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Article
Publication date: 1 March 2004

Erkki K. Laitinen

The purpose of the research is to analyse the ability of nonfinancial factors to predict value creation in Finnish technology firms. Nonfinancial factors are defined in…

Abstract

The purpose of the research is to analyse the ability of nonfinancial factors to predict value creation in Finnish technology firms. Nonfinancial factors are defined in terms of a large set of variables on organizational characteristics, strategy, competitive stance, consistency of performance measurement, management control systems (MCSs), and quality of MCSs. Financial ratios are used as a benchmark. The hypotheses are that, firstly, nonfinancial factors include important information for prediction and, secondly, that they provide incremental information over financial ratios. The nonfinancial variables are drawn from a postal survey carried out in 1999. Financial variables for 1998–2001 are obtained for 40 private firms of the 110 firms responding to the survey. Shareholder value is estimated on the basis of the four‐year financial data for 2001. This value divided by the shareholder book value (estimated‐to‐book value ratio, EBV) as well as its drivers are predicted by past non‐financial and financial data. Partial Least Squares (PLS) method is used to analyse the importance of information in prediction. The results give support to the hypotheses. Moreover, the results show that nonfinancial factors yield important incremental information over financial ratios when predicting value drivers, that is, growth, profitability, and risk. Especially, financial ratios are weak in predicting growth.

Details

Review of Accounting and Finance, vol. 3 no. 3
Type: Research Article
ISSN: 1475-7702

Keywords

Book part
Publication date: 25 September 2020

Peterson K. Ozili

Forensic accounting theory is an explanation of why and how the choice of methods or techniques used to detect creative accounting or manipulations in financial and…

Abstract

Forensic accounting theory is an explanation of why and how the choice of methods or techniques used to detect creative accounting or manipulations in financial and non-financial reporting, and the outcome of using such methods or techniques, depends on the accounting and non-accounting decisions taken into consideration by the forensic accountant or investigator. This theory is useful in stimulating meaningful discussions in the literature. This theory is useful to both practitioners and academics, and the resulting contributions to accounting theory and forensic science are useful to the problem-solving process in the global financial reporting agenda. The chapter discusses forensic accounting theory under a set of hypotheses for forensic investigation.

Details

Uncertainty and Challenges in Contemporary Economic Behaviour
Type: Book
ISBN: 978-1-80043-095-2

Keywords

Book part
Publication date: 15 September 2022

Mariya Shygun and Anastasiia Chystova

Purpose: Development of an approach, methods to the internal audit of tax differences, analysis of the peculiarities of the application of internal audit procedures of tax…

Abstract

Purpose: Development of an approach, methods to the internal audit of tax differences, analysis of the peculiarities of the application of internal audit procedures of tax differences and their reflection in the software in Ukraine.

Need for the Study: One of the most important general economic and accounting problems both in practical and scientific terms is the problem of determining the financial results of the enterprise, the methodology of its calculation and methods of taxation.

Questions of consistency of indicators of tax and financial accounting arise constantly as the results revealed according to tax accounting data, considerably deviate from real financial results of activity of the enterprise according to financial accounting data. This leads to tax differences. Moreover, significant deviations can be both in one direction and in the other. These indicators are important for study and analysis.

Methodology: The method of a systematic approach was used to reveal the content of tax differences and build the methodology of internal audit. Selective research, grouping, generalisation are used to study the state of the methodology and organisation of accounting for tax differences and their internal audit.

Findings: The study of the organisation and methods of internal audit allowed the authors to develop their methods of internal audit of tax differences. The chapter highlights such elements of internal audit as sources of information, audit directions, objects of audit and possible typical errors that may be identified during the internal audit. Sources of information for internal audit of tax differences are divided into groups: primary documents, accounting records, reporting and legislation. The authors systematised tax differences and analysed their impact on the pre-tax financial result. Possible errors in accounting for tax differences and ways to correct them are considered. The authors present options for displaying tax differences in software products used in Ukraine.

Practical Implications: This chapter examines the key components of the methodology of auditing the financial statements of the enterprise in terms of indicators of tax differences, the use of which ensures the reliability of reporting, avoids penalties from the tax authorities and ensures the prospects for the organisation. The possibility of digitalisation of accounting for tax differences on the example of software that is popular in Ukraine is considered. The pre-tax financial result is a consolidated, aggregate indicator that is determined by comparing income and expenses from different activities recognised per accounting rules and in most cases cannot be used to calculate income tax without appropriate adjustments.

Details

The New Digital Era: Digitalisation, Emerging Risks and Opportunities
Type: Book
ISBN: 978-1-80382-980-7

Keywords

Article
Publication date: 2 May 2017

Khalid A. Alanzi and Mishari M. Alfraih

This study aims to question whether learning outcomes of the first course in accounting could predict the overall academic performance of accounting students as measured…

Abstract

Purpose

This study aims to question whether learning outcomes of the first course in accounting could predict the overall academic performance of accounting students as measured by their graduating grade point average (GPA).

Design/methodology/approach

The sample of the present study was drawn from accounting students who were graduated during 2015 from a business college in Kuwait. Linear regression analysis was used to test the study's hypothesis.

Findings

The results indicate that there was a statistically significant association between the grade earned in the first course in accounting and the graduating GPA, which explained the significant impact of the learning outcomes of the first course in accounting on the overall academic performance of accounting students as measured by their graduating GPA, with and without controls for other factors.

Practical implications

The findings provide accounting educators with valuable insight into the significance of the outcomes of the first course in accounting, which would, in turn, lead to taking the necessary actions to enhance students' performances in this particular course, leading to improvements in the overall academic performance. The findings also provide academic researchers with a useful benchmark for future studies, as these findings would be expected to serve as a base for future studies in this area of research by re-examining the impact of students’ performance in the first course in accounting on the overall academic performance of accounting students in different educational environments and/or using the findings of the current study for another comparative research study.

Originality/value

Focusing on the impact of the learning outcomes of the first course in accounting on the overall academic performance of accounting students, rather than the other way around, the study contributes remarkably to the existing literature of accounting education, especially in developing countries such as Kuwait.

Details

Journal of International Education in Business, vol. 10 no. 01
Type: Research Article
ISSN: 2046-469X

Keywords

Article
Publication date: 8 July 2019

Bijan Bidabad, Mahmoud Allahyarifard and Mahshid Sherafati

This paper aims to explain a new system of accounting for partnership financing that applies in Rastin profit and loss sharing banking. In this system, the interest rate…

Abstract

Purpose

This paper aims to explain a new system of accounting for partnership financing that applies in Rastin profit and loss sharing banking. In this system, the interest rate is not used in calculations and accounting, and instead, the “time value” of capital based on the amount and duration of the partnership is used.

Design/methodology/approach

Rastin Partnership Accounting principles have been founded on off-balance-sheet items and on the basis of the institutions’ obligations to the depositors and receivers of financial resources, and they are in compliance with the nature of the financial intermediary activity (a partnership of depositor in the yields of the fund receiver via the bank).

Findings

The distribution of profit among stakeholders (including workforce and capital owners) is accomplished according to the share of each beneficiary in the created value added. In this regard, Euler’s theorem, as the best mathematical-economic innovation for distribution of income is applied.

Research limitations/implications

This system is novel, and it is required to be more elaborated for further practical development and adjustment.

Practical implications

In this accounting system, the return of the partnership is distributed among sharers based on the amount and duration of their partnership. The penalty for delay in payment is calculated from the amount of the incurred loss due to negligence or blameworthy of the undertaker and not upon a penalty interest rate.

Social implications

Interest rate as an essential factor in conventional accounting is not usable in Islamic banking and other similar institutions that work based on partnership, such as mutual funds and saving and loan associations. The proposed system removes this shortage and is fairer than the conventional accounting.

Originality/value

Approach of this accounting system is fully different from the conventional accounting because of intrinsic characteristics of the intermediary role of financial partnership institutions and Islamic banks.

Details

Journal of Islamic Accounting and Business Research, vol. 10 no. 4
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 12 June 2018

Khalid A. Alanzi and Mishari M. Alfraih

This study aims to examine the effect of accounting students’ performance in the first part of introductory accounting on duration to successfully complete accounting program.

Abstract

Purpose

This study aims to examine the effect of accounting students’ performance in the first part of introductory accounting on duration to successfully complete accounting program.

Design/methodology/approach

Linear regression (ordinary least squares) with a sample of 127 accounting students, who were graduated during the 2015/2016 academic year from a business college in Kuwait, was used to test the study’s hypothesis.

Findings

The results indicate that there was a statistically significant association between the grade earned in the first part of introductory accounting and the college duration, which explained the significant influence of the grade earned in the first part of introductory accounting on the college duration, with and without controls for other factors.

Practical implications

The findings provide administrators, accounting educators and academic researchers with a useful benchmark for improving accounting programs and guidelines for future academic research.

Originality/value

The value of this study would be twofold; it provided a foundation for future comparative studies, potentially leading to the harmonization of international accounting education, and it addressed some of the gaps in the existing regional accounting education literature resulting from the scarcity of prior studies. In addition, the college where data were collected has been recently approved to enter the candidacy for accreditation at the Accreditation Council for Business Schools and Programs. Given the accrediting bodies emphasis on academic performance and graduation on time, the study’s findings would help the college in enhancing its students’ performance and maximizing the chances of its accreditation application being successful.

Details

Journal of Global Responsibility, vol. 9 no. 3
Type: Research Article
ISSN: 2041-2568

Keywords

Article
Publication date: 14 July 2014

Grant Samkin and Annika Schneider

– This paper aims to consider the accounting academic, the environment in which the academic operates and the challenges they face.

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Abstract

Purpose

This paper aims to consider the accounting academic, the environment in which the academic operates and the challenges they face.

Design/methodology/approach

This paper explores a number of issues relating to the accounting academic. The five papers that make up the special issue are located within a framework which is used to illustrate how each one contributes to the field. This paper is primarily discursive in nature.

Findings

The theoretical, methodological and empirical approaches used in the papers that make up this special issue are described. In addition, the paper suggests that the accounting academic will remain a fertile area for future research.

Practical implications

This portrayal of accounting academics is of interest to accounting researchers, accounting historians, university managers and individual academics.

Originality/value

This special issue provides a range of examples of research relevant to the accounting academic and sets an agenda for future research.

Details

Meditari Accountancy Research, vol. 22 no. 1
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 20 September 2022

Stoyu I. Ivanov and Matthew Faulkner

Small firms, which represent much of the Silicon Valley region, tend to experience losses due to their small scale, small customer base and lack of diversification. The…

Abstract

Purpose

Small firms, which represent much of the Silicon Valley region, tend to experience losses due to their small scale, small customer base and lack of diversification. The authors study the impact of accounting conservatism and losses on firm value and as such this study is an appropriate addition to this growing field of financial management.

Design/methodology/approach

The authors use methodology developed in prior literature to examine Silicon Valley and non-Silicon Valley firms' and their behavior when facing losses and the factors, which might play a role in their valuation. The authors focus particularly on earnings and accounting conservatism. Accounting conservatism captures how fast firms record losses relative to gains. The faster losses are recognized than gains the more accounting conservatism is exhibited. The authors examine the seemingly unrelated estimation of differences in means for our independent variables of interest across the two samples of Silicon Valley and non-Silicon Valley firms, both earnings and accounting conservatism. The authors use matched sample analysis of these firms based on four digit SIC code, size and date. In robustness, the authors run a more in-depth propensity score matched sample analysis.

Findings

The authors document that market values of Silicon Valley firms with accounting losses are affected less by negative earnings than other firms with accounting losses in the United States outside of the Silicon Valley region, noting the “lose big, win bigger” sentiment of Silicon Valley. Additionally, the authors document that accounting conservatism does play a role in influencing valuations of companies with accounting losses both in Silicon Valley and the rest of the United States, marginally more for Silicon Valley firms.

Originality/value

This study would be of interest to fund managers who need to consider smaller firms for inclusion in their portfolios. A lot of small firms have experienced losses ever since going public, especially Silicon Valley start-up firms.

Details

Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 18 January 2021

Vera Palea

The purpose of this paper is to discuss whether fair value accounting fits for long-term equity investments, which are considered key to retool economies according to…

Abstract

Purpose

The purpose of this paper is to discuss whether fair value accounting fits for long-term equity investments, which are considered key to retool economies according to sustainability criteria. In doing so, the paper focuses on the European Union and addresses the European Commission’s (2018a) concern that current accounting rules are unfit for achieving the United Nations Sustainable Development goals and the targets of the Paris Agreement on climate change.

Design/methodology/approach

The paper grounds in a wide literature review on the effects of fair value accounting on investors’ asset allocation strategies. By critically integrating literature on the notion of long-term investment with theories and possible accounting approaches, the paper provides implications for a revision of the current measurement system for long-term equity investments.

Findings

The literature review supports the view that fair value accounting has played a role in discouraging equity investments over time, thus leaving economies with poorer risk-sharing and weaker long-term investments. The paper contributes to the debate on alternative measurement systems by suggesting possible solutions in relation to controversies arising from empirical evidence.

Originality/value

Reorienting economies according to sustainability criteria represents an urgent issue which requires prompt and policy-oriented responses. Accordingly, this paper offers insights and guidelines that can help policymakers revise current accounting rules for long-term equity investments in line with sustainable development objectives.

Details

Meditari Accountancy Research, vol. 30 no. 1
Type: Research Article
ISSN: 2049-372X

Keywords

Open Access
Article
Publication date: 22 November 2022

Olga Golubeva

This article investigates whether accounting, a tool that affects the actions of both organisations and society, can contribute to further developing the concept of…

Abstract

Purpose

This article investigates whether accounting, a tool that affects the actions of both organisations and society, can contribute to further developing the concept of sustainability. Exploiting real-time accounts of management speeches, termed “managerial talk” in the context of this paper, the study is among the first to include technology within a sustainability framework.

Design/methodology/approach

A data structure with first-order and second-order categories was created using a methodology elaborated by Van Maanen (1979) and Gioia et al. (2012). The empirical data was collected during 20 presentations delivered by senior managers from companies, the financial industry, the Swedish government and non-profit organisations to the Swedish Society of Financial Analysts between November 2016 and February 2020.

Findings

The study develops an inductive model that emerges as a result of the data analysis process. It emphasises that technology can be both an enabler for, and an interference with, sustainability according to the application of steering mechanisms. The latter include governance and regulations, analysis and evaluation tools, and disclosure practice.

Research limitations/implications

Acknowledging the role of technology in sustainable development can potentially assist in the implementation of sustainability and, arguably, in fostering an alignment between the three pillars of sustainability.

Originality/value

Interrelationships between sustainability, technology and accounting comprise a relatively unexplored research setting that has seldom been at the centre of academic studies.

Details

Accounting, Auditing & Accountability Journal, vol. 35 no. 9
Type: Research Article
ISSN: 0951-3574

Keywords

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