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1 – 10 of over 1000Henri Hussinki, Tatiana King, John Dumay and Erik Steinhöfel
In 2000, Cañibano et al. published a literature review entitled “Accounting for Intangibles: A Literature Review”. This paper revisits the conclusions drawn in that paper. We also…
Abstract
Purpose
In 2000, Cañibano et al. published a literature review entitled “Accounting for Intangibles: A Literature Review”. This paper revisits the conclusions drawn in that paper. We also discuss the intervening developments in scholarly research, standard setting and practice over the past 20+ years to outline the future challenges for research into accounting for intangibles.
Design/methodology/approach
We conducted a literature review to identify past developments and link the findings to current accounting standard-setting developments to inform our view of the future.
Findings
Current intangibles accounting practices are conservative and unlikely to change. Accounting standard setters are more interested in how companies report and disclose the value of intangibles rather than changing how they are determined. Standard setters are also interested in accounting for new forms of digital assets and reporting economic, social, governance and sustainability issues and how these link to financial outcomes. The IFRS has released complementary sustainability accounting standards for disclosing value creation in response to the latter. Therefore, the topic of intangibles stretches beyond merely how intangibles create value but how they are also part of a firm’s overall risk and value creation profile.
Practical implications
There is much room academically, practically, and from a social perspective to influence the future of accounting for intangibles. Accounting standard setters and alternative standards, such as the Global Reporting Initiative (GRI) and European Union non-financial and sustainability reporting directives, are competing complementary initiatives.
Originality/value
Our results reveal a window of opportunity for accounting scholars to research and influence how intangibles and other non-financial and sustainability accounting will progress based on current developments.
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Durgesh Pandey and Paul Gilmour
The “metaverse” is the new buzzword. With the phenomenal growth of the metaverse comes accounting, taxation and jurisdictional challenges, which business and governments have yet…
Abstract
Purpose
The “metaverse” is the new buzzword. With the phenomenal growth of the metaverse comes accounting, taxation and jurisdictional challenges, which business and governments have yet to fully address. This paper aims to highlight and rationalise the lack of regulatory framework and multiplicity of jurisdictions on metaverse transactions. This paper addresses some of the complications with respect to accounting and taxation in virtual environments.
Design/methodology/approach
This study relies on secondary data and emerging literature to understand the multiplicity of jurisdiction and complexity of the accounting transactions. The concept of the metaverse is rapidly evolving, and this study uses extant literature to provide the foundation for understanding the key challenges relating to accounting and taxation.
Findings
Concepts of revenue recognition and deferment are challenged by the transactions in the metaverse. There are novel applications, underpinned by emerging technologies and blockchain supporting new crypto assets, such as non-fungible tokens and other decentralised finance (DeFi) tools; however, the caveats of anonymity and jurisdictional issues persist. The paper suggests that the industry must adapt to the unique reporting requirements of these assets and develop new standards for evaluating their value for financial reporting purposes. The paper emphasises the need for a case-based approach in the absence of standardised regulations for the accounting industry in the metaverse.
Originality/value
This paper adds original contributions to extant literature of the metaverse and advances ongoing debates into the accounting and taxation issues pertinent to the metaverse and DeFi.
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This study aims to evaluate Islamic bank compliance with the accounting and auditing organisation for Islamic financial institutions (AAOIFI), assess the impact of multiple…
Abstract
Purpose
This study aims to evaluate Islamic bank compliance with the accounting and auditing organisation for Islamic financial institutions (AAOIFI), assess the impact of multiple accounting standards in Islamic banking, examine the need for private accounting standards and assess international financial reporting standards (IFRS) compatibility with Islamic banking and analyse financial leasing accounting in Islamic banking compared to IFRS 16.
Design/methodology/approach
A combination of comparative theoretical analysis, physical examination, and semi-structured interviews has been used as a research methodology. These methods are interconnected and complement each other to provide a comprehensive approach to address the research questions.
Findings
Islamic banks in various countries show varying compliance with AAOIFI accounting standards. Some fully comply, while others adopt a hybrid approach combining AAOIFI and IFRS. Differences in accounting treatments can result in conflicts, asset inflation and financial statement discrepancies. Challenges and criticisms faced by AAOIFI standards include violating the matching principle and lacking faithful representation. Collaboration among academics, standards-setting bodies and organisers is crucial for guiding the reporting of Islamic financial statements.
Practical implications
The research identifies gaps in implementing Islamic accounting standards and proposes strategies to enhance compliance, improve performance and increase transparency in Islamic financial institutions. It highlights the importance of a harmonised and universally accepted accounting framework for Islamic banking, considering the compatibility between IFRS and Islamic principles.
Social implications
Social implications have arisen regarding the global acceptance of Islamic finance, which leads to an increase in socially Islamic finance exchange.
Originality/value
This research examines the consequences of using multiple accounting standards in the Islamic banking industry and discusses the need for private accounting standards and compatibility with IFRS.
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Hamada Elsaid Elmaasrawy, Omar Ikbal Tawfik and Abdul-Rashid Abdul-Rahaman
This study aims to examine the effect of audit client’s use of blockchain (BC) on auditing accounting estimates (AEs), especially the inherent risk (IR), control risk (CR) and…
Abstract
Purpose
This study aims to examine the effect of audit client’s use of blockchain (BC) on auditing accounting estimates (AEs), especially the inherent risk (IR), control risk (CR) and collection of audit evidence.
Design/methodology/approach
The study used a questionnaire to collect data for a sample of 249 auditors. A partial least squares method is used to test the hypotheses.
Findings
The results showed positive relationship between audit client’s use of BC and both IR and CR when auditing AEs. The results also showed the BC improves the collection of sufficient and appropriate audit evidence when auditing AEs.
Research limitations/implications
This study did not address all the risks associated with auditing AEs, including fraud, detection, sampling and nonsampling risks, and the procedures and tests for auditing AEs.
Practical implications
There are several implications of this research, including that it informs the revision of auditing standards and guidelines to correspond with successive technological changes, which subsequently clarify the roles and responsibilities of auditors, and the study findings will also cause changes to the design and form of audit procedures so as to obtain sufficient and appropriate audit evidence.
Originality/value
To the best of the authors’ knowledge, this study is considered the first of its kind that deals with the effects of audit client’s use of BC on audit AEs in the Middle East and North Africa region. This study also presented different sets of measures as proxies for measuring IR, CR and AE.
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Modar Abdullatif, Rami Alzebdieh and Saeed Ballour
This paper aims to explore the potential effect of key audit matters (KAM) on the audit report lag (ARL). In particular, it aims to discover whether the number of KAMs reported by…
Abstract
Purpose
This paper aims to explore the potential effect of key audit matters (KAM) on the audit report lag (ARL). In particular, it aims to discover whether the number of KAMs reported by an audit firm in Jordan is related to the length of its ARL.
Design/methodology/approach
The authors analysed data from the first three years of KAM reporting in Jordan (2017–2019) for 194 public listed Jordanian companies to examine the relation between the number of KAMs and the ARL, taking into account several control variables related to the Jordanian context.
Findings
This study found that there is no statistically significant relation between the number of KAMs reported by Jordanian audit firms and their ARLs, suggesting that the KAM reporting in Jordan is somewhat superficial, with the selection of what is actually reported as a KAM not directly related to the efforts needed to deal with its concerns. However, this study also found statistically significant positive relations between the ARL and each of audit fees, audit firm size, the issuance of a qualified audit opinion and company leverage and a statistically significant negative relation between the ARL and company profitability.
Originality/value
This is one of the very few studies to cover the potential relation between KAM reporting and the ARL. In a developing country context characterised by limited demand for an external audit of high quality, this study finds that auditors may decouple on their reporting of KAMs by not actually making significant efforts to deal with them.
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This paper aims to determine the adaptability of China’s legal system in recognizing and enforcing foreign judgements in China.
Abstract
Purpose
This paper aims to determine the adaptability of China’s legal system in recognizing and enforcing foreign judgements in China.
Design/methodology/approach
Academic articles, case law and books are examined as are relevant reports by various regulatory authorities and organizations.
Findings
Historically, Chinese courts have strictly adhered to “de facto reciprocity”, which made it difficult for foreign judgements to be recognized and enforced in China. Fortunately, Chinese courts have since abandoned their rigid adherence to de facto reciprocity, and have instead, used flexible tests of reciprocity such as de jure reciprocity, reciprocal commitment and reciprocal understand/consensus. Accordingly, this would facilitate the recovery of stolen assets, as there is a lower threshold for the recognition and enforcement of a foreign judgement.
Research limitations/implications
There are limited data available in relation to the recognition and enforcement of foreign judgements pertaining to the recovery of stolen assets. Any discussions within this paper are based on the impressionistic observations of this author, which may not reflect the true state of affairs within the Belt and Road Initiative.
Practical implications
Those who are interested in examining the viability in recognizing and enforcing foreign judgements relating to stolen assets will have an interest in this topic.
Originality/value
The value of the paper is to demonstrate the difficulties in recognizing and enforcing foreign judgements in China in relation to stolen assets.
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Anna M. Cianci and George T. Tsakumis
The purpose of this study is to examine accountants’ application of principles-based accounting standards to a lawsuit contingency recognition scenario and the potential role that…
Abstract
Purpose
The purpose of this study is to examine accountants’ application of principles-based accounting standards to a lawsuit contingency recognition scenario and the potential role that accounting work experience plays in mitigating accountants’ aggressive financial reporting.
Design/methodology/approach
This study presents a 2 × 2 between-subjects experiment with accounting experience (measured as high vs low) and contingency type (asset vs liability) as independent variables and accountants’ lawsuit contingency conservatism likelihood judgments and US$ recognition recommendations as the dependent variables.
Findings
Consistent with expectations, findings indicate that more experienced accountants are more likely to recognize liabilities and items that decrease income and less likely to recognize assets and items that increase income than their less experienced counterparts. Accountants also recommended recognizing lower (higher) mean US$ amounts for assets (liabilities), as expected. Supplemental analyses show a significant moderated-mediated effect whereby the interactive effect of contingency type and accounting experience on individuals’ US$ recognition recommendations is partially mediated through the nature of the conservatism judgment.
Practical implications
The finding that less experienced accountants report more aggressively than more experienced accountants when applying a principles-based standard supports the call for using judgment frameworks in imprecise standard settings and suggests that firms may want to ensure that accountants with adequate work experience are on hand as U.S. generally accepted accounting principles become more principles-based over time.
Originality/value
To the best of the authors’ knowledge, this study is the first to examine the impact of accounting work experience on the application of principles-based accounting standards and the mitigation of aggressive financial reporting. Our supplemental analyses also identify the nature of the conservatism judgment as a mediating mechanism which partially explains more experienced accountants’ US$ asset and liability recognition recommendations.
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Khouloud Ben Ltaief and Hanen Moalla
The purpose of this study is twofold. On the one hand, it studies the impact of IFRS 9 adoption on the firm value; and on the other hand, it investigates the impact of the…
Abstract
Purpose
The purpose of this study is twofold. On the one hand, it studies the impact of IFRS 9 adoption on the firm value; and on the other hand, it investigates the impact of the classification of financial assets on the firm value.
Design/methodology/approach
The study covers a sample of 55 listed banks in the Middle Eastern and North African (MENA) region. Data is collected for three years (2017–2019).
Findings
The findings show that banks’ value is not impacted by IFRS 9 adoption but by financial assets’ classification. Firm value is positively affected by fair value through other comprehensive income assets, while it is negatively affected by amortized cost and fair value through profit or loss assets. The results of the additional analysis show consistent outcomes.
Practical implications
This research reveals important managerial implications. Priority should be given to the financial assets’ classification strategy following the adoption of IFRS 9 to boost the market valuation of banks. It may be useful for investors, managers and regulators in their decision-making.
Originality/value
This study enriches previous research as IFRS 9 is a new standard, and its adoption consequences need to be investigated. A few recent studies have focused on IFRS 9 as a whole or on other parts of IFRS 9, namely, the impairment regime and hedge accounting and concern developed contexts. However, this research adds to the knowledge of capital market studies by investigating the application of IFRS 9 in terms of classification in the MENA region.
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This paper aims to examine the impact of the mandatory adoption of (International Financial Reporting Standards [IFRS] 9) on loan provisions, nonperforming loans (NPL) and…
Abstract
Purpose
This paper aims to examine the impact of the mandatory adoption of (International Financial Reporting Standards [IFRS] 9) on loan provisions, nonperforming loans (NPL) and impairment loan loss in Gulf banks. This study also investigates potential variations in outcomes compared to prior models and explores the use of the Callaway and Sant’Anna (2021) estimator for difference-in-differences (DiD) with multiple time periods.
Design/methodology/approach
The research is based on a sample of 53 Gulf banks covering the period from 2012 to 2020. The study analyzes the changes in loan provisions, impairment loss and NPL following the implementation of IFRS 9. It uses statistical analysis and the DiD method to compare the outcomes between the experimental group (treated by IFRS 9) and the control group (not treated).
Findings
The findings reveal a statistically insignificant increase in loan provisions, impairment loss and NPL after the adoption of IFRS 9. These results align with previous studies and suggest that Gulf banks were proactive in anticipating and mitigating the impact of the new standard. The study also observes a synchronization of provisioning practices across Gulf countries and a certain level of consistency in recognizing loan losses.
Practical implications
The practical implications of this study suggest that Gulf banks have successfully absorbed the impact of IFRS 9 and have implemented collaborative approaches.
Originality/value
The study offers some new sight into IFRS9 outcomes in developing countries and opens the door for implementing a novel DiD estimation in future research studies.
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Maha Khalifa, Haykel Zouaoui, Hakim Ben Othman and Khaled Hussainey
The authors examine the effect of climate risk on accounting conservatism for a sample of listed companies operating in 26 developing countries.
Abstract
Purpose
The authors examine the effect of climate risk on accounting conservatism for a sample of listed companies operating in 26 developing countries.
Design/methodology/approach
The authors employ the Climate Risk Index (CRI) developed by Germanwatch to capture the severity of losses due to extreme weather events at the country level. The authors use different approaches to measure firm-level accounting conservatism.
Findings
The authors find that greater climate risk leads to a lower level of accounting conservatism. The results hold even after using different estimation methods.
Research limitations/implications
Although the authors' analysis is limited to the period 2007–2016, it could be helpful for standard setters such as International Accounting Standards Board (IASB) and International Sustainable Standards Board (ISSB) as they may consider the potential effect of climate risk in their international standards.
Practical implications
The negative impacts of climate risk on the quality of financial reporting as proxied by accounting conservatism could trigger regulators and standard setters to require disclosure of information relating to climate risks and to incorporate climate-related risks in their risk management systems. In addition, for policymakers, incorporating accounting conservatism as a financial quality reporting standard could help promote greater transparency, accuracy and reliability in financial reporting in the context of climate risk.
Originality/value
The authors add to the literature on international differences in accounting conservatism by showing that climate risk significantly affects unconditional and conditional conservatism. The authors' results provide fresh evidence of the dark side of climate change. That is, climate risk is shown to decrease financial reporting quality.
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