Search results

1 – 6 of 6
Article
Publication date: 4 May 2020

Noriyuki Tsunogaya and Andreas Hellmann

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…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Originality/value

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.

Article
Publication date: 5 March 2020

Noriyuki Tsunogaya and Chris Patel

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

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Originality/value

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.

Details

Accounting, Auditing & Accountability Journal, vol. 33 no. 4
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 20 June 2016

Noriyuki Tsunogaya

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…

3624

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Originality/value

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.

Details

Accounting, Auditing & Accountability Journal, vol. 29 no. 5
Type: Research Article
ISSN: 0951-3574

Keywords

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 quality;…

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

Article
Publication date: 12 September 2016

Noriyuki Tsunogaya, Satoshi Sugahara and Parmod Chand

The purpose of this paper is to examine the effects of a principles-based accounting standard with guidance (principles-with-guidance approach), stringency (conservativeness) of…

Abstract

Purpose

The purpose of this paper is to examine the effects of a principles-based accounting standard with guidance (principles-with-guidance approach), stringency (conservativeness) of numerical thresholds, and incentives (high or low debt-equity ratio environment) on the judgments of Japanese auditors in a lease accounting setting.

Design/methodology/approach

To reflect Japanese auditors’ judgmental features, this study adopts a quasi-experiment that uses both manipulation for different environments (i.e. stable or critical financial condition) and perceptions about the importance of “principles” and “guidance” in different types of lease accounting standards (i.e. substantially all, approximately 90 and 88 percent).

Findings

Principle” (substantially all) has a positive effect, while “guidance” (approximately 90 percent) has a negative effect on encouraging Japanese auditors to capitalize lease transactions. “More stringent guidance” (approximately 88 percent) has a positive effect only when clients are in critical financial conditions. Other findings indicate that judgments of Japanese auditors are strongly influenced by their colleagues’ perceived judgments.

Originality/value

This is the first quasi-experiment to examine Japanese auditors’ professional judgments using a lease accounting setting. To find out whether Japanese auditors interpret and apply International Financial Reporting Standards (IFRS) in the similar manner as their counterparts in other countries will be important when Japanese policymakers make their final decision regarding the adoption of IFRS. The discussion and findings also contribute to the International Accounting Standards Board (IASB) with regard to enhancing global convergence of financial reporting.

Details

Asian Review of Accounting, vol. 24 no. 3
Type: Research Article
ISSN: 1321-7348

Keywords

Content available
Book part
Publication date: 30 September 2019

Abstract

Details

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

1 – 6 of 6