Search results

1 – 10 of over 145000
To view the access options for this content please click here
Article
Publication date: 1 February 2016

Liang Song and Joel C Tuoriniemi

The purpose of this paper is to examine how firms’ accounting quality affects bank loan contracting in seven emerging markets and whether these relationships are affected…

Abstract

Purpose

The purpose of this paper is to examine how firms’ accounting quality affects bank loan contracting in seven emerging markets and whether these relationships are affected by borrowers’ governance standards.

Design/methodology/approach

The study sample period is 1999-2007 because the syndicated loan market was severely affected by the East Asian financial crisis of 1998 and the US financial crisis of 2008. The final sample includes 719 loan observations for 75 firms in seven emerging markets.

Findings

The authors find that syndicated lenders provide loans with more favorable terms such as larger amounts, longer maturity and lower interest spread to borrowers in emerging markets with higher accounting quality. The authors also find that the influences of accounting quality on syndicated loan contracting for borrowers in emerging markets exist only with higher country- and firm-level governance rankings. The results of this paper suggest that lenders place more value on accounting numbers generated by borrowers in emerging markets with stronger internal and country governance frameworks.

Originality/value

Overall, this research provides new insights about how accounting quality affects the contract design. Specifically, the extant literature has demonstrated the effects of accounting quality on financial contracts in developed countries (e.g. Bharath et al., 2008). The authors extend this analysis to borrowers in emerging markets and confirm a similar result. Most notably, the authors explore whether the relationship between accounting quality and syndicated loan contracts is influenced by borrowers’ country- and firm-level governance, and find that accounting quality matters only when accompanied by high-quality governance. This research provides new insights about how accounting quality and governance standards affect the terms of borrowing contracts in emerging markets.

Details

Pacific Accounting Review, vol. 28 no. 1
Type: Research Article
ISSN: 0114-0582

Keywords

To view the access options for this content please click here
Article
Publication date: 1 June 2005

Kim Watty

To provide a view of quality in accounting education from the perspective of a critical stakeholder group – academic accountants. The identification of this view adds to…

Downloads
5078

Abstract

Purpose

To provide a view of quality in accounting education from the perspective of a critical stakeholder group – academic accountants. The identification of this view adds to the growing discussions around quality, and how it is assured in higher education.

Design/methodology/approach

Applying a framework for defining quality in higher education to an accounting context, a postal survey questionnaire was sent to academic accountants at 39 Australian universities to gather data about their views of quality in accounting education.

Findings

Academic accountants view quality, as currently defined and promoted in their immediate working environment, differently to their views about how quality should be defined and promoted. As a consequence, quality assurance and improvement systems may be currently designed to assure quality that is promoted in accounting education, rather than quality that ought to be promoted.

Research limitations/implications

Using a postal survey to gather data on the complex issue of “quality” might not always provide the richness of data that may be collected during face‐to‐face survey interviews.

Practical implications

The findings of this study provide valuable input into the discussion around the design of quality assurance and improvement systems in higher education generally, and for accounting education specifically.

Originality/value

In the absence of any previous empirical research that has sought to identify these perceptions, the findings fill the gap in the literature by clearly identifying the views of quality in accounting education from a key stakeholder group – academic accountants.

Details

Quality Assurance in Education, vol. 13 no. 2
Type: Research Article
ISSN: 0968-4883

Keywords

To view the access options for this content please click here
Book part
Publication date: 30 September 2019

Masumi Nakashima

This study focuses on a survey of chief financial officers (CFOs) in public firms in Japan concerning the following six points: the importance of the definition earnings…

Abstract

This study focuses on a survey of chief financial officers (CFOs) in public firms in Japan concerning the following six points: the importance of the definition earnings quality; higher quality earnings; the determinants of earnings quality; prevalence, magnitude, and motivation of earnings management; accounting that influences earnings quality; and misrepresenting of earnings. The results are following: first, Japanese CFOs define earnings quality as earnings accurately reflecting economic reality, earnings accurately reflecting the results of operations, and earnings backed by cash flows, earnings sustainability, recurring, and consistent, and earnings reflecting long-term trend importance. Second, Japanese firms consider earnings that reflect consistent reporting choices over time as higher quality. They do not consider that earnings having accruals that are eventually realized as cash flow as higher earnings quality. Third, Japanese CFOs indicate that 30% of earnings quality is impacted by firm characteristics such as firm’s business model, industry, and macroeconomic conditions. Surprisingly, the influence of the board of directors is greater than the impact of their internal controls. Fourth, as for the determinants of earnings quality, CFOs consider that more than 70% of Japanese CFOs do not allow the discretion and that accounting standards limit their ability to report higher earning quality. Fifth, Japanese CFOs consider that higher earnings are influenced by accounting principles such as policies that match expenses with revenues and policies that rely on fair value accounting as much as possible. Sixth, CFOs themselves predict that 50% of Japanese firms use discretions and that they use 20% of earnings per share (EPS). Since there is inside and outside pressure to hit earnings benchmarks, Japanese firms possess the motivation to use earnings to misrepresent economic performance, Japanese managers see a red flag when generally accepted accounting principle’s earnings do not correlate with cash flow from operations.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78973-370-9

Keywords

To view the access options for this content please click here
Book part
Publication date: 6 November 2012

Irene Nalukenge, Stephen K. Nkundabanyanga and Venancio Tauringana

Purpose – The overall purpose of this study is to investigate whether literacy levels and external user-pressure by the Uganda Revenue Authority affect the perceived…

Abstract

Purpose – The overall purpose of this study is to investigate whether literacy levels and external user-pressure by the Uganda Revenue Authority affect the perceived quality of accounting information of Ugandan SMEs.

Design/methodology/approach – A postal questionnaire survey of 98 SMEs drawn from Kampala, Uganda was undertaken. Ordinary Least Squares (OLS) regression was used to determine whether literacy levels and external user-pressure affect the quality of accounting information controlling for firm size, accounting qualification and firm age.

Findings – The findings suggest that literacy levels and external user-pressure influence the perceived quality of accounting information. Accounting qualification and firm age were also found to be positively associated with the quality of accounting information. However, there is no significant relationship between firm size and quality of accounting information.

Originality/value – The study provides evidence of the effect of literacy and external user-pressure on the quality of accounting information in a developing country where such evidence does not currently exist.

Implications – Since accounting information is important for economic growth, the Ugandan government needs to spend more resources to improve the literacy especially among the SMEs. The Uganda Revenue Authority also needs to maintain pressure on SMEs to improve the quality of information provided by SMEs since such information is important for assessing tax payable.

Details

Accounting in Africa
Type: Book
ISBN: 978-1-78190-223-3

Keywords

To view the access options for this content please click here
Book part
Publication date: 23 August 2021

Mohammad Nurunnabi

The study aims at reviewing a synthesis of disclosure, transparency, and International Financial Reporting Standards (IFRS) implementation in an attempt to provide…

Abstract

The study aims at reviewing a synthesis of disclosure, transparency, and International Financial Reporting Standards (IFRS) implementation in an attempt to provide directions for future research. Prior research overwhelmingly supports that the IFRS adoption or effective implementation of IFRS will enhance high-quality financial reporting, transparency, enhance the country’s investment environment, and foreign direct investment (FDI) (Dayanandan, Donker, Ivanof, & Karahan, 2016; Gláserová, 2013; Muniandy & Ali, 2012). However, some researchers provide conflicting evidence that developing countries implementing IFRS are probably not going to encounter higher FDI inflows (Gheorghe, 2009; Lasmin, 2012). It has also been argued that the IFRS adoption decreases the management earnings in countries with high levels of financial disclosure. In general, the study indicates that the adoption of IFRS has improved the financial reporting quality. The common law countries have strong rules to protect investors, strict legal enforcement, and high levels of transparency of financial information. From the extensive structured review of literature using the Scopus database tool, the study reviewed 105 articles, and in particular, the topic-related 94 articles were analysed. All 94 articles were retrieved from a range of 59 journals. Most of the articles (77 of 94) were published 2010–2018. The top five journals based on the citations are Journal of Accounting Research (187 citations), Abacus (125 citations), European Accounting Review (107 citations), Journal of Accounting and Economics (78 citations), and Accounting and Business Research (66 citations). The most-cited authors are Daske, Hail, Leuz, and Verdi (2013); Daske and Gebhardt (2006); and Brüggemann, Hitz, and Sellhorn (2013). Surprisingly, 65 of 94 articles did not utilise the theory. In particular, four theories have been used frequently: agency theory (15), economic theory (5), signalling theory (2), and accounting theory (2). The study calls for future research on the theoretical implications and policy-related research on disclosure and transparency which may inform the local and international standard setters.

Details

International Financial Reporting Standards Implementation: A Global Experience
Type: Book
ISBN: 978-1-80117-440-4

Keywords

To view the access options for this content please click here
Article
Publication date: 12 March 2020

Eunjung Cho, Jeehong Kim and Sooin Kim

The purpose of this paper is to examine whether a negative outcome (i.e. a sanction) of an inspection by Korea’s Financial Supervisory Service for an industry-leading…

Abstract

Purpose

The purpose of this paper is to examine whether a negative outcome (i.e. a sanction) of an inspection by Korea’s Financial Supervisory Service for an industry-leading company affects the accounting quality of other companies in the same industry. The premise is that when peer companies observe the negative results of such an inspection on a leader in their industry, they will be more concerned about their own risk during a future inspection and more likely to increase their accounting quality.

Design/methodology/approach

The authors conduct a mutivariate Oridnary Least Squares (OLS) regression using 11,476 South Korean samples from 2002 to 2016. The study uses ordinary least square regressions to test the hypotheses using discretionary accruals as a proxy for accounting quality.

Findings

The authors find that peer companies reduced their discretionary accruals in the next period and that this reduction is amplified according to the severity of the disciplinary action on the industry leader and the materiality of errors in that leader’s financial statements.

Originality/value

This finding contributes to the literature by providing the first evidence of a spillover effect of regulatory inspection on accounting quality that financial reporting sanctions not only affect the overall accounting quality of the sanctioned company but also that of its peers in the same industry. The authors expect this study to lead to future research on the effect of other regulations on industry-wide accounting quality.

Details

Managerial Auditing Journal, vol. 35 no. 5
Type: Research Article
ISSN: 0268-6902

Keywords

To view the access options for this content please click here
Article
Publication date: 19 July 2020

Dominique Dufour, Philippe Luu and Pierre Teller

This paper analyses the role of accounting information quality on leverage adjustments. More specifically, the authors investigate whether a better accounting information…

Abstract

Purpose

This paper analyses the role of accounting information quality on leverage adjustments. More specifically, the authors investigate whether a better accounting information leads to a higher speed of adjustment to the target financial leverage.

Design/methodology/approach

The authors use a two-step method. They first estimate the target financial structure and then the influence of accruals quality on the speed of adjustment to this target. The study sample consists of French listed companies in the CAC All-Tradable index. The sample contains 210 companies and 1,713 observations.

Findings

Accounting literature showed the positive influence of accounting quality on financial management. The study findings are in line with these results. The authors give evidence of that a better quality of accruals is associated with a greater speed of adjustment.

Research limitations/implications

A common limitation in this field is the use of proxies. This makes results harder to generalize. For this reason, the authors implemented several models to improve the robustness of their results.

Practical implications

The authors give evidence that firms have an incentive to disclose a good-quality accounting information. A weak accounting quality prevents firms from adjusting their leverage to their financial target and therefore reduce their value.

Social implications

This work shows the need for accounting standardization bodies to strive to produce accounting standards allowing the production of high-quality accounting information. In a teaching dimension, these results highlight the importance in corporate finance of acquiring expertise in quality accounting information analysis.

Originality/value

This work is original because the authors study the influence of accounting quality on speed of adjustments of firms operating in the same legal environment and using the same accounting standards, when previous work compared different accounting frameworks. The French context is characterized by the weakness of market mechanisms and the important role of banks. These characteristics are known to reduce the role of accounting information in financing process. This result is interesting because the authors demonstrate that firms operating in this context still have an incentive in producing high accounting quality information.

Details

Journal of Applied Accounting Research, vol. 21 no. 4
Type: Research Article
ISSN: 0967-5426

Keywords

To view the access options for this content please click here
Article
Publication date: 8 June 2020

Mohammadreza Mehrabanpour, Omid Faraji, Reza Sajadpour and Mohammad Alipour

The purpose of this study is to examine the impact of financial statement comparability as a qualitative feature of financial reporting on cash holdings and the mediating…

Abstract

Purpose

The purpose of this study is to examine the impact of financial statement comparability as a qualitative feature of financial reporting on cash holdings and the mediating role of disclosure quality and financing constraints in firms listed on the Tehran Stock Exchange (TSE).

Design/methodology/approach

Using panel data from 110 TSE-listed firms from 2011 to 2017 in Iran, this study uses the regression analysis to examine the research hypotheses. The first hypothesis examines the relationship between financial statements comparability and cash holdings and two other hypotheses examine the mediating role of financing constraints and disclosure quality in this relationship.

Findings

Based on pecking-order theory and institutional context of Iranian firms, the results show that financial reporting comparability has a significant negative impact on corporate cash holdings. The results also show that disclosure quality and financing constraints have no mediating role in the relationship between accounting comparability and cash holdings. The robustness tests with alternative measures of accounting comparability and cash holdings support the findings of this study.

Research limitations/implications

The limitations of this study are as follows: limited number of TSE companies that have necessary data to conduct research; and using the disclosure quality scores provided by TSE organization.

Practical implications

The findings suggest that creditors should consider the financial status and also the quality of financial reporting of companies, before granting credit to them. It is also recommended that regulators in the capital market publish the ratings of companies in terms of financial statement comparability alongside the disclosure ratings and a continuous regulatory oversight on companies.

Originality/value

To the best of the authors’ knowledge, this is the first empirical research on the effect of accounting comparability on the level of cash holdings that examines the mediating role of financing constraints in the context of Iran market as an emerging economy. Moreover, this is the first empirical research that studies the effect of disclosure quality on this relationship.

Details

Journal of Financial Reporting and Accounting, vol. 18 no. 3
Type: Research Article
ISSN: 1985-2517

Keywords

To view the access options for this content please click here
Article
Publication date: 5 December 2016

Krismiaji, Y. Anni Aryani and Djoko Suhardjanto

The purpose of this paper is to discuss empirical research examining the impact of International Financial Reporting Standard (IFRS) adoption and board governance on the…

Downloads
2216

Abstract

Purpose

The purpose of this paper is to discuss empirical research examining the impact of International Financial Reporting Standard (IFRS) adoption and board governance on the accounting quality, in terms of relevance and faithful representation.

Design/methodology/approach

The research uses a sample of 454 observations of publicly listed companies on the Indonesian Stock Exchange for the fiscal year that ends on December 31, 2008 through 2011. Relevance is measured by predictive value, whereas faithful representation is measured by absolute discretionary accrual as an inverse measure. Board governance is measured by the board of commissioner score whereas IFRS adoption is measured by the percentage of IFRS adopted. The data used in this study are obtained both from Indonesian Capital Market Directory, Indonesian Stock Exchange database, and from company annual reports.

Findings

This research found evidence of a positive association of IFRS adoption on the relevance of accounting information quality. With respect to faithful representation, this study proves a positive association after IFRS adoption. This research also found that board governance has a positive impact on accounting information quality after IFRS adoption both in relevance and faithful representation. This result is in line with investor’s expectations that fair value IFRS adoption enhances the relevance of accounting information.

Originality/value

This study provides further evidence on the effect of IFRS adoption and board of governance on accounting information quality using data from Indonesia. Moreover, this study measures and tests both dimensions of earnings quality which are relevance and faithful representation and portrays a complete story about the quality of earnings. This study uses the qualitative characteristics of accounting information as proxies for accounting quality, so that it enriches the accounting literature about the role of accounting standards in financial reporting quality.

Details

Asian Review of Accounting, vol. 24 no. 4
Type: Research Article
ISSN: 1321-7348

Keywords

To view the access options for this content please click here
Article
Publication date: 8 February 2016

Ibrahim El-Sayed Ebaid

This study aims to examine whether the adoption of International Financial Reporting Standards (IFRS) leads to accounting quality improvements in Egypt as a code-law…

Downloads
2414

Abstract

Purpose

This study aims to examine whether the adoption of International Financial Reporting Standards (IFRS) leads to accounting quality improvements in Egypt as a code-law country. In particular, the study examines earnings management, the construct often used to assess accounting quality.

Design/methodology/approach

The study compares earnings management practice for Egyptian listed companies before (2000-2006) and after (2007-2009) the adoption of IFRS.

Findings

The findings of the study reveal that accounting quality, as measured by earnings management, has decreased in post-adoption period compared to pre-adoption period. IFRS are set up to provide high-quality financial reporting. However, this cannot be achieved solely by a regulatory requirement to follow. The accounting system is a complementary component of the country’s overall institutional system. Institutional improvements did not simultaneously take place by the Egyptian government around the adoption of IFRS. The Egyptian government did not introduce a more effective enforcement system, mandatory corporate governance regulations, investor protection mechanisms and sufficient institutional knowledge of IFRS during that period. Thus, even if IFRS are higher quality standards, the institutional features of Egyptian market could eliminate any improvement in accounting quality arising from adopting IFRS.

Research/limitations/implications

The results of the study are consistent with prior research suggesting that the adoption of IFRS, which are generally perceived to be of higher quality than domestic standards, does not necessarily lead to higher accounting quality in code-law countries like Egypt. The overall results indicate that incentives dominate accounting standards in determining accounting quality in Egypt.

Originality/value

The main reason why countries adopt IFRS invariably is to improve accounting quality. It is, therefore, of interest to ascertain if this goal has been met, especially, in code-law countries such as Egypt.

Details

Journal of Financial Regulation and Compliance, vol. 24 no. 1
Type: Research Article
ISSN: 1358-1988

Keywords

1 – 10 of over 145000