Search results

The paper extends the literature by examining the impact of politics, conflicts and compromises resulting from external pressures (gaiatsu, 外圧) and internal pressures (naiatsu, 内圧) on the convergence and globalization of accounting and accountability in Japan.

Using Japan as a case study, it is examined how and why the stimulus for significant accounting reforms arises, how the government manages and reacts to the powerful forces of gaiatsu and how it balances naiatsu among key stakeholders.

The ongoing changes in accounting regulations in Japan are neither the result of an unmediated response to gaiatsu nor the outcome of naiatsu. Rather, Japanese accounting changes are the consequence of complex external interactions and internal compromises. Specifically, Japan demonstrates a repetitive pattern of conflict management, which alters the domestic power balance based on naiatsu, and forces the Japanese government to make compromises to policy changes initiated by gaiatsu.

The findings have implications for the development of accounting and accountability, the globalized business world and international accounting research because they challenge claims made by global standards setters that international standards such as International Financial Reporting Standards are superior, are built on so-called “best practices” and are relevant to all countries.

Invoking the concepts of gaiatsu and naiatsu is a critical approach to understanding Japan's convergence toward economic liberalism and Anglo-American models of accounting and accountability.

The purpose of this paper is to explore whether there are differences in either the level of support for the mandatory adoption of International Financial Reporting Standards or the arguments made by various stakeholder groups within Japan’s Business Accounting Council (BAC) during different time periods from 2009 to 2013.

Using a content analysis of related BAC meetings and referring to Gernon and Wallace’s (1995) accounting ecology framework, this study provides rigorous and holistic insights into the debates concerning the adoption of IFRS in Japan. Time-series analyses are specifically applied to unravel continuous or discontinuous patterns of BAC members’ statements.

The results indicated significantly higher levels of disapproval of mandatory adoption of IFRS by representatives from accounting academics, manufacturing industry, and the Financial Services Agency than by those from the Japanese Institute of Certified Public Accountants. Also, a lower level of disapproval of mandatory adoption of IFRS was found in 2009 than in 2012 and 2013. The results further demonstrated that diversity of opinions and arguments existed in different stakeholder groups as well as in different time periods.

The findings of this study suggest that accounting research will be enhanced by an objective and critical examination of the sociological context of the globalization (convergence) process.

The results of this study will provide answers related to the possible, probable, and desirable aspects of the globalization (convergence) process by unraveling the causes and consequences of certain patterns presented in BAC members’ statements.

The purpose of this paper is to open up the Anglo‐centred argument in gender and accounting by exploring the relationship of women and accounting in a different social and cultural context.

The paper draws on in‐depth ethnographical studies to explore the real‐ life experiences of 66 Japanese women (9 percent of all women CPAs) who have entered the accounting profession from a range of backgrounds and generations.

The paper finds that some women accounting professionals in Japan have brought about changes in accounting practice there by applying a uniquely feminine approach in their day‐to‐day work. Their strict approach is attuned to the ongoing globalization in the field of accountancy, and this has helped to widen the opportunities for women.

This paper demonstrates that, in order to understand the issues surrounding gender and accounting, it is important to consider the prevailing social context and its underpinnings. In the Japanese “interdependent” social context, gender is intertwined in the process of accounting to establish its “independent” status.

It has been argued that the unique social and cultural context in Japan will make it difficult for the country to converge its accounting and auditing with global standards. By incorporating a gender perspective, the paper aims to clarify the social assumptions under which accounting and auditing operate in Japan.

By making a close analysis of the process by which Japanese women have entered the accounting profession, the paper reveals the connection between the growing significance of auditing and the changing role and position of women.

There has been growing concern worldwide regarding audit quality in Japan after the Kanebo and Olympus accounting scandals. The purpose of this paper is to examine the Japanese audit market from 2001 to 2011 to determine whether audit quality differs between Big N and Non-Big N audit firms and whether this difference, if existed, changed during 2007 when the number of big audit firms declined from four to three and the requirements of audit quality became more rigorous.

This study employs a sample of Japanese listed firms from fiscal year 2001 to 2011. Five proxy variables for audit quality are used and the data are analyzed using the propensity score matching method.

The authors show that irrespective of their size, all audit firms in Japan provide the same quality of service, when controlling for client characteristics including keiretsu, foreign sales ratio and bankruptcy risk measured in Japan. Additionally, the results suggest that although only three major audit firms remain in the Japanese audit market after the dissolution of PricewaterhouseCooper’s Chuo-Aoyama firm in 2007, the audit quality difference between Big N and Non-Big N remained unchanged before and after 2007.

The study contributes to the lack of existing empirical evidence on audit quality in Japan, a country characterized with low audit litigation risk and more emphasis on auditor reputation, given the influence of the notable change in Japanese audit market competition from Big 4 to Big 3. The study’s research design contributes to the extant literature by using multiple proxies of audit quality.

This study aims to examine the (overt) arguments and (covert) myths the Business Accounting Council (BAC) members have used to lobby over controversial accounting issues, such as the application of fair value accounting (FVA) and the adoption of International Financial Reporting Standards (IFRS) in Japan.

The authors used a content analysis to examine 85 statements included in multiperiod BAC meeting minutes and 68 articles prepared by International Accounting Standards Board (IASB) representatives from Japan.

The results reveal that together with the arguments, myths were created and amplified by opponents of FVA and the Financial Services Agency to hide the latter’s strong regulatory power. They created these myths, using covert stories of the importance of manufacturing activities and tax accounting (for small- and medium-sized enterprises [SMEs]), to oppose mandatory IFRS adoption in Japan and, thus, to maintain vested rights in preparing the Japanese generally accepted accounting principles and Japanese accounting standards for SMEs.

First, this study contributes to the lobbying literature by focusing on the coalition (network) effect of influential stakeholder groups. Second, although lobbying activities have been investigated mostly using comment letters, this study reviews multiperiod BAC meeting minutes and articles prepared by IASB representatives from Japan. Third, the study examines both overt arguments and covert myths, both of which are important in unmasking the fundamental structures of power within influential organizations, such as government agencies and standard-setters.

Globalization has brought about migration and the transnational movement of people from different backgrounds, cultures, ethnicities, using different languages, and has thereby facilitated intercultural interaction and re-interpretation of lived experiences. Gender research in accounting is also influenced by globalization, which has created a platform where different cultures can meet and interact, and where knowledge can be synthesized from the work of authors from various different countries. Building on my own research experiences and their outcomes, this study examines the globalization of gender research in accounting by tracing the development of research on the relationship between Japanese women and accounting. The experiences of Japan highlight that knowledge in accounting, including gender-in-accounting studies, historically flows from West to East. The language, concepts and framework in existing Western-led accounting studies translate and visualize the history and phenomena in a Japanese context to be shared within the international accounting arena.

This study demonstrates that this process provides a body of interesting evidence from Japanese contexts in the fields of history, household accounting and professionalization. Accounting played an enabling role for women in Japan, while positioning women to act as catalysts for social change. Questions arise regarding the potential for such findings (from the East) to flow to the West and be accorded equal status to Western-led accounting research. The study concludes by discussing, in terms of achieving sustainable and innovative knowledge creation in accounting, the importance of herstory in understanding local culture and its integration into ‘global’ academic research.

This study investigates the relationship between foreign ownership, earnings quality and overinvestment in Japanese zombie firms.

The study makes use of data from Japanese firms listed on the first section of the Tokyo Stock Exchange from 2009 to 2019. The study employs logistic and multinomial logistic models to test whether the overinvestment behavior of zombie firms is mitigated by foreign shareholdings and earnings quality.

The results show that (1) zombie firms tend to overinvest; (2) an increase in foreign ownership mitigates the overinvestment of zombie firms and (3) the mitigation of zombie firms' overinvestment by foreign ownership is stronger with higher earnings quality.

This study extends the discussion of earnings quality and investment efficiency to the zombie firm setting. Previous studies in accounting suggest that high earnings quality enhances firms' investment efficiency. The findings suggest that both a change in ownership structure and high-quality accounting information are necessary to mitigate the inefficiency of zombie firms.

This paper aims to examine the association between earnings quality and firm-specific return volatility for a large sample of Japanese manufacturing firms.

This archival research uses idiosyncratic volatility and asynchronicity as two analogous proxies for firm-specific return volatility to investigate its association with earnings quality.

Using idiosyncratic volatility and asynchronicity as two comparable proxies for firm-specific return volatility, the author finds contradictory results. The author relates this contradiction to another debate in accounting and finance literature about whether firm-specific return volatility captures firm-specific information or noise. Initially, the author obtains conflicting results because the systematic risk, one of the components of asynchronicity, is highly correlated with earnings quality. After controlling for the systematic risk, the author finds that higher earnings quality is associated with lower firm-specific return volatility. This finding is consistent with the noise-based explanation of firm-specific return volatility. The author also separates earnings quality into an innate component driven by economic fundamentals and a discretionary component driven by managerial discretionary behavior and finds that both components have significant impact on firm-specific return volatility but the innate component has significantly stronger effect than the discretionary component.

This is the first research study presenting evidence on the association between earnings quality and firm-specific return volatility in the Japanese setting. The findings of this paper are likely to contribute to the resolution of a well-known debate on whether firm-specific return volatility captures more firm-specific information being impounded in stock prices or noise in stock prices.

The purpose of this paper is twofold. First, it aims to contribute to the theoretical discussion on shared service centres (SSCs) for public sector accounting by putting forth a novel typology of different SSCs and their creation modes, and outlining the challenges these specific models are likely to face. Second, it uses the Estonian case study to test the theoretical conjectures.

Since in the Estonian central government different reform models for creating SSCs for public sector accounting have been tried out, the Estonian case offers an opportunity for exploring what the motives behind the creation of different forms of SSCs can be and what kind of challenges reform actors can face when opting for different reform models. The sources of data for the qualitative case study included official documents, media articles and interviews.

The Estonian case study demonstrates that the distinct reform models for creating SSCs in public sector accounting can indeed have different motives and also face various challenges to different degrees. Some challenges, however, are present in all reform models (e.g. difficulties in achieving customer orientation and reduced input to managerial decision making).

This paper puts forth a novel typology of public sector SSC reform models and analyses the challenges these different reform models are likely to face. The theoretical contribution and the Estonian case study are valuable for both academics and practitioners analysing or considering the creation of SSCs.

‘Japan's amazing ability to disappoint.’ This was the title on the front cover of the Economist, 26th September, 1998 issue. Although this referred to Japan's government's inability to solve its huge financial problems, the same may be said about its ability to materialise its much‐heralded and ambitious programme of so‐called ‘Big Bang’ financial deregulation if the reform lacks substance such as proper protective measures for consumers as well as a transparent and accountable regulatory process. ‘Free, Fair and Global’ — the three basic principles put forward by the former prime minister Ryutaro Hashimoto upon unveiling his plan to launch Big Bang on 11th November, 1996 — rings hollow to the car of those who suffered a huge financial loss due to mis‐selling of high‐risk financial products.