Pub Date : 2018-07-06DOI: 10.1504/IJCA.2018.10014042
Abdallah Ali-Nakyea, J. K. Amoh
Even though Ghana is well endowed with many natural resources, the country's economy is characterised by high budget deficits, rising debt-to-gross domestic product (GDP) ratios, persistent trade and current account deficits, and unemployment. Consequently, the country continues to rely on foreign direct investment (FDI) to drive economic growth. The paper sought to examine whether the generous tax incentives have been commensurate with FDI flows. The study relied on data from world development indicators (WDI) and Ghana Revenue Authority (GRA) to justify the need to relook at the commensurate gains of FDI flows in response to tax incentives. The paper found that despite numerous justifications for a tax incentive policy to attract FDI flows, their efficacy to attract commensurate with FDI flows is doubtful. We conclude that tax incentives to multinational companies (MNCs) have not had their desired impact; hence, policy makers should rather create the enabling investment environment to attract FDIs.
{"title":"Have the generous tax incentives in the natural resource sector been commensurate with FDI flows? A critical analysis from an emerging economy","authors":"Abdallah Ali-Nakyea, J. K. Amoh","doi":"10.1504/IJCA.2018.10014042","DOIUrl":"https://doi.org/10.1504/IJCA.2018.10014042","url":null,"abstract":"Even though Ghana is well endowed with many natural resources, the country's economy is characterised by high budget deficits, rising debt-to-gross domestic product (GDP) ratios, persistent trade and current account deficits, and unemployment. Consequently, the country continues to rely on foreign direct investment (FDI) to drive economic growth. The paper sought to examine whether the generous tax incentives have been commensurate with FDI flows. The study relied on data from world development indicators (WDI) and Ghana Revenue Authority (GRA) to justify the need to relook at the commensurate gains of FDI flows in response to tax incentives. The paper found that despite numerous justifications for a tax incentive policy to attract FDI flows, their efficacy to attract commensurate with FDI flows is doubtful. We conclude that tax incentives to multinational companies (MNCs) have not had their desired impact; hence, policy makers should rather create the enabling investment environment to attract FDIs.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"157 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122066849","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-07-06DOI: 10.1504/IJCA.2018.10013985
Riyadh Al-Abdullah, Ibtihaj Ismail Yaqoob, R. Atwa, Ruba Bsoul
Ostensibly, the most important constituent of Hofstede's theory on culture is the claim that his system of six pairs of cultural values can be used to predict sub-cultural values. Eighteen mentally held characteristics by an Iraqi forensic accountant are used as sub-cultural values. Based on the scores assigned by Hofstede to the Iraq dominant cultural values, the alleged predictive ability indoctrinate Iraqis to have an inferiority complex about their culture. Three different tests are used to check the predictive ability claimed by Hofstede. The three tests generate results that render Hofstede's claim on the predictive ability of cultural values to be invalid. On the other hand, a pure theoretical evaluation of the Hofstede's system of six pair of cultural values reveals that the purpose behind the alleged predictive ability is to indirectly promote the superiority of the cash wealth maximisation culture. Thus, believe that you are inferior and the cure is ready, i.e., cash wealth maximisation camouflaged in a system of six pairs of cultural values.
{"title":"The motives behind the alleged ability of Hofstede's cultural values in predicting sub-cultural values: the case of Iraqi forensic accountants' mentally held characteristics as sub-cultural values","authors":"Riyadh Al-Abdullah, Ibtihaj Ismail Yaqoob, R. Atwa, Ruba Bsoul","doi":"10.1504/IJCA.2018.10013985","DOIUrl":"https://doi.org/10.1504/IJCA.2018.10013985","url":null,"abstract":"Ostensibly, the most important constituent of Hofstede's theory on culture is the claim that his system of six pairs of cultural values can be used to predict sub-cultural values. Eighteen mentally held characteristics by an Iraqi forensic accountant are used as sub-cultural values. Based on the scores assigned by Hofstede to the Iraq dominant cultural values, the alleged predictive ability indoctrinate Iraqis to have an inferiority complex about their culture. Three different tests are used to check the predictive ability claimed by Hofstede. The three tests generate results that render Hofstede's claim on the predictive ability of cultural values to be invalid. On the other hand, a pure theoretical evaluation of the Hofstede's system of six pair of cultural values reveals that the purpose behind the alleged predictive ability is to indirectly promote the superiority of the cash wealth maximisation culture. Thus, believe that you are inferior and the cure is ready, i.e., cash wealth maximisation camouflaged in a system of six pairs of cultural values.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115804623","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-07-06DOI: 10.1504/IJCA.2018.10013998
C. Graham, Todd L. Sayre
While the revised conceptual framework issued by the FASB and the IASB states that an entity perspective is appropriate for financial reporting, the framework nevertheless still contains elements that are inconsistent with this perspective. This paper aims to contribute to the discourse around financial reporting perspective by examining the shareholder-centric focus inherent in the traditional balance sheet. We argue that the current balance sheet configuration presents a potentially misleading characterisation of shareholder claims. We suggest that shareholders do not own the corporation, its undistributed profit or the underlying assets.
{"title":"How the balance sheet misrepresents shareholder claims and undermines the entity perspective","authors":"C. Graham, Todd L. Sayre","doi":"10.1504/IJCA.2018.10013998","DOIUrl":"https://doi.org/10.1504/IJCA.2018.10013998","url":null,"abstract":"While the revised conceptual framework issued by the FASB and the IASB states that an entity perspective is appropriate for financial reporting, the framework nevertheless still contains elements that are inconsistent with this perspective. This paper aims to contribute to the discourse around financial reporting perspective by examining the shareholder-centric focus inherent in the traditional balance sheet. We argue that the current balance sheet configuration presents a potentially misleading characterisation of shareholder claims. We suggest that shareholders do not own the corporation, its undistributed profit or the underlying assets.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132556148","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-06-18DOI: 10.1504/IJCA.2018.10013390
Madeline Trimble
In response to the ongoing debate about whether IFRS has improved accounting quality, I introduce a new firm-level determinant of effective IFRS adoption: the political connectedness of a firm. Established political connections recognise value from firms, which they reward with shielding from enforcement agencies and/or providing financial resources outside of capital markets. By using the exogenous shock of mandatory IFRS adoption in the EU, I isolate the effect that political connections have on discretionary accounting choices. I find that although accounting quality is ex ante and ex post lower for politically connected firms with top executives in federal roles, there is no incremental difference in the positive effect of IFRS adoption relative to non-connecting firms. This finding suggests that political connections are not fully immune to IFRS effects, and yet the role of political connections is not completely negated by mandated IFRS adoption.
{"title":"Politically connected firms and the effectiveness of International Financial Reporting Standards adoption","authors":"Madeline Trimble","doi":"10.1504/IJCA.2018.10013390","DOIUrl":"https://doi.org/10.1504/IJCA.2018.10013390","url":null,"abstract":"In response to the ongoing debate about whether IFRS has improved accounting quality, I introduce a new firm-level determinant of effective IFRS adoption: the political connectedness of a firm. Established political connections recognise value from firms, which they reward with shielding from enforcement agencies and/or providing financial resources outside of capital markets. By using the exogenous shock of mandatory IFRS adoption in the EU, I isolate the effect that political connections have on discretionary accounting choices. I find that although accounting quality is ex ante and ex post lower for politically connected firms with top executives in federal roles, there is no incremental difference in the positive effect of IFRS adoption relative to non-connecting firms. This finding suggests that political connections are not fully immune to IFRS effects, and yet the role of political connections is not completely negated by mandated IFRS adoption.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"206 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132726766","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-06-18DOI: 10.1504/IJCA.2018.10013409
Babonyire Adafula, W. A. Atuilik, J. K. Amoh
The accounting profession has drawn and continues to draw criticisms from the downsides of paternalism based on libertarian economic views and the false assumption of the ability of people to make rational choices that are in their best interest. The modest goal of this paper is to call for a rethink in views on the paternalistic characterisation of the accounting profession. We argue that the accounting professional possesses specialised skill, expertise, and training for which he/she is hired by the client. Second, we assert that a prerequisite for understanding and use of accounting information is 'reasonable knowledge of business and commerce'. The justifications for the paternalistic orientation of the accounting profession are overwhelmingly persuasive. The paper therefore asserts that the proto-paternalistic posture of the accounting profession is an ineluctable phenomenon. Contemporary demands for reporting complex transactions and the incessant calls for stringent oversight of accounting practice make paternalism compelling.
{"title":"Protecting the questionably knowledgeable user of accounting information: a defence of paternalism in the accounting profession","authors":"Babonyire Adafula, W. A. Atuilik, J. K. Amoh","doi":"10.1504/IJCA.2018.10013409","DOIUrl":"https://doi.org/10.1504/IJCA.2018.10013409","url":null,"abstract":"The accounting profession has drawn and continues to draw criticisms from the downsides of paternalism based on libertarian economic views and the false assumption of the ability of people to make rational choices that are in their best interest. The modest goal of this paper is to call for a rethink in views on the paternalistic characterisation of the accounting profession. We argue that the accounting professional possesses specialised skill, expertise, and training for which he/she is hired by the client. Second, we assert that a prerequisite for understanding and use of accounting information is 'reasonable knowledge of business and commerce'. The justifications for the paternalistic orientation of the accounting profession are overwhelmingly persuasive. The paper therefore asserts that the proto-paternalistic posture of the accounting profession is an ineluctable phenomenon. Contemporary demands for reporting complex transactions and the incessant calls for stringent oversight of accounting practice make paternalism compelling.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123640030","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-06-18DOI: 10.1504/IJCA.2018.10013408
Fathi Jouini, Marwa Saied
This study examines the effect of the interaction between audit quality variables and the ownership structure on earnings management based on a sample of 86 French companies listed on the stock exchange in the SBF 120 during 2010-2013. We conclude on one hand that the interaction between auditor reputation and the concentration of capital negatively affects earnings management and on the other hand, the interaction between auditor reputation and the size of float has a positive effect on earnings management. Also, the interaction between auditor seniority and the percentage of the voting rights held by the public reduces the practice of earnings management. For the effect of the interaction between auditor reputation and institutional investors, we find a negative and significant effect on the earnings management.
{"title":"Effect and interaction between external audit quality and ownership structure on earnings management for listed French companies","authors":"Fathi Jouini, Marwa Saied","doi":"10.1504/IJCA.2018.10013408","DOIUrl":"https://doi.org/10.1504/IJCA.2018.10013408","url":null,"abstract":"This study examines the effect of the interaction between audit quality variables and the ownership structure on earnings management based on a sample of 86 French companies listed on the stock exchange in the SBF 120 during 2010-2013. We conclude on one hand that the interaction between auditor reputation and the concentration of capital negatively affects earnings management and on the other hand, the interaction between auditor reputation and the size of float has a positive effect on earnings management. Also, the interaction between auditor seniority and the percentage of the voting rights held by the public reduces the practice of earnings management. For the effect of the interaction between auditor reputation and institutional investors, we find a negative and significant effect on the earnings management.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122181747","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-04-16DOI: 10.1504/IJCA.2018.091180
A. Hamdan
This study aims to investigate the moderation role of board independence on the relationship between dividend policy and agency costs. We develop a formal model of a firm that chooses a dividend to minimise the sum of its agency costs of paying dividends with the role independent outsiders board members. The study used panel data with random-effect model for 237 firms from four Gulf Cooperation Council (henceforth, GCC) countries: Bahrain, Oman, Saudi Arabia and United Arab Emirates for a period of 13 years from 2003-2015. We find that dividends are positively related to asset utilisation, the GCC firms resort to dividend policy in order to reduce free cash flow, eventually reducing agency costs. Furthermore, the findings revealed that the inclusion of board independence as a moderating variable has influenced positively the relationship between dividend policy and reducing agency costs.
{"title":"Dividend policy, agency costs and board independence","authors":"A. Hamdan","doi":"10.1504/IJCA.2018.091180","DOIUrl":"https://doi.org/10.1504/IJCA.2018.091180","url":null,"abstract":"This study aims to investigate the moderation role of board independence on the relationship between dividend policy and agency costs. We develop a formal model of a firm that chooses a dividend to minimise the sum of its agency costs of paying dividends with the role independent outsiders board members. The study used panel data with random-effect model for 237 firms from four Gulf Cooperation Council (henceforth, GCC) countries: Bahrain, Oman, Saudi Arabia and United Arab Emirates for a period of 13 years from 2003-2015. We find that dividends are positively related to asset utilisation, the GCC firms resort to dividend policy in order to reduce free cash flow, eventually reducing agency costs. Furthermore, the findings revealed that the inclusion of board independence as a moderating variable has influenced positively the relationship between dividend policy and reducing agency costs.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"73 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123185366","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-04-16DOI: 10.1504/IJCA.2018.091159
T. Tinker, A. Afolabi, Abdelkader Mohamed Sghaier Derbali, Aida Sy
In this paper, we investigate the cases of accounting and business fraud known as Ponzi schemes. These cases studies have been done several decades ago by Professor Tony Tinker. But, notwithstanding Tinker's warning, some corporations and some corporate executives still believe, they are above the law and are using accounting to mislead shareholders and mismanage the corporate finances. The case of Bernard Madoff, a CPA, is an example.
{"title":"Ponzi schemes and California pyramids Ponzi schemes and Home-Stake","authors":"T. Tinker, A. Afolabi, Abdelkader Mohamed Sghaier Derbali, Aida Sy","doi":"10.1504/IJCA.2018.091159","DOIUrl":"https://doi.org/10.1504/IJCA.2018.091159","url":null,"abstract":"In this paper, we investigate the cases of accounting and business fraud known as Ponzi schemes. These cases studies have been done several decades ago by Professor Tony Tinker. But, notwithstanding Tinker's warning, some corporations and some corporate executives still believe, they are above the law and are using accounting to mislead shareholders and mismanage the corporate finances. The case of Bernard Madoff, a CPA, is an example.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126016064","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-04-16DOI: 10.1504/IJCA.2018.10012237
M. Mahaney, Murray J. Bryant
The primary goal of the US Securities and Exchange Commission (SEC) is to protect investors by deterring wrongdoing resulting in investor loss. The SEC deters wrongdoing in two ways: by threatening penalties and signalling illegal behaviour. If the SEC does not hold individuals accountable or if it is unclear what actions are illegal, wrongdoing will continue. Consent decrees have become the SEC's enforcement norm. Through negotiation both the defendant and the agency avoid costs and save time, but individuals responsible for wrongdoing have largely avoided personal accountability. Although firms have introduced clawback provisions into executive contracts, evidence shows that boards of directors largely have not activated clawbacks. Boards must hold employees personally responsible; thus boards should design executive contracts that clearly state the rationale for clawbacks and a means by which their amounts - amounts both fair and in the best interests of the corporation - can be established.
{"title":"Great expectations: a regulatory promise unfulfilled","authors":"M. Mahaney, Murray J. Bryant","doi":"10.1504/IJCA.2018.10012237","DOIUrl":"https://doi.org/10.1504/IJCA.2018.10012237","url":null,"abstract":"The primary goal of the US Securities and Exchange Commission (SEC) is to protect investors by deterring wrongdoing resulting in investor loss. The SEC deters wrongdoing in two ways: by threatening penalties and signalling illegal behaviour. If the SEC does not hold individuals accountable or if it is unclear what actions are illegal, wrongdoing will continue. Consent decrees have become the SEC's enforcement norm. Through negotiation both the defendant and the agency avoid costs and save time, but individuals responsible for wrongdoing have largely avoided personal accountability. Although firms have introduced clawback provisions into executive contracts, evidence shows that boards of directors largely have not activated clawbacks. Boards must hold employees personally responsible; thus boards should design executive contracts that clearly state the rationale for clawbacks and a means by which their amounts - amounts both fair and in the best interests of the corporation - can be established.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"09 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127465697","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-04-16DOI: 10.1504/IJCA.2018.10012253
Bernard Baimwera, D. Wangombe
Carbon markets with international carbon offsets have been designed to channel carbon finance for climate change management to poor and developing countries. With the threat of climate change becoming more real and economically untenable, the global carbon markets have become a key response mechanism for mitigating climate change. However, the reasons given as to why carbon markets are good ways to respond to climate change do not explain why such markets have flourished as governance mechanisms in relation to climate. Moreover, carbon markets have not been easily accessible to poor and developing countries, which are more vulnerable to the impacts of climate change. The extent to which these markets have benefited poor and developing countries, especially in Africa, has been put to question. Subsequent changes to carbon financial architecture by the Paris climate agreement is likely to have even more compounding effects for developing countries and the legal and policy frameworks they will adopt for their climate governance.
{"title":"A reflection on the role of carbon markets in climate governance in Kenya","authors":"Bernard Baimwera, D. Wangombe","doi":"10.1504/IJCA.2018.10012253","DOIUrl":"https://doi.org/10.1504/IJCA.2018.10012253","url":null,"abstract":"Carbon markets with international carbon offsets have been designed to channel carbon finance for climate change management to poor and developing countries. With the threat of climate change becoming more real and economically untenable, the global carbon markets have become a key response mechanism for mitigating climate change. However, the reasons given as to why carbon markets are good ways to respond to climate change do not explain why such markets have flourished as governance mechanisms in relation to climate. Moreover, carbon markets have not been easily accessible to poor and developing countries, which are more vulnerable to the impacts of climate change. The extent to which these markets have benefited poor and developing countries, especially in Africa, has been put to question. Subsequent changes to carbon financial architecture by the Paris climate agreement is likely to have even more compounding effects for developing countries and the legal and policy frameworks they will adopt for their climate governance.","PeriodicalId":343538,"journal":{"name":"International Journal of Critical Accounting","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115456177","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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