scholarly journals The relationship between financial reporting standards and accounting irregularities: evidence from US banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali İhsan Akgün ◽  
Yener Altunbaş ◽  
Yurtsev Uymaz
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Bank Performance ◽  
Reporting Standards ◽  
Content Type ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
The Usa ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this paper is to explore whether the choice of International Financial Reporting Standards (IFRS) vs Generally Accepted Accounting Principles (GAAP) is associated with the frequency and likelihood of accounting irregularities and fraud in US banks. Design/methodology/approach The authors examine the relationship between financial reporting standards and accounting irregularities in publicly listed US banks. Using a sample of 4,284 banks with accounting irregularities observed in the USA over the period of 1996–2014. They used logit model to estimate the likelihood of corporate misreporting having been committed in terms of accounting irregularities. Findings The authors show that banks that use US GAAP exhibit better operating performance than fraudulent banks that use IFRS except for certain variables. They also find that fraudulent banks are more likely to commit accounting irregularities when they have to follow IFRS and banks have relatively better bank performance. Practical implications Overall, the empirical findings result consistent with Kohlbeck and Warfield’s (2010) find that accounting standards are linked to fewer accounting irregularities. Originality/value In this study, accounting irregularities have a significant effect on bank performance during the Dodd–Frank period. It finds that banks that choose to use IFRS are more likely to have accounting irregularities and to engage in fraud.

Factors that influenced the adoption of IFRS by Islamic banks in the UAE

2020 ◽  
Vol 33 (1) ◽  
pp. 75-91 ◽  
Author(s):  
Mohammad Haroun Sharairi
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Accounting Standards ◽  
Adoption Process ◽  
Islamic Banking ◽  
Reporting Standards ◽  
Islamic Banks ◽  
Content Type ◽  
Financial Reporting Standards ◽  
The Relationship

Purpose This paper aims to investigate the factors that influenced the current adoption of the international financial reporting standards (IFRS) by Islamic banks in the UAE. This paper examined the relationship between the theoretical aspects and practical components of the research investigation regarding the factors that influence the adoption of IFRS. This paper will contribute to the existing knowledge and practices in not only Islamic countries but also Western countries in terms of a deeper understanding of the adoption of IFRS by the Islamic banks and how the factors could influence the Islamic banking adoption, process, activities and financial reporting. Design/methodology/approach Several theories of regulation were considered in this paper to explain the existence of Islamic accounting regulations and understand why some of the Islamic accounting prescriptions became formal regulations, while others did not. Data was collected for this purpose by conducting a survey with professionals and managers of four Islamic banks in the UAE. Findings This paper revealed that factors, such as religion, culture and local investors, may have limited influence on the current adoption of accounting standards in the Islamic banks. Furthermore, this paper uncovered a concern among respondents of issues that developed when Islamic banks commenced the adoption of IFRS. This paper also indicated that respondents’ opinion does not reflect a perception that all IFRS are suitable for the application of Shariah transactions. Originality/value This study is unique as no study has yet explored the factors that influenced the adoption of the IFRS by Islamic banks in the UAE.

Exploring the relationship between dispositions to think critically and sustainability concern in HESD

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kerry Shephard ◽  
Qudsia Kalsoom ◽  
Ritika Gupta ◽  
Lorenz Probst ◽  
Paul Gannon ◽  
...  
Keyword(s):  
Higher Education ◽  
Sustainable Development ◽  
Critical Thinking ◽  
New Zealand ◽  
Design Methodology ◽  
Educational Systems ◽  
Content Type ◽  
The Usa ◽  
The Relationship ◽  
Practical Implications

Purpose Higher education is uncertain which sustainability-related education targets should be sought and monitored. Accepting that something needs to be measurable to be systematically improved, the authors explored how measures relate to potential targets. This paper aims to focus on dispositions to think critically (active open-minded thinking and fair-minded thinking in appraising reasoning) as measures and explored how they related to sustainability concern as an indicative educational target. Design/methodology/approach This research included the development and testing of research instruments (scales) that explored dispositions to critical thinking and sustainability concern. Authors researched these instruments within their own correspondence groups and tested them with university students and staff in Pakistan, the USA, Austria, India and New Zealand. The authors also asked a range of contextualising questions. Findings Respondents’ disposition to aspects of active, open-minded thinking and fair-minded thinking do predict their concern about facets of sustainability but their strength of religious belief was an important factor in these relationships and in their measurement. Practical implications This research demonstrates the complexity of monitoring dispositions to think critically and sustainability concern in educational systems, particularly in circumstances where the roles of religious beliefs are of interest; and suggests ways to address this complexity. Originality/value This research integrates and expands discourses on ESD and on critical thinking in diverse disciplines and cultures. It investigates measurement approaches and targets that could help higher education institutions to educate for sustainable development and to monitor their progress, in ways that are compatible with their culture and values.

Accounting for leases – lessons from COVID-19

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alan Teixeira
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Accounting Standards ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Financial Accounting Standards Board ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Setting Process

Purpose The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) have given relief to lessees in response to the coronavirus (COVID-19) pandemic. However, it is not clear why any relief from the requirements in International Financial Reporting Standards (IFRS) or the Accounting Standards Codification (ASC) should be necessary. The purpose of this paper is to highlight weaknesses in how the IASB and FASB developed their leases Standards, and why those Standards are not robust enough to cope with a shock to the economic system. Design/methodology/approach The COVID-19 relief suspends some features of the leasing requirements rather than changing them. What if other economic or regulatory events cause the same circumstances to arise? Findings Have COVID-19 exposed weaknesses in the leasing standards that should have been avoided when they were developed or is COVID-19 the problem? Originality/value Analysis of actual board discussions and staff papers is unusual and provides insights into the standard-setting process.

The IPSASB's recent strategies: opportunities for academics and standard-setters

2020 ◽  
Vol 32 (3) ◽  
pp. 315-319 ◽  
Author(s):  
Gwenda Jensen
Keyword(s):  
Public Sector ◽  
Financial Reporting ◽  
Design Methodology ◽  
Accounting Standards ◽  
Fitness For Purpose ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Public Sector Accounting ◽  
Ongoing Dialogue ◽  
Practical Implications

PurposeThe purpose of this article is to contribute to an ongoing dialogue between practitioners and academics. This article describes the International Public Sector Accounting Standards Board (IPSASB) recent strategies and highlights the IPSASB's increasing outreach to academics.Design/methodology/approachThis is a practitioner's viewpoint which reflects the IPSASB's publicly available documents, and the opinions of a practitioner directly involved in the IPSASB's work and International Public Sector Accounting Standards (IPSAS) development.FindingsThe findings are that the IPSASB has increased its outreach to academics and now academics have more opportunities to engage with the IPSASB and IPSAS developments. The IPSASB's strategy has remained relatively constant over time, focusing on IPSAS to address public sector-specific issues, alignment with the International Financial Reporting Standards (IFRS) and reduction of differences between IPSAS and Government Finance Statistics (GFS) reporting guidelines.Research limitations/implicationsThe limitations of this article (which are also its strength in terms of fitness for purpose) are that as a practitioner's viewpoint it provides a brief overview and personal judgments, rather than an empirical analysis of developments applying a theoretical framework.Practical implicationsThe practical implications were IPSASB's increased outreach to the research community providing opportunities for academics to have increased input into IPSAS development, with likely benefits to researchers and the IPSASB.Social implicationsPractitioners’ engagement with academics supports increased understanding of the respective views leading to better outcomes for practitioners and academics working in the area of public sector financial reporting and its regulation.Originality/valueThis article is the first to (a) describe the IPSASB's increasing outreach to academics during 2019–2020 and (b) compare the IPSASB's strategies for the period of 2019–2023, with its strategies since the beginning of IPSAS developments in 1996–1997.

Audit committee effectiveness, isomorphic forces, managerial attitude and adoption of international financial reporting standards

2019 ◽  
Vol 9 (4) ◽  
pp. 502-526 ◽  
Author(s):  
Juma Bananuka ◽  
Arafat Walugyo Kadaali ◽  
Veronica Mukyala ◽  
Bruno Muramuzi ◽  
Zainab Namusobya
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Explanatory Power ◽  
Mediating Effect ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Microfinance Institutions ◽  
Content Type ◽  
Financial Reporting Standards ◽  
The Relationship

Purpose The purpose of this paper is to report the results of a study carried out to establish the contribution of audit committee (AC) effectiveness, isomorphic forces and managerial attitude to the adoption of international financial reporting standards (IFRS). Design/methodology/approach This study is cross-sectional and correlational. Data were collected through a questionnaire survey of 67 MFIs that are members of the Association of Microfinance Institutions of Uganda (AMFIU). Findings Both AC effectiveness, isomorphic forces and managerial attitude significantly contribute to the adoption of IFRS. However, the explanatory power of managerial attitude is subsumed in isomorphic forces and AC effectiveness. Results further indicate that AC effectiveness partially mediates the relationship between isomorphic forces and adoption of IFRS. In terms of control variables, ownership and capital structure are not significant predictors of adoption of IFRS. Originality/value To the authors’ knowledge, this is the first study to investigate the contribution of AC effectiveness, isomorphic forces and managerial attitude to the adoption of IFRS in MFIs using evidence from a developing country on the African scene like Uganda. Further, earlier literature has not tested the mediating effect of AC effectiveness in the relationship between isomorphic forces and the adoption of IFRS which has been reported in this paper.

Cautiousness on convergence of accounting standards across countries

2016 ◽  
Vol 21 (2) ◽  
pp. 246-267 ◽  
Author(s):  
Silvia Angeloni
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Empirical Literature ◽  
Corporate Disclosure ◽  
Content Type ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Financial Communication ◽  
Convergence Process ◽  
The Usa

Purpose – The purpose of this paper is to provide an updated picture of the convergence process between International Financial Reporting Standards (IFRS) and United States Generally Accepted Accounting Principles (US GAAP), with IFRS clearly emerging as a global financial reporting benchmark. This study is aimed at evaluating the main benefits but also some significant issues arising from the adoption of a single set of accounting standards. Design/methodology/approach – The main examples of theoretical and empirical literature for and against IFRS implementation are reviewed. Findings – Since markets became increasingly global, the comparability of financial statements is required to enable better corporate communication and transparency to the advantage of all stakeholders. The main difficulties of IFRS adoption by the USA are explored. Practical implications – The study’s implications are to emphasize the practical obstacles to resolving the issues of financial communication through a uniform set of standards, by highlighting the importance of taking into account other dynamics in improving the corporate disclosure domestically and globally. Originality/value – The key contribution of this study is to reflect on the best ways to reach global communication without sacrificing the effectiveness and affordability of financial reporting.

Construal of self and Chinese accountants’ aggressive financial reporting judgments

2017 ◽  
Vol 30 (8) ◽  
pp. 1771-1795 ◽  
Author(s):  
Peipei Pan ◽  
Chris Patel
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Cultural Influences ◽  
Significant Loss ◽  
Reporting Standards ◽  
Personality Variable ◽  
Content Type ◽  
Personality Variables ◽  
Financial Reporting Standards ◽  
Aggressive Financial Reporting

Purpose The purpose of this paper is to respond to calls in the literature to examine personality variables which may provide sharper insights into accountants’ judgments in applying principles-based International Financial Reporting Standards (IFRS). This paper contributes to the literature on the global convergence of financial reporting by examining the influence of an important personality variable, construal of self, on Chinese accountants’ aggressive financial reporting judgments. Design/methodology/approach A between-subjects quasi-experiment was applied. In total, 122 Chinese professional accountants were categorized as either independents or interdependents, on the basis of their scores on construal of self scales. Subjects made their consolidation reporting judgments in the manipulated situations based on the financial performance of the investee entity, which refers to the situation where the investee entity makes a significant profit or a significant loss in the reporting period. Findings Compared to interdependent accountants, independent accountants used the flexibility allowed in the principles-based standards to make more aggressive consolidation reporting judgments. Also, adoption of IFRS may not necessarily ensure consistent judgments even within China. Originality/value This paper provides empirical evidence of the importance of construal of self in examining accountants’ aggressive judgments. The authors suggest that it may be premature to assume that adoption of IFRS will lead to comparable financial reporting. The findings are relevant to researchers who are interested in examining personality and cultural influences on accountants’ judgments both within and across countries. Companies and organizations may incorporate appropriate strategies to recruit and train independent and interdependent accountants, particularly by addressing the influence of construal of self on aggressive financial reporting judgments.

Guidance on internal audit's interface with regulators

2014 ◽  
Vol 29 (3) ◽  
pp. 268-283 ◽  
Author(s):  
Andrew D. Chambers
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Internal Audit ◽  
Internal Auditing ◽  
Content Type ◽  
Auditing Standards ◽  
Supervisory Process ◽  
The Relationship ◽  
Audit Standards ◽  
Practical Implications

Purpose – The purpose of this paper is to identify and interpret expectations of regulators about the interface between regulators and internal audit. Design/methodology/approach – Contemporary pronouncements are subjected to a content analysis about the relationship demands that regulators place upon internal audit. Comparison is made with internal auditing standards. The paper identifies the significant challenges and considers the future. Findings – Regulators are increasingly prescriptive about what they expect from internal audit. The scope of internal audit work must cover all matters of interest to the regulator. Internal audit is now regarded as part of the supervisory process. Unlike financial reporting and external auditing, there is no attempt to regulate the setting of internal audit standards, but regulators themselves are enunciating internal audit requirements that go beyond the standards. Research limitations/implications – The paper draws mainly upon developments in the financial sector, which is leading the way in prescribing the interface between regulator and internal audit. Practical implications – The enhanced requirements of regulators impact upon internal audit's other relationships on the internal audit universe and scope, and on staffing internal audit. Originality/value – This is the first attempt to synthesise what regulators currently require from their relationship with internal audit, which needs to be reflected in internal audit charters and in future releases of global internal auditing standards.

Intellectual capital: mediator of board of directors’ effectiveness and adoption of International Financial Reporting Standards

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zainabu Tumwebaze ◽  
Juma Bananuka ◽  
Kassim Alinda ◽  
Kalembe Dorcus
Keyword(s):  
Board Of Directors ◽  
Financial Reporting ◽  
Intellectual Capital ◽  
Mediation Effect ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Content Type ◽  
Reporting Practices ◽  
Financial Reporting Standards ◽  
The Relationship

Purpose The purpose of this paper is twofold: to test whether intellectual capital mediates the relationship between board of directors’ effectiveness and adoption of International Financial Reporting Standards (IFRS) and to examine the contribution of the specific elements of intellectual capital and board of directors’ effectiveness to adoption of IFRS. Design/methodology/approach This study is cross-sectional. Usable questionnaires were received from 67 microfinance institutions (MFIs) that are members of the Association of MFIs of Uganda. The data was analyzed using Statistical Package for Social Sciences and MedGraph program (Excel version). Findings Results indicate that intellectual capital mediates the relationship between board of directors’ effectiveness and adoption of IFRS. Results further indicate that board independence and board meetings contribute significantly to the adoption of IFRS unlike board size and board committees. Results also indicate that in the intellectual capital elements, only structural capital and human capital significantly contribute to the adoption of IFRS unlike relational capital. Originality/value This study provides more insights on our understanding of the relationship between intellectual capital, board of directors’ effectiveness and adoption of IFRS. Specifically, it provides first time evidence of the mediation effect of intellectual capital in the relationship between board of directors’ effectiveness and adoption of IFRS using evidence from an African developing country – Uganda. Further, this paper adds to existing literature on corporate governance and reporting practices, as it provides more insights on the contribution of specific elements of board of directors’ effectiveness and intellectual capital to adoption of IFRS.

scholarly journals Does the impact of IFRS on audit fees differ between early and late adopters?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vincent Konadu Tawiah
Keyword(s):  
Financial Reporting ◽  
Audit Fees ◽  
Content Type ◽  
Early Adopters ◽  
Financial Reporting Standards ◽  
One Year ◽  
The Cost ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

Purpose This study aims to examine whether the impact of international financial reporting standards (IFRS) on audit fees differs between early and late adopters. Design/methodology/approach The authors use robust econometric estimation on a sample of 314 firms from both early and late IFRS adopting countries. Findings The authors find that IFRS is positively and significantly associated with an increase in audit fees for early adopters, but the impact is very weak for late adopters and insignificant in some cases. The results on auditing time suggest that increase in audit fees around IFRS adoption is due to an increase in audit reporting lags. After accounting for pre- and post-years, the authors find that the relationship between IFRS and audit fees, as well as audit time for late adopters, is significant only in the adoption year. However, early adopters experience a significant increase in audit fees and audit time in the transition year to one-year post-adoption. Practical implications The findings imply that countries that are yet to adopt IFRS are less likely to experience a significant increase in audit fees audit time. Hence, is probable that the benefit of IFRS will outweigh the cost. Originality/value The results, therefore, suggest that early adopters paid a premium for been the first users of IFRS, which is consistent with any innovation. The study provides new insights by demonstrating that the consequences of IFRS differ between early and late adopters.

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