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11 – 20 of over 1000Olga Fullana, Mariano González and David Toscano
In this paper we analyse the effect on unconditional conservatism of the mandatory adoption of International Financial Reporting Standards (IFRS) by the European listed firms in…
Abstract
Purpose
In this paper we analyse the effect on unconditional conservatism of the mandatory adoption of International Financial Reporting Standards (IFRS) by the European listed firms in January 2005. Under the hypothesis that accounting regulation influences the accounting conservatism, we use a non-market-based measure of unconditional conservatism – the accrual-based measure proposed by Givoly and Hayn (2000) – to test this effect, controlling for the other determinants of the unconditional conservatism found in the accounting literature.
Design/methodology/approach
We use a panel data of 10 years and 96 non-financial listed firms in the Spanish stock market in which the differences between local GAAP and IFRS are more important. A pre-estimation analysis of the data reveals that GLS with random effects is the correct estimation procedure. However, to try to deal with the likely endogeneity in the set of variables, the authors perform an estimate with a dynamic estimator for panels with few periods and many individuals where the independent variables are not strictly exogenous.
Findings
As expected, results show evidence that support a significant reduction on the unconditional conservatism of firms in the sample due to the adoption of IFRS. This evidence is relevant to equity market, debt market and corporate governance users of the financial information, and also for the policymakers who can assess the effects of their mandate.
Research limitations/implications
Results shown in this paper have all the limitations of system-, country-, sample- and event-specific studies but, along with many others drawn in alternative contexts, may help to correctly understand both the time-evolution and cross-sectional country differences of firms’ unconditional conservatism.
Originality/value
The study represents the first analysis of the effect of the adoption of IFRS on unconditional conservatism of the European listed companies using a non-market accrual-based measure. Results are not influenced by the dynamics of the stock market and, by comparison, allow us to analyse this influence in results provided by using market-based measures of the unconditional accounting conservatism provided by previous literature.
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Joanne Lye, Hector Perera and Asheq Rahman
The aim of this research is to illustrate how a change from cash‐based accounting to accruals‐based accounting in the core public sector of New Zealand occurred.
Abstract
Purpose
The aim of this research is to illustrate how a change from cash‐based accounting to accruals‐based accounting in the core public sector of New Zealand occurred.
Design/methodology/approach
The grounded theory research strategy is used in a field study setting.
Findings
The findings suggest that there were six antecedents of the change – key people, axial principles, communicating ideas, contextual determinants, ethos, and knowledge. All of these converged to create the synergistic process of change that led to policy innovations. In this change process, accounting change was a means to an end, where accrual accounting was introduced in order to achieve ministerial control and measure performance of government entities to provide relevant information for management decision making.
Research limitations/implications
Since this is a case study based on a single country, not all analytical categories will be relevant to other contexts/countries. However, the study provides a conceptual framework that identifies constructs that are insightful for other settings.
Practical implications
The findings of the study will be useful to researchers and policymakers interested in appreciating the causes and catalysts of major policy shifts in public sector accounting. The findings suggest that there are no general reform formats that can be applied to all countries.
Originality/value
The insights were derived from participants who were directly involved in the change. The strength of grounded theory strategy used in this study was that, by not being bound by an a priori theory, one was able to ground one's understanding in the factors surrounding the change.
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Sabrina Gigli and Laura Mariani
The purpose of this paper is to examine the change from cash accounting to accrual accounting, identifying and assessing the institutional and organisational barriers that may…
Abstract
Purpose
The purpose of this paper is to examine the change from cash accounting to accrual accounting, identifying and assessing the institutional and organisational barriers that may affect this process. A specific focus on knowledge gaps is provided.
Design/methodology/approach
The study employs a mixed method design, combining action research activities, a survey, and in-depth qualitative interviews in the setting of Italian public universities.
Findings
The findings highlight a low degree of compliance with the accrual accounting system and budgeting system, which is the result of the lack of an accrual accounting culture in the Italian public sector.
Originality/value
The analysis confirms some barriers to the transition highlighted by previous literature and also adds further explanations of such limitations in terms of the lack of skills and accounting knowledge of the universities’ administrative staff possesses.
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Eugenio Anessi-Pessina, Greta Nasi and Ileana Steccolini
Accounting innovations, and especially the introduction of accruals accounting, are often portrayed as fundamental aspects of publicsector reforms. An increasing body of…
Abstract
Accounting innovations, and especially the introduction of accruals accounting, are often portrayed as fundamental aspects of publicsector reforms. An increasing body of literature has been studying the experiences of different countries and levels of government, often referring to Lueder's (1992) "contingency model" and its subsequent developments. This model highlights a number of social, political, and administrative variables that are likely to affect government accounting innovations. It applies at a country-wide level and is mainly intended to describe and compare the environments within which accounting reforms take place, as well as the technical features of such reforms. Our paper, on the contrary, tries to expand the contingency model by applying it to individual organisations and by testing its explanatory power.
Yuri Biondi and Lasse Oulasvirta
Recognition, measurement and disclosure of public sector assets constitute relevant matters for national and international public sector accounting standard-setting. This chapter…
Abstract
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.
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Chitra Sriyani De Silva Lokuwaduge and Keshara De Silva
The purpose of this paper is to extend the New Public Financial Management concept and the contingency model approach to an analysis of the determinants of the accrual-based…
Abstract
Purpose
The purpose of this paper is to extend the New Public Financial Management concept and the contingency model approach to an analysis of the determinants of the accrual-based International Public Sector Accounting Standards (IPSAS) adoption process as a financial management reform in Sri Lanka, a developing country in Asia.
Design/methodology/approach
Based on the prior literature, this paper develops a framework to highlight the importance of accrual-based reforms in public sector accounting policies to enable better transparency and accountability. It shows the extent to which Sri Lankan public sector institutions have adopted IPSAS-based accounting standards and the limitations of adopting these standards in a developing country, using documentary analysis.
Findings
In developing countries, the public sector faces practical problems when adopting reforms due to limited institutional capacity, high political involvement and bureaucracy in decision making. This paper concludes that significant policy changes towards the adoption of international accounting standards have gained momentum over the last decade in Sri Lanka while the much larger economies in Asia are still studying this process. However, the prevailing political uncertainty in Sri Lanka has negatively impacted the implementation process.
Originality/value
Relatively little is known about the diffusion of, and the difficulties in, implementing accrual-based IPSAS in the Asian region. This paper is an attempt to fill this gap by exploring the Sri Lankan experience. This could be applied by other developing countries in Asia, including the high-growth nations, for policy adoption and accounting harmonisation.
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Jerry Sun and Guoping Liu
The purpose of this paper is to examine whether high analyst coverage increases or decreases accounting conservatism.
Abstract
Purpose
The purpose of this paper is to examine whether high analyst coverage increases or decreases accounting conservatism.
Design/methodology/approach
Sample firms were selected from the Compustat and I/B/E/S databases for years 1989‐2006. The authors used both accrual‐based and market‐value‐based measures of accounting conservatism, also the extent to which negative cash flow from operations is more timely recognized via accruals than positive cash flow from operations to measure accounting conservatism. The regression analyses are conducted to test the hypotheses.
Findings
Strong evidence was found that analyst coverage is positively associated with accounting conservatism. The results suggest that firms choose more conservative accounting methods when they are followed by more analysts than when they are followed by fewer analysts. The results are robust to a battery of sensitivity analyses.
Originality/value
This paper sheds light on how analyst coverage affects firms' accounting choices and extends the limited research on the monitoring role of analyst coverage. The findings are consistent with the notion that analyst coverage plays an important corporate governance role in the financial reporting process. This paper also adds to the literature on the economic determinants of accounting conservatism, and provides some implications for practitioners.
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The purpose of this paper is to assess the extent of central government financial information disclosed in accordance with accrual-based International Public Sector Accounting…
Abstract
Purpose
The purpose of this paper is to assess the extent of central government financial information disclosed in accordance with accrual-based International Public Sector Accounting Standards (IPSAS) and to investigate the environmental factors affecting this level, drawing on the contingency theory framework.
Design/methodology/approach
This study uses a self-constructed checklist of 116 items to measure the IPSAS disclosure level by 100 public sector entities from different countries across the globe during the period 2015–2017. Panel regressions have been used.
Findings
The results show significant differences in compliance levels with IPSAS disclosures across nations. They reveal a positive influence of the degree of government openness (political culture), quality of public administration and management and prior experience with International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) in the public sector on this level, whereas government financial condition is a nonsignificant factor.
Practical implications
The research findings are potentially relevant to academics, researchers, practitioners, standard-setters and government policymakers. By examining the influencing factors of IPSAS disclosure level, this paper paves the way for further investigation of this topic with a more extensive set of micro and macroeconomic variables whether at the central or local government level in other jurisdictions
Originality/value
This study provides new insights into the assessment of the transparency and completeness of government accrual-based financial statements. Based on the contingency theory, this paper is the first to empirically investigate the factors affecting the level of disclosure under accrual-based IPSAS by central government entities in a cross-country analysis.
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Susana Jorge, Sónia P. Nogueira and Nuno Ribeiro
This paper aims at understanding the action of pilot entities, in order to ultimately infer about their role to the overall reform process of public sector accounting (PSA).
Abstract
Purpose
This paper aims at understanding the action of pilot entities, in order to ultimately infer about their role to the overall reform process of public sector accounting (PSA).
Design/methodology/approach
Taking the Portuguese case as a reference, the new institutional theory (isomorphism perspective) and institutional logics are used to explain the action and stance of pilot entities in the implementation process of reforms.
Findings
Pilot experiments are expected to provide feedback on the main difficulties felt in the implementation of a new PSA system, helping to define a global strategy to overcome those problems and to improve the system to be generally and finally put into practice. Nevertheless, entities seem to find it important to be pilots, more for individual advantages than for the common benefit of the reform as a whole. Therefore, in order for them to actually be important actors in the reform process, pilots need to be included in the decision process, better realizing the benefits of the new IPSAS-based system and be provided with the proper technical, human and financial support.
Research limitations/implications
This research suffers from some limitations, namely concerning the use of questionnaires. The findings may, in some points, reflect the perceptions of the respondents and not the actual reality. Additionally, the respondents were not asked about any personal background factors, which may influence their answers. Also, they did not allow relating the new PSA system features with the way pilot entities (re)acted. In regard to the implications for practice, the study points to a need for decision-makers and external support bodies to work more closely with pilot entities in the overall design and implementation of PSA reforms. Pilot entities need to understand the importance and usefulness of changes, and reform authorities need to better recognize their institutional reality and the support they require. Only in this way, the use of pilots can make a difference in the implementation of PSA innovations.
Originality/value
This paper contributes to theory by adding to a better understanding of the role of the ones acting in the development and implementation of PSA innovations, enlightening on how pilot entities can act/react. Despite several studies on PSA reforms, very few so far have addressed pilot entities in particular, their attitude and actual contribution toward PSA reforms, and why. The case of Portugal as a frontrunner in adopting an IPSAS-based system within the EU helps contribute to that understanding in the setting of European countries.
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Ricardo Rocha de Azevedo, André Feliciano Lino, André Carlos Busanelli de Aquino and Túlio César Pereira Machado-Martins
The successful implementation of International Public Sector Accounting Standards (IPSAS) depends on the adoption and subsequent maintenance of accrual accounting policies…
Abstract
Purpose
The successful implementation of International Public Sector Accounting Standards (IPSAS) depends on the adoption and subsequent maintenance of accrual accounting policies. Moreover, Financial Management Information Systems (FMIS) are important drivers of reforms, and their replacement might disrupt the execution of accrual accounting policies. This paper aims to analyze the effects of FMIS replacement (or maintenance) on the retention of accrual accounting policies in Brazilian local governments.
Design/methodology/approach
The research adopts a sequential mixed-methods approach, starting with a quantitative analysis of the presence of accrual accounting policies in local governments and the effects of FMIS replacement. Next, a qualitative analysis is conducted with a survey, documents and interviews to observe the FMIS replacement process. Our analysis focuses on local governments from one state in Brazil, but the context is highly transferable to other states, as the same procurement law and accounting regulations apply.
Findings
FMIS replacement may reduce accounting policies retention; consequently, public procurement regulation may induce a public procurement context in which the IPSAS project would find more difficulties to prosper.
Research limitations/implications
This research contributes to the IPSAS literature by examining the phenomenon of accounting policies retention or persistence, as one should not take it for granted that an adopted accounting procedure will be sustained over time. The analysis argues that FMIS replacement due to compulsory rebidding should be carefully considered.
Practical implications
Promoters of accounting reforms may consider the regulation of contracting out for FMIS a relevant issue to the institutionalization of accounting policies.
Originality/value
The analysis innovates by linking IPSAS accounting reform to the contracting out of FMIS.
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