nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2019‒08‒26
eight papers chosen by

  1. Company Characteristics, Corporate Governance, Audit Quality Impact on Earnings Management By Friska Firnanti
  2. Последващо оценяване на репутацията – преглед на съществуващата нормативна уредба By Atanasov, Atanas
  3. Can accounting standardization serve the public interest? By Alain Burlaud
  4. Adoption of CSR and Sustainability Reporting Standards: Economic Analysis and Review By Hans B. Christensen; Luzi Hail; Christian Leuz
  5. Earnings Management and Fraudulent Financial Reporting By Rosita Suryaningsih
  6. Inflation expectations and consumer spending: the role of household balance sheets By Lieb, Lenard; Schuffels, Johannes
  7. Incentive effects of R&D tax incentives - A meta-regression analysis focusing on R&D policy designs By Pöschel, Carla
  8. Accounting: what balance is there between universality and contingency? By Alain Burlaud; Geneviève Causse

  1. By: Friska Firnanti (Accounting, Trisakti School of Management, Indonesia Author-2-Name: Kashan Pirzada Author-2-Workplace-Name: Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Kedah, Malaysia Author-3-Name: Budiman Author-3-Workplace-Name: Trisakti School of Management, Kyai Tapa No. 20, 11440, Jakarta, Indonesia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - The purpose of this research is to empirically examine how company characteristics, corporate governance and audit quality affect earnings management. Methodology/Technique - The population used for this research is manufacturing companies listed on the Indonesian Stock Exchange between 2013 and 2015. The sampling method used in this research is purposive sampling. 64 companies are examined, with 192 items of data being obtained. Finding - This research also uses statistical testing through a multiple regression. The results show that return on assets, financial leverage, free cash flow, and sales growth all have an influence on earnings management. Meanwhile, other variables such as managerial ownership, institutional ownership, board size, the presence of an audit committee, firm size, and audit quality have no significant effect on earnings management. Novelty - In this research, company characteristics are proxied with the return on assets, financial leverage, firm size, free cash flow, and sales growth, while corporate governance is proxied with managerial ownership, institutional ownership, board size, and the presence of an audit committee. Type of Paper - Empirical.
    Keywords: Company Characteristics; Corporate Governance; Audit Quality; Earnings Management; Agency Theory.
    JEL: M40 M41 M49
    Date: 2019–07–12
  2. By: Atanasov, Atanas
    Abstract: The purpose of this article is to review and analyze existing practices in the accounting regulation of post-reputation accounting as one of the major problems in the field of accounting harmonization by not aiming to critically analyze individual regulations in terms of their relevance. The objective analysis of the reviewed regulations allows us to summarize that the existing order for carrying out the ex post evaluation of the reputation and the specified disclosure elements are very important in order to obtain real indications of the business situation and the need for impairment but on the other hand they are extremely sensitive and easy to manipulate, as they use internal assumptions and assessments of enterprise management that are extremely difficult to verify. We believe that this is one of the main prerequisites for changing the regime in subsequent accounting for goodwill.
    Keywords: goodwill accounting, subsequent evaluation, IFRS, FASB
    JEL: M40 M41 M48
    Date: 2019–06
  3. By: Alain Burlaud (LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM])
    Abstract: In line with his concerns to conceptualize the accounting principles and practices, the author develops the topic that falls under the above title, based on the premise that the facts and developments during the economic crisis show that accounting standards cannot be conceived solely by their internal consistency-often revealed a posteriori by their conceptual framework, but also by taking into account their economic and social impact, and their consequences. Hence, the standard setters claim that they work for the general interest. Consequently, the author pursues to define the concept of general interest in the light of relevant literature and accounting law, and examines the procedural answers provided by standard setters to confirm the consideration of the general interest concept, and to finally find out whether a substantiated answer is possible. In his analysis, the author also outlines the issue of high relevance of stakeholders' representation in regulatory bodies and their intervention in the development of standards. In his endeavour, the author also suggests a substantial approach to the general interest in terms of consequentialism, i.e. the teleological ethics according to which an action must be judged morally on the consequences it implies. Of course, the concept is applied to financial and non-financial information. An interesting conclusion is reached on the general interest that not only legitimizes the standard setters who claim it, but also the public authorities that also determine the content of the financial and non-financial statements of the companies. This intervention is due to the consequences of the standards and their impact on society. Therefore it can never be taken for granted the fact that international standard setters consider themselves as representatives of the general interest.
    Keywords: Accounting standards,standard setters,regulatory bodies,general interest JEL Classification: M 41,M 48
    Date: 2018
  4. By: Hans B. Christensen; Luzi Hail; Christian Leuz
    Abstract: This study provides an economic analysis of the determinants and consequences of corporate social responsibility (CSR) and sustainability reporting. To frame our analysis, we consider a widespread mandatory adoption of CSR reporting standards in the United States. The study focuses on the economic effects of standards for disclosure and reporting, not on the effects of CSR activities and policies themselves. It draws on an extensive review of the relevant academic (CSR and non-CSR) literatures in accounting, economics, finance, and management. Based on a discussion of the fundamental economic forces at play and the key features and determinants of (voluntary) CSR reporting, we derive and evaluate possible economic consequences, including capital-market effects for select stakeholders as well as potential firm responses and real effects in firm behavior. We also highlight issues related to the implementation and enforcement of CSR reporting standards. Our analysis yields a number of insights that are relevant to the current debate on CSR and sustainability reporting and provides scholars with avenues for future research.
    JEL: F30 G30 G38 K22 L21 M14 M41 M48
    Date: 2019–08
  5. By: Rosita Suryaningsih (Universitas Multimedia Nusantara, Scientia Garden, Jl Boulevard Gading Serpong, 15811, Tangerang, Indonesia Author-2-Name: Febryanti Simon Author-2-Workplace-Name: Universitas Multimedia Nusantara, Scientia Garden, Tangerang, Indonesia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - The objective of this research is to obtain empirical evidence about the effect of real earnings management that is proxied by abnormal Cash Flow from operating and discretionary expenses towards fraudulent financial reporting. Methodology/Technique - The objects in this research are companies listed on the Indonesian Stock Exchange (idx) between 2011 and 2015 comprised of companies that have engaged in fraudulent activities as well as those that have not, to enable a comparison to be made. The companies that have engaged in fraudulent financial reporting were obtained from a list issued by the Financial Services Authority (OJK), being the agency that oversees the capital market in Indonesia. The sampling is conducted using purposive sampling. Secondary data is used, and the hypotheses are testing using logistic regression analysis. Finding - The results of this research show that: (1) Real Earning Management proxied by Abnormal Cash Flow from operating activities (CFO) have a significant effect towards Fraudulent Financial Reporting (FFR), (2) Real Earning Management proxied by Abnormal Discretionary Expenses does not have an effect on Fraudulent Financial Reporting (FFR) and (3) Real Earning Management that is proxied by Abnormal Cash Flow from operating (CFO) and Abnormal Discretionary Expenses have a simultaneous and significant effect on Fraudulent Financial Reporting (FFR). Novelty - Based on these findings, this research provides insight to companies to enable them to give greater attention to abnormal cash flow from operating activities due to the effect this has on companies that are suspected of committing irregularities in its operational activities. This is important because fraudulent reporting can erode investor's confidence and thereby reduce investment in the company. Type of Paper - Empirical.
    Keywords: Abnormal Cash Flow; Abnormal Discretionary Expenses; Financial Services Authority (OJK); Fraudulent Financial Reporting; Real Earning Management.
    Date: 2019–07–19
  6. By: Lieb, Lenard (General Economics 2 (Macro)); Schuffels, Johannes (General Economics 2 (Macro))
    Abstract: Research interest in the reaction of consumption to expected inflation has increased sharply in recent years due to efforts by central banks to kick-start demand through higher inflation expectations. We contribute to this literature by analyzing whether various components of households’ balance sheets determine how consumption reacts to expected inflation. Many channels are conceivable: an increase in inflation expectations can raise consumption through direct increases in expected real wealth, e.g. for households with nominal financial liabilities. By affecting the real interest rate, expected inflation can interact with wealth if only those households can adapt their consumption to current real interest rates that are not budget constrained or sufficiently liquid to shift funds between consumption and savings. We use household-level information on balance sheets, vehicle expenditures and inflation expectations from the Dutch Central Bank’s Household Survey. We find evidence for a relation between a household’s expected inflation and the probability to have positive expenditures on durables. This effect is stronger for households with low net worth. We find no evidence of such effects on the amount of durable expenditures.
    JEL: D84 E31 E21
    Date: 2019–08–20
  7. By: Pöschel, Carla
    Abstract: Despite the growing literature on the effectiveness of R&D tax incentives, little is known about differing design aspects of the underlying R&D tax policies. In this paper, I apply sophisticated meta-regression methodology to separate the distinct provisions through which various R&D tax policies affect firms' R&D expenditure. My results indicate on average larger input additionality effects of hybrid tax regimes compared to volume-based schemes, while incremental tax measures seem to provide the lowest incentives for firms. My findings are particularly important for policy makers optimizing the design of an R&D tax policy.
    Keywords: R&D Tax Policy,Design Aspects,Input Additionality Effects,Meta-Regression Analysis
    Date: 2019
  8. By: Alain Burlaud (LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM]); Geneviève Causse (ESCP Europe, UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Abstract: Rezumat Întrebarea privind caracterul universal sau contingent al contabilităţii este esenţială deoarece determină una dintre dimensiunile guvernării organizaţiilor. Prima parte a lucrării prezintă dinamica universalităţii, adică, a mişcării către un standard global unic. Ce-a de-a doua parte descrie limitele acestei mişcări şi, în opoziţie, relevanţa unui standard adaptat la situaţiile contingente şi constrângerile locale. În final, partea a treia a lucrării se ocupă de echilibrul dintre aceste două concepte ale contabilităţii.
    Keywords: Cuvinte-cheie: Contabilitate,universalitate,contingenţă
    Date: 2018

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