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This study aims to examine the economic consequences of, and managerial behaviour in response to, the introduction of IFRS 16 Leases. It extends the debt covenant hypothesis to explain why firms reduce the use of operating leases with the introduction.

This study develops a model, based on operating leases as an alternative financing source and the determinants of debt policy, to estimate the effects of gearing on operating lease intensity. High gearing is a proxy to probably closer to the violation of, or expected to violate, the gearing restriction in debt covenants given the retrospective capitalisation of operating leases, when IFRS 16 takes effect.

This study finds that operating lease intensity fell between 2011 (immediately after the first exposure draft leading to IFRS 16) and 2018 (immediately prior to the effective date of IFRS 16). It also finds that gearing affects changes in operating lease intensity over 2011 and 2018, consistent with the debt covenant hypothesis.

The introduction of IFRS 16 is a natural experiment with unique characteristics (the active lobbying behaviour, ex ante evidence on adverse economic consequences, a prolonged standard-setting period, etc.) valuable for accounting research.

A showcase about the relevance of financial reporting for contracting interests of firms and managers and a good reference for accounting standard setters in considering and managing the economic consequences of proposed accounting standards.

This study adds to the limited research on the consequences of accounting standards and documents the ex-post impact on firm leverage ratios and the behavioural aspects of reporting entities.

The purpose of this study is to investigate the implementation of International Financial Reporting Standard (IFRS) 16 in developing countries to enhance asset pronouncements or the quality of opaque accounting information for listed firms’ leasing transactions.

This study designed ordinary least square (OLS) regression models to examine the hypotheses in two ordered tests. The first-order test ascertained the association between fundamental accounting information and earnings or stock prices. Then, the second-order test was nested to add the instrument variable to the first-order one. In addition, the researchers selected 17 Asia-Pacific countries.

First, this study contributes to the fair value of firms’ asset measurements, and the accounting discipline requires adaptive scalability to produce future potential cash flows. Second, it reduces literature gaps between the pros and cons of the opaqueness of assets. In addition, these research arguments would be the referee for reducing information’s opacity. Finally, this study demonstrates the impact of IFRS 16’s implementation on firms’ conservatism levels and entropy’s information quality, requiring the regulators to accommodate these issues.

Due to the implementation of IFRS 16, the authors are neutral about the impacted financial statements and political consequences for these Asia-Pacific listed firms and countries. First, we propose the uniqueness of problematic elaboration since implementing IFRS 16 results in a more pronounced or opaque information quality due to vulnerable complexities in the financial statements. Second, this implementation is associated with hierarchical information and conservatism, producing accounting information entropy or negentropy. However, the hierarchy theory suggests various levels of conservatism that could increase or decrease the information’s quality.

The purpose of this study is to construct and test a new measure of auditor orientation using two audit quality-related tasks.

The sample consists of 66 Dutch and US graduate auditing students. Participants complete two tasks: one involving a lease classification and another, supplemental experiment involving a contingent liability judgment. The purpose is to construct a new measure for rules-based/ principles-based orientation. Rigorous, psychometric testing confirms that parts of tolerance for ambiguity (TOA) and need for cognition (NFC), together, form a new construct the authors identify as auditor orientation. The authors next conduct a main and supplemental experiment with novice auditor participants from both the USA and the Netherlands.

The authors begin with rigorous, psychometric testing using participants from the USA and the Netherlands. The resulting 10-item scale combines parts of TOA and NFC to reflect auditor orientation. The common themes across scale items are high (low) adaptability to complexity and a substance-over-form (form-over-substance) preference for principles-oriented (PO) (rules-oriented [RO]) auditors. Conducting two experiments, results from two distinct tasks confirm our research question; novice auditors classified as RO (PO) are more (less) likely to recommend a more aggressive/client-favorable disclosure judgment.

Auditor orientation (i.e. rules or principles) has a significant impact on the application of rules-based or principles-based standards. How the standards are applied, therefore, influences auditor decision-making and thus audit quality. However, there is a paucity of auditor orientation research to date, including a validated measure. The study contributes a new measure for future research in the related accounting standards and audit quality literatures, while also identifying a potentially important construct in auditor training.

An intractable effect of revenue and expense recognition based on tax regulation and accounting rules is unresolved and may be manageable only by reducing the value of deferred taxes. Therefore, in this study, the authors examined the relationship between the International Accounting Standard 12 (IAS 12) and deferred income taxes associated with tax and accounting rules.

The authors used a large sample of balanced data from 144 firms across 1992–2019. To mitigate the problem of superfluous results, the authors used the same number of firms and years for pre- and post-IAS 12 periods. The authors employed robust econometric estimations to establish the impact of IAS 12 on deferred tax.

The regression results show that deferred tax assets decreased significantly, whereas deferred tax liabilities increased significantly, in the post-IAS 12 period. These contrasting results imply that IAS 12 implementation has increased conservatism and prudence in financial reporting. However, the authors find that the increase in deferred tax assets post-IAS 12 is value destructive, suggesting that its implementation has unintended consequences. The results are robust to alternative measurements and econometric identification strategies.

While prior studies have explored topics such as deferred tax measurement and the impact of income and expense recognition, the authors specifically analyzed how IAS 12 affects deferred taxes and their effect on the market valuation. The authors find that certain accounting standards may not be relevant to the capital market.

This study aims to explore COVID-19-related accounting disclosures using sociological disclosure analysis (SDA) within the context of the developing economy of Bangladesh.

COVID-19-related accounting disclosures from listed banks’ annual reports have been examined using three levels of SDA: textual, contextual and sociological interpretations. Data were gathered from the banks’ 2019 and 2020 annual reports. The study uses the legitimacy theory as its theoretical framework.

The research reveals a substantial shift in corporate disclosures due to COVID-19, marked by a significant increase from 2019 to 2020. Despite regulatory and professional directives for COVID-19-specific disclosures, notable non-compliance is evident in subsequent events, going concern, fair value, financial instruments and more. Instead of assessing the implications of COVID-19 and making disclosures, companies used positive, vague and subjective wording to legitimize non-disclosure.

The study’s insights can inform regulators and policymakers in crafting effective guidelines for future crisis-related reporting like COVID-19. The research adds to the literature by methodologically using SDA to explore pandemic-specific disclosures, uncovering the interplay between disclosures, legitimacy and stakeholder engagement.

This study represents a pioneering effort in investigating COVID-19-specific disclosures. Moreover, it uses the SDA methodology along with the legitimacy theory to analyze accounting disclosures associated with COVID-19.

Wisdom is considered as crucial in decision-making in both management and auditing practice. This research aims to investigate the concept of wisdom in auditing, thereby empirically exploring the determinants of wisdom in audit decision-making and explaining inter-relations among these determinants.

This study employs grounded theory methodology that is based on in-depth interviews with twenty-seven practicing auditors who are audit partners, managers, seniors and assistants of auditing firms. Guided by the grounded theory, data collection and data analyses were conducted simultaneously to look into the new insights of the research phenomenon. The coding process was constantly compared until the research's theoretical saturation is reached after four rounds. At the end of the research process, the study conducted a survey to confirm the proposed framework as well as examine the inter-relationships between the defined determinants.

Results suggest developing a conceptual framework to interpret wisdom-based decision-making process in auditing. A wise process of audit decision-making is defined as an integrated exercise of multiple determinants including knowledge assimilation, judgmental ability and ethical orientation. The research also explains and examines the potential interrelationships among these determinants in the audit decision-making process.

Wisdom is a valuable tacit ability for all external auditors. The development of wise decision-making abilities of auditors should be considered an integral part of multiple virtues including knowledge and judgmental and ethical aspects.

The contributions of this study are original and significant because it proposes a new approach to explain for the audit decision-making process and enhances better understandings of the concept of wisdom in auditing practices and its roles in audit decision-making.

This paper aims to achieve two goals: first, to evaluate the existing interest-free monetary policy tools in the major Islamic financial hubs of Malaysia, Pakistan and Bahrain and; second, to suggest how monetary policy tools in Turkey can be used in other countries.

This study follows a qualitative research method based on literature review, comparison, evaluation and design.

The policy rate cannot be used due to Shariah concerns. The reserve requirement depends on qard, and the reserves should be kept separately in the central bank. In terms of ijarah sukuk, Shariah concerns should be taken into account and a new structure, as displayed in Figure 3, should be followed. Government investment certificates can be used as an interest-free monetary policy tool. A genuine mudarabah interbank investments can also be used. Wadiah acceptance with no habitual gift can be used as well, and Tawarruq and central bank notes are not preferable due to Shariah concerns as well. Having said that, a Turkey-based tawarruq platform can be structured for others to use instead of applying to London.

This paper’s unique suggestion is to develop an interbank taqaruz market and a taqaruz method with the central bank. It is also unique for Turkey in the subject.

The purpose of this study is to investigate the association between nonaudit services (NAS) and out-of-period adjustments (OOPAs). Over the years, the number of OOPAs has risen while the number of restatements has decreased. This could indicate an improvement in financial reporting quality. It could also indicate the use of a type of stealth restatement for opportunistic purposes. These less prominent restatements are more likely to go undetected and could perpetuate opportunistic disclosure and mitigate the likelihood of unfavorable market reactions.

The authors use a two-stage multivariate regression analysis to examine the relationship between NAS and the reporting of an OOPA. The authors use prior research on NAS to guide the model development. The authors perform several robustness checks including different types of NAS and different characteristics of OOPAs.

The results indicate that NAS has a significantly negative association with the existence of OOPAs. The core findings suggest that NAS does not impair auditor independence. Rather, greater amounts of NAS may contribute to knowledge spillover, which leads to higher financial reporting and audit quality. The results are robust to several additional tests.

The results raise interesting implications for regulators, executives, auditors, investors and future research. The authors provide insight into the relationship between NAS and auditor independence.

To the best of the authors’ knowledge, prior research has not considered the effect of NAS on OOPAs. The authors contribute to the literature by providing evidence that OOPAs, a form of stealth restatements, is an important consideration in audit quality research.

The purpose of this paper is to examine a recent comprehensive corporate real estate (CRE) alignment model which was derived from previous CRE alignment models. This study proposes several modifications and additions based on business and decision-making literature to increase the framework’s multidisciplinary strength and extend its implementation phase.

Literature from various fields is reviewed and “lessons” incorporated into the framework. The business literature review began with corporate strategy theories cited in CRE alignment theory and extended to critiques of those and more recent theories. Likewise, decision-making and implementation both began with material cited in CRE literature and “rippled” out to encompass pertinent material.

The model used provides a robust framework, and this study has identified several areas that would appear to improve that model from a theoretical and practical perspective. Areas of further research are identified that appear to offer opportunities to further develop the framework.

Historically, there has been a tendency for new CRE alignment models to be created rather than existing ones being developed further. Here, a framework derived from a meta-study of CRE alignment models is reviewed, and improvements are proposed to further develop CRE alignment theory and its application in practice through the addition of viewpoints from the business field and more focus on the implementation phase of the model.

This research explores the determinants and consequences of salesperson polychronicity in a business-to-business (B2B) sales environment. Additionally, the study examined the link between the antecedents and consequences of salesperson polychronicity using resistance to change (RC) and manager trust in salesperson (MT) as moderators.

A conceptual framework was developed by testing eight hypotheses based on data collected from 378 salesperson-manager dyads.

The authors find that opening leader behavior is positively associated with salesperson polychronicity, while closing leader behavior negatively influences salesperson polychronicity. In addition, salesperson polychronicity positively affects service recovery performance and customer-directed organizational citizen behaviors (OCB). Finally, the RC and MT significantly and positively moderate the linkage between the antecedents and consequences of salesperson polychronicity.

This study is original because this is the first study to address polychronicity as an individual trait in a B2B environment where multitasking behavior is of paramount importance.