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on Accounting and Auditing |
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Issue of 2019‒01‒14
ten papers chosen by |
| By: | Oxelheim, Lars (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Being able to separate temporary global macroeconomic influences – caused by fluctuations in exchange rates, interest rates and inflation – from intrinsic performance – related to a superior product, production process or management - is crucial to the assessment of the development of a firm’s competiveness. Against that background, the paper analyzes institutions’ role in making firms supply outside shareholders with relevant information corresponding to satisfactory transparency from the shareholder perspective. Based on a sample of the 100 largest public European firms it is found no firm provided information to the level deemed satisfactory by the outside shareholder. One explanation may be that optimal transparency for the firm does not equal satisfactory transparency for the outside shareholder. However, the implementation of IFRS/IAS 1 in the EU as of 2005, and a company’s international cross-listing activities exhibit associations with better supply of information and a narrowing of the gap. Shareholders in the Anglo-Saxon corporate governance system are provided with more relevant information than those in other corporate governance systems. The paper adds to the literature on the role of institutions in international corporate governance, with the particular focus on information asymmetries in an international business context. |
| Keywords: | Macroeconomic fluctuations; Intrinsic performance; International financial reporting standards; Corporate information disclosure; Optimal transparency; Satisfactory transparency; Corporate governance systems; International cross-listing |
| JEL: | F23 F37 G18 G32 G38 L25 M21 M41 M48 |
| Date: | 2018–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1259&r=all |
| By: | Juniarti (Petra Christian University, Jl. Siwalankerto 121-131, 60236, Surabaya, Indonesia Author-2-Name: Devi Tirta Raharjo Author-2-Workplace-Name: Petra Christian University, Jl. Siwalankerto 121-131, 60236, Surabaya, Indonesia Author-3-Name: Regina Monica Author-3-Workplace-Name: Petra Christian University, Jl. Siwalankerto 121-131, 60236, Surabaya, 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 Indonesian Accounting Standard Authority has required companies to adopt the International Financial Reporting Standard (IFRS) since its adoption in 2012. The new standard emphasizes relevance, while the previous standard focused on conservative issues. While the IFRS does not specifically aim to reduce conservatism, this aspect is no longer the emphasis of the new standard. There are concerns about whether the IFRS reduces conservatism and the research on this issue are still uncertain. Hence, this study aims to determine the level of conservatism in the period following the adoption of the IFRS. The study also aims to examine the outcome of the adoption of the IFRS since its adoption in Indonesia in 2012. Methodology/Technique - Using the accounting conservatism model developed by Basu (1997), the authors compare firm conservatism before and after the adoption of the IFRS. The sample includes companies listed on the Indonesian Stock Exchange between 2006 and 2016. There are 3.742 firm-years that consist of 394 companies from various industrial sectors. The data is analyzed using a Pooled Least Square method. Findings - The results show that conservatism was high prior to the adoption of the IFRS. Further, accounting earnings are more sensitive to the negative return than to the positive return before the adoption of the IFRS. However, in the post-adoption period, sensitivity to negative return has decreased. This means that the adoption of the IFRS has reduced levels of conservatism. The Indonesian Accounting Standard Authority may rely on these results to evaluate the mandatory policy of IFRS. Novelty - This study explores the prevalence of conservatism within firms prior to, and following, the adoption of the IFRS using longitudinal data. |
| Keywords: | Conservatism; Earning Quality; IFRS Adoption; Indonesia; Pre and Post-adoption. |
| JEL: | M41 M48 |
| Date: | 2018–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:afr162&r=all |
| By: | Polakova, Aija (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | I study publication of the European Union (EU) tax haven blacklist on December 5, 2017 to examine whether and how the use of recognized tax havens affects firm value. I find that the tax haven naming and shaming by the EU was associated with a negative stock price reaction of firms with tax haven affliates. The largest reaction was for those tax havens, for which it was not foreseeable that they would be included in the blacklist. Retail firms experienced a larger decrease in share price than firms in other industries, which is consistent with a potential consumer backlash. Also more tax aggressive firms faced more negative returns, which suggests that investors expect firms might be audited or fined for past or overly aggressive tax avoidance. The negative reaction was less pronounced in countries with low levels of investor protection and weakly-governed firms with substantial conflicts of interest between principals and shareholders. This is consistent with increased scrutiny and potential for countermeasures associated with the blacklist, which reduce opportunities for managerial wealth diversion. |
| Keywords: | Event study; governance; tax avoidance; tax haven |
| JEL: | G12 G32 H25 H26 |
| Date: | 2018–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2018_018&r=all |
| By: | Majidah (Accounting Department, School of Economics and Business, Telkom University, Indonesia Author-2-Name: Dedik Nur Triyanto Author-2-Workplace-Name: Telkom University, Jl. Telekomunikasi, 40257, Bandung, Indonesia Author-3-Name: Erika Vivi Andriyani Author-3-Workplace-Name: Telkom University, Jl. Telekomunikasi, 40257, Bandung, 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 - This study aims to examine the influence of auditor and auditee factors on auditor retention. Methodology/Technique - The analysis unit of this research is manufacturing firms that were listed on the Indonesian Stock Exchange between 2010 and 2014. Using purposive sampling, 54 companies, or 270 observations, were obtained. This research uses a logistic regression; there are 12 outliers in the data that disturb the regression model, hence, the final research data set was 258. Findings - The result of the logistic regression analysis shows that auditee and auditor factors can simultaneously explain auditor retention by up to 4%. This partial effect shows that only audit quality affects auditor retention by 57.2%, at a level of significance of less than a = 5%. Meanwhile, firm size affects auditor retention by 14.8%, at a significance level of less than a = 10%. Novelty – This research is unique because auditor retention and proxy of audit quality has never been investigated in previous studies. |
| Keywords: | Auditee Factors; Auditor Factors; Auditor Retention, Indonesia. |
| JEL: | M4 M42 M49 |
| Date: | 2018–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:jfbr145&r=all |
| By: | Nahariah Jaffar (Faculty of Management, Multimedia University, Malaysia Author-2-Name: Azleen Shabrina Mohd Nor Author-2-Workplace-Name: Faculty of Management, Multimedia University, Persiaran Multimedia, 63100 Cyberjaya, Selangor, Malaysia Author-3-Name: Zarehan Selamat Author-3-Workplace-Name: Faculty of Management, Multimedia University, Persiaran Multimedia, 63100 Cyberjaya, Selangor, Malaysia 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 goal of integrated reporting is to enhance the cohesiveness and efficiency of corporate reporting. It encourages organizations to create greater value by identifying the factors that have a material impact on its operations. The Integrated Reporting (IR) Framework guides the overall content of an integrated report through the Guiding Principles and Content Elements. The Framework has eight elements. This study explores the level of voluntary disclosure of information related to these eight elements by companies listed on the Bursa Malaysia before and after the establishment of the Framework. Methodology/Technique - This study examines the annual reports of 603 Main Market listed companies of Bursa Malaysia between 2012 and 2015. The year 2012 is referred to as the "pre-issuance period" while 2015 is referred to as the "post issuance period". Findings - The findings of the study show that the companies that do disclose more information, do so in relation to three out of the eight elements only. These are: governance, strategy and resource allocation, and outlook. Overall, there is a lack of lineage among the information related to the IR elements presented in the annual reports. Novelty - The findings demonstrate the need for the full adoption of integrated reporting in Malaysia. |
| Keywords: | Content Elements; Integrated Reporting Framework; Listed Companies; Pre and Post Issuance Period; Voluntary Disclosure. |
| JEL: | M40 M41 M49 |
| Date: | 2018–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:afr163&r=all |
| By: | Juniarti (Petra Christian University, Jl. Siwalankerto 121-131, 60236, Surabaya, Indonesia Author-2-Name: Beatrice Marcellina Author-2-Workplace-Name: Petra Christian University, Jl. Siwalankerto 121-131, 60236, Surabaya, Indonesia Author-3-Name: Alvita Angela Author-3-Workplace-Name: Petra Christian University, Jl. Siwalankerto 121-131, 60236, Surabaya, 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 adoption of IFRS aims to reduce the level of information asymmetry. Prior studies conducted in developed countries prove that the adoption of IFRS enhances transparency and diminishes information asymmetry. However, in developing countries with a low level of openness, limited regulation, and more centralized ownership, the ability of IFRS to reduce information asymmetry remains unknown. To address this issue, this study aims to investigate whether IFRS adoption will reduce information asymmetry in some developing countries in South East Asia. Methodology/Technique - This research is applied in three developing countries: Indonesia, the Philippines and Thailand. Information asymmetry is proxied by the cost of capital using the Easton model (2004) and a bid-ask spread. Listed firms from the three countries are selected as the research sample resulting in 5.313 firm-years for the period between 2007 and 2016. Findings - This study concludes that the adoption of the IFRS decreases information asymmetry in developing countries. These finding confirm that the benefit of the adoption is the same as in developed countries, despite the level of law enforcement in developing countries being lower. Managers, standard authorities and investors must note that the IFRS conveys benefits to the market, which increases transparency by asking lower returns and valuing company stocks appropriately. Novelty - This study examines the benefits of the adoption of the IFRS in reducing information asymmetry in some emerging countries to enhance the generalization of the results from prior studies that are mostly conducted in developed countries. |
| Keywords: | Bid-Ask Spread; Cost of Capital; Information Asymmetry; IFRS Adoption. |
| JEL: | M41 M48 M49 |
| Date: | 2018–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:afr164&r=all |
| By: | Marie Bjørneby; Annette Alstadsæter; Kjetil Telle (Statistics Norway) |
| Abstract: | Third-party reporting and employers’ tax withholding are powerful compliance mechanisms, as long as the employer and employee do not collude to evade. Using data from randomly assigned on-site audits among 2,462 Norwegian firms, we provide evidence of collusive tax evasion. We find that firms assigned to be audited increased their subsequent wage reporting on behalf of their employees by 18 percent relative to firms assigned to the control group. The effect is more pronounced among small firms with few employees. Our results document the limitations of third-party reporting, but also that these limitations can be counteracted by relatively inexpensive on-site audits. |
| Keywords: | collaborative tax evasion; collusive tax evasion; random audits; undeclared work; third-party reporting |
| JEL: | E26 H26 H32 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:891&r=all |
| By: | Joao Ayres; Marcio Garcia; Diogo A. Guillén; Patrick J. Kehoe |
| Abstract: | Brazil has had a long period of high inflation. It peaked around 100 percent per year in 1964, decreased until the first oil shock (1973), but accelerated again afterward, reaching levels above 100 percent on average between 1980 and 1994. This last period coincided with severe balance of payments problems and economic stagnation that followed the external debt crisis in the early 1980s. We show that the high-inflation period (1960–1994) was characterized by a combination of fiscal deficits, passive monetary policy, and constraints on debt financing. The transition to the low-inflation period (1995–2016) was characterized by improvements in all of these features, but it did not lead to significant improvements in economic growth. In addition, we document a strong positive correlation between inflation rates and seigniorage revenues, although inflation rates are relatively high for modest levels of seigniorage revenues. Finally, we discuss the role of the weak institutional framework surrounding the fiscal and monetary authorities and the role of monetary passiveness and inflation indexation in accounting for the unique features of inflation dynamics in Brazil. |
| JEL: | E0 E02 E3 E4 E42 E5 E58 E6 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25421&r=all |
| By: | Christopher Hossfeld (ESCP-EAP - ESCP-EAP - Ecole Supérieure de Commerce de Paris); Yvonne Muller (CDPC - Centre de Droit Pénal et de Criminologie - UPN - Université Paris Nanterre); David Alexander (Birmingham Business School - University of Birmingham [Birmingham]); Moritz Pöschke; Lionel Zevounou (THEORHIS - Centre de théorie du droit - CTAD - Centre de Théorie et Analyse du Droit - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, CTAD - Centre de Théorie et Analyse du Droit - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, IDHES - Institutions et Dynamiques Historiques de l'Économie et de la Société - ENS Cachan - École normale supérieure - Cachan - UP1 - Université Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - UEVE - Université d'Évry-Val-d'Essonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This report try to examine the public interest notion in UE context from an accounting point of view. It is the result of our study: 1) that there is no European or general (universal) definition of public interest. All members of the research group concluded that there is no definition for their country (including in the accounting field); the same is true in the EU 2) that the notion contains "interests" to be protected/defended 3) that the notion makes it possible to "legitimize" an action and/or standards 4) that the notion is (therefore) a tool at the service of a policy 5) that it is not necessary - or even politically counterproductive - to define the public interest (precisely) 6) that the question of whether a broadening of the notion of "public interest" with the integration of financial stability and sustainable development is desirable requires a nuanced answer: if it is justified at the political level to be able to use accounting standards as a tool of public policy, it does not seem appropriate from an economic point of view, and more precisely with regard to the main objective of financial information (true and fair view) and its effectiveness. |
| Date: | 2018–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01936960&r=all |
| By: | Ana Filipa Roque (University of Beira Interior, NECE Research Centre in Business Sciences, Estrada do Sineiro, 6200-209, Covilhã, Portugal Author-2-Name: Maria do Céu Alves Author-2-Workplace-Name: University of Beira Interior, NECE Research Centre in Business Sciences, Estrada do Sineiro, 6200-209, Covilhã, Portugal Author-3-Name: Mário Raposo Author-3-Workplace-Name: University of Beira Interior, NECE Research Centre in Business Sciences, Estrada do Sineiro, 6200-209, Covilhã, Portugal 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 - Organisational change necessarily requires an adaptation of a company's information structure, particularly its Management Accounting and Control Systems (MACSs). These systems should be designed according to the defined strategies to assist managers in the decision-making process. This paper reviews research that analyzes the MACSs concept and the elements that characterise it, so that it may be used to identify and characterise the existing systems in any company. Methodology/Technique - Based on a contingency approach to management, the authors perform a broad literature review. Among other aspects, MACS information outputs will be analyzed in terms of the style of use, its nature and the type of decisions supported. In an attempt to broaden the scope of MACS functions, this paper reviews the present literature and provides a theoretical framework for studying the operationalization of MACS. Findings - The results obtained indicate that the operationalization of the MACS concept can be achieved through the way information is managed and characterised, establishing three categories and six different dimensions. Novelty - Theoretically, this framework characterises the existing MACS concept to analyse its impact on company strategy. The authors conclude that knowledge on the relationship between MCAS and strategy is limited, providing considerable scope for further research. In the future, the authors intend to develop a case study to analyse the impact of this framework on companies' internationalisation strategy. |
| Keywords: | Management Accounting and Control Systems; Accounting Information System; Organizational Change; Strategy; Operationalization of Concepts. |
| JEL: | M16 M40 F23 |
| Date: | 2018–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:jmmr201&r=all |