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Trust is an essential ingredient in facilitating financial transactions. The financial reporting process helps to create trust, but it, in turn, has to be trusted. Auditing and professional standards have been the traditional means by which trust in financial reporting has been fostered. Recently, these institutions have been put under great pressure by changes in the size and scope of financial markets. The consequence is likely to be a continuing change in the nature of trust and the means by which it is supported. In the future, personal trust is likely to be substituted increasingly by trust in systems supported by regulatory bodies. This does not mean that trust is no longer important, but rather that the form which it takes has changed. The importance of trust needs to be recognised by those engaged in shaping the future of financial reporting, if they are to meet the needs of users of financial information.

Although granted funding from government agencies, Britain’s Northern Rock (NR) Bank experienced a depositors’ bank run in 2007. The purpose of this paper is to explore bank managers’ and the Triparties’ communications, in their failed attempt to reassure depositors during the crisis.

The paper is based on content analysis of information given to depositors by bank managers and the Triparties via mass media. The theoretical concepts of rituals and masking were utilized.

Results suggest that nonfinancial reporting supersedes financial reporting. Rather than hidden losses, bank regulators’ and politicians’ discussions of emergency funding for NR was the crucial incident signaling “something going on.” Even positive statements by prominent organizational actors may have signaled serious problems that compromised NR’s “business as usual” stance.

Collective action manifested in a bank run is triggered by reasons other than numbers in financial reporting. The research results indicate a need to consider how regulatory authorities act during financial crises.

Previous studies concluded that sensegivers must be consistent in framing communication to sensemakers. Sensemaking requires that the crisis communication is also consistent in the sensemakers’ framing. Because it is difficult for sensegivers to reshape the collective sensemakers’ frame, successful crisis communication requires that sensegivers change their communication to match the sensemakers’ frame, including symbolic actions. Additionally, a bank run is characterized first by loss of trust in financial reporting; second, in nonfinancial reporting; and, finally, in the sensegiving actor: a domino effect.

This study aims to examine the role of blockchain technology (BCT) in trust in financial reporting (TFR) and the use of smart contracts (USC). It aims to ascertain the mediating role of USC in the relationship between BCT and TFR, thereby contributing to the limited empirical literature in this domain.

Based on a sample of the accountants’ familiarity with BCT, a structural equation model was constructed and analyzed using AMOS 24. The model proposes and tests relationships between BCT, USC and TFR.

The study highlights BCT’s significant positive influence on TFR, with USC mediating this effect. It provides empirical evidence that supports the transformative potential of BCT and USC in enhancing TFR.

These findings have significant implications for practitioners, regulatory bodies and policymakers. By highlighting the effectiveness of BCT and USC in fostering TFR, the study makes one aware of strategies to mitigate financial malpractices. It promotes the adoption of BCT in accounting practices.

This study addresses a gap in the literature by investigating the complex interplay of BCT, USC and TFR. It offers a unique perspective by exploring the mediating role of USC, thereby enhancing our understanding of the mechanisms through which BCT can foster TFR.

The public trust in auditors’ judgments and reputation plays an important role in substantiating audit functions as value‐added services, which lend credibility to published financial reports. Recent numerous financial restatements by high profile companies coupled with bankruptcies of major companies caused by reported financial statement fraud have eroded public confidence in financial reports and related audit functions. Restoring the public confidence requires considerable efforts by legislators, regulators, standard‐setting bodies, the business community, and the accounting profession. This article suggests 12 ways that the accounting profession can rebuild public trust in financial reports and related audit functions.

The purpose of this paper explores whether cost audits as governance mechanism affected the trust of the users of financial statements and whether they provide the benefits intended by regulators.

The research method involved unstructured open‐ended face‐to‐face interviews with cost auditors in practice, mid‐ to high‐level accounts and finance executives of companies and investors. Twenty‐three interviews were conducted over a five‐week period from December 2004 to January 2005 in Kolkata city of India. The selection of respondents was purposive, to explore the attitudes of these three groups towards mandatory cost audit.

Mandatory cost audit in India has not enhanced the level of trust of investors and preparers of financial statements also have the opinion. It has not brought those benefits expected by regulators.

It is suggested following the findings of this paper that future research should carefully consider the usefulness and cost and benefit aspects of the mandatory cost audit in India.

This is a pioneering study providing an in‐depth analysis of mandatory cost auditing in India.

This paper assessed accuracy level in accounting for government funds in Nigeria's federal treasury and their faithful presentation in government financial reporting. It aimed to determine whether the reported annual balances in Nigeria's financial reporting were reliable or otherwise. Data used in analysis were obtained from secondary sources from federal treasury.

Ex-post “facto” analysis method was adopted in the study involving the use of statistical techniques of absolute or aggregate mean percentage error derived from differences between recomputed and published fund balances and was employed. This was augmented with interactive review meetings of the initial case research report with the management of Nigeria's audit agency.

Results distilled from the consolidated revenue fund (CRF), development fund and public debt show that recomputed values were greater than the fund balances in the gazetted financial statements. Results for contingency fund (CTF), federation account fund (FAF), special trust fund (STF) and sundry deposit fund yield equal figures and accurate. The paper concludes that there were serial understatements of the core public fund balances in the financial statements over the years. This trend of reporting incorrect in three core public funds in financial statements rendered Nigeria's financial position unreliable in the affected years for decisions. It also facilitated frauds, mismanagement of funds and corrupt practices.

The scope of the research is restricted to assessment of degree of accuracy in fund accounting, faithful representation of the respective fund balance in the liabilities side of FGN balance sheet and the reliability of the financial position. But, it did not consider or cover the implementation of International Public Sector Accounting Standards (IPSASs) in federal treasury since FGN had not issued any full IPSAS–oriented financial statements as on 2015.

Identification of deficiencies in fund account balances, structural defects in fund accounting and acts of understatement of carrying balances in CRF and capital development fund (CDF) implies that the aggregate core fund liabilities reported in financial statement of government entities without corresponding assets do not actually reflect a true and fair financial position in some countries. It reveals remarkable degree of financial information asymmetry in government financial reporting. Illusionary fund accounting has direct linkage to poor fiscal governance in many sovereign with associated sub-optimal delivery of public goods and service level distress syndrome in many economies; lead to poverty, unemployment, crisis and macroeconomic disturbances.

The study contributes to the development of fund accounting system; strengthening government financial reporting architecture and practices. It provides framework for tracking financial information asymmetry in government financial reporting and mismanagement of public funds. It provides platform to effect necessary adjustment (correction) during the “first time 3-year adoption” adjustment window in Nigeria. Flowing from the findings, it advocates for institutionalization of government fund accounting standards and provides evidence for migration to accrual accounting system in countries that have not already implemented it. Evaluation system developed herein will improve fund management in federal treasury and contribute to efficient public financial management, good governance and enhance development of public accounting practice.

This exploratory empirical research is the one to ever evaluate accuracy level of fund accounting in sovereign entities and faithful representation in government's financial position prior to implementation of accrual accounting and financial reporting. The study established substantial level of illusionary accounting for public funds and information asymmetry in published government's financial reporting. It is necessary to rectify these discrepancies in fund accounting and financial reporting prior to and or during the first three years of the IPSAS transition implementation programme. These research deliverables provide adopters with relevant data for adjustment accounting during the transition period in strengthening public financial reporting in order to realize the benefit of full IPSAS accrual accounting.

This study aims to investigate the impact of the audit committee’s (AC’s) independence and competence in the company’s investment decision-making in Bahraini- and Indonesian-listed firms, then to compare the two results

A quantitative method is used and cross-sectional data are collected through a self-administered questionnaire survey. A stratified random sample technique is adopted with a total of 409 respondents from 39 listed companies in Bahrain and 303 respondents from 27 companies listed on the Indonesia Stock Exchange (IDX). A descriptive analysis is used to identify the characteristics of the respondents, while a correlation analysis, linear regression and t-test analyses are used to test the model, explain the relationships among variables and compare the two studies (Bahrain vs Indonesia).

It is found that the AC independence and AC competence have a positive and significant influence on investment decision-making for both the Bahrain and the Indonesia studies

The current study’s results have implications for the process of appointing and nominating the AC members, since this would affect an investor’s investment decision. Investors’ perception of the independence and competence of ACs will make a difference in their investment decisions.

AC independence and competence are importantly crucial for the decision-makers in improving the quality of financial reporting, internal control, and audit. This may lead to an increase in investors’ trust in financial reports and their ability to make favorable investment decisions.

This paper examines the effect that the introduction of the FRS 9, the general disclosure standard in New Zealand, has on the level of disclosure of certain unspecified operating expenses. Generally, a low level of operating expense disclosure was found with no overall improvement recorded after the introduction of FRS 9. In many cases, companies did not disclose any unspecified operating expenses. Firm size and overseas listing/ownership appeared to be positively associated with the disclosure of unspecified operating expenses. Most companies did disclose the mandatory expenses monitored (depreciation, audit and directors' fees). Commentary is provided on the inadequacy of the discretionary aspects of accounting standards such as FRS 9, and the inadequacy of regulatory enforcement. Given the move to international harmonisation, and the level of disclosure seemingly at odds with international practice, the adoption and enforcement of International Accounting Standard 1 (IAS 1) would provide a simple solution.

The purpose of this paper is to provide a structured overview of literature in the nexus of trust and accounting. This can serve as a basis for future research, and thus provide a framework for asking more precise and focused research questions.

All papers published in prominent accounting journals during a 15‐year period were examined. Papers pertaining to the field of trust and accounting were categorized and analyzed in more detail, and qualitatively classified in accordance with selected dimensions. The review focused on papers explicitly exploring the link between accounting and trust.

A large proportion of the papers is in the field of management accounting (MAN). The majority of published papers in the field are based on sociological theory, but there are some economics‐based papers. Sociologically based analysis seems to provide more structure, but is also less paradigmatic in nature than economic theory. Only a small number of papers have an explicit definition of the concept of trust. The authors' conclusion is that the state of research has been developing to become more paradigmatic in recent years.

This is the only literature review that provides a comprehensive overview of research on trust and accounting. Thus, it is an aid to future research in the area.

This study reviews and discusses the accounting literature that analyzes the role of auditors and enforcers in the context of fraud.

This literature review includes both qualitative and quantitative studies, based on the idea that the findings from different research paradigms can shed light on the complex interactions between different financial reporting controls. The authors use a mixed-methods research synthesis and select 64 accounting journal articles to analyze the main proxies for fraud, the stages of the fraud process under investigation and the roles played by auditors and enforcers.

The study highlights heterogeneity with respect to the terms and concepts used to capture the fraud phenomenon, a fragmentation in terms of the measures used in quantitative studies and a low level of detail in the fraud analysis. The review also shows a limited number of case studies and a lack of focus on the interaction and interplay between enforcers and auditors.

This study outlines directions for future accounting research on fraud.

The analysis underscores the need for the academic community, policymakers and practitioners to work together to prevent the destructive economic and social consequences of fraud in an increasingly complex and interconnected environment.

This study differs from previous literature reviews that focus on a single monitoring mechanism or deal with fraud in a broadly manner by discussing how the accounting literature addresses the roles and the complex interplay between enforcers and auditors in the context of accounting fraud.