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Book part
Publication date: 13 January 2021

Chibuzo Amadi and Amanze Ejiogu

At the end of this chapter, learners should be able to:

  • Define accounting.
  • Explain the objectives of financial accounting/reporting.
  • Explain regulatory framework for financial

Abstract

Learning Objectives

At the end of this chapter, learners should be able to:

  • Define accounting.

  • Explain the objectives of financial accounting/reporting.

  • Explain regulatory framework for financial reporting.

  • Appreciate why human resource managers should care about accounting.

Define accounting.

Explain the objectives of financial accounting/reporting.

Explain regulatory framework for financial reporting.

Appreciate why human resource managers should care about accounting.

Details

Financial and Managerial Aspects in Human Resource Management: A Practical Guide
Type: Book
ISBN: 978-1-83909-612-9

Keywords

Content available
Article
Publication date: 31 May 2017

Wiyarni Wiyarni

The purpose of this study is to explore the area of accounting in traditional market. There are two areas of accounting: management and financial accounting. Some of…

Abstract

The purpose of this study is to explore the area of accounting in traditional market. There are two areas of accounting: management and financial accounting. Some of traditional market traders have prepared financial notes, whereas some of them do not. Their financial notes usually consist of receivables, payables, customer orders, inventories, sales and cost price, and salary expenses. The purpose of these financial notes is usually for decision making. It is very rare for the traditional market traders to prepare financial notes for external users, such as vendors, creditors, and customers. This is because their transactions with vendors, creditors, and customers are very simple. This study used interpretive paradigm. Data was collected using in-depth interview and direct interaction with four informants from three traditional markets. Data is analyzed by organizing them, breaking them into manageable units, coding them, synthesizing them, and searching for patterns. Based on the analysis, this study found that the accounting area of traditional market activities is management accounting rather than financial accounting.

Details

Asian Journal of Accounting Research, vol. 2 no. 1
Type: Research Article
ISSN: 2459-9700

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Book part
Publication date: 21 May 2021

Peterson K. Ozili

Purpose: This chapter discusses how pandemics affect the nature of financial reporting especially for financial and non-financial institutions that were deeply affected by…

Abstract

Purpose: This chapter discusses how pandemics affect the nature of financial reporting especially for financial and non-financial institutions that were deeply affected by the 2020 coronavirus (COVID-19) outbreak.

Method: This chapter presents a reflective discussion of the accounting practices and financial reporting options for firms during a pandemic, ­focusing on the interface between financial reporting and pandemics.

Findings: Accounting practices or techniques such as fair value accounting, big-bath accounting, loss avoidance, and income smoothing t­echniques can help to dampen the effect of a pandemic on firm performance.

Practical Implications and Significance: Some implications about the merits and risks of accounting during pandemics are highlighted and discussed.

Originality: Although the coronavirus COVID-19 crisis is, to some extent, still unfolding, there is limited empirical evidence on the implication for accounting.

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Article
Publication date: 22 October 2021

Maria Cadiz Dyball and Ravi Seethamraju

The paper reports on a study that investigated the (potential) impact of client use of blockchain technology on financial statement audits of Australian accounting firms.

Abstract

Purpose

The paper reports on a study that investigated the (potential) impact of client use of blockchain technology on financial statement audits of Australian accounting firms.

Design/methodology/approach

Data were primarily collected from semi-structured interviews with a range of stakeholders including audit partners from first- and second-tier accounting firms in Australia. The interviews focused on the perceived (potential) impact of blockchain on the stages of obtain (retain) engagement, engagement planning, risk assessment, audit evidence and reporting of financial statement audits of clients that use blockchain technology. Perceptions of changes to financial statement audits were interpreted using the logics of professionalism and commercialism.

Findings

Australian accounting firms have either obtained or considered engagements with clients with a cryptocurrency business or that use a blockchain platform although they are a small group. There is a view that blockchain technology is distinctive and therefore poses risks not encountered before in audit engagements. These risks would most likely shift how firms plan, design audit methodologies and execute financial statement audits. The study showed that the logics of professionalism and commercialism are not conflicting but instead complementary. They present both opportunities and challenges for firms to apply and develop audit expertise in an emerging area in audit.

Research limitations/implications

Being an exploratory study, the findings are tentative. A case study of an audit engagement with a cryptocurrency business will add to a nuanced understanding of the challenges posed to financial statement audits by blockchain technology.

Originality/value

This study is novel because of its focus on the impact of an evolving technology on the stages of financial statement audits.

Details

Accounting, Auditing & Accountability Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 10 June 2021

Thereza Raquel Sales de Aguiar

The purpose of this paper is to explore issues related to the use of financial accounting and reporting by discussing three interrelated areas: the theoretical…

Abstract

Purpose

The purpose of this paper is to explore issues related to the use of financial accounting and reporting by discussing three interrelated areas: the theoretical foundations, the framework and practicalities. The paper also discusses participatory and pluralistic approaches to accounting and corporate governance as alternatives to address some of these issues.

Design/methodology/approach

This is a narrative research based on deductive thematic analysis of secondary data. This study provides a general overview of the existing literature of the limits of the use of financial accounting and its impact on business and society.

Findings

In terms of the theoretical foundations, this paper contrasts financial accounting explained by agency theory and a dialogic accounting approach. The findings of this study emphasise the need to establish an accounting framework for the interests of the many (not the few) in conjunction and simultaneously with a participatory and pluralistic approach to corporate governance. Finally, this paper explores accounting for carbon emissions and recent financial accounting scandals to analyse the impact of the inappropriate use of financial accounting and reporting in business and society.

Originality/value

This paper provides an overview of the limits of the use of financial accounting by exploring its theoretical background, framework and practicalities. The paper also discusses the need for new accounting and corporate governance frameworks that allow a pluralistic and participatory approach to the decision-making of companies.

Details

Accounting Research Journal, vol. 34 no. 4
Type: Research Article
ISSN: 1030-9616

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Book part
Publication date: 3 September 2014

Orhan Akisik

This paper explores the relationship between foreign direct investments and financial reporting changes via financial development in 12 Latin American countries during the…

Abstract

Purpose

This paper explores the relationship between foreign direct investments and financial reporting changes via financial development in 12 Latin American countries during the period from 1997 to 2010.

Methodology/Approach

In order to control the possible endogeneity problem, the Generalized Method of Moments (GMM) estimation technique has been conducted using country-level panel data obtained from the World Development Indicators website.

Findings

The empirical analyses provide evidence that international accounting standards have a significant effect on foreign direct investments. However, financial development associated with such standards reduces this positive effect. This is an important finding, suggesting that investors are likely to prefer portfolio to direct investments in Latin American financial markets that require or permit the use of international accounting standards.

Research Implications

The conclusions that have been drawn from this study are important for investors, creditors, and regulators. Although international accounting standards appear to affect foreign investments, there could be a lack of adaptation of these standards to specific economic environments due to cultural, educational, and economic factors. Therefore, firms, regulators, professional organizations, and accounting firms should make necessary arrangements so that the benefits of using these standards increase their costs.

Originality/Value

The study contributes to the international accounting literature by examining the effects of international accounting standards and financial development on foreign direct investments in Latin America.

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Abstract

Details

Advances in Accounting Education: Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-84950-869-8

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Book part
Publication date: 23 August 2021

Mohammad Nurunnabi

The study critically evaluates the theory of International Financial Reporting Standards (IFRS) implementation in an attempt to provide directions for future research…

Abstract

The study critically evaluates the theory of International Financial Reporting Standards (IFRS) implementation in an attempt to provide directions for future research. Using the extensive structured review of literature using the Scopus database tool, the study reviewed 79 articles, and in particular the topic-related 57 articles were analysed. Nine journals contribute to 51% of articles (29 of 57 articles). In particular, the three journals published 15 articles: Critical Perspectives on Accounting (7), Accounting, Organizations and Society (4), and Journal of Applied Accounting Research (4). In total, 83% (47 of 57) of the articles were published 2009–2018. A total of 1,168 citations were found from 45 articles since 12 articles were without citations. The highest cited authors were Ball (2006) – 410 citations, Kothari, Ramanna, and Skinner (2010) – 135 citations, and Napier (1989) – 85 citations. In particular, five theories have been used widely: institutional theory (13), accounting theory (6), agency theory (3), positive accounting theory (3), and process theory (2). Future studies’ focus could be on theory implications in IFRS adoption/implementation studies in a country or a group of countries’ experience. Future studies could also focus on various theories rather depending on a single theory (i.e. institutional theory).

Details

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

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Abstract

Details

Advances in Accounting Education Teaching and Curriculum Innovations
Type: Book
ISBN: 978-0-76231-035-7

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Book part
Publication date: 28 October 2021

Matt Kaufman, Ella Mae Matsumura and Urban Wemmerlöv

This study examines challenges to the retrospective financial evaluation of continuous improvement (CI) activities. Through a review of the literature and active…

Abstract

This study examines challenges to the retrospective financial evaluation of continuous improvement (CI) activities. Through a review of the literature and active engagement with CI implementations, we identify several issues that may lead to divergence between operational and financial assessments. Out of this conflict emerges a set of concepts that we find important − the delineation of soft versus hard capacity benefits, the distinction between capacity used and capacity paid for, and the data gaps that relate to these benefits – and recognize operational improvement and financial improvement as distinct, yet interrelated, theoretical constructs. This study helps explain a series of persistent gaps in the management accounting literature: Conflict between operations and accounting managers, the divergent perspectives of Johnson and Kaplan after their publication of Relevance Lost (Johnson & Kaplan, 1987), and the need for both operational control (including detailed capacity control) and accounting control in CI firms. Instead of one control system being at odds with the other, or co-existing despite each other, each of these systems support a different component of the financial improvement process. Operational control systems in CI firms emphasize non-financial information and social and behavioral controls that empower decision-making by employees, while accounting control systems seek to motivate and translate operational gains into financial gains. Soft and hard benefits linked to capacity play an integral role in understanding the difference in focus of each control system, while data limitations help to explain why these systems remain loosely coupled in practice (or absent, as seems to be the case with detailed Capacity Management Systems).

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