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This paper provides evidence on the impact of regulatory environment on financial reporting quality of transitional economies. This study compares the financial reporting quality of Hong Kong firms which are cross-listed in mainland China with those of Hong Kong firms cross-listed in China using specific earnings management metrics (earnings smoothing, timely loss recognition, value relevance and managing towards earnings targets) under pre- and post-IFRS regimes.

The financial reporting quality of Chinese A-share companies and Hong Kong listed companies are examined using earnings management measures. Using 2007 as base year, the study used a cumulative of −5 and +5 years of convergence experience which provide a total of 3,000 firm-year observations. In addition to regression analyses, we used the difference-in-difference analysis to check for the impact of regulatory environments on earnings management.

Through the lens of contingency theory, our results indicate that the adoption of the new substantially IFRS-convergent accounting standards in China results in better financial reporting quality evidenced by less earning management. The empirical results further shows that accounting data are more value relevant for Hong Kong listed firms, and that firms listed in China are more likely to engage in accrual-based earnings management than in real earnings management activities. We established that different earnings management practices that are seemingly tolerable in one country may not be tolerable in another due to level of differences in the regulatory environments.

The findings show that Hong Kong listed companies’ exhibit higher level of financial reporting quality than Chinese listed companies, which implies that the financial reporting quality under IFRS can be significantly different in regions with different institutional, economic and regulatory environments. The results imply that contingent factors such as country’s institutional structures, its extent of regulation and the strength of its investor protection environments impact on financial reporting quality particularly in transitional and emerging economies. As such, these factors need to be given appropriate considerations by financial reporting regulators and policy-makers interested in controlling earnings management practices among their corporations.

This study is a high impact study considering that China plays a significant role in today’s globalised economy. This study is unique as it the first, that we are aware of, to compare real earnings activities against accrual-based earnings management in pre- and post-IFRS adoption periods within the Chinese and Hong Kong financial reporting environments, distinguishing between cross-listed and non-cross-listed firms.

The study contributes to the literature on public value and performance examining politicians’ and managers’ perspectives by investigating the importance they attach to the different facets of performance information (i.e. budgetary, accrual based- and non-financial information (NFI)).

We survey politicians and managers in all Italian municipalities of at least 80,000 inhabitants.

Overall, NFI is more appreciated than financial information (FI). Moreover, budgetary accounting is preferred to accrual accounting. Politicians’ and managers’ preferences are generally aligned.

NFI as a measure of public value is not alternative, but rather complementary, to FI. The latter remains a fundamental element of public sector accounting due to its role in resource allocation and control.

The preference for NFI over FI and of budgetary over accruals accounting suggests that the current predominant emphasis on (accrual-based) financial reporting might be misplaced.

Public value and performance are multi-faceted concepts. They can be captured by different types of information and evaluated according to different criteria, which will also depend on the category of stakeholders or users who assesses public performance. So far, most literature has considered the financial and non-financial facets of performance as virtually separate. Similarly, in the practice, financial management tends to be decoupled from non-financial performance management. However, this research shows that only by considering their joint interactions we can achieve an accurate representation of what public value really is.

A long-time ethical issue in financial accounting is earnings management. Two popular ways that earnings are managed include use of accruals (Kothari et al., 2016) and real activities management (RM). This study examines the association between RM and short selling and an association between short sellers and RM behavior related to earnings management. Instead of using accruals, RM is accomplished by timing investment or financing decisions and thereby alter reported earnings. Our results show that short sellers avoid targeting firms with a high level of RM, but this only holds for those firms that just meet analysts’ forecasts. This result suggests that short sellers interpret RM as a signal used by companies to convey their “good news” and confidence in their future performance. On the other hand, the authors document that heavily shorted firms engage in a lower amount of RM, which is consistent with the notion that short selling plays an external disciplinary role in constraining firms’ RM behavior for earnings management. This chapter would be of interest to anyone concerned with earnings management, such as financial market analysts, investors, academic researchers, and, in particular, regulators, who are involved in setting rules on short selling.

The data expected from the governmental accounting, in which all the budget operations are recorded, and the reports based on these data couldn’t be achieved until recently. To meet the necessities of society, the most important instrument of the modern state aiming to maximize the level of welfare is the taxes collected from the citizens, and the state has responsibilities in front of the society playing a funding source role. Moreover, in order to successfully manage the public administrations, which nowadays have more duties and authorities, it is a necessity to make use of the management information and methods. Thus, the development of public accounting, which refers to the determining, recording, and reporting all the financial operations performed by the state, has become inevitable. Many international regulations, modern accounting systems, and modern approaches have been developed for the public sector. In the present study, it was aimed to emphasize the development and importance of public accounting for the management and administration of the state.

Implementation of accrual-based accounting systems and the related preparation of an initial balance sheet are stimulating a debate on valuation and management of fixed assets, emphasising how critical it is to have adequate asset information. This chapter aims to propose a framework to clarify the relationship between the asset inventory and the asset register by examining the objectives and characteristics of asset information systems, drawing from experience regarding the implementation of asset inventories and registers from four countries (Malaysia, South Africa, Switzerland, and Australia – State of Victoria).

Recognition, measurement and disclosure of public sector assets constitute relevant matters for national and international public sector accounting standard-setting. This chapter develops a theoretical analysis drawing upon a dualistic approach contrasting current value and historical cost accounting models. Accordingly, the latter should be adapted and then preferred to cope with public sector specificities, with a view to providing information for and enforcing accountability to citizens and their political representatives. Drawing upon this theoretical setting, our analysis develops a consistent design for the overarching conceptual framework for assets in general, providing illustrative examples for specific categories such as financial, heritage, natural and military assets.

The practice of real earnings management (REM) or earnings manipulation through the company’s real activities is increasingly widespread. Companies that want to achieve profit targets have switched from accrual-based to REM, especially in the firm family owner, who is an active manager. Our study aims to determine whether family ownership in a company will be a factor in the existence of greater REM practices. The authors collected 2,613 observational data from non-financial companies on the Indonesia Stock Exchange (IDX) during 2013–2018 using a purposive sampling method and then analyzed using panel random effect (RE) regression. The results show that family ownership significantly negatively affects abnormal operating cash flow which means that family firms are more likely to reduce operating cash flow to report higher income than non-family firms. Thus, it can be concluded that family firms in Indonesia are more likely to be involved in REM than non-family firms.

Purpose: This paper aims to study the impact of adoption eXtensible Business Reporting Language (XBRL) on earnings management.

Design/methodology/approach: This study uses a sample of all firms listed on the Indonesian stock exchange, except for finance and real-estate sectors from 2012 to 2019, with a total of 2,560 firms–years with panel data analysis.

Findings: Four findings in this study are listed as follow. First, the surprising result is that accrual earnings management increase after the adoption of XBRL. Second, after the adoption of XBRL, there was an increase in real earnings management. Third, the results of the study prove that the use of Big 4 auditors will weaken the increase in real earnings management after the adoption of XBRL. Finally, this study shows that after the adoption of XBRL, it turns out that both accrual and real earnings management experienced an increase.

Originality/value: This study contributes to providing an evaluation note to IDX regulators that the goals they want to achieve have not been achieved. This study provides empirical evidence for the debate over whether the adoption of XBRL is beneficial.

Accountability and financial transparency came to be accepted as the basic principles in obtaining and using public resources in an efficient and productive manner. One of the most important tools to realize this goal is the annual report, also referred to in Public Financial Management and Control Law. Annual reports are comprehensive reports that also contain the realization outcomes according to the performance indicators that pertain to the activities that these institutions implement according to their strategic plan and performance program. The authors explain the reasons of variations from the plans, and also contain the administrative and financial information on the institution. The contribution of the annual reports, in presenting a transparent and accountable structure by enabling efficiency and productivity in municipalities that use a major part of public resources, is undeniable.

The purpose of this study is to evaluate the financial and performance information within the annual reports issued by the municipalities of Turkey within the scope of accountability and to reveal the present condition from the results of this evaluation. In short, this study investigates to which degree the municipalities enlighten their stakeholders from the aspect of financial information via annual reports. Within the scope of the study, annual reports of metropolitan municipalities for the year 2017 and 2018 were obtained and the presence of several considerations, defined according to the extent of the financial and performance information they provide and their manner of presentation, were checked.

In this study, we investigate whether higher institutional ownership is related to better internal controls and whether better internal control is associated with a higher quality of transparency.