashflows, is frequently advanced as a desirable property of earnings. We consider whether the security price response to unexpected earnings, as indicated by the earnings response coefficient (ERC), depends on the extent that earnings are historically close to operating cashflows. Using a sample of 1993-1999 quarterly earnings announcements, we find that the ERC varies inversely with the relative (size-adjusted) absolute magnitude of the accrual component of quarterly earnings after controlling for other well-documented determinants of ERC. Such results support the closeness-to-cash property of a firm's earnings time series as an important ERC determinant.
Journal: Accounting and Business Research
Pages: 109-120
Issue: 2
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730013
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730013
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:2:p:109-120
Template-Type: ReDIF-Article 1.0
Author-Name: Tony Zijl
Author-X-Name-First: Tony
Author-X-Name-Last: Zijl
Author-Name: Geoffrey Whittington
Author-X-Name-First: Geoffrey
Author-X-Name-Last: Whittington
Title: Deprival value and fair value: a reinterpretation and a reconciliation
Abstract: Measurement is an important current issue for financial accounting standard-setters. Current values are increasingly replacing historical cost measures, but an important unresolved issue is the precise form that current value should take. In this paper two alternative measurement bases that have appeared in accounting standards. Deprivai Value (sometimes called Value to the Business) and Fair Value, are explained and compared. They are then reconciled by making the following three adjustments to their conventional definitions. (1) In the case of Deprival Value, situations in which net realisable value exceeds replacement cost imply that there is a profitable redevelopment or redeployment opportunity, so that net realisable value is regarded as the appropriate measure of Deprivai Value. (2) In the case of Fair Value, transactions costs (including installation and removal costs) are added to acquisition values and deducted from disposal values. (3) In the case of Fair Value, it is assumed that net realisable value represents the ‘highest and best use’, except when it is exceeded by both replacement cost and value in use. In the latter case, ‘highest and best use’ (and therefore Fair Value) is inferred by assuming profit-maximising behaviour by the owner. It is suggested that the resulting synthesis represents a method of current valuation which is consistent with the objective of measuring the asset in terms of the economic opportunities that are available to its current owner in the condition and location in which it is currently to be found.
Journal: Accounting and Business Research
Pages: 121-130
Issue: 2
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730014
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:2:p:121-130
Template-Type: ReDIF-Article 1.0
Author-Name: Laura Spira
Author-X-Name-First: Laura
Author-X-Name-Last: Spira
Title: Book Review
Journal:
Pages: 131-132
Issue: 2
Volume: 36
Year: 2006
X-DOI: 10.1080/00014788.2006.9730015
File-URL: http://hdl.handle.net/10.1080/00014788.2006.9730015
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Handle: RePEc:taf:acctbr:v:36:y:2006:i:2:p:131-132
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729626
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729626
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 1
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729627
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:1:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: David Alexander
Author-X-Name-First: David
Author-X-Name-Last: Alexander
Author-Name: Simon Archer
Author-X-Name-First: Simon
Author-X-Name-Last: Archer
Title: On economic reality, representational faithfulness and the ‘true and fair override’
Abstract: The concept of ‘representational faithfulness’ is related to notions such as financial statements ‘giving a true and fair view’ or ‘presenting fairly’, which form a key part of auditors' opinion statements, and to ‘creative accounting’. These considerations lead to some deep conceptual issues concerning the relationship between financial reporting and its objects. We argue that it is mistaken to consider this relationship as one of ‘correspondence’. It is a more subtle, reflexive relationship which needs to be explicated if both the power and the fragility of accounting and financial reporting are to be properly understood. A related issue with which accounting standard-setters are confronted is exemplified in IAS 1, namely the possibility that ‘compliance with a Standard would be misleading, and…therefore departure from a requirement is necessary to achieve a fair presentation’ (IASC, 1997 para. 13). This issue is sometimes referred to as ‘the true and fair override’ (TFO), whereby a guiding principle, or higher-order rule (meta-rule), is invoked to justify non-application of a lower-order rule. The issue of the TFO is related to that of representational faithfulness (RF) mentioned above because the standard justification given for the TFO implies ‘correspondence’ between financial reporting and what it seeks to represent. We argue that if the characterisation of the relationship between financial reporting and its objects as one of ‘correspondence’ is rejected, justification of the TFO is problematic. In other words, while such a meta-rule has a key role to play as a guiding principle, to use it as an ‘override’ raises serious philosophical problems, as well as potential problems of preparer opportunism.
Journal: Accounting and Business Research
Pages: 3-17
Issue: 1
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729628
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729628
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:1:p:3-17
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Chung
Author-X-Name-First: Richard
Author-X-Name-Last: Chung
Author-Name: Michael Firth
Author-X-Name-First: Michael
Author-X-Name-Last: Firth
Author-Name: Jeong-Bon Kim
Author-X-Name-First: Jeong-Bon
Author-X-Name-Last: Kim
Title: Auditor conservatism and reported earnings
Abstract: Conservatism is an underlying concept of financial accounting. We argue that the auditor forces conservatism on client companies and that the amount of conservatism depends on the economic performance of the company and on the type of audit firm. In particular, we contend that Big Six audit clients use more conservative accounting than non-Big Six audit clients when the clients are performing poorly (as reflected in stock prices). We attribute the more conservative accounting used by Big Six audit clients to the influence of the audit firm. By regressing excess earnings to price ratios on excess stock returns and other variables, we find evidence consistent with our hypothesis that Big Six auditors influence their clients to adopt more conservative accounting than non-Big Six auditors only when the clients' financial performance is worse than expected.
Journal: Accounting and Business Research
Pages: 19-32
Issue: 1
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729629
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729629
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:1:p:19-32
Template-Type: ReDIF-Article 1.0
Author-Name: Elisabeth Dedman
Author-X-Name-First: Elisabeth
Author-X-Name-Last: Dedman
Title: Executive turnover in UK firms: the impact of Cadbury
Abstract: This study examines whether the Cadbury Committee recommendations regarding board structure have increased the power of boards to replace poorly performing CEOs. It also looks at whether institutional investors have become more proactive in this regard post-Cadbury. The study employs a comprehensive sample of UK listed firms between 1990 and 1995. Firm performance, CEO ownership and institutional ownership are found to be significantly related to the probability of non-routine top executive turnover. It appears that the managerial labour market is disciplining managers more quickly after Cadbury. However, there is no evidence that this is because boards have become more likely to remove CEOs following poor performance. Neither is any evidence found to support the assertions of institutional investors who claim to be more proactive since Cadbury. It is concluded that neither the Cadbury board structure reforms, nor the professed change in behaviour of institutional investors, has reduced the agency problem of managerial entrenchment in large UK firms.
Journal: Accounting and Business Research
Pages: 33-50
Issue: 1
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729630
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729630
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:1:p:33-50
Template-Type: ReDIF-Article 1.0
Author-Name: John Edwards
Author-X-Name-First: John
Author-X-Name-Last: Edwards
Author-Name: Hugh Greener
Author-X-Name-First: Hugh
Author-X-Name-Last: Greener
Title: Introducing ‘mercantile’ bookkeeping into British central government, 1828–1844
Abstract: The finances and accounting practices of British central government were the subject of persistent and critical comment from radical politicians within Parliament during the 1820s. The key to effective reform was seen to be the adoption of more business-like procedures, with the mercantile system of double entry bookkeeping considered superior to the established methods for recording and reporting the financial effects of government activity. The radical revision of entrenched administrative procedures required not only recognition of existing defects but individuals possessing the political will and position to implement necessary reform. This paper examines the characteristics of the assembly of politicians committed to accounting change, the initial implementation of accounting change and how further resistance was addressed so as to achieve the apparent diffusion of cash-based double entry bookkeeping throughout much of British central government by 1844.
Journal: Accounting and Business Research
Pages: 51-64
Issue: 1
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729631
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729631
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:1:p:51-64
Template-Type: ReDIF-Article 1.0
Author-Name: Ann Gaeremynck
Author-X-Name-First: Ann
Author-X-Name-Last: Gaeremynck
Author-Name: Marleen Willekens
Author-X-Name-First: Marleen
Author-X-Name-Last: Willekens
Title: The endogenous relationship between audit-report type and business termination: evidence on private firms in a non-litigious environment
Abstract: This study provides evidence on the relationship between audit-report type and subsequent business termination for private companies in a non-litigious environment. The results show that an endogenous relationship exists between bankruptcy and audit-report type, and between voluntary liquidation and audit-report type. A non-clean opinion is typically issued when firms face financial difficulties, which in turn become more severe after the receipt of a non-clean audit opinion. We find evidence that, even without a litigation deterrent in Belgium, financial performance has a similar impact on audit-report type as in litigious environments. We find that the self-fulfilling prophecy hypothesis holds for bankruptcy but not for voluntary liquidation. Our study also provides some evidence on audit reporting differences between Big 6 and non-Big 6 auditors in the Belgian audit market. When financial difficulties are obvious, as is the case when a company is about to go bankrupt, both Big 6 and non- Big 6 auditors are as competent and/or independent to assess and report going-concern problems. However, when financial difficulties are less apparent, as is the case for firms that voluntarily decide to liquidate, our results indicate that Big 6 auditors are more likely to issue a non-clean audit opinion than non-Big 6 auditors.
Journal: Accounting and Business Research
Pages: 65-79
Issue: 1
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729632
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729632
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:1:p:65-79
Template-Type: ReDIF-Article 1.0
Author-Name: W. Baxter
Author-X-Name-First: W.
Author-X-Name-Last: Baxter
Author-Name: Jane Hughes
Author-X-Name-First: Jane
Author-X-Name-Last: Hughes
Author-Name: Markus Milne
Author-X-Name-First: Markus
Author-X-Name-Last: Milne
Author-Name: Deryl Northcott
Author-X-Name-First: Deryl
Author-X-Name-Last: Northcott
Author-Name: David Pendrill
Author-X-Name-First: David
Author-X-Name-Last: Pendrill
Title: Book reviews
Journal:
Pages: 81-87
Issue: 1
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729633
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729633
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:1:p:81-87
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: 15th Annual Conference on Accounting, Business and Financial History at Cardiff Business School 10–11 September 2003
Journal:
Pages: 88-88
Issue: 1
Volume: 33
Year: 2003
X-DOI: 10.1080/00014788.2003.9729634
File-URL: http://hdl.handle.net/10.1080/00014788.2003.9729634
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Handle: RePEc:taf:acctbr:v:33:y:2003:i:1:p:88-88
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial board
Journal:
Pages: ebi-ebi
Issue: 4
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663342
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663342
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:4:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Nieves Carrera
Author-X-Name-First: Nieves
Author-X-Name-Last: Carrera
Author-Name: Salvador Carmona
Author-X-Name-First: Salvador
Author-X-Name-Last: Carmona
Author-Name: Isabel Gutiérrez
Author-X-Name-First: Isabel
Author-X-Name-Last: Gutiérrez
Title: Human capital, age and job stability: Evidence from Spanish certified auditors (1976–1988)
Abstract: During the period 1976–1988, Spain witnessed pervasive transformations that led the country from a military dictatorship to a fully‐fledged democracy. In turn, the audit profession experienced high demand which doubled the number of members of the Institute of Sworn Auditors of Spain (Instituto de Censores Jurados de Cuentas de España). In this unique social laboratory, we draw on the insights of human capital theory and the entrepreneurship literature to examine the profile of newly certified auditors at the time of receiving the audit certificate that enabled them to (i) become a licensed auditor and engage in public practice, or (ii) become an unlicensed auditor and leave the profession immediately after receiving the professional qualification. Our results indicate that those Spanish auditors who had high general or specific human capital and job stability and were at the younger or older ends of the age continuum were less likely to apply for audit licences than their counterparts (i.e. low general or specific human capital, middle‐aged, and unstable jobs).
Journal: Accounting and Business Research
Pages: 295-312
Issue: 4
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663343
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663343
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:4:p:295-312
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Barker
Author-X-Name-First: Richard
Author-X-Name-Last: Barker
Author-Name: Shahed Imam
Author-X-Name-First: Shahed
Author-X-Name-Last: Imam
Title: Analysts’ perceptions of ‘earnings quality’
Abstract: This paper examines sell‐side analysts’ perceptions of ‘earnings quality’. Prior research suggests that analysts’ stock recommendations, price targets, earnings forecasts and written reports are relevant to share price formation. One of the main inputs in analysts’ forecasting and valuation models is earnings, and analysts’ perceptions of earnings quality are therefore important. There is, however, little direct evidence in the literature on what these perceptions are and on what role they have in decision‐making. This paper seeks first to understand earnings quality as interpreted by analysts, and it then tests this interpretation against its actual usage in analysts’ research reports. An inductive approach is used that combines interview data with content analysis, and the findings are interpreted in the light of findings from market‐based and other research. We find that the concept of earnings quality is both accounting‐based (relating to notions of core or sustainable earnings, cash and accrual components of earnings, and accounting policies) and non‐accounting‐based (relating to information drawn from outside the financial statements). We find more non‐accounting than accounting references to earnings quality, and that (relatively subjective) non‐accounting references are especially widely used where analysts express positive or negative opinions about earnings quality. It is relatively unusual for an analyst's opinion to be both negative and accounting‐ based. If, however, an analyst does express negative, accounting‐based views on earnings quality, then he or she is highly unlikely to be positive in other respects. We interpret this evidence to be consistent with analysts’ economic incentives to generate trading volume yet to be favourably biased towards companies, while seeking to use value‐relevant information relating to earnings. We also conclude that the importance of accounting‐based information relating to earnings quality is more important than it might seem, and that it exerts a significant influence on the analysis and recommendations in analysts’ reports.
Journal: Accounting and Business Research
Pages: 313-329
Issue: 4
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663344
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663344
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:4:p:313-329
Template-Type: ReDIF-Article 1.0
Author-Name: Martin Bugeja
Author-X-Name-First: Martin
Author-X-Name-Last: Bugeja
Author-Name: Raymond da Silva Rosa
Author-X-Name-First: Raymond
Author-X-Name-Last: da Silva Rosa
Title: Taxation of shareholder capital gains and the choice of payment method in takeovers
Abstract: From December 1999, shareholders who disposed of shares in Australian takeovers in exchange for scrip could elect to defer capital gains taxation until the disposal of the shares received. We investigate payment method choice by acquiring firms before and after this regulatory change to assess whether target shareholder capital gains tax liabilities became an important factor considered in choosing the form of payment. The results show that, subsequent to the regulatory change, there is a significantly higher probability that equity will be offered as consideration where target shareholder capital gains are greater. This finding confirms the importance of shareholder level taxation in explaining corporate acquisition structure and adds to previous European and US evidence on factors associated with payment method choice in takeovers.
Journal: Accounting and Business Research
Pages: 331-350
Issue: 4
Volume: 38
Year: 2008
X-DOI: 10.1080/00014788.2008.9663345
File-URL: http://hdl.handle.net/10.1080/00014788.2008.9663345
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Handle: RePEc:taf:acctbr:v:38:y:2008:i:4:p:331-350
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730053
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730053
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: 2-2
Issue: 1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730054
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730054
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:1:p:2-2
Template-Type: ReDIF-Article 1.0
Author-Name: Vincent Chong
Author-X-Name-First: Vincent
Author-X-Name-Last: Chong
Author-Name: Darren Johnson
Author-X-Name-First: Darren
Author-X-Name-Last: Johnson
Title: Testing a model of the antecedents and consequences of budgetary participation on job performance
Abstract: This paper examines the effect of antecedents (such as task exceptions and task analysability) and consequences (such as job-relevant information, budget goal level, budget goal acceptance and budget goal commitment) of budgetary participation on job performance. The responses of 135 middle-level managers, drawn from a cross- section of manufacturing firms, to a survey questionnaire, were analysed by using a structural equation modelling (SEM) technique. The results of this study suggest that task exceptions and task analysability are important antecedents of budgetary participation. The results further suggest that the cognitive effect of participation in goal- setting allows subordinates to gather, exchange and share job-relevant information. The availability of job-relevant information allows subordinates to develop effective strategies or plans, which will help them to exert effort over time, in an attempt to attain their goals. The results support the proposition that setting difficult but attainable budget goals increases subordinates? budget goal level, acceptance, and commitment to the budget goal, which in turn improves job performance.
Journal: Accounting and Business Research
Pages: 3-19
Issue: 1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730055
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730055
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:1:p:3-19
Template-Type: ReDIF-Article 1.0
Author-Name: Gary Giroux
Author-X-Name-First: Gary
Author-X-Name-Last: Giroux
Author-Name: Rowan Jones
Author-X-Name-First: Rowan
Author-X-Name-Last: Jones
Title: Investigating the audit fee structure of local authorities in England and Wales
Abstract: The purpose of this paper is to model and test the audit fee structure of local authorities in England and Wales, with particular interest in fees charged by the Big 4 and other private sector auditors. The Audit Commission, a national public body under Parliament, regulates local government audits in England and Wales. The Audit Commission sets audit standards, appoints the auditors, and establishes a formula to determine standard audit fees. Constrained by the standard audit fees, each local authority and its auditor negotiate the actual audit fees. The majority of audits are conducted by district auditors (public sector employees under the Audit Commission), although about 25% of local authorities are audited by one of six private auditors (including three of the Big 4). Regression results for financial year 2000/01 have high explanatory power and work well to explain fee differences. Model relationships are somewhat different from US counterparts (which is the context of most of the audit economics literature) and type of authority partially explains fee differences. OLS regression results indicate a Big 4 discount for local authority audits. Because of expected self-selection bias, the Heckman procedure is used to analyse the differences between private sector and public sector auditors, which indicates no selection bias for Big 4 firms, although bias is present for private firms as a whole and district auditors in some models. When fees are size-adjusted, results continue to show a Big 4 discount. The Big 4 discount was robust to other follow-up tests.
Journal: Accounting and Business Research
Pages: 21-37
Issue: 1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730056
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730056
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:1:p:21-37
Template-Type: ReDIF-Article 1.0
Author-Name: Lee Parker
Author-X-Name-First: Lee
Author-X-Name-Last: Parker
Title: Financial and external reporting research: the broadening corporate governance challenge
Abstract: This study provides a critical examination of contemporary financial and external reporting research from a corporate governance perspective. Adopting Hines' social constructionist approach to financial reporting, the study investigates research into accounting publishing patterns, published reviews of major subject areas within financial and external reporting research, and interviews a sample of accounting professors in British universities. The findings reveal a strong North American economics and finance-based positivist influence, a largely uncritical acceptance of accounting's subservience to the demands of the market, a reluctance to engage major policy questions and broader reporting constituencies. These appear to be conditioned to a large degree by internal features and pressures within the academic research community. Evidence is presented for greater attention to major environmental shifts impacting accounting and communities globally, a reinvigoration of researchers' direct engagement with reporting constituents in the field, a revisiting of major accounting, business, social and environmental policy questions, and a preparedness to address today's major corporate governance concerns of communities and governments.
Journal: Accounting and Business Research
Pages: 39-54
Issue: 1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730057
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730057
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:1:p:39-54
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Archer
Author-X-Name-First: Simon
Author-X-Name-Last: Archer
Title: Financial and external reporting research: the broadening corporate governance challenge
Journal: Accounting and Business Research
Pages: 55-58
Issue: 1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730058
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730058
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:1:p:55-58
Template-Type: ReDIF-Article 1.0
Author-Name: Lee Parker
Author-X-Name-First: Lee
Author-X-Name-Last: Parker
Title: Financial and external reporting research: the broadening corporate governance challenge
Journal: Accounting and Business Research
Pages: 59-61
Issue: 1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730059
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730059
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:1:p:59-61
Template-Type: ReDIF-Article 1.0
Author-Name: John Edwards
Author-X-Name-First: John
Author-X-Name-Last: Edwards
Author-Name: Stephen Walker
Author-X-Name-First: Stephen
Author-X-Name-Last: Walker
Title: Accountants in late 19th century Britain: a spatial, demographic and occupational profile
Abstract: Recurring difficulties over defining occupational and professional boundaries in British accountancy are best understood by examining historical variations in the emergence and status of the population of accountants. The study uses census enumerators’ books for 1881 to construct a spatial, demographic and occupational profile of professional and non-professional accountants. It is shown that there were considerable geographical variations in the density of accountants. It is speculated that these variations reflected patterns in the feminisation of bookkeeping as well as socio-cultural differences in meanings of the title ‘accountant’, which were sustained by networks. Although accountants were most closely associated with commercial activity, the boundaries of the occupation remained obscure. The description ‘accountant’ embraced a multitude of employment statuses, the performance of diverse tasks and included specialist sub-occupations. Members of professional bodies comprised a small proportion of the total community of accountants in 1881. Further, there was a yawning divide between the status of professional and non-professional practitioners and there were also considerable variations in status within the chartered profession, between CAs in Scotland and England and Wales, and between the London elite and their lesser brethren in the provinces.
Journal: Accounting and Business Research
Pages: 63-89
Issue: 1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730060
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730060
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:1:p:63-89
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Call for papers for a special issue of Accounting, Auditing and Accountability Journal: “Accounting and the Visual”
Journal:
Pages: 90-90
Issue: 1
Volume: 37
Year: 2007
X-DOI: 10.1080/00014788.2007.9730061
File-URL: http://hdl.handle.net/10.1080/00014788.2007.9730061
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Handle: RePEc:taf:acctbr:v:37:y:2007:i:1:p:90-90
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 2
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728955
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728955
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:2:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: Alan Richardson
Author-X-Name-First: Alan
Author-X-Name-Last: Richardson
Title: Special issue on international accounting history
Abstract: As firms, markets and regulation becomes global in scope, we need to understand cultures other than our own and the factors that shape the pattern of transnational development. This special issue of Accounting and Business Research includes examples of work in international accounting history that can provide insights into the international development of accounting practice and institutions. The papers include an examination of the linkages between the international business and political science literatures and accounting history (Richardson and MacDonald), a genealogy of the Niven family spanning two continents (Lee), an examination of the origins of operational auditing (Flesher and Zareski), and a history of voluntary harmonisation efforts among Nordic countries (Aisbitt).
Journal: Accounting and Business Research
Pages: 63-65
Issue: 2
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728956
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728956
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:2:p:63-65
Template-Type: ReDIF-Article 1.0
Author-Name: Alan Richardson
Author-X-Name-First: Alan
Author-X-Name-Last: Richardson
Author-Name: Laura MacDonald
Author-X-Name-First: Laura
Author-X-Name-Last: MacDonald
Title: Linking international business theory to accounting history: implications of the international evolution of the state and the firm for accounting history research
Abstract: Accounting is an interdisciplinary subject. We routinely draw insights and models from the base disciplines (e.g. economics, psychology etc.) as a starting point for research on accounting issues. As accounting researchers, and accounting historians in particular, explore the international dimensions of accounting it is appropriate, therefore, to look to the literature on international relations for insights. This paper provides examples of how we could use the literature on the nation-state and international enterprises to frame questions about international accounting history.
Journal: Accounting and Business Research
Pages: 67-77
Issue: 2
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728957
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728957
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:2:p:67-77
Template-Type: ReDIF-Article 1.0
Author-Name: T. Lee
Author-X-Name-First: T.
Author-X-Name-Last: Lee
Title: The contributions of Alexander Thomas Niven and John Ballantine Niven to the international history of modern public accountancy
Abstract: This study examines the historical contributions to public accountancy of two Scottish Chartered Accountants. Alexander Thomas Niven was a charter member of the Society of Accountants in Edinburgh in 1854. and founded the Scottish public accountancy firm of A T Niven and Company in 1859. His son, John Ballantine Niven, became a Society member in 1893, co-founded the American public accountancy firm of Touche, Niven and Company in 1900, and was elected President of the American Institute of Accountants in 1924. The professional careers of both men are analysed in the context of a researched genealogy of the Niven family over two centuries in Scotland and the US. The analysis reveals the potential impact of successive generations of the Niven family in Scotland on the professional careers of Alexander Thomas Niven and John Ballantine Niven, and the significance of the latter's emigration to the development of the American profession. The historical contributions of both men are discussed within the context of specific economic and social factors over a considerable period of time. The conclusions of the study are that each Niven career was more than the sum of the events of a defined lifetime, and that the transfer of public accountancy knowledge through the emigration of John Ballantine Niven was a vital ingredient in the maturation of the American profession.
Journal: Accounting and Business Research
Pages: 79-92
Issue: 2
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728958
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728958
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:2:p:79-92
Template-Type: ReDIF-Article 1.0
Author-Name: Dale Flesher
Author-X-Name-First: Dale
Author-X-Name-Last: Flesher
Author-Name: Marilyn Zarzeski
Author-X-Name-First: Marilyn
Author-X-Name-Last: Zarzeski
Title: The roots of operational (value-for-money) auditing in English-speaking nations
Abstract: Operational auditing, also known as comprehensive auditing, management auditing, performance auditing, and value-for-money auditing, has had a diverse history across countries and professional disciplines. Although operational auditing is primarily a function of the internal and governmental auditor, public accountants and management consultants also perform similar audits. The roots of operational auditing go in multiple directions, as various organisations have played major roles in its development. Influential organisations were the General Accounting Office (GAO), under the leadership of T. Coleman Andrews; the American Institute of Management, led by Jackson Martindell; the Canadian Comprehensive Auditing Foundation, under the leadership of J. J. Macdonell; and the Institute of Internal Auditors (IIA), under the leadership of many individuals. Although the work of Martindell was carried on simultaneously with that of the IIA and the GAO, there was little influence of one group on another. In other words, two different professions developed operational auditing independently, but simultaneously. The US was the leader in the development of the concept of operational auditing. Surprisingly, despite its leadership in operational auditing development, principles developed in the US have not been adopted by other nations. Instead, Canada developed its own system, which was later partly copied by others in the British Commonwealth. This historical view of operational auditing across English-speaking countries provides evidence that international diffusion and cross-disciplinary diffusion of auditing ideas has been minimal.
Journal: Accounting and Business Research
Pages: 93-104
Issue: 2
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728959
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728959
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:2:p:93-104
Template-Type: ReDIF-Article 1.0
Author-Name: Sally Aisbitt
Author-X-Name-First: Sally
Author-X-Name-Last: Aisbitt
Title: Harmonisation of financial reporting before the European Company Law Directives: the case of the Nordic Companies Act
Abstract: De jure harmonisation of financial reporting began early in the Nordic countries with initial discussions reported as early as the 1930s. Legislation implemented in the 1970s was based on a proposal for a common Nordic Companies Act. This article follows the history of this legislation and analyses it with a view to providing insights into voluntary harmonisation across multiple countries. The main lessons appear to be that (1) Germany had a measurable influence; (2) taxes played an important role which has persisted in some countries, with others resisting change until the 1980s and 1990s; (3) the Nordic countries were among the first to introduce a legal requirement for publication of a funds flow statement; (4) meeting the needs of diverse and dynamic stakeholders was addressed differentially by the Nordic countries; and (5) regional co-operation seems to have been overtaken by events on the broader international stage and the costs of compromise.
Journal: Accounting and Business Research
Pages: 105-117
Issue: 2
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728960
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728960
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:2:p:105-117
Template-Type: ReDIF-Article 1.0
Author-Name: R. Parker
Author-X-Name-First: R.
Author-X-Name-Last: Parker
Title: Book review
Journal:
Pages: 119-120
Issue: 2
Volume: 32
Year: 2002
X-DOI: 10.1080/00014788.2002.9728961
File-URL: http://hdl.handle.net/10.1080/00014788.2002.9728961
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Handle: RePEc:taf:acctbr:v:32:y:2002:i:2:p:119-120
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: i-i
Issue: 4
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728943
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728943
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:4:p:i-i
Template-Type: ReDIF-Article 1.0
Author-Name: M. Hossain
Author-X-Name-First: M.
Author-X-Name-Last: Hossain
Author-Name: S. Cahan
Author-X-Name-First: S.
Author-X-Name-Last: Cahan
Author-Name: M. Adams
Author-X-Name-First: M.
Author-X-Name-Last: Adams
Title: The investment opportunity set and the voluntary use of outside directors: New Zealand evidence
Abstract: This study examines whether the composition of boards of directors differs between high and low growth firms. Based on prior research, we hypothesise that firms with greater investment opportunities require more monitoring because managers in these firms have more discretion both in selecting investments and allocating resources between investments. Because outside directors can be more effective monitors than inside directors, we predict that outsiders will make up a larger proportion of the board in high growth firms than in low growth firms. Using a cross-sectional sample of 77 New Zealand firms, our results suggest that the percentage of outside directors is related to growth for two of the four measures of investment opportunities which we employ. As expected, the percentage of outside directors is also related to a composite measure of investment opportunities.
Journal: Accounting and Business Research
Pages: 263-273
Issue: 4
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728944
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728944
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:4:p:263-273
Template-Type: ReDIF-Article 1.0
Author-Name: Kevin Keasey
Author-X-Name-First: Kevin
Author-X-Name-Last: Keasey
Author-Name: Philip Moon
Author-X-Name-First: Philip
Author-X-Name-Last: Moon
Author-Name: Darren Duxbury
Author-X-Name-First: Darren
Author-X-Name-Last: Duxbury
Title: Performance measurement and the use of league tables: some experimental evidence of dysfunctional consequences
Abstract: The practice of organisations adopting performance measurement systems that utilise a range of key performance indicators linked to various aspects of corporate strategy has become widespread. At the same time, however, many organisations are developing reporting frameworks that summarise these indicators in the form of a league table, ranking sub-units according to their achievements. The use of such league tables has the capacity to create a form of dysfunctional behaviour as managers focus primarily on their league table positions—the notion of measure fixation. This paper describes a new experiment that seeks to explore this possibility. The results suggest that information concerning the change in league table position leads to an increase in risk-seeking behaviour, particularly where a project proposal creates an opportunity for the manager's sub-unit to move to the top of the league table. This is an unintended dysfunctional consequence of using league tables within performance measurement system design.
Journal: Accounting and Business Research
Pages: 275-286
Issue: 4
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728945
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728945
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:4:p:275-286
Template-Type: ReDIF-Article 1.0
Author-Name: Paul Klumpes
Author-X-Name-First: Paul
Author-X-Name-Last: Klumpes
Title: Incentives and disincentives for voluntary disclosure by pension funds: international evidence
Abstract: This paper examines competing proprietary and political cost arguments for incentives facing managers of different types of Australian and UK pension fund, to voluntarily disclose pension liability information in annual reports sent to their participants. For Australian defined benefit pension funds, the disclosure reveals the fund's actuarial surplus or deficit, which conveys information to participants about the pension fund's ability to generate future cash flows. Tests are conducted on the voluntary reporting practices of a sample of 119 Australian and 100 UK pension funds, using variables which prior research suggests affects their financial valuation and performance. The empirical results support predictions that managerial discretionary disclosure carries proprietary cost implications for Australian defined benefit pension funds, as proxied by their investment risk and funding ratio, and political cost implications for Australian defined contribution and UK defined benefit pension funds, as proxied by their size.
Journal: Accounting and Business Research
Pages: 287-298
Issue: 4
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728946
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728946
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:4:p:287-298
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Lin
Author-X-Name-First: Stephen
Author-X-Name-Last: Lin
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: FRS3 earnings, Headline earnings, and accounting-based valuation models
Abstract: This paper examines the joint and incremental explanatory value of book value per share and two measures of earnings per share (Headline and FRS3 EPS) for the cross-section of UK share prices. We find that Headline EPS explains a significant proportion of cross-sectional variation in share price. Book value per share contributes incremental explanatory value to the model, which is both statistically and economically significant. However, the incremental explanatory value contributed by FRS3 EPS is negligible. We conclude that FRS3 should be revised to encourage firms to report something like Headline EPS on a standardised basis in addition to FRS3 EPS.
Journal: Accounting and Business Research
Pages: 299-306
Issue: 4
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728947
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728947
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:4:p:299-306
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: Is true and fair of over-riding importance?: a comment on Alexander's benchmark
Journal: Accounting and Business Research
Pages: 307-312
Issue: 4
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728948
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728948
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:4:p:307-312
Template-Type: ReDIF-Article 1.0
Author-Name: K. Peasnell
Author-X-Name-First: K.
Author-X-Name-Last: Peasnell
Author-Name: P. Pope
Author-X-Name-First: P.
Author-X-Name-Last: Pope
Author-Name: S. Young
Author-X-Name-First: S.
Author-X-Name-Last: Young
Title: Detecting earnings management using cross-sectional abnormal accruals models
Abstract: This paper examines specification and power issues in relation to three models used to estimate abnormal accruals. In contrast to the majority of prior work evaluating models estimated in time-series, we examine the performance of cross-sectionally estimated models. In addition to testing the standard-Jones (Jones, 1991) and modified-Jones (Dechow et al., 1995) models, we also develop and test a new specification, labelled the ‘margin model’. Consistent with prior US research employing time-series specifications of the two Jones models, our findings suggest that each of the three cross-sectional models are well specified when applied to a random sample of firm-years. However, the margin model appears to generate relatively better specified estimates of abnormal accruals when cash flow performance is extreme. Analysis of the models' ability to detect artificially induced earnings management indicates that all three procedures are capable of generating relatively powerful tests for economically plausible levels of accruals management (e.g., less than 10% of lagged total assets). Regarding their relative performance, the standard-Jones and modified-Jones models are found to be more powerful for revenue and bad debt manipulations. In contrast, the margin appears to be more powerful at detecting non-bad debt expense manipulations.
Journal: Accounting and Business Research
Pages: 313-326
Issue: 4
Volume: 30
Year: 2000
X-DOI: 10.1080/00014788.2000.9728949
File-URL: http://hdl.handle.net/10.1080/00014788.2000.9728949
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Handle: RePEc:taf:acctbr:v:30:y:2000:i:4:p:313-326
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal:
Pages: ebi-ebi
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729970
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Forthcoming Articles
Journal:
Pages: ii-ii
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729971
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:ii-ii
Template-Type: ReDIF-Article 1.0
Author-Name: Miles Gietzmann
Author-X-Name-First: Miles
Author-X-Name-Last: Gietzmann
Author-Name: Cass School
Author-X-Name-First: Cass
Author-X-Name-Last: School
Title: Guest editorial to international conference on advances in accounting-based valuation
Journal:
Pages: 275-276
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729972
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729972
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:275-276
Template-Type: ReDIF-Article 1.0
Author-Name: David Ashton
Author-X-Name-First: David
Author-X-Name-Last: Ashton
Author-Name: Terry Cooke
Author-X-Name-First: Terry
Author-X-Name-Last: Cooke
Author-Name: Mark Tippett
Author-X-Name-First: Mark
Author-X-Name-Last: Tippett
Author-Name: Pengguo Wang
Author-X-Name-First: Pengguo
Author-X-Name-Last: Wang
Title: Linear information dynamics, aggregation, dividends and ‘dirty surplus’ accounting
Abstract: We generalise the Ashton et al. (2003) Aggregation Theorem by demonstrating how the market value of equity disaggregates into its recursion and real (adaptation) components when the linear information dynamics incorporate a dirty surplus adjustment and also, when dividends are paid. Our analysis shows that ignoring the dirty surplus adjustment will, in general, induce biases into the functional expressions for the recursion and real (adaptation) values of equity. Furthermore, we show that whilst the recursion value of equity is independent of dividend policy, the real (adaptation) value of equity is affected by the dividend policy invoked by the firm. Tabulated results show that the difference in equity value between a dividend and a non-dividend paying firm is most pronounced at low levels of the recursion value.
Journal: Accounting and Business Research
Pages: 277-299
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729973
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729973
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:277-299
Template-Type: ReDIF-Article 1.0
Author-Name: Adam Ostaszewski
Author-X-Name-First: Adam
Author-X-Name-Last: Ostaszewski
Title: ‘Equity smirks’ and embedded options: the shape of a firm's value function
Abstract: This paper examines the methodology and assumptions of Ashton, D., Cooke, T., Tippett, M., Wang, P. (2004) employing recursion value η as an explanatory single-variable in a model of the firm, first introduced by Ashton, D., Cooke, T., Tippett, M., in (2003). A qualitative analysis of all of their numerical findings is given together with an indication of how more useful is the tool of special function theory, here requiring confluent hyper-geometric functions associated with the Merton-style valuation equation A justification and a wider interpretation of their model and findings is offered: these come from inclusion of strictly convex dissipating frictions arising either as insurance costs, replacement costs of funds paid out, or of debt service, and from the inclusion of alternative adaptation options embedded in the equity value of a firm; these predict not only a J-shaped equity curve, but also, under the richer modelling assumption, a snake-like curve that may result from financial frictions like insurance. These ‘smirks’ in the equity curve may be empirically tested. It is shown that the inclusion of frictions in dividend selection (e.g. the signalling costs of Bhattacharya, 1979) leads to an optimal dividend payout of αη that is a constant coupon for an interval of η values preceded by an interval in which α = r; this is at variance with the ACTW model where the exogeneous assumption of a constant a is made.
Journal: Accounting and Business Research
Pages: 301-321
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729974
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:301-321
Template-Type: ReDIF-Article 1.0
Author-Name: Feng Chen
Author-X-Name-First: Feng
Author-X-Name-Last: Chen
Author-Name: Bjorn Jorgensen
Author-X-Name-First: Bjorn
Author-X-Name-Last: Jorgensen
Author-Name: Yong Yoo
Author-X-Name-First: Yong
Author-X-Name-Last: Yoo
Title: Implied cost of equity capital in earnings-based valuation: international evidence
Abstract: Assuming the clean surplus relation, the Edwards-Bell-Ohlson residual income valuation (RIV) model expresses market value of equity as the sum of the book value of equity and the expected discounted future residual incomes. Without assuming the clean surplus relation, Ohlson and Juettner-Nauroth (2000) articulate the role of forward earnings per share in valuation. We compare the implied costs of equity capital from these two approaches to earnings-based valuation within seven developed countries. We hypothesise superior performance from the RIV model in countries where the clean surplus relation holds well. First, we provide preliminary international evidence on the frequency and magnitude of the clean surplus deviations. Consistent with our hypothesis, we document superior reliability of the implied cost of equity capital derived from the RIV model when clean surplus adequately describes the firms' financial reporting. That is, the implied cost of equity capital derived from Ohlson and Juettner-Nauroth (2000) is relatively more reliable in countries where the clean surplus deviations are common. Our analyses suggest that the proper choice of earnings-based valuation model may depend on analysts' interpretation of their financial reporting environment.
Journal: Accounting and Business Research
Pages: 323-344
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729975
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729975
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:323-344
Template-Type: ReDIF-Article 1.0
Author-Name: Marco Trombetta
Author-X-Name-First: Marco
Author-X-Name-Last: Trombetta
Title: Discussion of ‘Implied cost of equity capital in earnings-based valuation: international evidence’
Journal: Accounting and Business Research
Pages: 345-348
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729976
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729976
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:345-348
Template-Type: ReDIF-Article 1.0
Author-Name: Miles Gietzmann
Author-X-Name-First: Miles
Author-X-Name-Last: Gietzmann
Author-Name: Adam Ostaszewski
Author-X-Name-First: Adam
Author-X-Name-Last: Ostaszewski
Title: Predicting firm value: the superiority of -theory over residual income
Abstract: One of the contributions of residual income theory is that it establishes an equivalence between valuation of a firm based upon a discounted stream of future dividends and valuation based on accounting data in which book value and a discounted stream of future residual incomes take centre stage. However, this equivalence result is non-unique: residual income is only one of many income measures for which equivalence can be shown to hold. Given this non-uniqueness, the traditional residual income equivalence result provides at best a weak defence for the necessity of accounting via residual income. The principal objective of the current paper is to address this central limitation of existing research. We consider how to move on from dependence on equivalence as a weak defence for accounting-based valuation, to a framework in which strict preference between alternative valuation methods is possible. The principal reason why previous research has not considered such issues is because it has lacked an underlying microeconomic theory of managerial choice providing a framework within which to rank alternative valuation rules. From first principles we develop a dynamic optimisation model of managerial choice that provides the benchmark by which we can objectively appraise valuation based upon residual and other income measures. We show that hysteresis (non-uniqueness of valuation) can typically arise for residual income, whereas in contrast for the q-theory based income measure which we derive, valuation is, as expected intuitively, increasing in income (under some mild regularity conditions). Furthermore, we show how our proposed g-theory income measure could be estimated empirically and that our model provides an explanation for some of the apparent anomalies in the Burgstahler-Dichev empirical findings.
Journal: Accounting and Business Research
Pages: 349-377
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729977
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:349-377
Template-Type: ReDIF-Article 1.0
Author-Name: John O'Hanlon
Author-X-Name-First: John
Author-X-Name-Last: O'Hanlon
Title: Discussion of ‘Predicting firm value: The superiority of superiority of -theory over residual income’ by Miles Gietzmann and Adam Ostaszewski
Journal: Accounting and Business Research
Pages: 379-382
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729978
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729978
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:379-382
Template-Type: ReDIF-Article 1.0
Author-Name: Helena Isidro
Author-X-Name-First: Helena
Author-X-Name-Last: Isidro
Author-Name: John O'Hanlon
Author-X-Name-First: John
Author-X-Name-Last: O'Hanlon
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: Dirty surplus accounting flows: international evidence
Abstract: It has been suggested that dirty surplus accounting (violation of the clean surplus relationship (CSR)) may result in mismeasurement of performance and value, and that cross-country variation in dirty surplus accounting may cause particular problems for international comparisons. Using articulated data that are largely hand-collected, we evaluate the potential impact of dirty surplus accounting in France, Germany, the UK and the US for the period 1993-2001. First, we report summary statistics on dirty surplus accounting flows. These indicate that distributions of dirty surplus flows are often not centred on zero, and that there is significant cross-country variation in such flows. Then, we use a measure of multi-period abnormal performance to document the bias and inaccuracy, and cross-country variation therein, that would have arisen from omitting dirty surplus flows in measuring performance. Where significant bias and cross-country variation therein arise, they are largely caused by omission of goodwill-related flows, which regulators are eliminating as a dirty surplus item. In contrast, all classes of dirty surplus flow contribute to significant cross-country variation in inaccuracy. Finally, we address the issue of dirty surplus flows from the valuation perspective. We use the residual income valuation model, which relies partly on CSR, to test whether perfect-foresight forecasts of dirty surplus accounting flows explain beginning-of-interval market-to-book ratios after controlling for other inputs to the valuation model. We find little evidence to suggest that omission of dirty surplus flows from residual income value estimates would have caused systematic valuation errors in the period and countries examined.
Journal: Accounting and Business Research
Pages: 383-410
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729979
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729979
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:383-410
Template-Type: ReDIF-Article 1.0
Author-Name: Pascal Frantz
Author-X-Name-First: Pascal
Author-X-Name-Last: Frantz
Title: Review of ‘Dirty surplus accounting flows: international evidence’
Journal: Accounting and Business Research
Pages: 411-412
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729980
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729980
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:411-412
Template-Type: ReDIF-Article 1.0
Author-Name: Clive Lennox
Author-X-Name-First: Clive
Author-X-Name-Last: Lennox
Author-Name: Claire Marston
Author-X-Name-First: Claire
Author-X-Name-Last: Marston
Author-Name: R. Parker
Author-X-Name-First: R.
Author-X-Name-Last: Parker
Author-Name: Chris Pong
Author-X-Name-First: Chris
Author-X-Name-Last: Pong
Title: Book reviews
Journal:
Pages: 413-417
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729981
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729981
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:413-417
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: 17th Annual Conference on Accounting, Business & Financial History at Cardiff Business School 15-16 September 2005 Announcement of Conference and Call for Papers
Journal:
Pages: 418-418
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729982
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729982
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:418-418
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Index to Volume 34 — 2004
Journal:
Pages: 1-2
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729983
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729983
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:1-2
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Guide for Authors
Journal:
Pages: 420-420
Issue: 4
Volume: 34
Year: 2004
X-DOI: 10.1080/00014788.2004.9729984
File-URL: http://hdl.handle.net/10.1080/00014788.2004.9729984
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Handle: RePEc:taf:acctbr:v:34:y:2004:i:4:p:420-420
Template-Type: ReDIF-Article 1.0
Author-Name: Bong Hwan Kim
Author-X-Name-First: Bong Hwan
Author-X-Name-Last: Kim
Title: Debt covenant slack and ex-post conditional accounting conservatism
Abstract:
This study examines how conditional accounting conservatism varies after debt contracts are executed (ex-post conditional conservatism) depending on the closeness to violations of debt covenants, the costs of covenant violations, and bank monitoring. I hypothesise that borrowers with lower debt-covenant slack have an incentive to avoid covenant violations and will have lower ex-post conditional conservatism levels than those with higher slack. I find that borrowers with both lower and higher slack increase their ex-post conditional conservatism, but that the magnitude of this increase in conservatism is positively associated with the level of covenant slack. Further, this positive relationship between the ex-post change in conditional conservatism and the debt-covenant slack is more pronounced when the costs of the debt-covenant breach are greater, and is less pronounced when lenders have stronger incentives to monitor borrowers. This study provides evidence that the ex-post change in conditional conservatism is affected by the costs of a covenant breach and bank monitoring.
Journal: Accounting and Business Research
Pages: 111-134
Issue: 2
Volume: 50
Year: 2020
Month: 2
X-DOI: 10.1080/00014788.2019.1663720
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1663720
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:2:p:111-134
Template-Type: ReDIF-Article 1.0
Author-Name: Sunay Mutlu
Author-X-Name-First: Sunay
Author-X-Name-Last: Mutlu
Title: Accounting quality and the choice of borrowing base restrictions in debt contracts
Abstract:
This paper examines the effect of accounting quality on the inclusion of a specific debt contract feature, the borrowing base restriction, which limits the borrower’s access to the credit line by the amount of its working capital assets. The quality of the working capital, in turn, becomes relevant to the choice of borrowing base restrictions. I argue that private monitoring of working capital decreases the effect of publicly available accounting information in debt contracts. I find that borrowers with low accounting quality, measured as low accrual quality, are more likely to access borrowing base lines of credit, as they face high adverse selection costs in non-borrowing base lines of credit. Accordingly, I show that the effect of accounting quality on the cost of debt is diminished in borrowing base lines of credit as compared to non-borrowing base lines of credit. Further results show that the diminishing effect of accounting quality in borrowing base lines is mainly due to the discretionary portion of accrual quality, rather than the innate portion. Moreover, based on the narrative length of borrowing base restrictions specifically written on eligible accounts receivables in loan contracts, I construct a borrowing base restrictiveness measure and find that the effect of accounting quality on the cost of debt is decreasing with the restrictiveness, supporting the substitution effect between contractual monitoring mechanisms and borrower accounting quality.
Journal: Accounting and Business Research
Pages: 135-178
Issue: 2
Volume: 50
Year: 2020
Month: 2
X-DOI: 10.1080/00014788.2019.1683440
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1683440
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:2:p:135-178
Template-Type: ReDIF-Article 1.0
Author-Name: Sammy X. Ying
Author-X-Name-First: Sammy X.
Author-X-Name-Last: Ying
Author-Name: Chris Patel
Author-X-Name-First: Chris
Author-X-Name-Last: Patel
Author-Name: Peipei Pan
Author-X-Name-First: Peipei
Author-X-Name-Last: Pan
Title: The influence of peer attitude and inherent scepticism on auditors’ sceptical judgments
Abstract:
Our study examines whether auditors’ sceptical judgments are influenced by peer attitude in the context of a peer providing informal advice to auditors in China. We hypothesise that when peer attitude reflects a high (low) emphasis on professional scepticism, auditors will be more (less) sceptical in their judgments. Our results from a between-subjects experiment support this hypothesis. We further examine whether the effect of peer attitude on sceptical judgments differs between auditors with higher or lower levels of inherent scepticism. Our results show that the effect of peer attitude is stronger among auditors with higher levels of inherent scepticism. The results provide evidence on the potential boundaries of informal peer advice as a mechanism to elevate auditors’ professional scepticism. Our findings demonstrate the importance of understanding how peer attitude and inherent scepticism jointly influence their auditors’ sceptical judgments.
Journal: Accounting and Business Research
Pages: 179-202
Issue: 2
Volume: 50
Year: 2020
Month: 2
X-DOI: 10.1080/00014788.2019.1686695
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1686695
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:2:p:179-202
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: 2020 International Accounting Standards Board Research Forum in Conjunction with Accounting and Business Research
Journal: Accounting and Business Research
Pages: 203-203
Issue: 2
Volume: 50
Year: 2020
Month: 2
X-DOI: 10.1080/00014788.2020.1711995
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1711995
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:2:p:203-203
Template-Type: ReDIF-Article 1.0
Author-Name: Beatriz Garcia Osma
Author-X-Name-First: Beatriz
Author-X-Name-Last: Garcia Osma
Author-Name: Elvira Scarlat
Author-X-Name-First: Elvira
Author-X-Name-Last: Scarlat
Author-Name: Karin Shields
Author-X-Name-First: Karin
Author-X-Name-Last: Shields
Title: Insider trading restrictions and earnings management
Abstract:
We study whether firms that voluntarily restrict insider trading have lower incentives for earnings management. Using a large sample of US firms, we measure these restrictions based on the extent to which insider transactions happen shortly after quarterly earnings announcements. We find that the adoption of insider trading restrictions is associated with a reduction of 9.92% in absolute discretionary accruals. Our findings are robust to controlling for changes in corporate governance, and we do not find evidence of a substitution effect between accruals and real earnings management, target beating or timeliness of loss recognition. Taken together, our results indicate that the voluntary adoption of blackout periods that limit insider trading improves the quality of financial reporting.
Journal: Accounting and Business Research
Pages: 205-237
Issue: 3
Volume: 50
Year: 2020
Month: 4
X-DOI: 10.1080/00014788.2020.1712650
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1712650
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:3:p:205-237
Template-Type: ReDIF-Article 1.0
Author-Name: Lufei Ruan
Author-X-Name-First: Lufei
Author-X-Name-Last: Ruan
Title: Accounting for fixed assets and investment efficiency: a real options framework
Abstract:
In a perfect world, a manager's investment in fixed assets would increase with the assets’ profitability. However, when managers privately know their project profitability and care about their company's short-term share price, managers of less profitable firms face the temptation to overinvest in order to pool with strong firms. This creates pressure on strong firms to overinvest to the point where weak firms cease to find it worthwhile to mimic strong firms. I show that, when firms have abandonment options, the willingness of a weak firm's manager to mimic depends on the expected future resale value of the fixed assets. An impairment policy (prohibiting write-ups) reduces the value of abandonment options, which are particularly important for weak firms. The reduced value of the abandonment options decreases the amount of overinvestment required by strong firms to separate themselves from weak firms. I also show that allowing firms to choose depreciation schedules improves investment efficiency: in equilibrium, strong firms choose faster depreciation. Last, in the staged-investments setting, I show that an impairment policy also mitigates underinvestment at an initial stage. These findings rationalise the current accounting standards for fixed assets and contribute to related policy debates on accounting measurement.
Journal: Accounting and Business Research
Pages: 238-268
Issue: 3
Volume: 50
Year: 2020
Month: 4
X-DOI: 10.1080/00014788.2019.1675492
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1675492
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:3:p:238-268
Template-Type: ReDIF-Article 1.0
Author-Name: Augustine Duru
Author-X-Name-First: Augustine
Author-X-Name-Last: Duru
Author-Name: Iftekhar Hasan
Author-X-Name-First: Iftekhar
Author-X-Name-Last: Hasan
Author-Name: Liang Song
Author-X-Name-First: Liang
Author-X-Name-Last: Song
Author-Name: Yijiang Zhao
Author-X-Name-First: Yijiang
Author-X-Name-Last: Zhao
Title: Bank accounting regulations, enforcement mechanisms, and financial statement informativeness: cross-country evidence
Abstract:
We construct measures of accounting regulations and enforcement mechanisms that are specific to a country's banking industry. Using a sample of major banks in 37 economies, we find that the informativeness of banks’ financial statements, measured by the value relevance of earnings and common equity, is higher in countries with stricter bank accounting regulations and countries with stronger enforcement. These findings suggest that superior bank accounting and enforcement mechanisms enhance the informativeness of banks’ financial statements. In addition, we find that the effects of bank accounting regulations are more pronounced in countries with stronger enforcement in the banking industry, suggesting that enforcement is complementary to bank accounting regulations in achieving higher value relevance of financial statements. Our study has important policy implications for bank regulators.
Journal: Accounting and Business Research
Pages: 269-304
Issue: 3
Volume: 50
Year: 2020
Month: 4
X-DOI: 10.1080/00014788.2017.1415801
File-URL: http://hdl.handle.net/10.1080/00014788.2017.1415801
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:3:p:269-304
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Call for Papers
Journal: Accounting and Business Research
Pages: 305-308
Issue: 3
Volume: 50
Year: 2020
Month: 4
X-DOI: 10.1080/00014788.2020.1733785
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1733785
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:3:p:305-308
Template-Type: ReDIF-Article 1.0
Author-Name: Anna Alexander
Author-X-Name-First: Anna
Author-X-Name-Last: Alexander
Author-Name: Antonio De Vito
Author-X-Name-First: Antonio
Author-X-Name-Last: De Vito
Author-Name: Martin Jacob
Author-X-Name-First: Martin
Author-X-Name-Last: Jacob
Title: Corporate tax reforms and tax-motivated profit shifting: evidence from the EU
Abstract:
This paper examines whether the profit-shifting trend in Europe during 2003–2013 can be explained by tax policy changes. Consistent with prior literature, we find that affiliates’ profits are sensitive to tax rate changes. However, we document that tax base–broadening reforms have mitigated the incentives for both inward and outward profit shifting. In particular, we find that anti-avoidance rules prevent multinational companies from shifting profits out of their foreign affiliates, whereas other tax base–broadening rules, such as restrictions on the deductibility of tax losses or on group tax relief, reduce the incentives for multinational companies to shift profits into foreign affiliates. Furthermore, we find evidence of a downward trend in profit shifting across European countries, especially when the tax enforcement is stricter. Overall, these results suggest that broader tax bases and stricter tax enforcement have successfully curbed this particular tax strategy.
Journal: Accounting and Business Research
Pages: 309-341
Issue: 4
Volume: 50
Year: 2020
Month: 6
X-DOI: 10.1080/00014788.2020.1712649
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1712649
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:4:p:309-341
Template-Type: ReDIF-Article 1.0
Author-Name: María J. Sánchez-Expósito
Author-X-Name-First: María J.
Author-X-Name-Last: Sánchez-Expósito
Author-Name: David Naranjo-Gil
Author-X-Name-First: David
Author-X-Name-Last: Naranjo-Gil
Title: The effect of relative performance feedback on individual performance in team settings under group-based incentives
Abstract:
This study reports the results of an experiment that analyses the behavioural effect of relative performance feedback (RPF) on individual performance when compensation is based on team performance. Specifically, it investigates whether RPF affects individual performance differently when the comparison focuses on other members of that individual’s team (within-group RPF) or on other teams (between-group RPF). We predict a negative effect of within-group RPF on individual performance. We also predict that between-group RPF moderates that negative effect, since it encourages individuals to focus on group goals rather than individual goals. Consistent with our predictions, results show that the negative effect of within-group RPF on individual performance is mitigated by between-group RPF. Our results can help accountants to better understand how the effects of relative performance feedback differ according to the predominant comparison target.
Journal: Accounting and Business Research
Pages: 342-359
Issue: 4
Volume: 50
Year: 2020
Month: 6
X-DOI: 10.1080/00014788.2020.1712548
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1712548
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:4:p:342-359
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen A. Zeff
Author-X-Name-First: Stephen A.
Author-X-Name-Last: Zeff
Author-Name: Thomas R. Dyckman
Author-X-Name-First: Thomas R.
Author-X-Name-Last: Dyckman
Title: Accounting and Business Research: the first 50 years, 1970–2019
Abstract:
This article is a historical review and analysis of the first 50 years of Accounting and Business Research.
Journal: Accounting and Business Research
Pages: 360-395
Issue: 4
Volume: 50
Year: 2020
Month: 6
X-DOI: 10.1080/00014788.2020.1731115
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1731115
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:4:p:360-395
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Thank you to reviewers
Journal: Accounting and Business Research
Pages: 396-398
Issue: 4
Volume: 50
Year: 2020
Month: 6
X-DOI: 10.1080/00014788.2020.1757194
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1757194
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:4:p:396-398
Template-Type: ReDIF-Article 1.0
Author-Name: Henrik Höglund
Author-X-Name-First: Henrik
Author-X-Name-Last: Höglund
Author-Name: Dennis Sundvik
Author-X-Name-First: Dennis
Author-X-Name-Last: Sundvik
Title: Do auditors constrain intertemporal income shifting in private companies?
Abstract:
This study investigates the association between private company auditing and intertemporal income shifting. Using a large reduction in the Finnish corporate tax rate as a strong incentive for income shifting and financial statement data coupled with proprietary information from the tax authorities, we analyse accruals and cost stickiness of small private companies. Our results reveal significant differences in accrual income shifting between audited and unaudited companies, but only among companies that on average could anticipate the tax reduction the most. Further, we find auditors to restrict sticky selling, general, and administrative cost behaviour that we hypothesise is associated with illegal actions. Additional tests expose a nontrivial number of incorrectly unaudited companies which are the ones mostly associated with income shifting. Taken together, our study highlights the effects of audit exemption and the importance of enforcement while also suggesting that the audit process is value adding for the tax authorities.
Journal: Accounting and Business Research
Pages: 245-270
Issue: 3
Volume: 49
Year: 2019
Month: 4
X-DOI: 10.1080/00014788.2018.1490166
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1490166
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:3:p:245-270
Template-Type: ReDIF-Article 1.0
Author-Name: Beatriz Santos-Cabalgante
Author-X-Name-First: Beatriz
Author-X-Name-Last: Santos-Cabalgante
Author-Name: Beatriz García Osma
Author-X-Name-First: Beatriz
Author-X-Name-Last: García Osma
Author-Name: Domi Romero Fúnez
Author-X-Name-First: Domi
Author-X-Name-Last: Romero Fúnez
Title: Accounting quality in railway companies during the nineteenth and twentieth centuries: the case of Spanish NORTE and MZA
Abstract:
Prior literature studying railway accounting during the nineteenth and twentieth centuries defends the thesis of lack of reliability of accounting figures. This prior research, which mainly studies the cases of the United Kingdom and the United States, offers mixed views on the causes, or simply accepts this thesis without providing conclusive evidence, as is the case of historical research in Spain. We provide novel evidence on the quality of railway accounting and contribute to this prior debate by (1) analysing the accounting for two material accruals: depreciation and prior period adjustments; (2) studying the persistence of earnings and its components, and (3) analysing how accrual accounting affects persistence. These analyses are conducted for the period 1856–1939 for the two major Spanish railway companies (MZA and NORTE). The reported evidence suggests that earnings are highly persistent. However, we show that there are significant differences across firms and that these differences are particularly obvious when analysing the adjustments for prior period earnings. Overall, our evidence does not support the thesis that accounting was underdeveloped, but rather, that managerial accounting choices lowered accounting quality.
Journal: Accounting and Business Research
Pages: 271-304
Issue: 3
Volume: 49
Year: 2019
Month: 4
X-DOI: 10.1080/00014788.2018.1493373
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1493373
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:3:p:271-304
Template-Type: ReDIF-Article 1.0
Author-Name: Pawel Bilinski
Author-X-Name-First: Pawel
Author-X-Name-Last: Bilinski
Author-Name: Douglas Cumming
Author-X-Name-First: Douglas
Author-X-Name-Last: Cumming
Author-Name: Lars Hass
Author-X-Name-First: Lars
Author-X-Name-Last: Hass
Author-Name: Konstantinos Stathopoulos
Author-X-Name-First: Konstantinos
Author-X-Name-Last: Stathopoulos
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: Strategic distortions in analyst forecasts in the presence of short-term institutional investors
Abstract:
We document that analysts cater to short-term investors by issuing optimistic target prices. Catering dominates among analysts at brokers without an investment banking arm as they face lower reputational cost. The market does not see through the analyst catering activity and their forecasts lead to temporary stock overpricing that short-term institutional investors exploit to offload their holdings to retail traders. We also report evidence consistent with catering brokers being rewarded with more future trades channelled through them. Our study identifies a new source of conflicts of interest in analyst research originating from the ownership composition of a stock.
Journal: Accounting and Business Research
Pages: 305-341
Issue: 3
Volume: 49
Year: 2019
Month: 4
X-DOI: 10.1080/00014788.2018.1510303
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1510303
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:3:p:305-341
Template-Type: ReDIF-Article 1.0
Author-Name: Sandria N. Tennant
Author-X-Name-First: Sandria N.
Author-X-Name-Last: Tennant
Author-Name: Marlon R. Tracey
Author-X-Name-First: Marlon R.
Author-X-Name-Last: Tracey
Title: Corporate profitability and effective tax rate: the enforcement effect of large taxpayer units
Abstract:
This paper examines how Large Taxpayer Units (LTUs), a commonly-used tool for enforcing tax compliance, affect large firms’ reported profitability and effective tax rate. Increased scrutiny may either improve reporting and compliance efforts, or lead to adverse reactions from large taxpayers such as profit shifting to reduce tax liabilities. As a source of exogenous enforcement shock, we exploit the actions of Jamaica's LTU around its large-taxpayer eligibility cutoff using a before-during regression discontinuity approach. We find the LTU increases pre-tax profit margin by 2–3 percentage points. Increased effective tax rates are also evidenced, albeit less robustly.
Journal: Accounting and Business Research
Pages: 342-361
Issue: 3
Volume: 49
Year: 2019
Month: 4
X-DOI: 10.1080/00014788.2018.1512398
File-URL: http://hdl.handle.net/10.1080/00014788.2018.1512398
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:3:p:342-361
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Thank you to reviewers
Journal: Accounting and Business Research
Pages: 362-363
Issue: 3
Volume: 49
Year: 2019
Month: 4
X-DOI: 10.1080/00014788.2019.1578036
File-URL: http://hdl.handle.net/10.1080/00014788.2019.1578036
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Handle: RePEc:taf:acctbr:v:49:y:2019:i:3:p:362-363
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 399-400
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770920
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770920
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:399-400
Template-Type: ReDIF-Article 1.0
Author-Name: Ana Simpson
Author-X-Name-First: Ana
Author-X-Name-Last: Simpson
Author-Name: Ane Tamayo
Author-X-Name-First: Ane
Author-X-Name-Last: Tamayo
Title: Real effects of financial reporting and disclosure on innovation
Abstract:
This paper reviews the literature on the real effects of financial reporting and disclosure on corporate innovation, highlighting both the possible channels of influence and the potential challenges that researchers face when attributing causal effects. We discuss the concept of innovation, emphasising the specific characteristics that make investments in innovation difficult to report. We then provide a review of the nascent work relating disclosure to innovation, which we organise around three channels: financing, compensation and learning. Finally, we discuss recent efforts aimed at increasing the quality of corporate disclosures, including disclosures of firms’ innovative activities. Throughout the paper, we highlight the trade-offs of disclosure (reduced information asymmetry and increased proprietary costs), which are particularly exacerbated in the context of corporate innovation.
Journal: Accounting and Business Research
Pages: 401-421
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770926
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770926
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:401-421
Template-Type: ReDIF-Article 1.0
Author-Name: Steve Cooper
Author-X-Name-First: Steve
Author-X-Name-Last: Cooper
Title: ‘Real effects of financial reporting and disclosure on innovation’– a practitioner view
Journal: Accounting and Business Research
Pages: 422-424
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770927
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770927
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:422-424
Template-Type: ReDIF-Article 1.0
Author-Name: Catherine Shakespeare
Author-X-Name-First: Catherine
Author-X-Name-Last: Shakespeare
Title: Reporting matters: the real effects of financial reporting on investing and financing decisions
Abstract:
In this paper, I provide an overview of the research on the real effects of financial reporting on investing and financing decisions made by firms. Accounting can improve investment efficiency and affect nearly every aspect of the financing decision by reducing information asymmetry and improving monitoring. However, limitations in the financial reporting system, specifically distinguishing liabilities from equity and determining control for consolidations, result in opportunities to structure transactions to achieve certain financial reporting outcomes. A recent new stream of research documents a link between accounting and macroeconomic indicators, providing evidence that accounting predicts revisions in these indicators. An interesting avenue for future research could be to investigate the link between accounting, investing and financing, and macroeconomic performance.
Journal: Accounting and Business Research
Pages: 425-442
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770928
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770928
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:425-442
Template-Type: ReDIF-Article 1.0
Author-Name: Karl Holmes
Author-X-Name-First: Karl
Author-X-Name-Last: Holmes
Title: ‘Reporting Matters: the real effects of financial reporting on investing and financing decisions’ - a practitioner view
Journal: Accounting and Business Research
Pages: 443-447
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770929
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770929
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:443-447
Template-Type: ReDIF-Article 1.0
Author-Name: John E. Core
Author-X-Name-First: John E.
Author-X-Name-Last: Core
Title: The real effects of financial reporting on pay and incentives
Abstract:
This paper discusses two real effects of financial reporting on pay and incentives: (1) Better earnings leads to better incentives, and (2) If pay is mismeasured, pay can be misused. The first real effect follows from the fact that incentives are often based on earnings, and the effectiveness of earnings-based incentives is positively related to the quality of earnings. Greater use of earnings in incentives provides better incentives at a lower cost. The second real effect has to do with how well the accounting system measures the expense of various pay components. Complex calculations are required to value complex pay components such as options, post-employment benefits, and performance-vested equity, and these calculations have historically not been done correctly. The incorrect accounting leads to these pay components being misused. I conclude by discussing how accounting and disclosure of pay and incentives can be improved.
Journal: Accounting and Business Research
Pages: 448-469
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770931
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770931
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:448-469
Template-Type: ReDIF-Article 1.0
Author-Name: Peter Smith
Author-X-Name-First: Peter
Author-X-Name-Last: Smith
Title: ‘The real effects of financial reporting on pay and incentives’ – a practitioner view
Journal: Accounting and Business Research
Pages: 470-473
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770932
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770932
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:470-473
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher J. Napier
Author-X-Name-First: Christopher J.
Author-X-Name-Last: Napier
Author-Name: Christian Stadler
Author-X-Name-First: Christian
Author-X-Name-Last: Stadler
Title: The real effects of a new accounting standard: the case of IFRS 15 Revenue from Contracts with Customers
Abstract:
International Financial Reporting Standard 15 (IFRS 15) Revenue from Contracts with Customers has significantly changed the philosophy of revenue recognition, not only to provide a fairer representation of corporate revenues, but also to inhibit the use of revenues for ‘earnings management’ purposes. We provide a framework to analyse the various effects of new and amended accounting standards. Changes in how companies recognise, measure, present and disclose their revenues (accounting effects) can affect how companies and their transactions are understood, both internally and externally (information effects), can change security prices (capital market effects) and can change how companies operate, and their costs and cash flows (real effects). We provide empirical evidence, based on a review of corporate annual reports, comment letters and interviews, on the effects of IFRS 15. We find evidence of accounting, information and, to a lesser extent, real effects, although, outside a few industries, IFRS 15 has had relatively little impact on the recognition and measurement of revenue.
Journal: Accounting and Business Research
Pages: 474-503
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770933
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770933
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:474-503
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Veysey
Author-X-Name-First: Richard
Author-X-Name-Last: Veysey
Title: ‘The real effects of a new revenue accounting standard’- a practitioner view
Journal: Accounting and Business Research
Pages: 504-506
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770935
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770935
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:504-506
Template-Type: ReDIF-Article 1.0
Author-Name: John Burns
Author-X-Name-First: John
Author-X-Name-Last: Burns
Author-Name: Stephen Jollands
Author-X-Name-First: Stephen
Author-X-Name-Last: Jollands
Title: Acting in the public interest: accounting for the vulnerable
Abstract:
This article seeks to initiate research around the potential roles of the accounting profession for tackling the challenges of the vulnerable. Its backdrop is the current consideration of the profession’s public interest role. The importance of dialogue around the public interest role is evidenced by the increasing levels of vulnerability, even within developed countries. Accounting underpinned by broader values has potential to provide knowledge of issues relating to the vulnerable. However, the accounting profession has only engaged with such potential to a limited degree. The article overviews existing knowledge and areas within which more research is required. In order to illustrate the potential for such research, initial findings from two case studies of homelessness (an example of the vulnerable) provide evidence as to the importance, and challenges, of accounting for the vulnerable. This article highlights the need to: take a principles-based approach in defining the vulnerable, undertake an accounting that reflects the lives they value, acknowledge that there are different ways for addressing these issues, recognise that an absence of perfect numbers should not become a barrier to action, and that accounting for the vulnerable is one way that the accounting profession may discharge their public interest roles.
Journal: Accounting and Business Research
Pages: 507-534
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770940
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770940
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:507-534
Template-Type: ReDIF-Article 1.0
Author-Name: Nicki Deeson
Author-X-Name-First: Nicki
Author-X-Name-Last: Deeson
Title: ‘Acting in the public interest: accounting for the vulnerable’ – a practitioner view
Journal: Accounting and Business Research
Pages: 535-537
Issue: 5
Volume: 50
Year: 2020
Month: 7
X-DOI: 10.1080/00014788.2020.1770941
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1770941
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:5:p:535-537
Template-Type: ReDIF-Article 1.0
Author-Name: Nikolaos Tsileponis
Author-X-Name-First: Nikolaos
Author-X-Name-Last: Tsileponis
Author-Name: Konstantinos Stathopoulos
Author-X-Name-First: Konstantinos
Author-X-Name-Last: Stathopoulos
Author-Name: Martin Walker
Author-X-Name-First: Martin
Author-X-Name-Last: Walker
Title: The monitoring role of the financial press around corporate announcements
Abstract:
This study finds that the financial press serves an important monitoring role by interpreting the tone of corporate announcements, moderating its impact to market participants in the process. Using textual analysis, we report that the press attenuates both the positive and negative tone of firm-initiated disclosures. However, the effect is asymmetric with the media mostly downplaying the tone of highly positive corporate press releases, consistent with the premise that management disclosures containing highly positive tone are less convincing. In addition, we find that the tone of the information produced by the financial media has an effect on market reactions above and beyond the impact of the linguistic content of corporate disclosures. Importantly, the impact of the linguistic content of corporate disclosures to market returns is moderated by the tone of new information included in media articles. Overall, this study adds new evidence to a growing body of literature suggesting that the tone of press-originated articles contains incremental information content.
Journal: Accounting and Business Research
Pages: 539-573
Issue: 6
Volume: 50
Year: 2020
Month: 9
X-DOI: 10.1080/00014788.2020.1735290
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1735290
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:6:p:539-573
Template-Type: ReDIF-Article 1.0
Author-Name: Susana Gago Rodríguez
Author-X-Name-First: Susana
Author-X-Name-Last: Gago Rodríguez
Author-Name: Bing Guo
Author-X-Name-First: Bing
Author-X-Name-Last: Guo
Author-Name: Gilberto Marquez Illescas
Author-X-Name-First: Gilberto
Author-X-Name-Last: Marquez Illescas
Author-Name: Manuel Núñez Nickel
Author-X-Name-First: Manuel
Author-X-Name-Last: Núñez Nickel
Title: Causal ambiguity: shape-flip between product market competition at industry level and voluntary disclosure
Abstract:
This paper analyses the moderating effect of causal ambiguity on the relation between product market competition (i.e. product substitution) and firms’ voluntary disclosure behaviour. Our empirical results show a ‘shape-flipping function’. That is, we observe an inverse U-shaped relation between competition and disclosure when causal ambiguity is low. Such a relation gradually evolves towards a U shape as the level of causal ambiguity increases. Our theoretical explanation is that causal ambiguity relaxes or inhibits the intensity of the proprietary and agency costs of voluntary disclosure (underlying restrictions of competition), and simultaneously strengthens the subjacent incentives of competition to reveal information. We obtain empirical evidence of this global perspective based on logistic estimations of a sample of US manufacturing firms from 2002 to 2015. Our models use earnings per share (EPS) forecast as a proxy of voluntarily disclosed information, inverse margin rate as a proxy of product market competition at industry level, and several proxies of causal ambiguity (i.e. firm complexity and firm predictability).
Journal: Accounting and Business Research
Pages: 574-607
Issue: 6
Volume: 50
Year: 2020
Month: 9
X-DOI: 10.1080/00014788.2020.1723056
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1723056
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:6:p:574-607
Template-Type: ReDIF-Article 1.0
Author-Name: Thomas Doellman
Author-X-Name-First: Thomas
Author-X-Name-Last: Doellman
Author-Name: Fariz Huseynov
Author-X-Name-First: Fariz
Author-X-Name-Last: Huseynov
Author-Name: Tareque Nasser
Author-X-Name-First: Tareque
Author-X-Name-Last: Nasser
Author-Name: Sabuhi Sardarli
Author-X-Name-First: Sabuhi
Author-X-Name-Last: Sardarli
Title: Corporate tax avoidance and mutual fund ownership
Abstract:
We document evidence that mutual funds, on average, are averse to investing in tax-avoiding firms, which seems anomalous given the potential for two likely motives. Mutual fund managers’ compensation incentives may lead them to prefer tax-avoiding firms, or the fact that mutual funds are well-diversified may lead to managers’ indifference. A less obvious motive, and one consistent with our results, is that mutual funds focus on decreasing their tax information processing costs. Our results remain similar when we address endogeneity concerns using several methods, including difference-in-differences and matching methodologies, and after running numerous robustness checks.
Journal: Accounting and Business Research
Pages: 608-635
Issue: 6
Volume: 50
Year: 2020
Month: 9
X-DOI: 10.1080/00014788.2020.1731676
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1731676
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:6:p:608-635
Template-Type: ReDIF-Article 1.0
Author-Name: Geoffrey Whittington
Author-X-Name-First: Geoffrey
Author-X-Name-Last: Whittington
Title: A History of Corporate Financial Reporting in Britain
Journal: Accounting and Business Research
Pages: 636-639
Issue: 6
Volume: 50
Year: 2020
Month: 9
X-DOI: 10.1080/00014788.2020.1753316
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1753316
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:6:p:636-639
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Macve
Author-X-Name-First: Richard
Author-X-Name-Last: Macve
Title: Perspectives from mainland China, Hong Kong and the UK on the development of China’s auditing firms: implications and a research agenda
Abstract:
Based on gaining privileged access to interview senior representatives of audit firms, regulatory bodies, financial institutions, universities and other organisations in mainland China, Hong Kong and the UK, this exploratory study presents a range of informed views about the rapid development of China’s auditing profession over the last 25 years. It explores the emerging roles of the firms in the 2nd-tier international networks and among the larger stand-alone firms as challengers to the Big 4, nationally and internationally. It identifies national and international institutional interactions that have shaped and are being shaped by this rapid growth, with particular reference to the overarching role of the State’s shifting strategies to create a domestic profession in China that can compete internationally. The potential consequences, given China’s unequalled size and its expanding global influence, could change the nature and structure of the global profession. A significant contribution of this exploratory empirical study has been to deconstruct the continuing conventional political and academic rhetoric that dichotomises firms into ‘foreign vs local’ and ‘Big 4 vs other’. It contributes new voices and alternative perspectives to the emerging literature on the glocalization of large professional services firms and suggests new opportunities for future auditing research.
Journal: Accounting and Business Research
Pages: 641-692
Issue: 7
Volume: 50
Year: 2020
Month: 11
X-DOI: 10.1080/00014788.2020.1736494
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1736494
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:7:p:641-692
Template-Type: ReDIF-Article 1.0
Author-Name: Christopher Nobes
Author-X-Name-First: Christopher
Author-X-Name-Last: Nobes
Title: A half-century of Accounting and Business Research: the impact on the study of international financial reporting
Abstract:
This paper celebrates the contribution of this journal, over its first 50 years, to research on international financial reporting, defined as comprising writings on comparative or harmonisation topics. The paper examines the journal’s output in that field and how it contributed to the field’s development. Even though the journal was sympathetic to international financial reporting, less than 1% of output in its first decade (the 1970s) related to it. In its first 35 years, a large proportion of the journal’s limited output in the field was produced by two small groups of researchers. However, during its fourth decade, the field gradually became dominant as the accounting world changed. By then, the journal had already published the seminal papers on several central topics in international financial reporting, including measuring harmonisation, using reconciliations to measure international accounting differences, assessing international differences in the influence of tax on financial reporting, and measuring international difference in the application of international standards. These topics were later taken up by many researchers in several other journals.
Journal: Accounting and Business Research
Pages: 693-701
Issue: 7
Volume: 50
Year: 2020
Month: 11
X-DOI: 10.1080/00014788.2020.1742446
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1742446
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:7:p:693-701
Template-Type: ReDIF-Article 1.0
Author-Name: Ken Peasnell
Author-X-Name-First: Ken
Author-X-Name-Last: Peasnell
Title: Editing Accounting and Business Research 1994–2006: the transition years in retrospect
Journal: Accounting and Business Research
Pages: 702-712
Issue: 7
Volume: 50
Year: 2020
Month: 11
X-DOI: 10.1080/00014788.2020.1742419
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1742419
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:7:p:702-712
Template-Type: ReDIF-Article 1.0
Author-Name: Pauline Weetman
Author-X-Name-First: Pauline
Author-X-Name-Last: Weetman
Title: Accounting and Business Research 2006–2012: reshaping the visibility
Journal: Accounting and Business Research
Pages: 713-720
Issue: 7
Volume: 50
Year: 2020
Month: 11
X-DOI: 10.1080/00014788.2020.1754540
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1754540
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Handle: RePEc:taf:acctbr:v:50:y:2020:i:7:p:713-720
Template-Type: ReDIF-Article 1.0
Author-Name: Jenny Chu
Author-X-Name-First: Jenny
Author-X-Name-Last: Chu
Author-Name: Aditi Gupta
Author-X-Name-First: Aditi
Author-X-Name-Last: Gupta
Author-Name: Gilad Livne
Author-X-Name-First: Gilad
Author-X-Name-Last: Livne
Title: Pay regulation – is more better?
Abstract:
From October 2013, UK law and regulations (the Reform) require periodic binding shareholders’ approval of executive directors’ remuneration policy, as well as enhanced disclosure in remuneration reports. These requirements supplement an ongoing requirement for an annual non-binding vote on compensation outcomes that are detailed in the remuneration report. Using a large sample of listed companies from 2010–2017 we investigate whether the Reform has affected pay levels, pay-performance sensitivity, the pay gap between the CEO and other employees, the amount of cash returned to shareholders, and dissent voting on the remuneration report. We find little evidence that the Reform has affected these variables in our sample firms. Using market-based tests we find that market participants anticipated an improvement in corporate governance for some key dates before the Reform came into force. Taken together, the paper’s evidence suggests the Reform has not met its stated objectives.
Journal: Accounting and Business Research
Pages: 1-35
Issue: 1
Volume: 51
Year: 2021
Month: 1
X-DOI: 10.1080/00014788.2020.1815515
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1815515
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:1:p:1-35
Template-Type: ReDIF-Article 1.0
Author-Name: SEPIDEH PARSA
Author-X-Name-First: SEPIDEH
Author-X-Name-Last: PARSA
Author-Name: NARISA DAI
Author-X-Name-First: NARISA
Author-X-Name-Last: DAI
Author-Name: ATAUR BELAL
Author-X-Name-First: ATAUR
Author-X-Name-Last: BELAL
Author-Name: TENG LI
Author-X-Name-First: TENG
Author-X-Name-Last: LI
Author-Name: GULIANG TANG
Author-X-Name-First: GULIANG
Author-X-Name-Last: TANG
Title: Corporate social responsibility reporting in China: political, social and corporate influences
Abstract:
This paper explores the main drivers of CSR and its reporting for large Chinese listed companies, and identifies the key institutional pressures and stakeholder influences that shape CSR and its reporting. The data were collected through interviews with managers from large listed Chinese companies. Our findings reveal how the Chinese government uses social organisations and social intermediaries to facilitate and mediate CSR and its reporting to meet changing societal expectations across regions, while ensuring that companies remain responsive to the expectations of international stakeholders. We find that CSR and its reporting help companies gain political legitimacy domestically, while retaining their legitimacy in global markets. Companies co-operate with social organisations and social intermediaries actively and continuously. This helped companies secure political legitimacy with the government, while helping officials maintain their social legitimacy. Our findings on regional differences support the idea that relations between Chinese business and society have a fundamental effect on CSR and its reporting.
Journal: Accounting and Business Research
Pages: 36-64
Issue: 1
Volume: 51
Year: 2021
Month: 1
X-DOI: 10.1080/00014788.2020.1780110
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:1:p:36-64
Template-Type: ReDIF-Article 1.0
Author-Name: Sydney Qing Shu
Author-X-Name-First: Sydney Qing
Author-X-Name-Last: Shu
Title: CEO inside debt, income smoothing, and stock price informativeness
Abstract:
I examine whether the informativeness of income smoothing varies with the extent to which the CEO holds inside debt (i.e. pension benefits and deferred compensation). I document that for firms where the CEO holds less inside debt, income smoothing reduces stock price informativeness. This result suggests that CEOs with lower inside debt smooth earnings to conceal firms’ underlying economic performance. I also find that the negative effect of income smoothing on stock price informativeness for firms whose CEOs hold less inside debt is more pronounced when firms have higher debt financing, lower analyst coverage, or weaker corporate governance.
Journal: Accounting and Business Research
Pages: 65-95
Issue: 1
Volume: 51
Year: 2021
Month: 1
X-DOI: 10.1080/00014788.2020.1798735
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1798735
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:1:p:65-95
Template-Type: ReDIF-Article 1.0
Author-Name: TSUNG-KANG CHEN
Author-X-Name-First: TSUNG-KANG
Author-X-Name-Last: CHEN
Author-Name: YIJIE TSENG
Author-X-Name-First: YIJIE
Author-X-Name-Last: TSENG
Author-Name: YU-SHUN HUNG
Author-X-Name-First: YU-SHUN
Author-X-Name-Last: HUNG
Author-Name: CHUN-CHI LIN
Author-X-Name-First: CHUN-CHI
Author-X-Name-Last: LIN
Title: Embedded value reporting quality and credit risk: evidence from life insurance companies
Abstract:
This study investigates the effects of releasing embedded value (EV) reports and EV report disclosure quality on life insurance companies’ credit risks, using issuer credit rating and bond yield spread data from 2001 to 2010. Results show that releasing an EV report and EV report disclosure quality are both significantly and negatively associated with life insurance companies’ credit risks. In addition, the CFO Forum (2004a, 2004b, European Embedded Value) significantly strengthens the negative effect of releasing an EV report on firm credit risk while the subprime crisis has the opposite effect in Europe. Finally, the results are robust to endogeneity issues and different model specifications of fixed effects.
Journal: Accounting and Business Research
Pages: 96-125
Issue: 1
Volume: 51
Year: 2021
Month: 1
X-DOI: 10.1080/00014788.2020.1749979
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1749979
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:1:p:96-125
Template-Type: ReDIF-Article 1.0
Author-Name: K. Hung Chan
Author-X-Name-First: K. Hung
Author-X-Name-Last: Chan
Author-Name: Yingwen Guo
Author-X-Name-First: Yingwen
Author-X-Name-Last: Guo
Author-Name: Phyllis Lai Lan Mo
Author-X-Name-First: Phyllis Lai Lan
Author-X-Name-Last: Mo
Title: Can auditors’ local knowledge compensate for a weaker regulatory oversight for the audit quality of foreign companies?
Abstract:
This study examines whether auditors’ local knowledge of clients can compensate for a weaker regulatory oversight in the audits of foreign companies. Based on a sample of Chinese companies that were listed in the U.S. and after controlling for other factors that may affect audit quality, we find that the audit quality of Hong Kong and Chinese non-Big 4 auditors is comparable to that of U.S. auditors with an affiliate in China and higher than that of U.S. auditors without a Chinese affiliate. Additional analysis indicates that U.S. auditors provide higher audit quality to U.S.-based listed firms than U.S.-listed Chinese firms and the quality difference is reduced for U.S. auditors with a Chinese affiliate. These results indicate that auditors’ local knowledge of foreign clients has a positive effect on audit quality and in certain circumstances, it can compensate for a weaker regulatory oversight in an international setting.
Journal: Accounting and Business Research
Pages: 127-155
Issue: 2
Volume: 51
Year: 2021
Month: 2
X-DOI: 10.1080/00014788.2020.1780109
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1780109
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:2:p:127-155
Template-Type: ReDIF-Article 1.0
Author-Name: Helena Isidro
Author-X-Name-First: Helena
Author-X-Name-Last: Isidro
Author-Name: Ana Marques
Author-X-Name-First: Ana
Author-X-Name-Last: Marques
Title: Industry competition and non-GAAP disclosures
Abstract:
We examine the role of industry-level product market competition on non-GAAP disclosure decisions. We consider traditional measures of industry competition (concentration, price-cost margin, and set up costs), and large reductions in import tariff rates that identify an exogenous increase in competition. We find that competition intensity influences the likelihood of non-GAAP disclosure and the magnitude of non-GAAP exclusions. Our evidence suggests that strong competition encourages managers to disclose higher non-GAAP earnings. However, when competition is strong, firms with low performance relatively to the industry exclude smaller amounts. We also find that in competitive environments, managers are more likely to provide reconciliations and are less likely to exclude recurring items that are commonly excluded by other firms in the industry. These findings indicate that industry competition has a positive influence on the transparency of non-GAAP disclosures.
Journal: Accounting and Business Research
Pages: 156-184
Issue: 2
Volume: 51
Year: 2021
Month: 2
X-DOI: 10.1080/00014788.2020.1798209
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1798209
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:2:p:156-184
Template-Type: ReDIF-Article 1.0
Author-Name: Jochen Pierk
Author-X-Name-First: Jochen
Author-X-Name-Last: Pierk
Title: Big baths and CEO overconfidence
Abstract:
This paper empirically investigates the relationship between managerial overconfidence and write-offs following CEO turnover. Incoming CEOs often engage in big bath accounting as they dispose of poorly performing projects. Overconfident managers overestimate their abilities and consequently have upwardly biased expectations concerning future firm performance. I hypothesise that overconfident CEOs are less likely to engage in a big bath following managerial change. The empirical results confirm this hypothesis by showing that big baths at CEO turnover are significantly less frequent among overconfident CEOs.
Journal: Accounting and Business Research
Pages: 185-205
Issue: 2
Volume: 51
Year: 2021
Month: 2
X-DOI: 10.1080/00014788.2020.1783634
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1783634
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:2:p:185-205
Template-Type: ReDIF-Article 1.0
Author-Name: Guilong Cai
Author-X-Name-First: Guilong
Author-X-Name-Last: Cai
Author-Name: Bingxuan Lin
Author-X-Name-First: Bingxuan
Author-X-Name-Last: Lin
Author-Name: Minghai Wei
Author-X-Name-First: Minghai
Author-X-Name-Last: Wei
Author-Name: Xiaowei Xu
Author-X-Name-First: Xiaowei
Author-X-Name-Last: Xu
Title: The role of institutional investors in post-earnings announcement drift: evidence from China
Abstract:
We examine how institutional investors influence post-earnings announcement drift (PEAD) in China. Our findings suggest that institutional holdings are positively correlated with PEAD in China, especially when institutional investors herd strongly on earnings news. This positive relationship is more salient for institutional investors with shorter investment horizons and in firms with higher information opacity. We also find that stock prices reverse in the fourth quarter after the earnings announcement. In contrast to the well-established view that institutional investors exploit PEAD and accelerate the speed of information incorporation, our findings suggest that they may instead exacerbate PEAD and slow down price discovery in emerging markets with different institutional backgrounds.
Journal: Accounting and Business Research
Pages: 206-236
Issue: 2
Volume: 51
Year: 2021
Month: 2
X-DOI: 10.1080/00014788.2020.1773755
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1773755
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:2:p:206-236
Template-Type: ReDIF-Article 1.0
Author-Name: Stergios Leventis
Author-X-Name-First: Stergios
Author-X-Name-Last: Leventis
Author-Name: Christopher Humphrey
Author-X-Name-First: Christopher
Author-X-Name-Last: Humphrey
Title: Special section editorial: Enforcement of financial reporting
Journal: Accounting and Business Research
Pages: 237-245
Issue: 3
Volume: 51
Year: 2021
Month: 4
X-DOI: 10.1080/00014788.2021.1891655
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1891655
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:3:p:237-245
Template-Type: ReDIF-Article 1.0
Author-Name: Alberto Quagli
Author-X-Name-First: Alberto
Author-X-Name-Last: Quagli
Author-Name: Francesco Avallone
Author-X-Name-First: Francesco
Author-X-Name-Last: Avallone
Author-Name: Paola Ramassa
Author-X-Name-First: Paola
Author-X-Name-Last: Ramassa
Author-Name: Costanza Di Fabio
Author-X-Name-First: Costanza
Author-X-Name-Last: Di Fabio
Title: Someone else’s problem? The IFRS enforcement field in Europe
Abstract:
This study adopts an institutional lens to explore enforcement as a complex and nuanced phenomenon shaped by the dynamics of its social context. It examines an IFRS regulatory incident that fails to conclude with any decision or resolving action in the context of the European Union, and as such invites serious questioning of enforcement functions. From our analysis accounting enforcement emerges as an interacting issue-based field in which auditors and the national enforcement agency adhere narrowly to their tasks, ensuring formal but not substantive IFRS compliance. Field participants are seen to respond to institutional pressures strategically by avoiding public positions and delegating choices to other actors, substantially accepting earnings manipulation. Our study shows that the national enforcer increased its interactions with other regulatory actors (i.e. agencies concerned with the setting and interpretation of standards) in the case of controversial issues and their responses can heavily influence overall enforcement effectiveness. Furthermore, its findings contribute to debates on the need for a pan-European enforcement agency and shed light on the importance of IFRS interpretation for the enforceability of international accounting standards.
Journal: Accounting and Business Research
Pages: 246-270
Issue: 3
Volume: 51
Year: 2021
Month: 4
X-DOI: 10.1080/00014788.2020.1802217
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1802217
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:3:p:246-270
Template-Type: ReDIF-Article 1.0
Author-Name: Catalin Nicolae Albu
Author-X-Name-First: Catalin
Author-X-Name-Last: Nicolae Albu
Author-Name: Nadia Albu
Author-X-Name-First: Nadia
Author-X-Name-Last: Albu
Author-Name: Sebastian Hoffmann
Author-X-Name-First: Sebastian
Author-X-Name-Last: Hoffmann
Title: The Westernisation of a financial reporting enforcement system in an emerging economy
Abstract:
Building on semi-structured interviews and publicly available documents in the realm of accounting, auditing and capital market regulation in Romania, this paper reviews and reflects on the prerequisites for, and conditions affecting the development of a financial reporting enforcement system (FRES) of Western origin in an emerging economy. It does so by examining institutional factors within and across the key components of the Romanian FRES, namely the engagement of the preparers and auditors of corporate financial reports and their interactions with public oversight bodies. The creation and functioning of the Romanian FRES are driven by the dynamics between Western and local pushes and pulls. Western actors offered support, especially in terms of technical assistance and educational programmes, but the Romanian government delayed the implementation of local support mechanisms, such that practices and mindsets did not change initially. Although practices and institutions have evolved since the country joined the European Union in 2007, the pursuit of a functional Western-based FRES remains an on-going process that is highly dependent on both the continuous external provision of adequate resources and the enrolment of national actors in the deployment of these resources.
Journal: Accounting and Business Research
Pages: 271-297
Issue: 3
Volume: 51
Year: 2021
Month: 4
X-DOI: 10.1080/00014788.2020.1826897
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1826897
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:3:p:271-297
Template-Type: ReDIF-Article 1.0
Author-Name: Andrew Lennard
Author-X-Name-First: Andrew
Author-X-Name-Last: Lennard
Title: Value and profit; an introduction to measurement in financial reporting
Journal: Accounting and Business Research
Pages: 298-302
Issue: 3
Volume: 51
Year: 2021
Month: 4
X-DOI: 10.1080/00014788.2020.1826695
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1826695
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:3:p:298-302
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Thank you to reviewers
Journal: Accounting and Business Research
Pages: 303-305
Issue: 3
Volume: 51
Year: 2021
Month: 4
X-DOI: 10.1080/00014788.2021.1891658
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1891658
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:3:p:303-305
Template-Type: ReDIF-Article 1.0
Author-Name: Andrei Filip
Author-X-Name-First: Andrei
Author-X-Name-Last: Filip
Author-Name: Alessandro Ghio
Author-X-Name-First: Alessandro
Author-X-Name-Last: Ghio
Author-Name: Luc Paugam
Author-X-Name-First: Luc
Author-X-Name-Last: Paugam
Title: Accounting information in innovative small cap firms: evidence from London’s Alternative Investment Market
Abstract:
We posit that investors and social media users place more weight on cash flows than on earnings for innovative small cap firms and that, in turn, innovative small cap firms (i) manage cash flows more than earnings, and (ii) disclose more cash flow than earnings information on social media. Using a matched sample of innovative and non-innovative small cap firms listed on the London’s Alternative Investment Market (AIM), we document that the value relevance of cash flows (earnings) is higher (lower) for innovative compared to non-innovative small cap firms. Using Twitter to examine the demand of accounting performance measures, we find that Twitter users more frequently retweet and include as ‘Favorite’ information about cash flows, than information about earnings for innovative small cap firms. We then show that innovative small cap firms engage less intensively in earnings management and exhibit higher abnormal cash flows compared to non-innovative small cap firms. Innovative small cap firms emphasise more information in their tweets about cash flows and less about earnings compared to non-innovative small cap firms. Cross-sectional tests demonstrate that seasoned equity offerings provide additional incentives to engage in increasing abnormal cash flow management activities.
Journal: Accounting and Business Research
Pages: 421-456
Issue: 4
Volume: 51
Year: 2021
Month: 06
X-DOI: 10.1080/00014788.2020.1842168
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1842168
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:4:p:421-456
Template-Type: ReDIF-Article 1.0
Author-Name: Jian Huang
Author-X-Name-First: Jian
Author-X-Name-Last: Huang
Author-Name: Lei Wang
Author-X-Name-First: Lei
Author-X-Name-Last: Wang
Author-Name: Han Yu
Author-X-Name-First: Han
Author-X-Name-Last: Yu
Author-Name: Zhen Zhang
Author-X-Name-First: Zhen
Author-X-Name-Last: Zhang
Title: Short selling prior to going concern disclosures
Abstract:
We provide insights into how the market processes going concern audit opinions based on the trading of some well-documented sophisticated investors – short sellers. We find that abnormal short selling increases significantly upon impending going concern disclosures. While prior literature attributed much of short selling around some corporate events to private information, we find evidence that pre-going-concern announcement short selling reflects both privately informed trading and processing of public information by short sellers. Further, a negative relation between pre-announcement short selling and post-announcement short-term stock returns exists for stocks with less short sale constraints. We also find moderate evidence associating short selling with subsequent bankruptcy to some extent. Overall, these results suggest that short sellers front run going concern announcements based on private information and fundamentals, although trading constraints prevent them fully impounding the severity of negative information in the short run, providing a partial explanation for the long-run price drift post-going concern.
Journal: Accounting and Business Research
Pages: 390-420
Issue: 4
Volume: 51
Year: 2021
Month: 06
X-DOI: 10.1080/00014788.2020.1842167
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1842167
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:4:p:390-420
Template-Type: ReDIF-Article 1.0
Author-Name: Omiros Georgiou
Author-X-Name-First: Omiros
Author-X-Name-Last: Georgiou
Author-Name: Elisavet Mantzari
Author-X-Name-First: Elisavet
Author-X-Name-Last: Mantzari
Author-Name: Julia Mundy
Author-X-Name-First: Julia
Author-X-Name-Last: Mundy
Title: Problematising the decision-usefulness of fair values: empirical evidence from UK financial analysts
Abstract:
In its recently revised conceptual framework, the IASB re-affirms decision-usefulness as the objective of financial reporting, disregarding claims about its lack of coherence. In this paper, we examine how this notion of decision-usefulness works in practice by focusing on the case of fair value measurement. In particular, we explore how decision-usefulness is perceived and experienced by financial analysts when using fair values in their work. We use the frame of ‘problematisation’, which involves challenging assumptions in existing literature, to formulate our research question and to interpret our findings. Empirical evidence, drawn from interviews with UK financial analysts and comment letters analysts wrote to the IASB, puts into question three key assumptions inherent in the revised conceptual framework. First, fair values are not considered to be unquestionably useful to decision-making; second, this usefulness is found to be contingent on the context of the decision being made; and third, the qualitative characteristics required to achieve decision-usefulness are challenged for their lack of meaning. Analysts’ testimonies also challenge taken-for-granted assumptions implicit in academic studies. Assumptions that the decision-usefulness of fair values can be established prior to practice are re-evaluated. We also reflect on the premise that the decision-usefulness of fair values can be challenged on its underlying market-based economic rationales. Overall, our findings contribute to thinking problematically about decision-usefulness which appears to be contingent rather than given by some predetermined ideals as envisaged in accounting conceptual frameworks.
Journal: Accounting and Business Research
Pages: 307-346
Issue: 4
Volume: 51
Year: 2021
Month: 6
X-DOI: 10.1080/00014788.2020.1814687
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1814687
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:4:p:307-346
Template-Type: ReDIF-Article 1.0
Author-Name: Grant Richardson
Author-X-Name-First: Grant
Author-X-Name-Last: Richardson
Author-Name: Grantley Taylor
Author-X-Name-First: Grantley
Author-X-Name-Last: Taylor
Author-Name: Ivan Obaydin
Author-X-Name-First: Ivan
Author-X-Name-Last: Obaydin
Author-Name: Mostafa Monzur Hasan
Author-X-Name-First: Mostafa Monzur
Author-X-Name-Last: Hasan
Title: The effect of income shifting on the implied cost of equity capital: evidence from US multinational corporations
Abstract:
This study examines the effect of income shifting on the implied cost of equity capital (ICOE) for US multinational corporations (MNCs). We find that income shifting is significantly positively associated with the ICOE after controlling for corporate tax avoidance and other determinants of the ICOE. On average, a one-standard deviation increase in income shifting is associated with an increase in the ICOE of around 0.37%. Our main results are robust to additional tests of risk-pricing and endogeneity. Furthermore, the association between income shifting and the ICOE is more pronounced for MNCs operating in low-quality information environments and where corporate governance monitoring is inadequate. Overall, our results show that the capital market perceives the income shifting of MNCs as a significantly risky undertaking.
Journal: Accounting and Business Research
Pages: 347-389
Issue: 4
Volume: 51
Year: 2021
Month: 6
X-DOI: 10.1080/00014788.2020.1808440
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1808440
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:4:p:347-389
Template-Type: ReDIF-Article 1.0
Author-Name: Julia Wilson
Author-X-Name-First: Julia
Author-X-Name-Last: Wilson
Title: ‘Preparers and the financial reporting system’ – a practitioner view
Journal: Accounting and Business Research
Pages: 508-510
Issue: 5
Volume: 51
Year: 2021
Month: 07
X-DOI: 10.1080/00014788.2021.1932260
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1932260
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:5:p:508-510
Template-Type: ReDIF-Article 1.0
Author-Name: Jonathan Ford
Author-X-Name-First: Jonathan
Author-X-Name-Last: Ford
Title: ‘The role of users’ engagement in shaping financial reporting: should activists target accounting more?’ – a practitioner view
Journal: Accounting and Business Research
Pages: 545-547
Issue: 5
Volume: 51
Year: 2021
Month: 07
X-DOI: 10.1080/00014788.2021.1932263
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1932263
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:5:p:545-547
Template-Type: ReDIF-Article 1.0
Author-Name: Allister Wilson
Author-X-Name-First: Allister
Author-X-Name-Last: Wilson
Title: ‘The art of conversation: the expanded audit report’ – a practitioner view
Journal: Accounting and Business Research
Pages: 582-584
Issue: 5
Volume: 51
Year: 2021
Month: 07
X-DOI: 10.1080/00014788.2021.1932269
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1932269
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:5:p:582-584
Template-Type: ReDIF-Article 1.0
Author-Name: Miguel Minutti-Meza
Author-X-Name-First: Miguel
Author-X-Name-Last: Minutti-Meza
Title: The art of conversation: the expanded audit report
Abstract:
The new generation of expanded audit reports includes disclosures about significant matters in a company’s financial reporting and its audit. These disclosures are a landmark change in auditors’ responsibility to provide information to the public. I examine expanded reports in various jurisdictions, why they became mandatory, what the evidence from their implementation is, and whether they have fulfilled the expectations of regulators and other stakeholders. Expanded reports are intended to increase the information content and usefulness of audit opinions, to increase external monitoring of auditors and management, and to foster a more open conversation between auditors and users of financial reporting. However, existing regulatory requirements, conflicting auditors’ incentives to provide new information, and evidence from the expanded reports’ implementation call into question whether these objectives have been met. It is my hope that expanded reports are only a first step towards enhanced auditor reporting.
Journal: Accounting and Business Research
Pages: 548-581
Issue: 5
Volume: 51
Year: 2021
Month: 07
X-DOI: 10.1080/00014788.2021.1932264
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1932264
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:5:p:548-581
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Power
Author-X-Name-First: Michael
Author-X-Name-Last: Power
Title: The financial reporting system – what is it?
Abstract:
This experimental essay constructs a conversation between systems thinking and financial reporting. First, general ideas of system and ecology are introduced and used to inform a review of three overlapping clusters of accounting research. Each of these clusters assumes and emphasises different system characteristics. Second, these characteristics are blended within the model of the financial reporting system as a risk cycle. Third, critical challenges in modelling the financial reporting system are considered, with a focus on the position of a financial reporting regulator. Finally, in a thought experiment, the perspective of a hypothetical non-executive director on the board of a regulator with system-wide responsibilities is adopted. The essay proposes some questions that such a director could expect a model of the financial reporting system would help to answer. Borrowing from ecology, it is argued that any model of the financial reporting system must: be as simple as possible without being too simple; be dynamic and focused on relationships rather than static entities; and embrace risk and uncertainty to avoid ‘illusions of control’.
Journal: Accounting and Business Research
Pages: 459-480
Issue: 5
Volume: 51
Year: 2021
Month: 07
X-DOI: 10.1080/00014788.2021.1932253
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1932253
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:5:p:459-480
Template-Type: ReDIF-Article 1.0
Author-Name: Sarah McVay
Author-X-Name-First: Sarah
Author-X-Name-Last: McVay
Author-Name: Brandon Szerwo
Author-X-Name-First: Brandon
Author-X-Name-Last: Szerwo
Title: Preparers and the financial reporting system
Abstract:
We review the accounting and related literature on the preparation of public company financial reports. We highlight numerous impediments to producing high quality financial reports, focusing on the roles of management, the board of directors, and internal audit. Key incentives of the CEO do not encourage investments in financial reporting quality, despite evidence that these investments provide net benefits to the firm, instead, key incentives appear to elicit myopia. We also demonstrate that although theoretically the board of directors and internal audit are integral components of firms’ internal controls, in practice there are numerous obstacles to effective oversight, including a lack of independence from management. Recent regulations have lessened but not fully mitigated these concerns.
Journal: Accounting and Business Research
Pages: 484-507
Issue: 5
Volume: 51
Year: 2021
Month: 07
X-DOI: 10.1080/00014788.2021.1932257
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1932257
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:5:p:484-507
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 457-458
Issue: 5
Volume: 51
Year: 2021
Month: 07
X-DOI: 10.1080/00014788.2021.1932276
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1932276
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:5:p:457-458
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Babington
Author-X-Name-First: Mark
Author-X-Name-Last: Babington
Title: ‘The financial reporting system’ – a practitioner view
Journal: Accounting and Business Research
Pages: 481-483
Issue: 5
Volume: 51
Year: 2021
Month: 07
X-DOI: 10.1080/00014788.2021.1932256
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1932256
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:5:p:481-483
Template-Type: ReDIF-Article 1.0
Author-Name: Beatriz García Osma
Author-X-Name-First: Beatriz
Author-X-Name-Last: García Osma
Author-Name: Cristina Grande-Herrera
Author-X-Name-First: Cristina
Author-X-Name-Last: Grande-Herrera
Title: The role of users’ engagement in shaping financial reporting: should activists target accounting more?
Abstract:
We define accounting engagement as stakeholders’ actions taken with the intention of influencing corporate reporting. Using this definition, we review the literature on such activism and discuss avenues for research. The evidence reviewed suggests accounting engagement is rare. We reflect on the reasons of this, given evidence on increasing overt engagement on other corporate issues, such as managerial compensation and governance, social, and environmental responsibility. Both information production and information acquisition costs have decreased over time, raising further questions about why engagement has not increased. We consider potential reasons linked to concerns over whether financial reporting meets users’ information needs, particularly, given the emergence of new users and the role of new technologies in the diffusion and processing of information. These concerns have accompanied claims of increasing complexity of financial accounting and the threat of information overload.
Journal: Accounting and Business Research
Pages: 511-544
Issue: 5
Volume: 51
Year: 2021
Month: 07
X-DOI: 10.1080/00014788.2021.1932261
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1932261
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:5:p:511-544
Template-Type: ReDIF-Article 1.0
Author-Name: Lufei Ruan
Author-X-Name-First: Lufei
Author-X-Name-Last: Ruan
Author-Name: Haiyan Zhang
Author-X-Name-First: Haiyan
Author-X-Name-Last: Zhang
Title: Do auditors consider alleged bribery when accepting clients? Evidence from Chinese non-state-owned enterprises
Abstract:
This study examines the relationship between firm-level alleged bribery and audit-related decisions for Chinese non-state-owned enterprises (NSOE). Using a sample of listed NSOEs in 2010–2016, we find that alleged bribery is negatively correlated with the probability of being accepted by top-tier auditors and is positively correlated with audit fees. These findings suggest that top-tier auditors are more reluctant to accept corrupt firms and also charge higher audit fees. Also, we find that the negative correlation between alleged bribery and the probability of being accepted by top-tier auditors is strengthened after an anti-corruption campaign launched by the Chinese government in 2013 and/or after the crackdown of provincial-level officials, and is more pronounced in less developed regions. Finally, we find that alleged bribery is positively associated with the level of earnings management, implying that alleged bribery likely increases irregularities in financial statements.
Journal: Accounting and Business Research
Pages: 744-776
Issue: 6-7
Volume: 51
Year: 2021
Month: 11
X-DOI: 10.1080/00014788.2020.1868283
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1868283
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:6-7:p:744-776
Template-Type: ReDIF-Article 1.0
Author-Name: Mark L. Defond
Author-X-Name-First: Mark L.
Author-X-Name-Last: Defond
Author-Name: Fan Zhang
Author-X-Name-First: Fan
Author-X-Name-Last: Zhang
Author-Name: Jieying Zhang
Author-X-Name-First: Jieying
Author-X-Name-Last: Zhang
Title: Auditing research using Chinese data: what’s next?
Abstract:
During the past decade, there has been a surge in auditing research that exploits Chinese data, much of which is published in top tier journals. China has been an attractive setting for auditing research due to the highly granular nature of the available data on public audits and the unique features of Chinese institutions. These advantages have allowed researchers to use Chinese data to study important auditing questions that US data is unable to address. But the popularity of Chinese data among researchers means that most of the obvious questions that lend themselves to the use of Chinese data are likely to be exhausted. In addition, newly mandated disclosures in the US and Europe are quickly making Chinese data much less unique than it used to be. Now that the “low hanging fruit” is gone, researchers who plan to use Chinese data will have to be more creative. This paper suggests some strategies, going forward, that are designed to further exploit the richness of Chinese data to address important questions in the auditing literature.
Journal: Accounting and Business Research
Pages: 622-635
Issue: 6-7
Volume: 51
Year: 2021
Month: 11
X-DOI: 10.1080/00014788.2020.1746626
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1746626
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:6-7:p:622-635
Template-Type: ReDIF-Article 1.0
Author-Name: Wenjun Wen
Author-X-Name-First: Wenjun
Author-X-Name-Last: Wen
Author-Name: Christopher Humphrey
Author-X-Name-First: Christopher
Author-X-Name-Last: Humphrey
Author-Name: Amanda Sonnerfeldt
Author-X-Name-First: Amanda
Author-X-Name-Last: Sonnerfeldt
Title: The strategic significance of the CICPA in the making of a Chinese home-grown public accounting profession
Abstract:
This paper provides a detailed, longitudinal study of the role and strategies of the Chinese Institute of Certified Public Accountants (CICPA) in building a Chinese home-grown public accounting profession since the late 1980s. Drawing on previously unaccessed archive materials and a series of interviews with senior representatives of the Chinese public accounting profession, this paper reveals a more nuanced empirical story of professional accounting development in China, in which the CICPA has had more strategic influence than is currently represented in the extant accounting literature. While the CICPA’s position vis-à-vis the state is a fragile one and necessitates on various occasions following specific state requirements and instructions, it has still been able to pursue its strategic intention of securing a nationalistic approach to professional accounting development. This paper analyses the shifting nature of the CICPA’s capacity for agency across three thematic areas of activities, including the CICPA’s efforts to counter the power and influence of the Big Four in China, promote the growth of indigenous accounting firms and support the establishment of the Communist Party branches in accounting firms.
Journal: Accounting and Business Research
Pages: 636-676
Issue: 6-7
Volume: 51
Year: 2021
Month: 11
X-DOI: 10.1080/00014788.2021.1935684
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1935684
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:6-7:p:636-676
Template-Type: ReDIF-Article 1.0
Author-Name: Qihui Gong
Author-X-Name-First: Qihui
Author-X-Name-Last: Gong
Author-Name: Xiaomei Han
Author-X-Name-First: Xiaomei
Author-X-Name-Last: Han
Author-Name: Huihui Shen
Author-X-Name-First: Huihui
Author-X-Name-Last: Shen
Author-Name: Qiuhang Xing
Author-X-Name-First: Qiuhang
Author-X-Name-Last: Xing
Title: Do professional risk funds affect audit quality?
Abstract:
In China, audit firms are required to maintain ‘professional risk funds’. These funds can be used only to pay civil compensation caused by deliberate or gross negligence in auditing activities. Using Chinese data from this peculiar regulatory characteristic, we investigate the impact of audit firms’ professional risk funds on audit quality. We find that the higher the audit firms’ professional risk funds, the lower the discretionary accruals. This finding is more pronounced for client firms with higher information asymmetry or weaker corporate governance. Further tests indicate that the higher the professional risk funds, the greater the audit effort invested in the auditing process, while audit fees do not change significantly. Our results suggest that higher professional risk funds ultimately improve audit quality by increasing audit effort.
Journal: Accounting and Business Research
Pages: 777-799
Issue: 6-7
Volume: 51
Year: 2021
Month: 11
X-DOI: 10.1080/00014788.2021.1911778
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1911778
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:6-7:p:777-799
Template-Type: ReDIF-Article 1.0
Author-Name: Jiaxing You
Author-X-Name-First: Jiaxing
Author-X-Name-Last: You
Author-Name: Xiting Wu
Author-X-Name-First: Xiting
Author-X-Name-Last: Wu
Author-Name: Le Luo
Author-X-Name-First: Le
Author-X-Name-Last: Luo
Author-Name: Hongtao Shen
Author-X-Name-First: Hongtao
Author-X-Name-Last: Shen
Author-Name: Xiaoping Tan
Author-X-Name-First: Xiaoping
Author-X-Name-Last: Tan
Title: New business as a bargaining factor in audit pricing: evidence from emission trading schemes
Abstract:
In this study, we examine whether auditors use a new business as a bargaining chip in audit pricing. Taking the launch of China’s pilot regional emissions-trading schemes (ETSs) as a quasi-natural experiment, we find that mandatory participation in an ETS results in increased audit fees subsequent to implementation of the regulation. Adopting both empirical and textual analyses to exclude three alternative explanations (auditing effort, audit risk, and reporting risk), our results suggest that a new business is used as a bargaining chip by auditors when they negotiate audit fees with their clients. Additional empirical tests suggest that pilot companies experience an increase in audit fees after ETS implementation only when the companies have less importance to the auditors, companies' CFOs do not have experience working in an accounting firm and signing auditors are better educated. These findings demonstrate that the mandatory implementation of an ETS creates a new accounting business and alters the auditor–auditee bargaining dynamics.
Journal: Accounting and Business Research
Pages: 800-823
Issue: 6-7
Volume: 51
Year: 2021
Month: 11
X-DOI: 10.1080/00014788.2021.1874265
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1874265
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:6-7:p:800-823
Template-Type: ReDIF-Article 1.0
Author-Name: Yingwen Deng
Author-X-Name-First: Yingwen
Author-X-Name-Last: Deng
Author-Name: Lu Xie
Author-X-Name-First: Lu
Author-X-Name-Last: Xie
Author-Name: Min Zhang
Author-X-Name-First: Min
Author-X-Name-Last: Zhang
Author-Name: Yaqian Wu
Author-X-Name-First: Yaqian
Author-X-Name-Last: Wu
Title: Beg your pardon? The effect of communication costs on audit quality
Abstract:
We examine how language-induced communication costs affect audit quality by utilising unique data of signing auditors’ native dialects and audit adjustments in China during 2006–2011. The results show that greater language-induced communication costs lead to lower audit quality. We further find that the negative effect of communication costs on audit quality is mitigated by extended audit tenure. Our study introduces linguistics theory into auditing and is the first to investigate the empirical impact of language-related communication costs in the audit context.
Journal: Accounting and Business Research
Pages: 824-851
Issue: 6-7
Volume: 51
Year: 2021
Month: 11
X-DOI: 10.1080/00014788.2020.1748558
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1748558
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:6-7:p:824-851
Template-Type: ReDIF-Article 1.0
Author-Name: Kevin Chee Keung Lam
Author-X-Name-First: Kevin Chee Keung
Author-X-Name-Last: Lam
Author-Name: Julia Junxia Liu
Author-X-Name-First: Julia Junxia
Author-X-Name-Last: Liu
Author-Name: Rita Wing Yue Yip
Author-X-Name-First: Rita Wing Yue
Author-X-Name-Last: Yip
Title: Does access to developed audit markets improve home audit quality? Evidence from China
Abstract:
In December 2010, Hong Kong regulators allowed 12 mainland Chinese registered audit firms to audit companies incorporated in mainland China and listed in Hong Kong (H-shares). In this study, we examine whether access to the Hong Kong audit market improves the quality of audits conducted by these Chinese audit firms for clients listed in the mainland markets (A-shares). Using data from 2008 to 2016, we find that mainland auditors with H-share clients provide higher quality audits, as measured by more modified audit opinions, higher audit fees and less earnings management, than auditors without H-share clients. This effect is more pronounced when the auditors are non-Big 4 firms and the clients are listed only in mainland China. Further analysis shows that A-share investors react positively to the initial announcement that mainland auditors are permitted to conduct H-share audits. Overall, our findings suggest that H-share audits have a positive spillover effect on the quality of A-share audits.
Journal: Accounting and Business Research
Pages: 707-743
Issue: 6-7
Volume: 51
Year: 2021
Month: 11
X-DOI: 10.1080/00014788.2021.1951645
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1951645
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:6-7:p:707-743
Template-Type: ReDIF-Article 1.0
Author-Name: Liansheng Wu
Author-X-Name-First: Liansheng
Author-X-Name-Last: Wu
Author-Name: Jason Zezhong Xiao
Author-X-Name-First: Jason Zezhong
Author-X-Name-Last: Xiao
Title: The value of auditing, audit independence, and audit pricing: a review of empirical evidence from China
Abstract:
In this paper, we review the empirical research on the value of auditing, audit independence, and audit fees published in Accounting Research and Auditing Research, the two premier accounting and auditing journals in China. We identify the main themes in the three areas and assess the consistency of the available empirical evidence on the topics we review. We also highlight the innovativeness of auditing studies published in Chinese language journals to English language readers of the global accounting academic community, before introducing the papers included in this Special Issue on Auditing in China. Finally, we identify gaps in the literature and suggest avenues to help promote further research in this area.
Journal: Accounting and Business Research
Pages: 585-621
Issue: 6-7
Volume: 51
Year: 2021
Month: 11
X-DOI: 10.1080/00014788.2021.1970703
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1970703
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:6-7:p:585-621
Template-Type: ReDIF-Article 1.0
Author-Name: Wei Li
Author-X-Name-First: Wei
Author-X-Name-Last: Li
Author-Name: Huilong Liu
Author-X-Name-First: Huilong
Author-X-Name-Last: Liu
Author-Name: Xizi Wang
Author-X-Name-First: Xizi
Author-X-Name-Last: Wang
Title: Does joining global accounting firm networks and associations affect audit quality and audit pricing? Evidence from China
Abstract:
This study investigates the impact of accounting firms joining global accounting firm networks and associations (AF N&As) on audit quality and audit pricing in China. We find that after their accounting firms join global AF N&As, client firms’ accrual-based earnings management is reduced. However, we find no evidence that audit fees are significantly affected. Cross-sectional analysis suggests that improvements in audit quality resulting from accounting firms joining global AF N&As are more pronounced when auditors have less audit experience, clients have more subsidiaries or auditor tenure is shorter. Additional tests suggest that joining AF N&As reduces the likelihood of accounting firms being dismissed by clients and increases the market share of the accounting firms.
Journal: Accounting and Business Research
Pages: 677-706
Issue: 6-7
Volume: 51
Year: 2021
Month: 11
X-DOI: 10.1080/00014788.2020.1824115
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1824115
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Handle: RePEc:taf:acctbr:v:51:y:2021:i:6-7:p:677-706
Template-Type: ReDIF-Article 1.0
Author-Name: Peipei Pan
Author-X-Name-First: Peipei
Author-X-Name-Last: Pan
Author-Name: Chris Patel
Author-X-Name-First: Chris
Author-X-Name-Last: Patel
Title: Formal accountability, perceived accountability and aggressive reporting judgements
Abstract:
We extend the literature on accountability in an experimental setting to examine the influence of formal accountability, individual-level perceived accountability and their interactions on accountants’ aggressive judgements in China. Individual-level perceived accountability is based on the phenomenological perspective, which recognises that its intrinsic nature is derived from multiple sources known as the ‘web of accountabilities’ in socialisation processes. Researchers suggest that perceived accountability is fidelity to ‘personal conscience’ in individuals’ moral values and their internal sense of moral obligations. Our findings show that when formal accountability was imposed, accountants were not aggressive in making their reporting judgements, irrespective of their scores on perceived accountability measures. In contrast, when formal accountability was not imposed, accountants who scored higher (lower) on perceived accountability measures were less (more) aggressive in making reporting judgements. Our results further show that imposition of formal accountability is not equally important in influencing the judgements of accountants who scored higher on perceived accountability measures and those who scored lower on those measures. Our findings have implications for determining which accountability frameworks could be developed to assist global standard setters, national regulators and organisations, including accounting firms, constrain aggressive financial reporting so as to improve financial reporting quality.
Journal: Accounting and Business Research
Pages: 67-93
Issue: 1
Volume: 52
Year: 2022
Month: 01
X-DOI: 10.1080/00014788.2020.1836469
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1836469
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:1:p:67-93
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen A. Zeff
Author-X-Name-First: Stephen A.
Author-X-Name-Last: Zeff
Title: The IAPC’s International Auditing Guidelines and its controversial IAG 13 on the auditor’s report
Abstract:
This paper is a historical account of the founding, organisation and early operation of the International Auditing Practices Committee (IAPC), which was one of the committees of the International Federation of Accountants (IFAC), from 1978 onwards. It examines the debates and disagreements attending the most controversial of the IAPC’s 29 International Auditing Guidelines (IAGs), dealing with the auditor’s report on financial statements, issued in 1983. It also reviews IFAC’s 1987 survey of compliance with the IAGs by its member countries around the world and the IAPC’s decision in 1991 to change Guidelines to Standards.
Journal: Accounting and Business Research
Pages: 94-113
Issue: 1
Volume: 52
Year: 2022
Month: 1
X-DOI: 10.1080/00014788.2020.1830023
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1830023
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:1:p:94-113
Template-Type: ReDIF-Article 1.0
Author-Name: Liuchuang Li
Author-X-Name-First: Liuchuang
Author-X-Name-Last: Li
Author-Name: Baolei Qi
Author-X-Name-First: Baolei
Author-X-Name-Last: Qi
Author-Name: Ashok Robin
Author-X-Name-First: Ashok
Author-X-Name-Last: Robin
Author-Name: Rong Yang
Author-X-Name-First: Rong
Author-X-Name-Last: Yang
Title: The effect of enforcement action on audit fees and the audit reporting lag
Abstract:
We study the effect of audit market regulation on auditor contracting by examining a sample of enforcement actions on engagement auditors by the China Securities Regulatory Commission (CSRC). We conjecture that sanctions change auditor behaviour through increased effort and diligence. Specifically, we hypothesise that sanctioned auditors would (a) increase audit fees and (b) increase reporting lag. We find results consistent with these hypotheses. We also provide supporting evidence using a battery of output measures of audit quality including abnormal accruals (various kinds), modified audit opinion, F-score, and restatements. Thus, both input-based and output-based indicators show that sanctioned auditors improve audit quality. Additionally, in nuanced tests, we present evidence on other aspects of auditor behaviour: we find that audit firms combine sanctioned auditors with more seasoned co-partners and assign a lighter workload. By far, this is the most direct and compelling evidence that auditors respond to sanctions. Overall, sanctions appear to encourage sanctioned auditors as well as their firms to take a concerted and strategic approach to improve audit quality.
Journal: Accounting and Business Research
Pages: 38-66
Issue: 1
Volume: 52
Year: 2022
Month: 1
X-DOI: 10.1080/00014788.2020.1808441
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1808441
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:1:p:38-66
Template-Type: ReDIF-Article 1.0
Author-Name: Chee Yeow Lim
Author-X-Name-First: Chee Yeow
Author-X-Name-Last: Lim
Author-Name: Gerald J. Lobo
Author-X-Name-First: Gerald J.
Author-X-Name-Last: Lobo
Author-Name: Pingui Rao
Author-X-Name-First: Pingui
Author-X-Name-Last: Rao
Author-Name: Heng Yue
Author-X-Name-First: Heng
Author-X-Name-Last: Yue
Title: Financial capacity and the demand for audit quality
Abstract:
Prior research documents that financial capacity could be positively or negatively associated with the demand for audit quality. We re-examine this relation using changes in local real estate prices as exogenous shocks to corporate financial capacity. Using auditor size, auditor industry specialisation, and auditor fees as measures of audit quality, we find robust evidence that an increase (decrease) in financial capacity significantly reduces (increases) the demand for audit quality, and that this relation is more pronounced when firms are more financially constrained, when external monitoring by institutional investors and financial analysts is weaker, and when there is more negative news about real estate price changes. Our study enriches the related literature by describing a more complete and dynamic relationship between audit quality and financial capacity.
Journal: Accounting and Business Research
Pages: 1-37
Issue: 1
Volume: 52
Year: 2022
Month: 1
X-DOI: 10.1080/00014788.2020.1824116
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1824116
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Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Thank you to reviewers
Journal: Accounting and Business Research
Pages: 221-222
Issue: 2
Volume: 52
Year: 2022
Month: 02
X-DOI: 10.1080/00014788.2022.2027326
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2027326
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:2:p:221-222
Template-Type: ReDIF-Article 1.0
Author-Name: Aminah Abdullah
Author-X-Name-First: Aminah
Author-X-Name-Last: Abdullah
Author-Name: Iqbal Khadaroo
Author-X-Name-First: Iqbal
Author-X-Name-Last: Khadaroo
Title: Controlling UK national museums and galleries: the pursuit of conflicting politico-economic and socio-cultural objectives
Abstract:
UK national museums and galleries (MaGs) are organised as non-departmental public bodies to enable them to pursue their desired socio-cultural objectives with minimal interference from the government. This study examines how the UK government controls heterogenous UK national MaGs to insidiously influence their objectives. It uses data collected from published sources and from interviews conducted with sponsors, trustees and senior managers of national MaGs located in London. The findings highlight that the government influences the domain of arts and culture by appointing trustees with similar ‘political’ and ‘business-thinking’ mindsets, using accounting mechanisms, and through direct intervention. When the government's politico-economic desires collided with the decision of the trustees and curators, the government directly intervened to protect its interest. The reduction in government funding and its desire to make MaGs financially independent have resulted in MaGs demanding greater autonomy over spending their self-generated funding to pursue their artistic objectives, potentially shifting accountability relationships and creating new possibilities.
Journal: Accounting and Business Research
Pages: 201-220
Issue: 2
Volume: 52
Year: 2022
Month: 2
X-DOI: 10.1080/00014788.2020.1832880
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1832880
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:2:p:201-220
Template-Type: ReDIF-Article 1.0
Author-Name: Yu Flora Kuang
Author-X-Name-First: Yu Flora
Author-X-Name-Last: Kuang
Author-Name: Xiaotao Kelvin Liu
Author-X-Name-First: Xiaotao Kelvin
Author-X-Name-Last: Liu
Author-Name: Srikanth Paruchuri
Author-X-Name-First: Srikanth
Author-X-Name-Last: Paruchuri
Author-Name: Bo Qin
Author-X-Name-First: Bo
Author-X-Name-Last: Qin
Title: CFO social ties to non-CEO senior managers and financial restatements
Abstract:
In this study, we examine how a CFO’s social ties with non-CEO senior managers in the same firm affect the likelihood of financial restatements. We categorise social ties as either professional or personal, and find that the two types of ties have distinct effects. Our findings show that CFOs’ professional ties with senior managers are associated with a lower likelihood of financial restatements. Interestingly, the effects of CFO personal ties are related to a firm’s operational performance, in that such ties are associated with a higher (lower) likelihood of financial restatements when operational performance is poor (good). Overall, our findings are consistent with the notion that CFO social ties with senior managers may give rise to both information sharing and arm-in-arm behaviour.
Journal: Accounting and Business Research
Pages: 115-149
Issue: 2
Volume: 52
Year: 2022
Month: 2
X-DOI: 10.1080/00014788.2020.1793719
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1793719
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:2:p:115-149
Template-Type: ReDIF-Article 1.0
Author-Name: Hongkang Xu
Author-X-Name-First: Hongkang
Author-X-Name-Last: Xu
Author-Name: Mai Dao
Author-X-Name-First: Mai
Author-X-Name-Last: Dao
Author-Name: Jia Wu
Author-X-Name-First: Jia
Author-X-Name-Last: Wu
Author-Name: Hua Sun
Author-X-Name-First: Hua
Author-X-Name-Last: Sun
Title: Political corruption and annual report readability: evidence from the United States
Abstract:
This study examines the association between the political corruption of a local government and the readability of firms’ annual reports. Based on a sample of 12,742 firm-year observations during the 2006–2014 period, the study reveals that firms located in more corrupt regions tend to disclose less readable financial reports. Our additional analyses reveal that the level of annual report readability is lower for firms located in more corrupt regions, regardless of the firms’ level of return on assets. We also find that firms located in more corrupt regions and having more able managers are more likely to obfuscate information in annual reports. The results imply firms’ effort to minimise rent extraction from corrupt government officials. A further test shows that firms in more corrupt regions are more likely to report less readable Management Discussion and Analysis (MD&A) section of annual reports. This paper extends the prior literature on annual report readability and political corruption. The paper also provides additional evidence to the mixed results on the management's obfuscation behaviour related to the readability of financial disclosures. The findings may be of interest to regulators seeking out factors influencing firms’ readability of annual reports.
Journal: Accounting and Business Research
Pages: 166-200
Issue: 2
Volume: 52
Year: 2022
Month: 2
X-DOI: 10.1080/00014788.2020.1815516
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1815516
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:2:p:166-200
Template-Type: ReDIF-Article 1.0
Author-Name: Carolyn Strand Norman
Author-X-Name-First: Carolyn Strand
Author-X-Name-Last: Norman
Author-Name: Anna M. Rose
Author-X-Name-First: Anna M.
Author-X-Name-Last: Rose
Author-Name: Jacob M. Rose
Author-X-Name-First: Jacob M.
Author-X-Name-Last: Rose
Author-Name: Joseph C. Ugrin
Author-X-Name-First: Joseph C.
Author-X-Name-Last: Ugrin
Title: Director friendships with the CEO: are they always a threat to director integrity?
Abstract:
This paper examines the effects of friendships with the CEO on the decisions of directors of non-profit organisations. Participants in the experiment are active non-profit directors. Results indicate that non-profit directors with no corporate director experience manage earnings less for the benefit of a CEO when they are friends of the CEO, relative to when they do not have a friendship with the CEO. Further, disclosure of the friendship does not result in an increased willingness to manage earnings for the benefit of a CEO friend. The results with non-profit directors are entirely opposite to those previously documented for corporate directors (Rose, J., Rose, A., Norman, C., and Mazza, C, 2014. Will disclosure of friendship ties between directors and CEOs yield perverse effects? The Accounting Review, 89 (4), 1545–1563.). Further, we find that non-profit directors who also have corporate director experience are willing to manage earnings more for a CEO who is a friend, relative to a CEO who is not a friend, and disclosure of the friendship results in increased willingness to manage earnings for the CEO.
Journal: Accounting and Business Research
Pages: 150-165
Issue: 2
Volume: 52
Year: 2022
Month: 02
X-DOI: 10.1080/00014788.2020.1840331
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1840331
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:2:p:150-165
Template-Type: ReDIF-Article 1.0
Author-Name: John Richard Edwards
Author-X-Name-First: John Richard
Author-X-Name-Last: Edwards
Title: Accounting, publicity and class conflict in Victorian Britain
Abstract:
This paper studies the role of publicly available accounting information in class conflict between capital and labour in Victorian Britain. The company investigated – the Staveley Coal & Iron Company Ltd – is one of the earliest industrial enterprises registered under the Companies Act 1862. The period studied is 1863, when the company was incorporated, through to 1900 by which time the workforce comprised approximately 6400 colliery and iron workers. The history of the company is contextualised in two ways. First, by positioning it within the coal and iron industry in terms of market share, size and profitability. Second, by locating Staveley’s labour management policies within relevant contemporary economic theory. It is then revealed, through an in-depth study of the company’s archives, that the directors sought to manage and manipulate the workforce through the provision of welfare facilities and by denying worker access to accounting information relevant for wage bargaining purposes. The study also unveils the directors’ report as an instrument deployed to project the image of a caring employer and to explain, to its shareholders, the sound business sense of committing resources for that purpose.
Journal: Accounting and Business Research
Pages: 321-346
Issue: 3
Volume: 52
Year: 2022
Month: 04
X-DOI: 10.1080/00014788.2021.1902260
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1902260
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:3:p:321-346
Template-Type: ReDIF-Article 1.0
Author-Name: David Oesch
Author-X-Name-First: David
Author-X-Name-Last: Oesch
Author-Name: Felix Urban
Author-X-Name-First: Felix
Author-X-Name-Last: Urban
Title: The effect of international subsidiaries on voluntary disclosure - evidence from natural disasters
Abstract:
This paper documents that managers of multinational companies adjust voluntary disclosure after significant events at international subsidiaries. We show an increase in the likelihood and frequency of management forecasts following natural disasters in regions where companies operate subsidiaries. The exogenous and staggered nature of natural disasters as well as our research design choices substantially raise the hurdle for alternative explanations of our result. Further analyses suggest that the effect is particularly strong for companies that rely on equity financing. Our paper contributes to the nascent literature on transmission effects within international business groups.
Journal: Accounting and Business Research
Pages: 223-253
Issue: 3
Volume: 52
Year: 2022
Month: 04
X-DOI: 10.1080/00014788.2021.1889351
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1889351
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:3:p:223-253
Template-Type: ReDIF-Article 1.0
Author-Name: Ahrum Choi
Author-X-Name-First: Ahrum
Author-X-Name-Last: Choi
Author-Name: Eugenia Y. Lee
Author-X-Name-First: Eugenia Y.
Author-X-Name-Last: Lee
Author-Name: Sunyoung Park
Author-X-Name-First: Sunyoung
Author-X-Name-Last: Park
Author-Name: Byungcherl Charlie Sohn
Author-X-Name-First: Byungcherl Charlie
Author-X-Name-Last: Sohn
Title: The differential effect of accrual-based and real earnings management on audit fees: international evidence
Abstract:
This study investigates the relative importance of accrual-based earnings management (AEM) and real earnings management (REM) as reflected in audit fees. Auditors charge not only for AEM, but also for REM, because it increases the litigation risks and audit complexity they face by dampening firms’ long-term fundamentals; however, whether auditors charge more for AEM or for REM is relatively unexplored. Using data from 24 countries, we find that auditors, on average, charge a higher premium for REM than for AEM. We also find that a strong legal regime increases the audit fee premium charged on both AEM and REM, where the premium for REM increases to a greater extent than it does for AEM. Overall, our results provide novel evidence of the relative importance of the different types of earnings management under different legal regimes to auditors.
Journal: Accounting and Business Research
Pages: 254-290
Issue: 3
Volume: 52
Year: 2022
Month: 04
X-DOI: 10.1080/00014788.2021.1911779
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1911779
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:3:p:254-290
Template-Type: ReDIF-Article 1.0
Author-Name: Rui Zhang
Author-X-Name-First: Rui
Author-X-Name-Last: Zhang
Author-Name: Raymond M. K. Wong
Author-X-Name-First: Raymond M. K.
Author-X-Name-Last: Wong
Author-Name: Agnes W. Y. Lo
Author-X-Name-First: Agnes W. Y.
Author-X-Name-Last: Lo
Author-Name: Gaoliang Tian
Author-X-Name-First: Gaoliang
Author-X-Name-Last: Tian
Title: Can mandatory dual audit reduce the cost of equity? Evidence from China
Abstract:
In China, a mandatory dual audit system for domestic A-share firms cross-listed on the Hong Kong stock market (i.e. AH companies) was abolished in 2010. Since then, AH companies have been allowed to choose to have a dual audit or a single audit. We find that the mandatory dual audit regime before the deregulation is associated with a lower cost of equity than voluntary dual audit after the deregulation. Furthermore, the lower cost of equity under the mandatory dual audit regime is greater in companies exposed to stronger financial constraints and with higher agency costs, and is not attenuated by alternative voluntary audits. Our results are not affected by accounting standards convergence and audit quality, and are robust to various model specifications. Our results suggest that the role of mandatory dual audit in mitigating agency costs and information asymmetry is not replaceable by voluntary dual audit.
Journal: Accounting and Business Research
Pages: 291-320
Issue: 3
Volume: 52
Year: 2022
Month: 04
X-DOI: 10.1080/00014788.2020.1870432
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1870432
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:3:p:291-320
Template-Type: ReDIF-Article 1.0
Author-Name: Stefan Sundgren
Author-X-Name-First: Stefan
Author-X-Name-Last: Sundgren
Author-Name: Tobias Svanström
Author-X-Name-First: Tobias
Author-X-Name-Last: Svanström
Title: Regulatory sanction risk and going-concern reporting practices: evidence for privately held firms
Abstract:
We study the temporal evolution of going-concern reporting from 2004 to 2013 and test whether sanction risk is related to the likelihood of a going-concern opinion using samples of privately held firms. In 2009, the Supervisory Board of Public Accountants (SBPA) in Sweden started to issue significantly more going-concern-related disciplinary sanctions, and we test whether and how auditors at different audit firms adjust their reporting practices (Type I and Type II errors) in response to the increased sanction risk. Our findings reveal that auditors are more likely to issue going-concern opinions to bankrupt and non-bankrupt firms when the sanction risk is higher, suggesting that sanction risk is positively associated with conservatism in auditors’ reporting. Furthermore, we find that auditors at Big 4 firms alter their reporting to conservative more than non-Top 7 firms when sanction risk increases. Finally, results on the informativeness of going-concern opinions indicate that a going-concern opinion increases the bankruptcy probability during both the lower and higher sanction risk periods, but the impact is higher under the higher sanction risk period.
Journal: Accounting and Business Research
Pages: 377-416
Issue: 4
Volume: 52
Year: 2022
Month: 06
X-DOI: 10.1080/00014788.2021.1931799
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1931799
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:4:p:377-416
Template-Type: ReDIF-Article 1.0
Author-Name: Kun Yu
Author-X-Name-First: Kun
Author-X-Name-Last: Yu
Title: Value relevance of excess return on pension assets and pension OCI components
Abstract:
This study investigates the value relevance and persistence of the excess of expected return over interest income on pension assets (excess return on pension assets) and pension-related other comprehensive income (OCI) components under SFAS No. 158. I find that firm value is positively associated with the excess return on pension assets and prior service cost OCI adjustments, but not associated with net pension loss OCI adjustments. The Mishkin test indicates that investors overestimate the persistence of the excess return on pension assets and treat transitory prior service cost OCI adjustments as if prior service cost represents an intangible asset. Consequently, the market overprices firms with large amounts of the excess return on pension assets and prior service cost OCI adjustments. In contrast, investors appear to correctly understand the transitory feature of net pension loss OCI adjustments. Overall, the results have important implications for a broad audience including investors, firms, and standard setters.
Journal: Accounting and Business Research
Pages: 347-376
Issue: 4
Volume: 52
Year: 2022
Month: 06
X-DOI: 10.1080/00014788.2021.1930996
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1930996
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:4:p:347-376
Template-Type: ReDIF-Article 1.0
Author-Name: Ozlem Arikan
Author-X-Name-First: Ozlem
Author-X-Name-Last: Arikan
Title: The effect of boilerplate language on nonprofessional investors’ judgments
Abstract:
Most companies disclose risk factors using vague, boilerplate language. Regulators are concerned that this vagueness reduces the decision-usefulness of the information; hence, they are encouraging companies to be more specific rather than generic. However, little is known about the impact of specificity on investment judgments. The results of this experimental study suggest that regulators’ concern may be justified. Non-professional investors who read a generic disclosure react less strongly immediately after reading it than those who read a more specific disclosure when prior information about the disclosed risk factor is available in their memory immediately before reading the risk disclosure. In addition, on realisation of the risk, they are more surprised than their counterparts who read a more specific disclosure, and lower their credibility judgments accordingly. These investors correct their judgments after the risk realisation to a greater extent than those who have read a more specific disclosure. The study has implications for regulators, managers, non-professional investors and researchers.
Journal: Accounting and Business Research
Pages: 417-442
Issue: 4
Volume: 52
Year: 2022
Month: 06
X-DOI: 10.1080/00014788.2021.1922990
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1922990
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:4:p:417-442
Template-Type: ReDIF-Article 1.0
Author-Name: Christian Ax
Author-X-Name-First: Christian
Author-X-Name-Last: Ax
Author-Name: Elin Ax
Author-X-Name-First: Elin
Author-X-Name-Last: Ax
Title: When the supply side of a management accounting innovation fails – the case of beyond budgeting in Sweden
Abstract:
Using the management fashion perspective as a theoretical lens, we explicate the limited success of the beyond budgeting (BB) concept in Sweden from a supply-side perspective. The fashion perspective assumes that management concepts do not emerge or diffuse by popular demand, instead viewing the activities of supply-side actors, such as management consultants, professional associations, and academics, as crucial to the success of management concepts in a marketplace of potential users. We conceptualize a management fashion-setting process that enabled us to explore how and why actors have selected or rejected BB, how and why BB has been processed, the channels through which BB has been disseminated, and how and why supply-side actors interact (or do not interact) with other supply-side actors and other parties in these activities. Our findings suggest that a weakly mobilized supply side has produced heavily reduced, heterogeneous packages of rhetoric and design characteristics regarding the BB concept that have reached only a small portion of the target audience of potential adopters. Our study illustrates how barriers to diffusion are created on the supply side in the absence of the localization of BB.
Journal: Accounting and Business Research
Pages: 443-478
Issue: 4
Volume: 52
Year: 2022
Month: 06
X-DOI: 10.1080/00014788.2021.1935685
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1935685
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:4:p:443-478
Template-Type: ReDIF-Article 1.0
# input file: catalog-resolver412645074872038582.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Doug King
Author-X-Name-First: Doug
Author-X-Name-Last: King
Title: ‘Does Every Accounting Issue Need a Solution?’ A practitioner view
Journal: Accounting and Business Research
Pages: 562-564
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079746
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079746
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:562-564
Template-Type: ReDIF-Article 1.0
# input file: catalog-resolver6580421187789197305.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Katharina Hombach
Author-X-Name-First: Katharina
Author-X-Name-Last: Hombach
Author-Name: Thorsten Sellhorn
Author-X-Name-First: Thorsten
Author-X-Name-Last: Sellhorn
Title: Does every accounting issue need a solution?
Abstract:
We discuss the concept and costs of resolving accounting issues. We first characterise the (degree of) resolution of an accounting issue as a continuous concept, arguing that an accounting issue is unresolved where an established solution is either uncertain or produces financial information with undesired consequences. We then describe standard setters and market participants as possible institutions that can contribute to such resolution. A series of standard-setting cases illustrates different settings as well as sources and degrees of resolution. We then review extant studies that speak to two important cost factors shaping the supply of accounting solutions: costs of learning about accounting solutions and opportunity costs arising from reduced incentives for innovations in accounting. We conclude with suggestions for future research and implications for standard setting.
Journal: Accounting and Business Research
Pages: 540-561
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079736
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079736
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:540-561
Template-Type: ReDIF-Article 1.0
# input file: catalog-resolver-9031827395759813114.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Hans Hoogervorst
Author-X-Name-First: Hans
Author-X-Name-Last: Hoogervorst
Title: ‘Why do accounting issues end up in the “too difficult” box?’ A practitioner view
Journal: Accounting and Business Research
Pages: 507-509
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079699
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079699
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:507-509
Template-Type: ReDIF-Article 1.0
# input file: catalog-resolver1278300280722886856.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Veronica Poole
Author-X-Name-First: Veronica
Author-X-Name-Last: Poole
Title: ‘Accounting standards: the “too difficult” box - the next big accounting issue?’ A practitioner view
Journal: Accounting and Business Research
Pages: 578-581
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079767
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079767
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:578-581
Template-Type: ReDIF-Article 1.0
# input file: catalog-resolver-3908326139010845744.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Richard Spencer
Author-X-Name-First: Richard
Author-X-Name-Last: Spencer
Title: ‘Accounting in the Anthropocene’: A practitioner view
Journal: Accounting and Business Research
Pages: 597-599
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079811
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079811
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:597-599
Template-Type: ReDIF-Article 1.0
# input file: catalog-resolver8633221929318939077.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Sudipta Basu
Author-X-Name-First: Sudipta
Author-X-Name-Last: Basu
Author-Name: Martin F. Grace
Author-X-Name-First: Martin F.
Author-X-Name-Last: Grace
Title: Insurance: in or out of the ‘too difficult’ box?
Abstract:
IFRS 17 requires a significant change to insurer accounting, and we look at some of the frictions resulting from its implementation. We make three points. First, since IFRS 17 is a principles-based standard, it will be costly to implement. Audit committees must become sophisticated users of the underlying models generating the reports. Second, we examine the effect of the Sarbanes-Oxley Act on U.S. public insurers and a similar law for private insurers to assess the costs of complying with new rules. We find evidence that these costs vary in their incidence across the industry. Third, we conduct an event study of specific announcements regarding IFRS 17 promulgation and implementation. We find a negative sentiment for announcements concerning the implementation. However, we cannot identify a single specific rationale for the negative sentiment as it could be related to several factors. In sum, we find that there are many reasons to keep insurance accounting as part of IFRS and some reasons that may lead to delays in implementation, but any concern this accounting standard is ‘too difficult’ is likely not due to the standard itself but to other things that may reflect the ultimate net benefits of the standard to investors.
Journal: Accounting and Business Research
Pages: 510-535
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2080350
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2080350
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:510-535
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# input file: catalog-resolver2950538652753936326.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Mary E. Barth
Author-X-Name-First: Mary E.
Author-X-Name-Last: Barth
Title: Accounting standards: the ‘too difficult’ box – the next big accounting issue?
Abstract:
Embracing the perspective of accounting as providing information to support capital allocation decisions could help avoid accounting issues ending up in the ‘Too Difficult' Box. Investors need and use information not contained in traditional financial statements. Thus, focusing on financial statements as the sole accounting output limits the ability of accounting reports to meet investors' information needs. Two issues on the horizon—accounting for digital assets and the effects of climate change—reveal how embracing this perspective could help avoid the ‘Too Difficult' Box. These issues reveal pitfalls arising from trying to fit newly created assets into categories—and consequent accounting—designed for previously identified assets. The issues also reveal potential benefits of substituting non-financial information for unavailable financial information rather than omitting the items from accounting reports. Both issues reinforce investors' need for information about risk. Digital assets, climate change, risk, and—more broadly—whether and how accounting reports should be broadened beyond financial statements motivate many interesting research questions. Insights from this research are vital as accounting faces potentially revolutionary changes in investors’ information needs.
Journal: Accounting and Business Research
Pages: 565-577
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079757
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079757
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:565-577
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# input file: catalog-resolver3918249878714466040.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 479-481
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079685
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079685
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:479-481
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# input file: catalog-resolver-8554893906939440625.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Jan Bebbington
Author-X-Name-First: Jan
Author-X-Name-Last: Bebbington
Author-Name: Andy Rubin
Author-X-Name-First: Andy
Author-X-Name-Last: Rubin
Title: Accounting in the Anthropocene: A roadmap for stewardship
Abstract:
Stewardship is a concept that has historically underpinned the practice of accounting, with a focus on the stewardship of financial resources. As times change, so too do the elements of organisational performance that might be subject to stewardship demands. Critically for this paper, a roadmap for organisational stewardship in the Anthropocene is developed. In brief, the Anthropocene is a term used to describe how human actions drive earth systems functioning, generating effects (for example) on the climate system as well as on the diversity of living creatures. Given these effects, an enlarged understanding of stewardship emerges that focuses on corporate purpose that takes account of wider than financial ambitions and effects as well as on governance processes that can support a broader perspective. The paper also highlights that achieving stewardship for ‘wicked problems’ that emerge from complex adaptive systems (with emergent elements and tipping points) might be best addressed by coalitions of organisations collaborating to achieve systems effects. Such an approach also suggests that accounting data gathering and tracing of organisational impact will require greater spatial capabilities than have previously been the case. Accounting for stewardship in the Anthropocene, therefore, represents a significant advance to current accounting practice.
Journal: Accounting and Business Research
Pages: 582-596
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079780
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079780
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:582-596
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# input file: catalog-resolver7777166168174204419.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Katherine Schipper
Author-X-Name-First: Katherine
Author-X-Name-Last: Schipper
Title: Why do accounting issues end up in the ‘too difficult’ box?
Abstract:
I discuss outcome-based characteristics of several vexatious and recurring standard-setting issues, described for purposes of this paper as ‘too difficult,’ and apply these characteristics to identify four examples of ‘too difficult’ accounting issues: reporting financial performance; disaggregated financial performance reporting as exemplified by segment reporting; distinguishing liabilities from equity; and accounting for intangible assets. I use existing and superseded IFRS and US GAAP standards and due process documents to illustrate the ‘too difficult’ nature of these issues. I then analyse the four ‘too difficult’ issues and discern two underlying causes. The first cause arises because existing conceptual frameworks contain either no guidance or indeterminate guidance for resolving ‘too difficult’ issues. The second cause arises when a conceptually grounded solution to a reporting issue exists but one of the following conditions is present: the solution is, as a practical matter, infeasible to implement; the solution requires so many subjective judgments and estimates that the resulting information is unlikely to be comparable and timely; the solution raises concerns about what some view as undesirable outcomes in performance reporting, in particular, volatility. I briefly discuss the extent to which extant accounting research might assist in resolving ‘too difficult’ issues and offer suggestions for future research.
Journal: Accounting and Business Research
Pages: 482-506
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079686
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079686
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:482-506
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# input file: catalog-resolver-8283166270406673062.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Jo Clube
Author-X-Name-First: Jo
Author-X-Name-Last: Clube
Title: ‘Insurance: in or out of the “too difficult” box?’ A practitioner view
Journal: Accounting and Business Research
Pages: 536-539
Issue: 5
Volume: 52
Year: 2022
Month: 07
X-DOI: 10.1080/00014788.2022.2079721
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2079721
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:5:p:536-539
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# input file: RABR_A_2017555_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Frank Thinggaard
Author-X-Name-First: Frank
Author-X-Name-Last: Thinggaard
Title: Discussion of ‘Multi-mode standardisation and comparability: Norway’s failed attempt to adopt the IFRS for SMEs’
Journal: Accounting and Business Research
Pages: 765-772
Issue: 6
Volume: 52
Year: 2022
Month: 09
X-DOI: 10.1080/00014788.2021.2017555
File-URL: http://hdl.handle.net/10.1080/00014788.2021.2017555
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:6:p:765-772
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# input file: RABR_A_2050171_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Raquel Wille Sarquis
Author-X-Name-First: Raquel Wille
Author-X-Name-Last: Sarquis
Author-Name: Ariovaldo dos Santos
Author-X-Name-First: Ariovaldo
Author-X-Name-Last: dos Santos
Author-Name: Isabel Lourenço
Author-X-Name-First: Isabel
Author-X-Name-Last: Lourenço
Author-Name: Guillermo Oscar Braunbeck
Author-X-Name-First: Guillermo Oscar
Author-X-Name-Last: Braunbeck
Title: The impact of the adoption of IFRS 11 on the comparability of accounting information
Abstract:
We analyse the impact of the introduction of IFRS 11 on the comparability of accounting information. IFRS 11 eliminated proportionate consolidation as an alternative to accounting for interests in joint ventures. Our sample comprises 2,059 firms with interests in joint ventures from 26 countries over the period 2005–2016. Overall, the comparability of accounting information decreased after the adoption of IFRS 11, but the effect is not uniformly distributed internationally. Further analysis of the information disclosed by the venturers in the notes indicates that the increase in disclosure requirements proposed by IFRS 12 may not fully mitigate the consequences of the elimination of proportionate consolidation in IFRS 11.
Journal: Accounting and Business Research
Pages: 690-726
Issue: 6
Volume: 52
Year: 2022
Month: 09
X-DOI: 10.1080/00014788.2022.2050171
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2050171
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:6:p:690-726
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# input file: RABR_A_1952060_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Minyue Dong
Author-X-Name-First: Minyue
Author-X-Name-Last: Dong
Author-Name: Romain Oberson
Author-X-Name-First: Romain
Author-X-Name-Last: Oberson
Title: Moving toward the expected credit loss model under IFRS 9: capital transitional arrangement and bank systematic risk
Abstract:
This paper examines banks’ option to adopt the capital transitional arrangement (CTA) set out by the Basel Committee on Banking Supervision, in response to the introduction of the International Financial Reporting Standard 9 (IFRS 9), which requires the use of an expected credit loss model instead of an incurred loss model to estimate the impairment of financial assets. Using a sample of publicly listed European banks from 2016 to 2019, we find that bank CTA adoption choice is associated with neutral factors captured by bank-specific fundamental characteristics, and potential opportunistic factors related to regulatory constraints implied by the application of IFRS 9. We further find that banks that adopted the CTA (CTA adopters) decrease their exposure to systematic risk during the transitional period. However, this relationship is only significant in countries with powerful banking authorities. In those with less powerful banking authorities, CTA adopters tend to exercise more aggressively their accounting discretion. Our study is the first to address banks’ voluntary choice to adopt the CTA policy under the mandatory application of IFRS 9.
Journal: Accounting and Business Research
Pages: 641-679
Issue: 6
Volume: 52
Year: 2022
Month: 09
X-DOI: 10.1080/00014788.2021.1952060
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1952060
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:6:p:641-679
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# input file: RABR_A_2082679_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Katherine Schipper
Author-X-Name-First: Katherine
Author-X-Name-Last: Schipper
Title: Discussion of ‘The impact of the adoption of IFRS 11 on the comparability of accounting information’
Journal: Accounting and Business Research
Pages: 727-733
Issue: 6
Volume: 52
Year: 2022
Month: 09
X-DOI: 10.1080/00014788.2022.2082679
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2082679
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:6:p:727-733
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# input file: RABR_A_1938963_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Richard Barker
Author-X-Name-First: Richard
Author-X-Name-Last: Barker
Author-Name: Andrew Lennard
Author-X-Name-First: Andrew
Author-X-Name-Last: Lennard
Author-Name: Stephen Penman
Author-X-Name-First: Stephen
Author-X-Name-Last: Penman
Author-Name: Alan Teixeira
Author-X-Name-First: Alan
Author-X-Name-Last: Teixeira
Title: Accounting for intangible assets: suggested solutions
Abstract:
Current accounting practice expenses many investments in intangible assets to the income statement, confusing earnings from current revenues with investments to gain future revenues. This has led to increasing calls to book those investments to the balance sheet. Drawing on relevant research, we evaluate solutions for intangible asset accounting that contrast with balance sheet recognition, and we compare these with current practice under IFRS. Key is acknowledging that an accounting solution comes from a double-entry system, which produces both an income statement and a balance sheet, and which has features that both enable and limit the information that can be conveyed about intangible asset value. In this system, asset recognition in the balance sheet must consider the effect on measurement in the income statement, for the income statement conveys value added to investment on the balance sheet. A determining feature is uncertainty about investment outcome and how that affects the income statement, so our solutions centre on accounting under uncertainty. Two other accounting features are added: there has to be an investment expenditure for balance sheet recognition, and that expenditure must be separately identifiable from transactions. These features, rather than the tangible-intangible asset dichotomy, lead to the prescribed solutions.
Journal: Accounting and Business Research
Pages: 601-630
Issue: 6
Volume: 52
Year: 2022
Month: 09
X-DOI: 10.1080/00014788.2021.1938963
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1938963
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:6:p:601-630
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# input file: RABR_A_2001306_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Anna Alon
Author-X-Name-First: Anna
Author-X-Name-Last: Alon
Author-Name: Geir Haaland
Author-X-Name-First: Geir
Author-X-Name-Last: Haaland
Author-Name: Kjell Ove Røsok
Author-X-Name-First: Kjell Ove
Author-X-Name-Last: Røsok
Title: Multi-mode standardisation and comparability: Norway's failed attempt to adopt the IFRS for SMEs
Abstract:
The coexistence of IFRS and non-IFRS standards has proven challenging at the national level. We utilise a multi-mode standardisation perspective that recognises the interplay of committees, market players, and the government to examine multi-standard financial reporting in Norway and focus on two parallel efforts that introduced proposals to base the national accounting standards on the IFRS for SMEs. In our case, the jurisdictional tensions stem from the broad remit of the government to regulate financial reporting and the ambiguous legal standing of the national standards and of the standard setter. Comparability is often cited as one of the central aims of standardisation in financial reporting. Consequently, how different players utilise the concept is of interest. We find that the scope of comparability that the standards aim to achieve is not given sufficient consideration. The feedback provided with regard to the proposals underscores that the scope of comparability is important for the users of the standards. They focus on the most likely comparisons that are made and want to maintain a national focus and comparability across similar types of companies and industries. They do not regard the standardisation efforts and proposed elimination of standards and options as necessarily beneficial for comparability.
Journal: Accounting and Business Research
Pages: 734-764
Issue: 6
Volume: 52
Year: 2022
Month: 09
X-DOI: 10.1080/00014788.2021.2001306
File-URL: http://hdl.handle.net/10.1080/00014788.2021.2001306
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# input file: RABR_A_1984906_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Niclas Hellman
Author-X-Name-First: Niclas
Author-X-Name-Last: Hellman
Title: Discussion of ‘Accounting for intangible assets: suggested solutions’
Journal: Accounting and Business Research
Pages: 631-640
Issue: 6
Volume: 52
Year: 2022
Month: 09
X-DOI: 10.1080/00014788.2021.1984906
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1984906
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:6:p:631-640
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# input file: RABR_A_2027078_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Araceli Mora
Author-X-Name-First: Araceli
Author-X-Name-Last: Mora
Title: Discussion of ‘Moving toward the expected credit loss model under IFRS 9: Capital Transitional Arrangement and bank systematic risk'
Journal: Accounting and Business Research
Pages: 680-689
Issue: 6
Volume: 52
Year: 2022
Month: 09
X-DOI: 10.1080/00014788.2022.2027078
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2027078
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:6:p:680-689
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# input file: RABR_A_1945909_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Beatriz García Osma
Author-X-Name-First: Beatriz García
Author-X-Name-Last: Osma
Author-Name: Belén Gill-de-Albornoz Noguer
Author-X-Name-First: Belén
Author-X-Name-Last: Gill-de-Albornoz Noguer
Author-Name: Elena De Las Heras Cristóbal
Author-X-Name-First: Elena
Author-X-Name-Last: De Las Heras Cristóbal
Author-Name: Simona Rusanescu
Author-X-Name-First: Simona
Author-X-Name-Last: Rusanescu
Title: Opinion-shopping: firm versus partner-level evidence
Abstract:
Employing Lennox’s (2000) methodology on a uniquely long time series of Spanish companies’ data, we find evidence of successful audit opinion-shopping through the firm switching decision. However, in contrast to Chen et al. (2016) in the Chinese setting, we find no evidence of successful opinion-shopping at the partner level. This supports the thesis that the audit market characteristics that are key to promote or deter opinion shopping might differ at the firm and partner level within a country, with consequences for audit quality. In addition, we provide evidence on the strategies that companies use to secure more favourable opinions. The results suggest that companies may prefer to opinion shop at the partner level, which is consistent with the argument that the costs and benefits associated with opinion-shopping are different at these two levels, and lead to different outcomes.
Journal: Accounting and Business Research
Pages: 773-814
Issue: 7
Volume: 52
Year: 2022
Month: 11
X-DOI: 10.1080/00014788.2021.1945909
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1945909
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:7:p:773-814
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# input file: RABR_A_1938961_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Yurou Liu
Author-X-Name-First: Yurou
Author-X-Name-Last: Liu
Title: Investor protection and audit fees: evidence from the E-interaction platform in China
Abstract:
This paper investigates the impact of investor protection on audit fees using a quasi-natural experiment provided by the introduction of the E-interaction platform in China. E-interaction provided investors with a platform to communicate directly with listed companies and participate in discussions of corporate matters, thereby enhancing the rights and interests of small and medium-sized investors, i.e. investor protection. Employing a difference-in-differences design, I find that, firms listed on the Shanghai Stock Exchange experienced a large reduction in audit fees after the adoption of E-interaction. The results are robust to changes in event windows and alternative research designs. Further analyses demonstrate that the reduction in audit fees was greater for firms with a higher level of expropriation of minority shareholders, i.e. tunnelling. I also find that controlling shareholders’ tunneling behaviours decreased after the introduction of E-interaction. Taken together, my results suggest that increased investor protection reduces audit fees by mitigating agency conflicts between the controlling shareholder and minority shareholders.
Journal: Accounting and Business Research
Pages: 815-837
Issue: 7
Volume: 52
Year: 2022
Month: 11
X-DOI: 10.1080/00014788.2021.1938961
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1938961
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:7:p:815-837
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# input file: RABR_A_1940076_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Mikael Cäker
Author-X-Name-First: Mikael
Author-X-Name-Last: Cäker
Author-Name: Sven Siverbo
Author-X-Name-First: Sven
Author-X-Name-Last: Siverbo
Author-Name: Johan Åkesson
Author-X-Name-First: Johan
Author-X-Name-Last: Åkesson
Title: Performance measurement systems, hierarchical accountability and enabling control
Abstract:
The theory of enabling control explains how the development and design of performance measurement systems (PMSs) induce subordinate managers to experience PMSs as enabling. However, PMSs are often vital to superior managers’ control. The empirical research indicates that PMSs cease to be enabling when given a large degree of attention in control processes. We use a qualitative case study, abductive research, and a hierarchical accountability perspective to explore how superior managers’ use of PMSs for control purposes may support subordinate managers’ experience of PMSs as enabling. We show how superior managers’ choices of how to use PMSs to demand and react to accounts may trigger subordinate managers to use the design characteristics of enabling control. We also show how PMSs can be important to superior managers’ control and still be experienced as enabling by subordinate managers. We show the importance of two choices for superior managers’ use of PMSs in hierarchical accountability: (1) extend performance evaluation over time and (2) limit the discretion for subordinate managers to play out within hierarchical communication.
Journal: Accounting and Business Research
Pages: 865-889
Issue: 7
Volume: 52
Year: 2022
Month: 11
X-DOI: 10.1080/00014788.2021.1940076
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1940076
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:7:p:865-889
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# input file: RABR_A_1938962_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Lu Xie
Author-X-Name-First: Lu
Author-X-Name-Last: Xie
Author-Name: Min Zhang
Author-X-Name-First: Min
Author-X-Name-Last: Zhang
Author-Name: Shengbao Zhai
Author-X-Name-First: Shengbao
Author-X-Name-Last: Zhai
Title: IFRS convergence and international trade: evidence from China
Abstract:
Using a comprehensive dataset of firm-level export transactions from China Customs, this paper investigates whether mandatory International Financial Reporting Standards (IFRS) convergence promotes Chinese firms’ export activities. We find that compared with private firms which were not immediately required to comply with the new accounting standards in 2007, listed firms experienced a significant increase in their exports after converging with IFRS. The positive effect of IFRS convergence on exports only occurred when firms traded with IFRS countries and when they were non-state-owned enterprises. The findings are robust to a battery of sensitivity tests. We contribute to the literature on the real economic effects of IFRS harmonisation by documenting its role in enhancing international trade and global product market integration.
Journal: Accounting and Business Research
Pages: 838-864
Issue: 7
Volume: 52
Year: 2022
Month: 11
X-DOI: 10.1080/00014788.2021.1938962
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1938962
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:52:y:2022:i:7:p:838-864
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# input file: RABR_A_1958669_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Vanessa Flagmeier
Author-X-Name-First: Vanessa
Author-X-Name-Last: Flagmeier
Author-Name: Jens Müller
Author-X-Name-First: Jens
Author-X-Name-Last: Müller
Author-Name: Caren Sureth-Sloane
Author-X-Name-First: Caren
Author-X-Name-Last: Sureth-Sloane
Title: When do firms highlight their effective tax rate?
Abstract:
This study examines GAAP effective tax rate (ETR) visibility as a distinct disclosure choice in firms’ financial statements. By applying a game-theory disclosure model for the voluntary disclosure strategies of firms, in a tax setting, we argue that firms face a trade-off in their ETR disclosure decisions. On the one hand, firms have an incentive to enhance their ETR disclosure when the ratio offers shareholders ‘favourable conditions’, for example, higher expected after-tax cash flows. On the other hand, the disclosure of a favourable low ETR could attract the attention of tax auditors and the public and ultimately result in disclosure costs. We empirically test disclosure behaviour by examining the relation between disclosure visibility and different ETR conditions that reflect different stakeholder-specific costs and benefits. While we find that unfavourable ETR conditions are not highlighted, we observe higher disclosure visibility for favourable ETRs (smooth, close to the industry average, and decreasing ETRs). Additional analyses reveal that this high visibility is characteristic of firm years with only moderately decreasing ETRs at usual ETR levels, while extreme ETRs are not highlighted. Interestingly and in contrast to our main results, a subsample of family firms does not seem to highlight favourable ETRs.
Journal: Accounting and Business Research
Pages: 1-37
Issue: 1
Volume: 53
Year: 2023
Month: 01
X-DOI: 10.1080/00014788.2021.1958669
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1958669
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:1:p:1-37
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# input file: RABR_A_1952059_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Kara E. Hunter
Author-X-Name-First: Kara E.
Author-X-Name-Last: Hunter
Author-Name: Jacob M. Rose
Author-X-Name-First: Jacob M.
Author-X-Name-Last: Rose
Author-Name: Atm Tariquzzaman
Author-X-Name-First: Atm
Author-X-Name-Last: Tariquzzaman
Author-Name: Jay C. Thibodeau
Author-X-Name-First: Jay C.
Author-X-Name-Last: Thibodeau
Title: Standard precision and aggressive financial reporting: the influence of incentive horizon
Abstract:
The extant literature on precision in accounting standards suggests that financial statement preparers are less likely to make aggressive financial reporting decisions under less precise, principles-based accounting standards as compared to under more precise, rules-based accounting standards. We extend this line of research by examining how the incentive horizon of financial statement preparers influences earnings management behaviour. Consistent with prior literature, we find evidence that more precise standards lead to more income-increasing earnings management behaviour than do less precise standards when the incentive horizon is short-term in nature. However, when the incentive horizon is long-term, more precise standards are associated with financial reporting decisions that reduce current income relative to less precise standards. Importantly, the findings demonstrate that the effects of standard precision are changed by the incentive time horizon, and the effects of standard precision on financial decision makers cannot be fully understood when precision is studied without considering the timing of management incentive structures.
Journal: Accounting and Business Research
Pages: 108-126
Issue: 1
Volume: 53
Year: 2023
Month: 01
X-DOI: 10.1080/00014788.2021.1952059
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1952059
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:1:p:108-126
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# input file: RABR_A_1946382_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Christopher Koch
Author-X-Name-First: Christopher
Author-X-Name-Last: Koch
Author-Name: Vanda Rothacker
Author-X-Name-First: Vanda
Author-X-Name-Last: Rothacker
Author-Name: Mario Scharfbillig
Author-X-Name-First: Mario
Author-X-Name-Last: Scharfbillig
Title: Do local proxy advisors matter? – Evidence from Germany
Abstract:
Prior research documents that the large US-based proxy advisors, Institutional Shareholder Services (ISS) and Glass Lewis (GL), play an important role as information intermediaries in corporate governance worldwide. We provide initial evidence on the role of local proxy advisors, using the German setting. We analyse voting recommendations by local (IVOX) and foreign (ISS, GL) proxy advisors. First, we find that IVOX's voting recommendations differ substantially from those of ISS and GL. Second, we observe that IVOX's against-recommendations are significantly negatively associated with voting support. Third, we find that this association is particularly negative for voting outcomes at companies where local institutional investors hold larger stakes. Taken together, our findings suggest that the local proxy advisor IVOX considers relevant factors appreciated by local institutional investors that are distinct from factors incorporated in foreign proxy advisors’ voting recommendations.
Journal: Accounting and Business Research
Pages: 83-107
Issue: 1
Volume: 53
Year: 2023
Month: 01
X-DOI: 10.1080/00014788.2021.1946382
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1946382
File-Format: text/html
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:1:p:83-107
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# input file: RABR_A_1982670_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Christof Beuselinck
Author-X-Name-First: Christof
Author-X-Name-Last: Beuselinck
Author-Name: Ferdinand Elfers
Author-X-Name-First: Ferdinand
Author-X-Name-Last: Elfers
Author-Name: Joachim Gassen
Author-X-Name-First: Joachim
Author-X-Name-Last: Gassen
Author-Name: Jochen Pierk
Author-X-Name-First: Jochen
Author-X-Name-Last: Pierk
Title: Private firm accounting: the European reporting environment, data and research perspectives
Abstract:
This study provides a guide to accounting research on private firms with an emphasis on the European setting. We start by providing an overview of private firm financial reporting regulation in Europe and indicate how this institutional framework can be used to identify promising research settings that in part generalise beyond the European setting. Next, we discuss the availability of private firm accounting data and the underlying data generating process that involves private firms’ original reports, governmental and private data aggregators, and commercial data providers. We show how this process generates insightful data, but at the same time causes complex sample selection issues that researchers should take into account when assessing prior findings and developing new research projects. Finally, we identify potential areas of future work by reviewing the extant literature along the three main motivations for conducting private firm work: (i) to learn more about private firms per se, (ii) to learn more about what distinguishes private firms from public firms, and (iii) to obtain insights from private firms that generalise across all firms.
Journal: Accounting and Business Research
Pages: 38-82
Issue: 1
Volume: 53
Year: 2023
Month: 01
X-DOI: 10.1080/00014788.2021.1982670
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1982670
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:1:p:38-82
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# input file: RABR_A_1959292_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Iryna Alves
Author-X-Name-First: Iryna
Author-X-Name-Last: Alves
Author-Name: Sofia M. Lourenço
Author-X-Name-First: Sofia M.
Author-X-Name-Last: Lourenço
Title: Subjective performance evaluation and managerial work outcomes
Abstract:
Organisations design performance evaluation systems to obtain desired work outcomes. This study analyses how subjective performance evaluation (SPE), a specific type of performance evaluation, is related to managerial work outcomes—turnover intention, organisational identification, and performance. To this end, we consider two possible mechanisms: feedback quality and trust in the supervisor. Moreover, we also consider whether adding objective performance measures to SPE alters these relationships. Based on questionnaire responses from 751 top executives and middle managers in small and medium enterprises, we find that SPE is negatively related to feedback quality, but this effect is mitigated when SPE is used jointly with objective performance measures. SPE is not directly related to trust in the supervisor when feedback quality is also considered in the analysis because the two mechanisms are inter-related—we find a positive relationship between feedback quality and trust in the supervisor. Both mechanisms are negatively related to turnover intention, but only trust in the supervisor is positively related to organisational identification. Finally, both turnover intention and organisational identification are positively related to performance. Our findings suggest that companies using SPE can improve work outcomes by adding objective performance measures to their performance evaluation system.
Journal: Accounting and Business Research
Pages: 127-157
Issue: 2
Volume: 53
Year: 2023
Month: 02
X-DOI: 10.1080/00014788.2021.1959292
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1959292
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:2:p:127-157
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# input file: RABR_A_1946764_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: K. Hung Chan
Author-X-Name-First: K. Hung
Author-X-Name-Last: Chan
Author-Name: Kenny Z. Lin
Author-X-Name-First: Kenny Z.
Author-X-Name-Last: Lin
Author-Name: Phyllis L. L. Mo
Author-X-Name-First: Phyllis L. L.
Author-X-Name-Last: Mo
Author-Name: Pauline W. Wong
Author-X-Name-First: Pauline W.
Author-X-Name-Last: Wong
Title: Does IFRS convergence improve earnings informativeness? An analysis from the book-tax tradeoff perspective
Abstract:
Exploiting the convergence of tax-based accounting standards to the judgement-based International Financial Reporting Standards (IFRS) as an information shock, this study examines whether the decrease in book-tax conformity improves earnings informativeness in China from the book-tax tradeoff perspective. Using A-share firms which experience this drastic regulatory change as the treatment firms and B-share firms which are not subject to such change as the benchmark firms, we find a significant decrease in the earnings informativeness for A-share firms but not B-share firms, and that the decrease is most pronounced for firms with strong financial reporting incentives. Additional analyses reveal that the decreases in earnings informativeness are due to financial reporting changes rather than changes in economic conditions. Our results shed light on the importance of considering underlying institutional factors in assessing the impact of changes in financial reporting on earnings quality.
Journal: Accounting and Business Research
Pages: 158-184
Issue: 2
Volume: 53
Year: 2023
Month: 02
X-DOI: 10.1080/00014788.2021.1946764
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1946764
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:2:p:158-184
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# input file: RABR_A_1986365_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Jacobo Gomez-Conde
Author-X-Name-First: Jacobo
Author-X-Name-Last: Gomez-Conde
Author-Name: Ernesto Lopez-Valeiras
Author-X-Name-First: Ernesto
Author-X-Name-Last: Lopez-Valeiras
Author-Name: Ricardo Malagueño
Author-X-Name-First: Ricardo
Author-X-Name-Last: Malagueño
Author-Name: Raul Gonzalez-Castro
Author-X-Name-First: Raul
Author-X-Name-Last: Gonzalez-Castro
Title: Management control systems and innovation strategies in business-incubated start-ups
Abstract:
We respond to recent calls for a better understanding of the effects of management control systems (MCS) in small start-ups. Using a sample of business-incubated start-ups, we examine the performance effects of the alignment between MCS and innovation strategies. Regression analyses show higher performance when financial (non-financial) MCS are associated with an emphasis on exploratory (exploitative) innovation strategies. Overall, this study contributes to understanding the contingent effects of MCS and innovation strategies in business-incubated start-ups, as well as the consequences for their outcome and survival.
Journal: Accounting and Business Research
Pages: 210-236
Issue: 2
Volume: 53
Year: 2023
Month: 02
X-DOI: 10.1080/00014788.2021.1986365
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1986365
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# input file: RABR_A_1813448_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: The Editors
Title: Correction
Journal: Accounting and Business Research
Pages: 237-237
Issue: 2
Volume: 53
Year: 2023
Month: 2
X-DOI: 10.1080/00014788.2020.1813448
File-URL: http://hdl.handle.net/10.1080/00014788.2020.1813448
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:2:p:237-237
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# input file: RABR_A_1986366_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Hong Fan
Author-X-Name-First: Hong
Author-X-Name-Last: Fan
Author-Name: Amin Mawani
Author-X-Name-First: Amin
Author-X-Name-Last: Mawani
Author-Name: Liqiang Chen
Author-X-Name-First: Liqiang
Author-X-Name-Last: Chen
Title: The role of information asymmetry in closely-held firms’ tax and financial reporting choices
Abstract:
This study examines whether and how closely-held ownership is associated with the relationship between tax and financial reporting aggressiveness. More specifically, we find that although both closely-held and widely-held firms pursue tax savings and higher reported earnings, closely-held firms are less aggressive compared to widely-held firms in pursuing both simultaneously. We argue and find evidence that this is associated with non-controlling shareholders and controlling shareholders concerned about agency costs imposed by each on the other. Furthermore, this finding is driven mainly by firms with high information asymmetry (as proxied by firm size, analyst following and board size), suggesting that information asymmetry is a channel through which closely-held ownership is associated with firms’ tax and financial reporting choices.
Journal: Accounting and Business Research
Pages: 185-209
Issue: 2
Volume: 53
Year: 2023
Month: 02
X-DOI: 10.1080/00014788.2021.1986366
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1986366
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# input file: RABR_A_1993777_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Christian Ott
Author-X-Name-First: Christian
Author-X-Name-Last: Ott
Author-Name: Jan Endrikat
Author-X-Name-First: Jan
Author-X-Name-Last: Endrikat
Title: Exploring the association between financial and nonfinancial carbon-related incentives and carbon performance
Abstract:
Firms increasingly respond to pressures to reduce their carbon emissions by providing financial and nonfinancial carbon-related incentives that should align and extrinsically motivate individuals’ behaviour towards improved carbon performance. We explore whether and how the provision of carbon-related incentives is associated with carbon performance. We employ data on carbon-related incentives and carbon emissions that S&P 500 firms voluntarily disclose to the CDP. Correcting for sample-induced endogeneity and time-series dependencies, we find that financial carbon-related incentives are associated with superior carbon performance, while nonfinancial carbon-related incentives are not associated with carbon performance. Financial carbon-related incentives appear to extrinsically motivate managers and employees and channel their efforts towards improving carbon performance. However, nonfinancial carbon-related incentives do not appear to be effective. These differences may be explained by the fact that financial carbon-related incentives trigger different cognitive and motivational mechanisms (e.g. utility, expectancies) in individuals than nonfinancial carbon-related incentives.
Journal: Accounting and Business Research
Pages: 271-304
Issue: 3
Volume: 53
Year: 2023
Month: 04
X-DOI: 10.1080/00014788.2021.1993777
File-URL: http://hdl.handle.net/10.1080/00014788.2021.1993777
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# input file: RABR_A_2178597_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: The Editors
Title: Thank you to reviewers
Journal: Accounting and Business Research
Pages: 376-378
Issue: 3
Volume: 53
Year: 2023
Month: 4
X-DOI: 10.1080/00014788.2023.2178597
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2178597
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# input file: RABR_A_2018287_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Stephen P. Walker
Author-X-Name-First: Stephen P.
Author-X-Name-Last: Walker
Title: The pursuit of organisational authenticity in the chartered accountancy profession in Great Britain
Abstract:
In contrast to the conventional focus on recruits and members, this paper examines identity construction in professional organisations. It explores authenticity work – identification activity directed at external audiences to assert distinctiveness. The focus is on commemorative celebrations of the Institute of Chartered Accountants of Scotland (ICAS) and the Institute of Chartered Accountants in England and Wales (ICAEW) during the twentieth century. Evidence from archival and published documents demonstrates that the chartered bodies in Britain were anxious to assert their uniqueness in an increasingly congested professional field. The analysis shows that ICAS made authenticity claims based on its unique position as the first accountancy body in the modern world and emphasised its status as the originator of the institutions of the accountancy profession. The ICAEW, by contrast, initially stressed its alignment to progress and modernity and later emphasised its standing as the leading professional body located at the centre of economic and political power. It is suggested that comprehending the authenticity claims of these organisations is potentially significant to understanding the fragmentation of the chartered accountancy profession in Britain.
Journal: Accounting and Business Research
Pages: 305-334
Issue: 3
Volume: 53
Year: 2023
Month: 04
X-DOI: 10.1080/00014788.2021.2018287
File-URL: http://hdl.handle.net/10.1080/00014788.2021.2018287
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# input file: RABR_A_2012418_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Sunhwa Choi
Author-X-Name-First: Sunhwa
Author-X-Name-Last: Choi
Author-Name: Robert Kim
Author-X-Name-First: Robert
Author-X-Name-Last: Kim
Title: Does sell-side debt research have investment value?
Abstract:
This study examines whether sell-side debt research has investment value for debt investors. We find that both the levels of and changes in recommendations are associated with event-time abnormal bond returns, and that changes in recommendations (i.e. upgrades and downgrades) are associated with stronger price reactions. More importantly, we find that changes in recommendations are associated with a significant post-event bond price drift, suggesting delayed market reactions to recommendation changes. The calendar-time portfolio approach of buying (selling) bonds following upgrades (downgrades) generates significant abnormal bond returns. In addition, we present new evidence that debt analysts often provide different recommendations for bonds issued by a firm to reflect different bond-specific characteristics. Overall, our results suggest that debt analysts’ recommendations have investment value.
Journal: Accounting and Business Research
Pages: 239-270
Issue: 3
Volume: 53
Year: 2023
Month: 04
X-DOI: 10.1080/00014788.2021.2012418
File-URL: http://hdl.handle.net/10.1080/00014788.2021.2012418
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:3:p:239-270
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# input file: RABR_A_2001638_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Limei Che
Author-X-Name-First: Limei
Author-X-Name-Last: Che
Author-Name: Emma-Riikka Myllymäki
Author-X-Name-First: Emma-Riikka
Author-X-Name-Last: Myllymäki
Author-Name: Tobias Svanström
Author-X-Name-First: Tobias
Author-X-Name-Last: Svanström
Title: Auditors’ self-assessment of engagement quality and the role of stakeholder priority
Abstract:
This study investigates auditors’ assessment of the quality of their own audit engagements, utilising survey data gathered from a Big Four audit firm in Sweden. We first examine to what extent auditors’ self-reported audit quality threatening behaviours (AQTBs) in the audit process are reflected in their assessment of overall audit quality (OAQ). The results indicate that AQTBs overall and all individual AQTBs are associated with quality assessment, though with variations in their significances. Second, we examine whether AQTBs and OAQ are associated with an auditor’s stakeholder priority, i.e. which stakeholder the auditor considers as her highest priority in the audit work. We find that auditors who consider the employer as the highest priority report more AQTBs. However, priorities are not related to OAQ. Furthermore, auditors prioritising the client or employer tend to assess the overall audit quality as being higher than what the AQTBs would suggest (i.e. they over-assess the quality). Interestingly, the findings regarding priorities are only evident among partners. In sum, the findings of this study provide important insights on how auditors themselves assess their audit quality, and on the role of auditors’ stakeholder priorities.
Journal: Accounting and Business Research
Pages: 335-375
Issue: 3
Volume: 53
Year: 2023
Month: 04
X-DOI: 10.1080/00014788.2021.2001638
File-URL: http://hdl.handle.net/10.1080/00014788.2021.2001638
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# input file: RABR_A_2021502_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Katrin Weiskirchner-Merten
Author-X-Name-First: Katrin
Author-X-Name-Last: Weiskirchner-Merten
Title: Capital budgeting and managerial empire building
Abstract:
I examine how a company's headquarters use an empire-building manager's report about decision-relevant private information to make capital budgeting decisions and compensate the manager. To this end, I construct a model comprising the headquarters (principal) and the manager (agent), who reports on the investment project's expected profitability. I identify the optimal investment sizes and compensation payments, where the headquarters trade off managerial information rents – arising from empire-building benefits inducing the manager to favour overinvestment – for investment efficiency. The headquarters counteract the manager's desire for overinvestment with investment distortions in the form of underinvestment (or overinvestment) for a high (or low) expected profitability. Due to these distortions, the expected compensation is not monotone in the level of empire-building benefits. Unlike previous capital budgeting studies, in this study, I show that managerial empire-building benefits can multi-directionally affect companies' optimal capital budgeting decisions and related compensation schemes.
Journal: Accounting and Business Research
Pages: 416-438
Issue: 4
Volume: 53
Year: 2023
Month: 06
X-DOI: 10.1080/00014788.2021.2021502
File-URL: http://hdl.handle.net/10.1080/00014788.2021.2021502
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# input file: RABR_A_2030668_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Charlie X. Cai
Author-X-Name-First: Charlie X.
Author-X-Name-Last: Cai
Author-Name: Fei Teng
Author-X-Name-First: Fei
Author-X-Name-Last: Teng
Author-Name: Xue Xia
Author-X-Name-First: Xue
Author-X-Name-Last: Xia
Author-Name: Yu Xin
Author-X-Name-First: Yu
Author-X-Name-Last: Xin
Title: The determinants and value-relevance of voluntary disclosure of supply chain information
Abstract:
We use the voluntary nature of supply chain information disclosure in China’s stock market, including both major customers and suppliers information, to study the determinants and value relevance of proprietary information voluntary disclosure. Consistent with information asymmetry concern, disclosure is more likely when firms are seeking external finance or operating with a more concentrated supply chain where the needs of reducing information asymmetry are higher. Supply chain disclosure is found to be associated with a lower firm valuation on average. Good corporate governance reduces such voluntary disclosure, further confirming protecting proprietary information is one of the key considerations of non-disclosure. The disclosure of supplier identity is less value relevant than customer identity.
Journal: Accounting and Business Research
Pages: 439-477
Issue: 4
Volume: 53
Year: 2023
Month: 06
X-DOI: 10.1080/00014788.2022.2030668
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2030668
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:4:p:439-477
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# input file: RABR_A_2045893_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Xiaoxi Li
Author-X-Name-First: Xiaoxi
Author-X-Name-Last: Li
Author-Name: Chee Yeow Lim
Author-X-Name-First: Chee Yeow
Author-X-Name-Last: Lim
Author-Name: Yanping Xu
Author-X-Name-First: Yanping
Author-X-Name-Last: Xu
Title: The minimum wage and corporate tax avoidance
Abstract:
This paper investigates the impact of the minimum wage (MW) on corporate tax avoidance. By exploiting heterogeneity in the MW level across cities and over time in China, we find that increases in the MW are associated with greater tax avoidance by firms. Our results are robust to the consideration of a sample of contiguous firms in two adjacent cities subject to different MWs, and a difference-in-differences research design that exploits the enactment of the Labor Contract Law in 2008 as an exogenous shock to the MW. In cross-sectional analyses, we find that the positive impact of MWs on tax avoidance is more pronounced for firms with higher labour intensity, greater financial constraints, and less product market power and in regions with laxer enforcement. Our paper suggests that the MW policy imposes substantial, albeit likely unintended, externalities on corporate tax. Our findings can help inform policymakers of more potential implications of MW policies.
Journal: Accounting and Business Research
Pages: 379-415
Issue: 4
Volume: 53
Year: 2023
Month: 06
X-DOI: 10.1080/00014788.2022.2045893
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2045893
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# input file: RABR_A_2056119_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Mahmoud Gad
Author-X-Name-First: Mahmoud
Author-X-Name-Last: Gad
Author-Name: Trang Nguyen
Author-X-Name-First: Trang
Author-X-Name-Last: Nguyen
Author-Name: Mariano Scapin
Author-X-Name-First: Mariano
Author-X-Name-Last: Scapin
Title: The effect of pay disparities within top management on conservative reporting
Abstract:
We study the effect of the pay gap between the chief executive officer (CEO) and the next layer of executives in the top management team (TMT)—a proxy for promotion-based tournament incentives—on conditional conservatism in financial reporting. We find that higher levels of tournament incentives are associated with less conservative financial reports. Our results hold in an instrumental variable (IV) analysis and regressions using alternative measures of both pay gap and accounting conservatism. Furthermore, we find that senior executives’ engagement in tournaments for promotion is affected by their perceived probability of success. Specifically, the negative relationship between the pay gap and conservatism is stronger (weaker) when the CEO is more (less) likely to be replaced. Overall, our results indicate that pay disparities within the TMT play an important role in financial reporting.
Journal: Accounting and Business Research
Pages: 478-504
Issue: 4
Volume: 53
Year: 2023
Month: 06
X-DOI: 10.1080/00014788.2022.2056119
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2056119
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# input file: RABR_A_2219157_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Roslyn Gamsa
Author-X-Name-First: Roslyn
Author-X-Name-Last: Gamsa
Title: ‘Access to finance: adaptability and resilience during a global pandemic’ A practitioner view
Journal: Accounting and Business Research
Pages: 580-582
Issue: 5
Volume: 53
Year: 2023
Month: 07
X-DOI: 10.1080/00014788.2023.2219157
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2219157
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# input file: RABR_A_2219151_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Stephen Daly
Author-X-Name-First: Stephen
Author-X-Name-Last: Daly
Title: Tax systems: adaptability and resilience during a global pandemic
Abstract:
The tax system is traditionally understood as being geared primarily, but not exclusively, towards the raising of revenues. Taxes perform distributive and regulatory roles for instance. Furthermore, the tax system can also be engaged for the purpose of providing stability in times of uncertainty and for providing key information to government so that its policies (whether economic, social, health, environmental and so on) can be pursued. With its multivarious capabilities, it would be of little surprise to learn that governments turned to the tax system during the COVID-19 pandemic in order to alleviate the economic consequences of the emergency. The paper sets out to investigate the ways the tax system was used in response to the pandemic. It narrows in on two key findings: that the tax system was instrumental in providing stability and also in providing salient information for government use. A picture of the tax system as being adaptable and resilient is painted. But the key findings of the paper are not made without reservation.
Journal: Accounting and Business Research
Pages: 541-560
Issue: 5
Volume: 53
Year: 2023
Month: 07
X-DOI: 10.1080/00014788.2023.2219151
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2219151
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# input file: RABR_A_2219149_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Catherine Burnet
Author-X-Name-First: Catherine
Author-X-Name-Last: Burnet
Title: ‘Accounting for resilience: the role of the accounting professions in promoting resilience' A practitioner view
Journal: Accounting and Business Research
Pages: 537-540
Issue: 5
Volume: 53
Year: 2023
Month: 07
X-DOI: 10.1080/00014788.2023.2219149
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2219149
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# input file: RABR_A_2219148_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Layla Branicki
Author-X-Name-First: Layla
Author-X-Name-Last: Branicki
Author-Name: Stephen Brammer
Author-X-Name-First: Stephen
Author-X-Name-Last: Brammer
Author-Name: Martina Linnenluecke
Author-X-Name-First: Martina
Author-X-Name-Last: Linnenluecke
Author-Name: David Houghton
Author-X-Name-First: David
Author-X-Name-Last: Houghton
Title: Accounting for resilience: the role of the accounting professions in promoting resilience
Abstract:
The rising incidence, variety and severity of extreme events that threaten both business and society has increased interest in promoting resilience to such threats. However, relatively little research has explored the potential contributions of the accounting profession to resilience at multiple scales and levels of analysis. To address the need for additional research, in this study we explore the contributions of the accounting profession to resilience during COVID-19. Drawing on a unique database of over 26,000 social media posts by the two principal professional accounting bodies in the UK context (ICAEW, ACCA) and UK-based accounts of the ‘Big 4’ professional services firms (PwC, Deloitte, EY, and KPMG), as well as user-engagement with those posts, we highlight processes by which the accounting profession encouraged resilience among individuals, organisations, and wider society. Our findings illuminate how the accounting profession contributed to resilience by supporting more effective crisis responses (by sharing trusted advice and shaping policy responses), better crisis adaptation (by crafting post-crisis futures and empowering the profession), and improved future crisis anticipation (by challenging complacency and being good citizens). We build on our analysis to propose a new framework characterising pathways for professions contributing to resilience.
Journal: Accounting and Business Research
Pages: 508-536
Issue: 5
Volume: 53
Year: 2023
Month: 07
X-DOI: 10.1080/00014788.2023.2219148
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2219148
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# input file: RABR_A_2219159_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Tristan Price
Author-X-Name-First: Tristan
Author-X-Name-Last: Price
Title: ‘The Covid-19 pandemic and management controls’ A practitioner view
Journal: Accounting and Business Research
Pages: 608-610
Issue: 5
Volume: 53
Year: 2023
Month: 07
X-DOI: 10.1080/00014788.2023.2219159
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2219159
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# input file: RABR_A_2219152_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Caroline Miskin
Author-X-Name-First: Caroline
Author-X-Name-Last: Miskin
Title: ‘Tax systems: adaptability and resilience during a global pandemic’ A practitioner view
Journal: Accounting and Business Research
Pages: 561-564
Issue: 5
Volume: 53
Year: 2023
Month: 07
X-DOI: 10.1080/00014788.2023.2219152
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2219152
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# input file: RABR_A_2219153_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Thorsten Beck
Author-X-Name-First: Thorsten
Author-X-Name-Last: Beck
Title: Access to finance: adaptability and resilience during a global pandemic
Abstract:
Firms’ access to external finance is constrained by information asymmetries between lenders and borrowers, which are inversely related to firm size and economic growth. Pandemic and lockdown measures constituted an extraordinary shock for corporations, including for their funding, mitigated, however, by governments’ fiscal, monetary and regulatory responses. The combined effect of these measures created a virtuous circle between corporates, banks, and sovereigns, avoiding a funding crunch for either and keeping risk premiums at deflated levels. Some of the more recent shocks provide similar justification for government interventions. However, there is a trade-off between government support during tail events and the market distortions that come with such support programmes. The conjecture is that we will continue to see a stronger role for governments during this time of great volatility and a tightening on market-based funding for corporations.
Journal: Accounting and Business Research
Pages: 565-579
Issue: 5
Volume: 53
Year: 2023
Month: 07
X-DOI: 10.1080/00014788.2023.2219153
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2219153
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# input file: RABR_A_2219158_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Hoa Ho
Author-X-Name-First: Hoa
Author-X-Name-Last: Ho
Author-Name: Christian Hofmann
Author-X-Name-First: Christian
Author-X-Name-Last: Hofmann
Author-Name: Nina Schwaiger
Author-X-Name-First: Nina
Author-X-Name-Last: Schwaiger
Title: The Covid-19 pandemic and management controls
Abstract:
We examine how firms respond to the Covid-19 pandemic by adjusting their management controls and what the consequences are in terms of firms’ resilience to the crisis. We review literature that deals with the influence of the Covid-19 pandemic on business and investigate results from a survey conducted within a large international multi-divisional service firm and the German Business Panel. We find evidence consistent with the claim that the Covid-19 pandemic is associated with a shock to transparency and increased incentive problems. We document firms’ adjustments of their management controls in response to the Covid-19 crisis: Action controls are stronger, result controls are more flexible, and cultural controls are weaker. Regarding firms’ resilience, we provide supportive evidence that more resilient firms face a smaller shock to transparency, adjust their management controls to a smaller extent, and are associated with stronger cultural controls in terms of higher organisational trust.
Journal: Accounting and Business Research
Pages: 583-607
Issue: 5
Volume: 53
Year: 2023
Month: 07
X-DOI: 10.1080/00014788.2023.2219158
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2219158
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:5:p:583-607
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# input file: RABR_A_2219146_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Robert Hodgkinson
Author-X-Name-First: Robert
Author-X-Name-Last: Hodgkinson
Title: Introduction
Journal: Accounting and Business Research
Pages: 505-507
Issue: 5
Volume: 53
Year: 2023
Month: 07
X-DOI: 10.1080/00014788.2023.2219146
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2219146
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# input file: RABR_A_2062585_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Christian Brück
Author-X-Name-First: Christian
Author-X-Name-Last: Brück
Author-Name: Thorsten Knauer
Author-X-Name-First: Thorsten
Author-X-Name-Last: Knauer
Author-Name: Anja Schwering
Author-X-Name-First: Anja
Author-X-Name-Last: Schwering
Title: Disclosure of value-based performance measures: evidence from German listed firms
Abstract:
We examine the determinants of the disclosure of value-based (VB) performance measures in Germany. We argue that firms are more likely to disclose VB performance measures when information asymmetry is greater, as greater information asymmetry means firms have a greater need to credibly signal a shareholder value orientation. Using a hand-collected dataset of German listed firms covering 1,528 firm-years from 2004 to 2011, we demonstrate that firms are more likely to disclose a VB performance measure if the free float is larger than the blocking minority and also, when firms are large, if they have high foreign sales to total sales ratios and are not cross-listed internationally. Our results indicate that German firms use VB performance measures to improve investor communication and to substantiate their shareholder value orientation. Our results should be interpreted against a background of increased shareholder value orientation and sophisticated cost accounting in German firms.
Journal: Accounting and Business Research
Pages: 671-698
Issue: 6
Volume: 53
Year: 2023
Month: 09
X-DOI: 10.1080/00014788.2022.2062585
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2062585
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# input file: RABR_A_2050172_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Adam J. Greiner
Author-X-Name-First: Adam J.
Author-X-Name-Last: Greiner
Author-Name: Mark J. Kohlbeck
Author-X-Name-First: Mark J.
Author-X-Name-Last: Kohlbeck
Author-Name: Thomas J. Smith
Author-X-Name-First: Thomas J.
Author-X-Name-Last: Smith
Title: Auditor pricing of abnormal income from sales of available for sale securities: evidence from the banking industry
Abstract:
We examine the relationship between abnormal income from sales of available for sale (AFS) securities and bank external auditor fees. Prior research finds that income from sales of AFS securities is used to achieve financial and regulatory reporting objectives, helpful in predicting future bank income, and assigned a persistent valuation multiple by investors. Building on prior research that suggests real activities management leads to negative outcomes, we predict and find that auditors respond to abnormal income from AFS securities sales with increases in audit fees and the effect is stronger among high risk (i.e. higher stock return and earnings volatility) banks relative to low risk banks. In additional analyses concerning a bank’s limited flexibility to achieve regulatory capital objectives through managing loan loss provisions, we find evidence of higher audit fees for banks with low regulatory capital and aggressive income-increasing AFS security sales. Among other robustness tests, we find higher audit fees as abnormal income from sales of AFS securities increases among banks with liquidity concerns and those approaching failure. Our findings suggest that auditors interpret abnormal income from AFS securities sales as an indicator of increased client business risk.
Journal: Accounting and Business Research
Pages: 611-645
Issue: 6
Volume: 53
Year: 2023
Month: 09
X-DOI: 10.1080/00014788.2022.2050172
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2050172
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# input file: RABR_A_2052006_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jie Sun
Author-X-Name-First: Jie
Author-X-Name-Last: Sun
Author-Name: Fangyuan Yin
Author-X-Name-First: Fangyuan
Author-X-Name-Last: Yin
Author-Name: Edward Altman
Author-X-Name-First: Edward
Author-X-Name-Last: Altman
Author-Name: Lewis Makosa
Author-X-Name-First: Lewis
Author-X-Name-Last: Makosa
Title: Effects of corporate financial distress on peer firms: do intra-industry non-distressed firms become more conditionally conservative?
Abstract:
We study whether public announcements (through delisting warnings) of financial distress of some firms in an industry affect the conditional accounting conservatism of intra-industry non-distressed firms. We hypothesize that the lenders of non-distressed firms perceive higher riskiness and demand for stricter debt covenants and more efficient monitoring of debt contracts when some firms show signals of financial distress in that industry. Intra-industry non-distressed firms increase their levels of conditional conservatism to meet the lenders’ demands for stricter monitoring of debt contracts and to reduce debt costs. Using the delisting warning data from the Chinese stock exchanges, we find that financial distress announcements lead to increases in conditional conservatism of non-distressed firms in that industry. We provide new evidence for the spillover effects of financial distress within an industry and the usefulness of conditional conservatism in debt contracts.
Journal: Accounting and Business Research
Pages: 646-670
Issue: 6
Volume: 53
Year: 2023
Month: 09
X-DOI: 10.1080/00014788.2022.2052006
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2052006
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:6:p:646-670
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# input file: RABR_A_2063104_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Ning Du
Author-X-Name-First: Ning
Author-X-Name-Last: Du
Author-Name: Alessandra Allini
Author-X-Name-First: Alessandra
Author-X-Name-Last: Allini
Author-Name: Marco Maffei
Author-X-Name-First: Marco
Author-X-Name-Last: Maffei
Title: How do bank managers forecast the future in the shadow of the past? An examination of expected credit losses under IFRS 9
Abstract:
One of the most significant changes under IFRS 9 is the shift to considering and incorporating forward-looking information to forecast expected credit losses (ECL). This study aims to understand how bank managers incorporate forward-looking information, such as future economic projections, in assessing significant credit risk deterioration, and how bank managers evaluate the reasonableness of different forecast horizons in order to project lifetime ECL. We conducted an experiment with 72 bank managers. Our results reveal that bank managers are reluctant to incorporate good news when historical information indicates a high default risk and potentially large credit loss, and that their ECL estimates are influenced by the upward or downward shift in the forecasted losses. We view these results as consistent with the unconditional conservatism of the new ECL model.
Journal: Accounting and Business Research
Pages: 699-722
Issue: 6
Volume: 53
Year: 2023
Month: 09
X-DOI: 10.1080/00014788.2022.2063104
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2063104
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:6:p:699-722
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# input file: RABR_A_2049193_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Hongkang Xu
Author-X-Name-First: Hongkang
Author-X-Name-Last: Xu
Author-Name: Mai Dao
Author-X-Name-First: Mai
Author-X-Name-Last: Dao
Author-Name: Hua Sun
Author-X-Name-First: Hua
Author-X-Name-Last: Sun
Title: Accounting firms’ employee satisfaction and audit fees
Abstract:
In this study, we examine whether audit fees are associated with job satisfaction among accounting firms’ employees. We use novel data obtained from social media site Glassdoor.com and find negative associations between audit fees and accounting firms’ job satisfaction. Our results are robust to alternative measures of employee satisfaction and correct for potential endogeneity problems using 2SLS regression models with instrumental variables (IVs), audit office fixed effects, and changes analysis. Our additional analysis reveals that compared to former employees’ ratings, current employees’ ratings play a more important role in determining the pricing of audit services. Moreover, audit fees are higher for firms audited by accounting firms with greater employee satisfaction and providing more nonaudit services. We further find that employee satisfaction at any audit level is associated with lower audit fees. Our study extends the extant literature on employee satisfaction and provides useful information for accounting firms regarding the importance of employee satisfaction to audit fees.
Journal: Accounting and Business Research
Pages: 821-852
Issue: 7
Volume: 53
Year: 2023
Month: 11
X-DOI: 10.1080/00014788.2022.2049193
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2049193
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# input file: RABR_A_2063105_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Ting Dong
Author-X-Name-First: Ting
Author-X-Name-Last: Dong
Author-Name: Milda Tylaite
Author-X-Name-First: Milda
Author-X-Name-Last: Tylaite
Author-Name: Ryan Wilson
Author-X-Name-First: Ryan
Author-X-Name-Last: Wilson
Title: Voluntary vs. mandatory: the role of auditing in constraining corporate tax avoidance in small private firms
Abstract:
This paper examines whether the status of the financial statement audit, as either voluntary or mandatory, is related to the corporate tax avoidance behaviour of private firms. Using the Swedish audit regime shift in 2010 which removed mandatory audit requirements for small private companies, we find that voluntarily audited firms exhibit a 19% decrease in total income tax burden relative to firms subject to mandatory audit following the regulatory change. This decrease corresponds to an average SEK 15,000 (approximately 1,500 euros) lower tax payment and is driven primarily by increasing conforming tax avoidance. We also find that increasing tax avoidance in voluntarily audited firms occurs, at least partly, due to impaired auditor independence under the voluntary audit regime. Finally, we show that the non-tax costs of tax avoidance restrict these tax-driven reporting changes. Our findings contribute to the literature on auditors’ constraining effect on corporate tax avoidance as well as to the debate over the costs and benefits of a mandatory financial statement audit regime.
Journal: Accounting and Business Research
Pages: 723-755
Issue: 7
Volume: 53
Year: 2023
Month: 11
X-DOI: 10.1080/00014788.2022.2063105
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2063105
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# input file: RABR_A_2073543_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jesper Banghøy
Author-X-Name-First: Jesper
Author-X-Name-Last: Banghøy
Author-Name: Jan Marton
Author-X-Name-First: Jan
Author-X-Name-Last: Marton
Author-Name: Thomas Plenborg
Author-X-Name-First: Thomas
Author-X-Name-Last: Plenborg
Author-Name: Emmeli Runesson
Author-X-Name-First: Emmeli
Author-X-Name-Last: Runesson
Title: Revisiting pay-performance sensitivity around IFRS adoption in Europe: the dominant role of Germany
Abstract:
In this study, we investigate the effect of IFRS adoption on pay-performance sensitivity (PPS) in the European Economic Area (EEA) and show that the documented positive effect is driven by one country: Germany. In pooled country tests, we explore the effect of individual institutional attributes and find that differences between IFRS and local GAAP, as well as proxies for different types of enforcement, moderate the IFRS effect. However, these findings are contingent on including Germany in the sample. This raises the possibility that the studied institutional attributes proxy for Germany, and that it is the unique combination of institutional attributes in Germany that explains the increase in PPS at the time of IFRS adoption. Our findings suggest that researchers should be careful when generalising results from multi-country studies or attributing the IFRS effects to individual institutional variables.
Journal: Accounting and Business Research
Pages: 790-820
Issue: 7
Volume: 53
Year: 2023
Month: 11
X-DOI: 10.1080/00014788.2022.2073543
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2073543
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Handle: RePEc:taf:acctbr:v:53:y:2023:i:7:p:790-820
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# input file: RABR_A_2106175_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Khalid Mehmood
Author-X-Name-First: Khalid
Author-X-Name-Last: Mehmood
Author-Name: Hongbin Tan
Author-X-Name-First: Hongbin
Author-X-Name-Last: Tan
Author-Name: Xuedan Tao
Author-X-Name-First: Xuedan
Author-X-Name-Last: Tao
Author-Name: Huabing (Barbara) Wang
Author-X-Name-First: Huabing (Barbara)
Author-X-Name-Last: Wang
Title: Does mandatory disclosure of firm’s tax avoidance position affect corporate investment efficiency?
Abstract:
This paper examines the effect of a firm’s tax avoidance position disclosure on corporate investment efficiency by utilising an exogenous shock to corporate tax reporting that mandates firms to disclose uncertain tax positions in their financial statements under Financial Interpretation No. 48 (FIN 48). We find that, after FIN 48, firms claiming uncertain tax benefits (i.e. affected firms) experience a significant decrease in investment efficiency relative to firms that do not have uncertain tax positions (i.e. non-affected firms). Our finding suggests that, despite promoting transparency, FIN 48 imposes an unfavourable information revelation effect that reduces investment efficiency for affected firms. In terms of the mechanism, we provide evidence that affected firms experience a larger increase (drop) in cost of capital (external financing) following FIN 48 and rule out an alternative explanation that the decreased investment efficiency may arise from internal liquidity constraints. In cross-sectional analyses, we find the adverse effect to be more pronounced for firms with higher disclosure quality, higher tax uncertainty, and more severe financial constraints. These findings provide insight into the debate on why firms sometimes forgo tax avoidance opportunities by pointing out a potential cost of tax avoidance.
Journal: Accounting and Business Research
Pages: 756-789
Issue: 7
Volume: 53
Year: 2023
Month: 11
X-DOI: 10.1080/00014788.2022.2106175
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2106175
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# input file: RABR_A_2149456_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Le Zhao
Author-X-Name-First: Le
Author-X-Name-Last: Zhao
Title: Corporate philanthropy as a response to greater tax enforcement
Abstract:
I examine whether firms engage in more corporate philanthropy in response to greater tax enforcement. Using the introduction of a new tax administration system as a proxy for increased tax enforcement, I find stricter tax enforcement results in more corporate donations, especially for tax aggressive firms. These results are concentrated in firms that have a greater demand for political connections or firms that have higher potential reputational costs. In summary, this study suggests that firms strategically use corporate philanthropy to respond to increased tax enforcement.
Journal: Accounting and Business Research
Pages: 33-54
Issue: 1
Volume: 54
Year: 2024
Month: 01
X-DOI: 10.1080/00014788.2022.2149456
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2149456
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# input file: RABR_A_2181752_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Yumin Karen Zhang Perry
Author-X-Name-First: Yumin Karen Zhang
Author-X-Name-Last: Perry
Author-Name: Christofer Adrian
Author-X-Name-First: Christofer
Author-X-Name-Last: Adrian
Author-Name: Fang Hu
Author-X-Name-First: Fang
Author-X-Name-Last: Hu
Author-Name: Cameron Truong
Author-X-Name-First: Cameron
Author-X-Name-Last: Truong
Title: Natural disasters and audit fees
Abstract:
This paper investigates the impact of natural disasters on the pricing of audit services. Using a staggered difference-in-differences (DiD) design and a sample of 1481 firm-year observations over the period 2014–2019 in China, we find that firms headquartered in areas affected by natural disasters are charged lower fees by auditors. This fee discount is not likely to be driven by a decrease in audit efforts exerted by auditors. We document that the negative relation between natural disasters and audit fees is more pronounced among (i) client firms that are audited by top domestic audit firms, (ii) client firms that are economically and politically important to auditors, and (iii) larger and more complex client firms.
Journal: Accounting and Business Research
Pages: 55-86
Issue: 1
Volume: 54
Year: 2024
Month: 01
X-DOI: 10.1080/00014788.2023.2181752
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2181752
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# input file: RABR_A_2282208_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Mark Clatworthy
Author-X-Name-First: Mark
Author-X-Name-Last: Clatworthy
Author-Name: Juan Manuel Garcia Lara
Author-X-Name-First: Juan Manuel
Author-X-Name-Last: Garcia Lara
Author-Name: Edward Lee
Author-X-Name-First: Edward
Author-X-Name-Last: Lee
Title: Accounting and Business Research – ESG themed issue
Journal: Accounting and Business Research
Pages: 1-2
Issue: 1
Volume: 54
Year: 2024
Month: 01
X-DOI: 10.1080/00014788.2024.2282208
File-URL: http://hdl.handle.net/10.1080/00014788.2024.2282208
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# input file: RABR_A_2071199_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Katrin Hummel
Author-X-Name-First: Katrin
Author-X-Name-Last: Hummel
Author-Name: Stéphanie Mittelbach-Hörmanseder
Author-X-Name-First: Stéphanie
Author-X-Name-Last: Mittelbach-Hörmanseder
Author-Name: Charles H. Cho
Author-X-Name-First: Charles H.
Author-X-Name-Last: Cho
Author-Name: Dirk Matten
Author-X-Name-First: Dirk
Author-X-Name-Last: Matten
Title: Corporate social responsibility disclosure: a topic-based approach
Abstract:
In this study, we investigate the potential differences in topic-specific corporate social responsibility (CSR) disclosure between companies located in liberal market economies (LMEs) and coordinated market economies (CMEs). We also examine the potential convergence of the reporting practices that characterise these two economies over time. We analyse a sample of 5,939 CSR reports issued by European and U.S. firms over 2008–2019. We use textual analysis to examine how explicitly such reports address specific CSR topics. Following Matten and Moon (2008), we focus on three thematic areas: ‘human resources’, ‘environmental protection’, and ‘society at large’. Each area comprises three distinct topics. Our results show that companies operating in LMEs report more explicitly on these thematic areas, with one exception: those operating in CMEs report more explicitly on parental policies. Additionally, the reporting practices of companies operating in these two types of economies converge for most of the topics under study. For the disclosure of parental leave policies, biodiversity, and waste, no distinct trend is observable.
Journal: Accounting and Business Research
Pages: 87-124
Issue: 1
Volume: 54
Year: 2024
Month: 01
X-DOI: 10.1080/00014788.2022.2071199
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2071199
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# input file: RABR_A_2241135_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Karen De Meyst
Author-X-Name-First: Karen
Author-X-Name-Last: De Meyst
Author-Name: Eddy Cardinaels
Author-X-Name-First: Eddy
Author-X-Name-Last: Cardinaels
Author-Name: Alexandra Van Den Abbeele
Author-X-Name-First: Alexandra
Author-X-Name-Last: Van Den Abbeele
Title: Reducing partner risk: the effect of feedback timing and incentives
Abstract:
Firms’ partners often face a wide range of risks and may experience detrimental effects when these firms do not meet certain targets. In this study, we examine how timing of feedback about target outcomes and the presence of incentives for managers to meet these targets influence managers’ effort and their partners’ willingness to collaborate. We test our hypotheses in a representative ESG setting using a multi-period investment game with a 2 × 2 design where a collaborating partner only realises a return on her investment if the manager of the firm with whom she contracts meets an ESG norm. The risk of not meeting this norm decreases when managers provide costly effort. While results show no significant effect of feedback timing on managers’ effort in the absence of incentives, providing incentives to the manager may be detrimental for effort provision when target outcomes become available after a short time period. We also find that in the absence of incentives, firms’ partners invest more when outcomes become available after a short time period than after a longer time period. Further, when outcomes become available after a short time period, partners invest less when managers receive incentives compared to when managers receive no incentives.
Journal: Accounting and Business Research
Pages: 3-32
Issue: 1
Volume: 54
Year: 2024
Month: 01
X-DOI: 10.1080/00014788.2023.2241135
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2241135
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# input file: RABR_A_2106542_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Justin Chircop
Author-X-Name-First: Justin
Author-X-Name-Last: Chircop
Author-Name: Jacqueline Gagnon
Author-X-Name-First: Jacqueline
Author-X-Name-Last: Gagnon
Author-Name: Steven Young
Author-X-Name-First: Steven
Author-X-Name-Last: Young
Title: Capital market response to high quality annual reporting: evidence from UK annual report awards
Abstract:
We examine the capital market response to the publication of annual reports shortlisted for corporate reporting awards. We find weaker capital market reactions to the publication of shortlisted annual reports compared with a matched sample of non-shortlisted annual reports, consistent with shortlisted reports containing similar or less price sensitive information relative to non-shortlisted reports. Further analysis shows that firms publishing shortlisted reports are more likely to release information to investors in a timelier manner throughout the financial year. We complement our archival empirical analysis with interview evidence from FTSE350 executives and consultants to shed light on the motives for investing in high-quality annual reports. Collectively, our results support the view that high quality annual reporting reflects superior firm-level investor communication processes and that the broader corporate reporting cycle shapes the information role of firm reporting.
Journal: Accounting and Business Research
Pages: 125-167
Issue: 2
Volume: 54
Year: 2024
Month: 02
X-DOI: 10.1080/00014788.2022.2106542
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2106542
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# input file: RABR_A_2116384_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Keval Amin
Author-X-Name-First: Keval
Author-X-Name-Last: Amin
Author-Name: Cecilia (Qian) Feng
Author-X-Name-First: Cecilia (Qian)
Author-X-Name-Last: Feng
Author-Name: Peng Guo
Author-X-Name-First: Peng
Author-X-Name-Last: Guo
Author-Name: Hong You
Author-X-Name-First: Hong
Author-X-Name-Last: You
Title: CEO Facial masculinity and accounting conservatism
Abstract:
In this study, we examine the consequences of CEO facial masculinity for accounting conservatism. Facial masculinity is associated with an array of masculine behaviours including aggression, ambition, egocentricity, risk taking, and an increased desire to maintain social status. We predict that such behaviours lead to aggressive financial reporting practices that incorporate bad news into earnings in a less timely manner (i.e. lower conditional conservatism). Using a sample of S&P 1500 firms from 1993 to 2015, we find that CEOs’ facial masculinity is associated with less conservative accounting. This finding is robust to the use of several measures of conservatism. Further, we document that stronger external monitoring dampens the negative relationship between CEO facial masculinity and conservatism. Our findings complement recent work that reveals CEO facial masculinity is positively associated with fraud and AAERs, and contributes to the literature by documenting the effect of an ‘off the job’ CEO characteristic on accounting conservatism.
Journal: Accounting and Business Research
Pages: 224-254
Issue: 2
Volume: 54
Year: 2024
Month: 02
X-DOI: 10.1080/00014788.2022.2116384
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2116384
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Handle: RePEc:taf:acctbr:v:54:y:2024:i:2:p:224-254
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# input file: RABR_A_2113757_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Tsung-Kang Chen
Author-X-Name-First: Tsung-Kang
Author-X-Name-Last: Chen
Author-Name: Yijie Tseng
Author-X-Name-First: Yijie
Author-X-Name-Last: Tseng
Author-Name: Ruey-Ching Lin
Author-X-Name-First: Ruey-Ching
Author-X-Name-Last: Lin
Title: Pension plans’ funded status volatility and corporate credit risk
Abstract:
We investigate whether and how U.S. pension plans’ funded status volatility affects firm credit risk. We first show that a firm's funded status volatility is positively related to its bond yield spread. We then find that the adoption of SFAS No.158 (2006) requiring the recognition of pension funding status on the statement of financial position renders the pension plan information more value-relevant, thereby increasing the effect of funded status volatility on bond yield spread. Furthermore, the predictions that funded status volatility affects asset value volatility and incomplete accounting information, which in turn affects corporate credit risk, are empirically supported. Our findings reinforce the need for firms to disclose reliable information about funded status volatility—a major pension plan risk—to external investors.
Journal: Accounting and Business Research
Pages: 190-223
Issue: 2
Volume: 54
Year: 2024
Month: 02
X-DOI: 10.1080/00014788.2022.2113757
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2113757
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Handle: RePEc:taf:acctbr:v:54:y:2024:i:2:p:190-223
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# input file: RABR_A_2112549_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Chun Keung (Stan) Hoi
Author-X-Name-First: Chun Keung (Stan)
Author-X-Name-Last: Hoi
Author-Name: Yun Ke
Author-X-Name-First: Yun
Author-X-Name-Last: Ke
Author-Name: Qiang Wu
Author-X-Name-First: Qiang
Author-X-Name-Last: Wu
Author-Name: Hao Zhang
Author-X-Name-First: Hao
Author-X-Name-Last: Zhang
Title: Does public scrutiny on corporate tax decisions affect directors? Effects of responsible (irresponsible) corporate tax practices on director reputation
Abstract:
In 2004, the Citizens of Tax Justice (CTJ) released a report that significantly raised public awareness of corporate tax avoidance practices in the companies that it scrutinised in the study. Using a six-year period straddling the CTJ event, we compare over time changes in external board seats held by incumbent directors serving scrutinised firms against those of their counterparts serving control firms with comparable tax practices but that were not scrutinised in the CTJ study. Incumbent directors in scrutinised firms with minimal tax avoidance practices gained more external board seats after the CTJ event than did board members in control firms. However, directors in scrutinised firms with aggressive tax avoidance practices neither gained nor lost more external board seats after the CTJ event than did directors in control firms. These findings provide little evidence that constituents in the corporate sector overwhelmingly favour tax minimisation practices as acceptable practices of conducting business operations. Rather, they provide evidence that corporate constituents, like their social peers, are somewhat attuned to the expectation for socially responsible tax practices. Lastly, we find that directors in scruitised firms with minimal tax avoidance practices are more likely to gain board seats from like-minded firms with responsible tax practices.
Journal: Accounting and Business Research
Pages: 168-189
Issue: 2
Volume: 54
Year: 2024
Month: 02
X-DOI: 10.1080/00014788.2022.2112549
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2112549
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# input file: RABR_A_2149458_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Jochen Bigus
Author-X-Name-First: Jochen
Author-X-Name-Last: Bigus
Author-Name: Kieu Phuong Mai Hua
Author-X-Name-First: Kieu Phuong Mai
Author-X-Name-Last: Hua
Author-Name: Sascha Raithel
Author-X-Name-First: Sascha
Author-X-Name-Last: Raithel
Title: Definitions and measures of corporate reputation in accounting and management: commonalities, differences, and future research
Abstract:
This study reviews and compares the definitions and measurements of ‘corporate reputation’ used in 173 studies published in seven top-tier accounting and management journals between 1980 and 2020. Accounting scholars frequently fail to define ‘reputation,’ and if they do, definitions vary considerably between the accounting and management fields. We further find that measures of reputation do not fit well with its definition. The accounting literature often employs secondary financial measures, which poorly reflect stakeholders’ reputation assessments. We develop a conceptual framework to better classify prior research and identify appropriate measures of reputation that match the chosen definition. We also suggest a number of further research opportunities: Accounting scholars may focus more on (a) stakeholders’ subjective nonfinancial assessments; (b) the emotional appeal of companies and its relationship with competence and integrity assessments; (c) the role of stakeholders’ normative expectations and (d) explicitly consider a multi-stakeholder perspective, where corporations have multiple reputations rather than one.
Journal: Accounting and Business Research
Pages: 304-336
Issue: 3
Volume: 54
Year: 2024
Month: 04
X-DOI: 10.1080/00014788.2022.2149458
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2149458
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# input file: RABR_A_2165030_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Juan Mao
Author-X-Name-First: Juan
Author-X-Name-Last: Mao
Author-Name: Baolei Qi
Author-X-Name-First: Baolei
Author-X-Name-Last: Qi
Author-Name: Guochang Zhang
Author-X-Name-First: Guochang
Author-X-Name-Last: Zhang
Title: The scale and scope of the client portfolio and audit quality at the individual auditor level: evidence from China
Abstract:
We examine the relation between the scale and scope of an individual auditor’s client portfolio and audit quality. Using a sample of auditor-years for the period of 2001–2016 from China, where the personal identities of signing auditors are publicly disclosed, we find that auditors with large client portfolio scale (measured by an auditor’s total audit fees from clients) provide higher quality audits (measured by discretionary accruals and the likelihood of issuing modified audit opinions). However, auditors with large client portfolio scope (measured by the number of industries where clients are located) provide lower quality audits. Further analyses indicate that auditors of higher ability and reputation tend to have larger client scales and wider client scopes. Overall, our results suggest that, at the individual auditor level, the scale of the client portfolio conveys the auditor’s ability, and given the scale, the industry and geographic scope of clients reflects the auditor’s workload.
Journal: Accounting and Business Research
Pages: 278-303
Issue: 3
Volume: 54
Year: 2024
Month: 04
X-DOI: 10.1080/00014788.2023.2165030
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2165030
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# input file: RABR_A_2145555_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Valerie Li
Author-X-Name-First: Valerie
Author-X-Name-Last: Li
Title: Groupthink tendencies in top management teams and financial reporting fraud
Abstract:
I investigate the factors that contribute to financial reporting fraud in firms that are, ex ante, at a high risk of committing fraud. Using propensity score matching, I select a sample of firms with similar ex ante risk for committing fraud. I find that within this sample, interconnectedness among members of the top management team (TMT), specifically connections developed outside the firm, is significantly and positively associated with financial reporting fraud. The effect of TMT interconnectedness on fraud is more pronounced in firms with more powerful Chief Executive Officers (CEOs) and in firms in which non-CEO executives’ wealth is more sensitive to firm risk, as measured by their portfolio vega. In addition, I find that the fraud committed by more interconnected TMTs persists for longer periods of time and is more difficult to detect. Further investigations suggest that the intensity of the connections between team members influences the risk of financial reporting fraud. My findings suggest that TMT interconnectedness promotes ‘groupthink’, which is associated with dysfunctional decision-making processes.
Journal: Accounting and Business Research
Pages: 255-277
Issue: 3
Volume: 54
Year: 2024
Month: 04
X-DOI: 10.1080/00014788.2022.2145555
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2145555
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# input file: RABR_A_2165031_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Dewan Rahman
Author-X-Name-First: Dewan
Author-X-Name-Last: Rahman
Author-Name: Muhammad Kabir
Author-X-Name-First: Muhammad
Author-X-Name-Last: Kabir
Author-Name: Muhammad Jahangir Ali
Author-X-Name-First: Muhammad Jahangir
Author-X-Name-Last: Ali
Author-Name: Barry Oliver
Author-X-Name-First: Barry
Author-X-Name-Last: Oliver
Title: Does product market competition influence annual report readability?
Abstract:
We study product market competition’s influence on annual report readability. As competition increases in an industry, our findings show that firms reduce the readability of their annual reports. We further document that the impact of competition on annual report readability is stronger for research and development (R&D)-intensive firms, for firms that have a higher level of trade secrecy (i.e. proprietary information), and for firms with higher levels of CEO performance-based incentives. Overall, our findings highlight the importance of the proprietary cost effect of competition on annual report readability.
Journal: Accounting and Business Research
Pages: 337-368
Issue: 3
Volume: 54
Year: 2024
Month: 04
X-DOI: 10.1080/00014788.2023.2165031
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2165031
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Handle: RePEc:taf:acctbr:v:54:y:2024:i:3:p:337-368
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# input file: RABR_A_1094839_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: The Editors
Title: Corrigendum
Journal: Accounting and Business Research
Pages: i-i
Issue: 5
Volume: 45
Year: 2015
Month: 7
X-DOI: 10.1080/00014788.2015.1094839
File-URL: http://hdl.handle.net/10.1080/00014788.2015.1094839
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# input file: RABR_A_2298784_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Gustav Finne
Author-X-Name-First: Gustav
Author-X-Name-Last: Finne
Author-Name: Jesper Haga
Author-X-Name-First: Jesper
Author-X-Name-Last: Haga
Author-Name: Dennis Sundvik
Author-X-Name-First: Dennis
Author-X-Name-Last: Sundvik
Title: Cost behaviour and reporting frequency during the COVID-19 outbreak
Abstract:
We examine the effect of financial reporting frequency on cost management decisions in crisis situations, with a focus on the COVID-19 outbreak. Using the European setting, we find that quarterly reporters exhibit greater cost elasticity relative to semi-annual reporters, meaning they had larger changes in cost for each change in sales. When allowing for cost asymmetry, we see that our results are driven by firms with decreases in sales and that quarterly reporters reduced their costs more. Additional analyses show that managerial learning and monitoring pressure might be potential channels behind the results and that there is a positive performance effect in the short run.
Journal: Accounting and Business Research
Pages: 491-520
Issue: 4
Volume: 54
Year: 2024
Month: 06
X-DOI: 10.1080/00014788.2023.2298784
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2298784
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# input file: RABR_A_2181141_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Kholod Alsahali
Author-X-Name-First: Kholod
Author-X-Name-Last: Alsahali
Author-Name: Ricardo Malagueño
Author-X-Name-First: Ricardo
Author-X-Name-Last: Malagueño
Author-Name: Ana Marques
Author-X-Name-First: Ana
Author-X-Name-Last: Marques
Title: Board attributes and companies’ choice of sustainability assurance providers
Abstract:
We study whether and how the monitoring quality of the board of directors is associated with the choice of providers of assurance for sustainability disclosures. We also examine whether this relation depends on companies’ economic, legal, and social environment. In an international empirical study considering five categories of assurance providers, we find that key board attributes, including board size, frequency of board meetings, CEO separation, proportion of women on the board, and the existence of a sustainability committee affect the type of assurance provider chosen by companies. Overall, companies with higher board monitoring quality are more likely to appoint a Big 4 assurer for their sustainability disclosures. Companies with a sustainability committee are more likely to engage an engineering firm, while firms with more board meetings are more likely to appoint an expert assurer. Moreover, we find that companies based in countries with strong environments are more likely to engage an external assurance provider, particularly a Big 4 assurer or an engineering firm. Overall, our results indicate that international sustainability disclosure assurance choices depend on corporate governance practices, as well as countries’ economic, social and legal environment.
Journal: Accounting and Business Research
Pages: 392-422
Issue: 4
Volume: 54
Year: 2024
Month: 06
X-DOI: 10.1080/00014788.2023.2181141
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2181141
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# input file: RABR_A_2351889_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: The Editors
Title: Thank you to reviewers
Journal: Accounting and Business Research
Pages: 521-523
Issue: 4
Volume: 54
Year: 2024
Month: 6
X-DOI: 10.1080/00014788.2024.2351889
File-URL: http://hdl.handle.net/10.1080/00014788.2024.2351889
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# input file: RABR_A_2294735_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Weipeng Yuan
Author-X-Name-First: Weipeng
Author-X-Name-Last: Yuan
Author-Name: Richard Macve
Author-X-Name-First: Richard
Author-X-Name-Last: Macve
Title: Reframing imperial China’s indigenous accounting history: further discoveries in archival materials from the three centuries before 1850
Abstract:
How far did the indigenous accounting of China's historically successful economy parallel Western double-entry bookkeeping (DEB)? We propose a scheme for classifying stages of bookkeeping that approach full DEB, review recently available nineteenth century Chinese accounting manuals and re-examine how far their recommendations reflect practice to be found in original account books contained in the archives of the Zigong brine wells for 1916-1917 (which have been argued to be essentially unchanged from the nineteenth century Qing era and perhaps earlier) and in the surviving accounts of the Fēngshèngtài salt traders of Henan province spanning 1854-1881. We introduce the accounting records we have now discovered from merchanting businesses in Anhui province, which span 300 years and survive from the 1590s onwards. These are all more sophisticated than the ‘merchant-banking' accounts in the vast archive of Tŏng Tài Shēng covering 1798-1850, and in the case of the Anhui merchants' accounts comprise ‘balance sheets' that include monetary values for physical as well as monetary assets, matching their owners' ‘capital'. We tentatively conclude, on the basis of the evidence now emerging, that despite its variety of forms indigenous Chinese style accounting practice may in some cases have captured the structural essentials of DEB’s content and functions and might be labelled ‘Chinese-style double-entry bookkeeping' ('CDEB'), over which Western bookkeeping had no conceptual advantages.
Journal: Accounting and Business Research
Pages: 457-490
Issue: 4
Volume: 54
Year: 2024
Month: 06
X-DOI: 10.1080/00014788.2023.2294735
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2294735
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# input file: RABR_A_2150595_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Chiara Banti
Author-X-Name-First: Chiara
Author-X-Name-Last: Banti
Author-Name: Gary C. Biddle
Author-X-Name-First: Gary C.
Author-X-Name-Last: Biddle
Author-Name: Jonathan Jona
Author-X-Name-First: Jonathan
Author-X-Name-Last: Jona
Title: Does a liability of foreignness in liquidity apply to US IPOs?
Abstract:
We provide evidence regarding two unanswered and consequential questions regarding share trading liquidity, a primary motive for US listings, for the prominent listing cohort of foreign-firm US initial public offerings (FIPOs). First, we test whether FIPOs exhibit a ‘liability of foreignness (Bell et al. 2012) in liquidity’ (LFL) compared with matched domestic-firm IPOs (DIPOs), despite listing requirements that are more stringent than for the mature cross-listed foreign firms studied previously. Second, we test whether US IPO LFL is moderated by FIPO home country institutional attributes that promote liquidity. Our findings for 327 FIPOs from 36 countries between 1990 and 2012 reveal that US IPO LFL is moderated, but not eliminated, by FIPO home country attributes, thus indicating incomplete bonding with US institutions. These findings extend prior research and serve to inform foreign firms considering US IPOs, exchanges competing for them, listing facilitators, regulators, and investors regarding a salient listing consideration.
Journal: Accounting and Business Research
Pages: 423-456
Issue: 4
Volume: 54
Year: 2024
Month: 06
X-DOI: 10.1080/00014788.2022.2150595
File-URL: http://hdl.handle.net/10.1080/00014788.2022.2150595
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# input file: RABR_A_2271295_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Salvador Carmona
Author-X-Name-First: Salvador
Author-X-Name-Last: Carmona
Author-Name: Igor Filatotchev
Author-X-Name-First: Igor
Author-X-Name-Last: Filatotchev
Author-Name: Jan Hendrik Fisch
Author-X-Name-First: Jan Hendrik
Author-X-Name-Last: Fisch
Author-Name: Gilad Livne
Author-X-Name-First: Gilad
Author-X-Name-Last: Livne
Title: Integrating contemporary accounting and international business research: progress so far and opportunities for the future
Abstract:
To date, the accounting and international business (IB) research fields have been developing rather independently, although some cross-discipline fertilisation is emerging. This paper aims to illustrate the conceptual and empirical bridges between the two disciplines. Specifically, we highlight how contributions originating in either field have influenced theory and research in such diverse areas as corporate governance, risk management, taxation and strategic decision making in multinational enterprises (MNEs). Further, we identify examples where attention by accounting researchers to the IB literature has resulted in innovative research, including studies focusing on control systems and financial reporting in MNEs. Based on our discussion of the state of mutual contributions between the disciplines, we highlight various areas where future research could benefit from further integration of the accounting and IB literatures.
Journal: Accounting and Business Research
Pages: 369-391
Issue: 4
Volume: 54
Year: 2024
Month: 06
X-DOI: 10.1080/00014788.2023.2271295
File-URL: http://hdl.handle.net/10.1080/00014788.2023.2271295
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Handle: RePEc:taf:acctbr:v:54:y:2024:i:4:p:369-391