nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2009‒01‒24
three papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Fair value versus historic cost Valuation for Biological assets: Implications for the quality of financial information By Josep Ma. Argiles (UB); Josep Garcia Bladon (IQS); Teresa Monllau (UPF)
  2. The role of financial auditor in detecting and reporting fraud and error By Bunget, Ovidiu-Constantin
  3. Public sector efficiency according to COFOG classification in the European Union By Donath , Liliana; Milos, Marius

  1. By: Josep Ma. Argiles (UB); Josep Garcia Bladon (IQS); Teresa Monllau (UPF) (Universitat de Barcelona)
    Abstract: This research finds neither significant differences in earnings and revenues for farms using fair value (FV) for biological assets with respect to those valuing at historic cost (HC), nor an increase in their volatility. It does not bring about differences in profitability, accounting manipulation and farm cash flows predictability either. On the contrary, most tests reveal higher predictive power of future earnings under FV. The study also provides evidence on flawed HC accounting practices in the agricultural sector and concludes that FV seems an interesting tool for the predominant small holdings in the agricultural sector in the European Union.
    Keywords: accounting relevance, historic cost, agricultural accounting, prediction, fair value, earnings, cash flow prediction, biological assets
    JEL: M41
    Date: 2009
  2. By: Bunget, Ovidiu-Constantin
    Abstract: Responsibility for preventing and detecting fraud rest with management entities. Although the auditor is not and cannot be held responsible for preventing fraud and errors, in your work, he can have a positive role in preventing fraud and errors by deterring their occurrence. The auditor should plan and perform the audit with an attitude of professional skepticism, recognizing that condition or events may be found that indicate that fraud or error may exist. Based on the audit risk assessment, auditor should develop programs to audit procedures by which to obtain reasonable assurance that the financial statements in their entirety, all significant errors and fraud have been identified. It is expected that the auditor to implement procedures that will lead to the discovery of errors or fraud without significant impact on the financial statements can not be held responsible for undetected such irregularities. The auditor should communicate with the management of his client. He should ask the management information concerning any significant fraud or error has been detected in order to detect key problems that could lead to certain activities, the implementation of audit procedures more than usual However the auditor faces the risk inevitable that some significant errors to be detected, even if the audit is planned and done properly
    Keywords: fraud; error; tests; audit
    JEL: M42
    Date: 2009–01–20
  3. By: Donath , Liliana; Milos, Marius
    Abstract: The budgetary constraints governments have to deal with on a daily bases require a new approach in public spending as well as the revision of public goods definition. Consequently the key words are efficiency and effectiveness, in order to comply with the new management approach requirements. Assessing the efficiency and performance of public expenses is a key item for analyzing the quality of public expenses because it connects the entries as public resources and their yield (efficiency) or the entries to the results obtained (performance)
    Keywords: public spending; performance; efficiency; effectiveness
    JEL: H50
    Date: 2008–12–01

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