Writing write-downs: the rhetoric of goodwill impairment

2017 ◽  
Vol 14 (1) ◽  
pp. 81-102
Author(s):  
Niklas Sandell ◽  
Peter Svensson
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Annual Reports ◽  
Close Reading ◽  
Content Type ◽  
Goodwill Impairment ◽  
Financial Communication ◽  
Rhetorical Practice ◽  
Nasdaq Omx ◽  
Practical Implications

Purpose The aim of this paper is to study the rhetoric of goodwill impairment, more specifically rhetoric, as it is constructed in the form of accounts (i.e. statements that explain unanticipated or untoward behavior). The authors argue that goodwill impairment is not only a technical matter but also a rhetorical practice by means of which external scrutiny is responded to. Design/methodology/approach The data corpus consists of explanations provided by corporations regarding impairment of goodwill. Data were collected from annual reports from companies quoted on NASDAQ OMX Stockholm, Sweden. The impairment explanations were analyzed according to a taxonomy of account types. The explanations were subjected to close reading to discern the potential rhetorical functions of the different accounts. Findings Seven account types are identified and discussed, namely, excuse, justification, refocusing, concession, mystification, silence and wordification. Research limitations/implications There is a need for further research that explores the process of authorship (i.e. writing, editing, negotiating and revising) through which the texts of financial communication are produced. Practical implications The findings have implications for the future formulations of standards regarding qualitative explanations in financial reporting in general and explanations of goodwill impairment in particular. Originality/value The paper contributes to the knowledge about the use of natural language and rhetoric in financial communication.

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.

Determinants of mandatory disclosure compliance in Swedish municipalities

2020 ◽  
Vol 32 (2) ◽  
pp. 247-265
Author(s):  
Pierre Donatella
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Mandatory Disclosure ◽  
Local Networks ◽  
Content Type ◽  
Government Accounting ◽  
Reporting Practice ◽  
Professional Environment ◽  
Prior Literature ◽  
Practical Implications

PurposeThe purpose of this article is to examine whether, and if so, to what extent, noncoercive isomorphism determines mandatory disclosure compliance at a later stage of an accounting reform.Design/methodology/approachThe analysis of compliance is based on data from 289 Swedish municipalities for 2016, which is nearly two decades after the initial legal reform in which mandatory requirements were imposed by the Swedish government in an effort to harmonize financial reporting practice. Following the standard approach in the literature, an unweighted compliance index was used as dependent variable. Proxies for municipal accounting networks and involvement in professional government accounting associations were used to explain individual municipalities' levels of compliance.FindingsDifferences in individual municipalities' levels of compliance were strongly related to the financial reporting practice of other municipalities in their accounting network. These results suggest that normative and mimetic isomorphic pressure stemming from these local networks, where accounting departments continually meet and share experiences, is a very potent force. In contrast, isomorphic pressure stemming from involvement in activities offered by professional government accounting associations is generally not a potent force at this stage.Practical implicationsIn settings where municipal accounting networks exist, it may be effective to stimulate de facto harmonization by directing information, education and other efforts toward the professional environment in which these networks operate.Originality/valueUnlike prior literature, the data in this study are from a later stage of a public sector accounting reform.

The role of investment property appraisal in European real estate companies

2020 ◽  
Vol 13 (1) ◽  
pp. 105-122
Author(s):  
Juha Mäki
Keyword(s):  
European Union ◽  
Real Estate ◽  
Design Methodology ◽  
Annual Reports ◽  
Real Estate Industry ◽  
Publicly Traded ◽  
Content Type ◽  
The Real Estate ◽  
Practical Implications

Purpose This paper aims to examine the connection between appraisals of investment properties and earnings properties in companies from two perspectives: what kinds of companies employ the most reputable appraisers and how appraisers produce estimations. Design/methodology/approach The research uses annual reports of European Union (EU) publicly traded real estate companies and examines the period 2007-2016. Findings The contribution of this study lies in establishing that some indicators and features of real estate companies affect the choice of appraiser and also in illustrating differences in the results of property valuations. In short, smaller companies with weaker performance are less willing to use external valuation, and external appraisers produce more conservative estimations for investment properties. Practical implications The research produces beneficial information for investors and other stakeholders interested in the real estate industry. Originality/value This is the first novel study to examine the link between appraisals of investment properties and earnings properties in companies in detail.

Profit-sharing investment accounts in islamic banks or mutualization, accounting perspective

2016 ◽  
Vol 14 (1) ◽  
pp. 30-48 ◽  
Author(s):  
Wasim K. AlShattarat ◽  
Muhannad A. Atmeh
Keyword(s):  
Financial Reporting ◽  
Mutual Fund ◽  
Design Methodology ◽  
Profit Sharing ◽  
Islamic Banks ◽  
Content Type ◽  
Implementation Challenges ◽  
Total Profit ◽  
Practical Implications

Purpose Islamic banks use Mudarabah contract to replace the interest-bearing deposits with profit-sharing investment accounts. The purpose of this paper is to explore the challenges and problems associated with the employment of Mudarabah contract by Islamic banks. Design/methodology/approach The study critically analyzes the Mudarabah contract used by Islamic banks. It reviews the evolution of the contract from its traditional type to more complicated types such as compound, unrestricted, commingled and continuous Mudarabah. The paper investigates the problems that have emerged from implementing such types in current business settings. Findings The paper proves that implementing the Mudarabah contract by banks imposes several problems among which are the following: difficulty in the determination of total profit resulting from Mudarabah and in allocating this profit to the multiple parties involved in Mudarabah; usage of reserves to cater against future losses may undermine the concept of Mudarabah profit-loss sharing and lead to earnings management; corporate governance is also a major problem in Mudarabah contract, as the depositors are exposed to risks but have no governance rights; and Mudarabah may also lessen the fair presentation of financial reporting. Research limitations/implications The paper examines the evolving Mudarabah contract and its implementation challenges, based on available literature (no empirical analysis was conducted). Practical implications The implications are significant for the future development of Islamic contracts and Islamic accounting treatments. Originality/value Many studies explored the Mudarabah contract from a Shariah or law perspective. However, this paper investigates the Mudarabah contract with a focus on the implication on accounting and financial reporting because of the lack of studies in this area. Furthermore, it demonstrates the persistent flaws in the Mudarabah contract, and it proposes a new model for mobilizing funds, i.e. mutual fund.

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.

Constructing accountability in inter-organisational collaboration

2014 ◽  
Vol 28 (5) ◽  
pp. 619-634 ◽  
Author(s):  
Johanna Andersson ◽  
Ewa Wikström
Keyword(s):  
Design Methodology ◽  
Social Care ◽  
Annual Reports ◽  
National Agency ◽  
Content Type ◽  
Health And Social Care ◽  
Reporting Systems ◽  
Empirical Context ◽  
And Performance ◽  
Practical Implications

Purpose – The purpose of this paper is to analyse how accounts of collaboration practice were made and used to construct accountability in the empirical context of coordination associations, a Swedish form of collaboration between four authorities in health and social care. They feature pooled budgets, joint leadership and joint reporting systems, intended to facilitate both collaboration and (shared) accountability. Design/methodology/approach – Empirical data were collected in field observations in local, regional and national settings. In addition, the study is based on analysis of local association documents such as evaluations and annual reports, and analysis of national agency reports. Findings – Accountability is constructed hierarchically with a narrow focus on performance, and horizontal (shared) accountability as well as outcomes are de-emphasised. Through this narrow construction of accountability the coordination associations are re-created as hierarchical and accountability is delegated rather than shared. Research limitations/implications – Features such as pooled budgets, joint leadership and joint reporting systems can support collaboration but do not necessarily translate into shared accountability if accountability is interpreted and constructed hierarchically. Practical implications – When practice conforms to what is counted and accounted for, using the hierarchical and narrow construction of accountability, the result may be that the associations become an additional authority. That would increase rather than decrease fragmentation in the field. Originality/value – This research derives from first-hand observations of actor-to-actor episodes complemented with the analysis of documents and reports. It provides critical analysis of the construction and evaluation of accounts and accountability related to practice and performance in collaboration. The main contribution is the finding that despite the conditions intended to facilitate inter-organisational collaboration and horizontal accountability, the hierarchical accountability persisted.

scholarly journals Statistical studies of financial reports and stock markets

2017 ◽  
Vol 1 (1) ◽  
pp. 5-9 ◽  
Author(s):  
Shyam Sunder
Keyword(s):  
Stock Market ◽  
Financial Reporting ◽  
Design Methodology ◽  
Empirical Studies ◽  
Financial Reports ◽  
Market Data ◽  
Content Type ◽  
Financial Decisions ◽  
Statistical Studies ◽  
Practical Implications

Purpose The purpose of this paper is to examine the usefulness of statistical studies of financial reports and stock market data for improving corporate financial reports. Design/methodology/approach Analytical writing. Findings It is often claimed that statistical studies of co-variation between financial and stock market data can help set better financial reporting policy. Such co-variation, even when it can be estimated, tells us little about which financial reports help to make better financial decisions. A case in support of such claims remains to be made. Practical implications The readers are advised to be extremely careful in drawing inferences from studies of co-variation between accounting and stock market data for financial reporting policy. Social implications Inference from accounting empirical studies to policy needs better rationale to avoid bad policy consequences. Originality/value This paper raises original questions about policy inferences from a large class of empirical research in accounting.

Do organisations in developing economies legitimise their level of profit? Evidence from Fiji

2016 ◽  
Vol 29 (1) ◽  
pp. 59-80 ◽  
Author(s):  
Acklesh Prasad ◽  
Peter Green ◽  
Jon Heales
Keyword(s):  
Social Contract ◽  
Chief Executive Officer ◽  
Design Methodology ◽  
Developing Economies ◽  
Chief Executive ◽  
Annual Reports ◽  
Public Enterprises ◽  
Content Type ◽  
Practical Implications ◽  
Corporate Annual Reports

Purpose This paper aims to investigate whether organisations in developing economies legitimise their level of profit. Design/methodology/approach Organisations’ level of profit is evaluated against the readability of sections of information available in the corporate annual reports. These sections include the Chairman’s Report, the Chief Executive Officer Report and the Notes to the Accounts. Findings More profitable organisations report more readable information in their corporate annual reports. Information in the non-mandatory sections of the report (Notes to the Accounts) is more readable compared to the information in the mandatory sections of the report (Chairman’s Report). Larger organisations report more readable information. Public Enterprises report more readable information compared to the Publicly Listed Companies. Research limitations/implications Organisations in the developing economies are aware of their role in their society. They respond to instances of possible violation of the implied social contract by sharing information in ways that relays news in certain ways. Practical implications Evidence of presence of legitimising activities by organisations would imply the need to strengthen the regulatory and monitoring guidelines to ensure efficient use of society’s resources and a fair rent charge for the utilities. Social implications There is a greater need to monitor and question organisations’ level of earned profit to ensure it is necessary to maintain their operations. Originality/value This study is the first attempt to investigate organisations’ immediate legitimising activities in relation to their reported profit.

scholarly journals A longitudinal study of the textual characteristics in the chairman’s statements of Guinness

2019 ◽  
Vol 32 (6) ◽  
pp. 1714-1741 ◽  
Author(s):  
Alonso Moreno ◽  
Michael John Jones ◽  
Martin Quinn
Keyword(s):  
Impression Management ◽  
Financial Reporting ◽  
Design Methodology ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Quantitative Character ◽  
Data Set ◽  
Content Type ◽  
Public Exposure ◽  
Practical Implications

Purpose The purpose of this paper is to longitudinally analyse the evolution of multiple narrative textual characteristics in the chairman’s statements of Guinness from 1948 to 1996, with the aim of studying impression management influences. It attempts to contribute insights on impression management over time. Design/methodology/approach The paper attempts to contribute to external accounting communication literature, by building on the socio-psychological tradition within the functionalist-behavioural transmission perspective. The paper analyses multiple textual characteristics (positive, negative, tentative, future and external references, length, numeric references and first person pronouns) over 49 years and their potential relationship to profitability. Other possible disclosure drivers are also controlled. Findings The findings show that Guinness consistently used qualitative textual characteristics with a self-serving bias, but did not use those with a more quantitative character. Continual profits achieved by the company, and the high corporate/personal reputation of the company/chairpersons, inter alia, may well explain limited evidence of impression management associated with quantitative textual characteristics. The context appears related to the evolution of the broad communication pattern. Practical implications Impression management is likely to be present in some form in corporate disclosures of most companies, not only those companies with losses. If successful, financial reporting quality may be undermined and capital misallocations may result. Companies with a high public exposure such as those with a high reputation or profitability may use impression management in a different way. Originality/value Studies analysing multiple textual characteristics in corporate narratives tend to focus on different companies in a single year, or in two consecutive years. This study analyses multiple textual characteristics over many consecutive years. It also gives an original historical perspective, by studying how impression management relates to its context, as demonstrated by a unique data set. In addition, by using the same company, the possibility that different corporate characteristics between companies will affect results is removed. Moreover, Guinness, a well-known international company, was somewhat unique as it achieved continual profits.

scholarly journals Banking on bullshit: indifferences towards truth in corporate social responsibility

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
David M. Herold ◽  
Timo Dietrich ◽  
Tim Breitbarth
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Reporting ◽  
Design Methodology ◽  
Banking Sector ◽  
Future Research ◽  
Corporate Communications ◽  
Content Type ◽  
Corporate Social ◽  
Practical Implications

PurposeThis study aims to identify and deconstruct bullshit in banks' corporate social responsibility (CSR) communication to advance the management rhetoric research space, which has been characterised by an indifference to truth and meaning.Design/methodology/approachWe provide a typology of bullshit phenomena overview in the banking sector and follow the McCarthy et al.'s (2020) C.R.A.P. framework from to showcase how bullshit can be comprehended, recognised, acted against and prevented.FindingsThis paper puts a spotlight on written and spoken language to detect bullshit in banks' CSR statements. It provides actionable insights into how stakeholders can act against and prevent bullshit statements from occurring in the future.Research limitations/implicationsFuture research is warranted to assess the use of still imagery, events and video materials in corporate communications and non-financial reporting. Further rigorous assessment of actual CSR initiatives must be undertaken to assess claimed contributions.Practical implicationsMonitoring mechanisms and independent assurance statements prepared by authorised third parties may strengthen the motivation and ethicality of CSR activities.Originality/valueThis viewpoint is the first to follow the C.R.A.P framework and critically assess indifferences towards truth in banks' CSR communications.

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