Pub Date : 2023-08-29DOI: 10.1108/arj-10-2022-0272
B. Marshall, Han Jin
Purpose The purpose of this paper is to examine the impact of greater reporting prominence of translation results following Accounting Standard Update (ASU) 2011-05 on net investment (NI) hedging practice. The authors investigate the role of increased transparency on the decision to engage in NI hedging (participation), the degree of NI hedging (level) and the hedging vehicle choice. Design/methodology/approach This paper uses the Heckman two-stage procedure (Heckman, 1979) in the hedging choice analysis. In the first stage, the authors model the participation decision as a function of reporting transparency, translation results and other control variables. In the second stage, the authors include the Inverse Mills ratio from the first stage Probit to examine both the level and vehicle choice decisions. Findings When translation is reported more prominently, the authors find an increase in the level of NI hedging and a greater likelihood of debt as the hedging vehicle, but no evidence firms are more likely to hedge. Regardless of where translation results are reported, firms facing ongoing translation losses are more likely to hedge. Research limitations/implications This paper examines S&P 500 firms in the years surrounding the effective date of ASU 2011-05. The findings suggest managers respond to the increase in reporting transparency by increasing hedging for long-term risk management purposes, supporting accounting authorities’ efforts to promote other comprehensive income information transparency. The results should hold for comparable firms with similar currency exposure, size and visibility, but may not apply to smaller firms with limited translation exposure. As only about a quarter of firms with translation exposure engage in NI hedging, the primary results are based on a relatively limited number of firms. Originality/value To the best of the authors’ knowledge, this is the first study that examines NI hedging behavior changes following ASU-2011-05. Second, the authors are the first to explore why firms are almost equally split between derivatives and debt as their exclusive hedging vehicle.
{"title":"Has increased prominence of translation results changed net investment hedging practice?","authors":"B. Marshall, Han Jin","doi":"10.1108/arj-10-2022-0272","DOIUrl":"https://doi.org/10.1108/arj-10-2022-0272","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to examine the impact of greater reporting prominence of translation results following Accounting Standard Update (ASU) 2011-05 on net investment (NI) hedging practice. The authors investigate the role of increased transparency on the decision to engage in NI hedging (participation), the degree of NI hedging (level) and the hedging vehicle choice.\u0000\u0000\u0000Design/methodology/approach\u0000This paper uses the Heckman two-stage procedure (Heckman, 1979) in the hedging choice analysis. In the first stage, the authors model the participation decision as a function of reporting transparency, translation results and other control variables. In the second stage, the authors include the Inverse Mills ratio from the first stage Probit to examine both the level and vehicle choice decisions.\u0000\u0000\u0000Findings\u0000When translation is reported more prominently, the authors find an increase in the level of NI hedging and a greater likelihood of debt as the hedging vehicle, but no evidence firms are more likely to hedge. Regardless of where translation results are reported, firms facing ongoing translation losses are more likely to hedge.\u0000\u0000\u0000Research limitations/implications\u0000This paper examines S&P 500 firms in the years surrounding the effective date of ASU 2011-05. The findings suggest managers respond to the increase in reporting transparency by increasing hedging for long-term risk management purposes, supporting accounting authorities’ efforts to promote other comprehensive income information transparency. The results should hold for comparable firms with similar currency exposure, size and visibility, but may not apply to smaller firms with limited translation exposure. As only about a quarter of firms with translation exposure engage in NI hedging, the primary results are based on a relatively limited number of firms.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first study that examines NI hedging behavior changes following ASU-2011-05. Second, the authors are the first to explore why firms are almost equally split between derivatives and debt as their exclusive hedging vehicle.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47061409","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 : 2023-08-11DOI: 10.56244/accrual.v1i2.686
D. Lestari, Andira Robianto
Penelitian ini bertujuan untuk menguji Pengaruh Intellectual Capital Dan Working Capital Turnover Terhadap Profitabilitas (Studi Kasus Pada Perusahaan Manufaktur Sub Sektor Tekstil Dan Garmen yang terdaftar di Bursa Efek Indonesia Tahun 2016-2020). Populasi dalam penelitian ini sebanyak 21 perusahaan. Metode pengambilan sampel yang digunakan yaitu purposive sampling sehingga diperoleh sampel sebanyak 14 perusahaan selama periode pengamatan 5 tahun sehingga menjadi 70 sampel. Teknik analisis data yang digunakan adalah Analisis Regresi Linier Berganda. Hasil penelitian menunjukkan bahwa Intellectual Capital berpengaruh positif dan signifikan terhadap Profitabilitas, Working Capital Turnover berpengaruh positif signifikan terhadap Profitabilitas, dan secara simultan Intellectual Capital dan Working Capital Turnover berpengaruh signifikan terhadap Profitabilitas. Keywords: Intellectual Capital, Working Capital Turnover, Profitabilitas
{"title":"THE IMPACT OF CAPITAL ON PROFITABILITY","authors":"D. Lestari, Andira Robianto","doi":"10.56244/accrual.v1i2.686","DOIUrl":"https://doi.org/10.56244/accrual.v1i2.686","url":null,"abstract":"Penelitian ini bertujuan untuk menguji Pengaruh Intellectual Capital Dan Working Capital Turnover Terhadap Profitabilitas (Studi Kasus Pada Perusahaan Manufaktur Sub Sektor Tekstil Dan Garmen yang terdaftar di Bursa Efek Indonesia Tahun 2016-2020). Populasi dalam penelitian ini sebanyak 21 perusahaan. Metode pengambilan sampel yang digunakan yaitu purposive sampling sehingga diperoleh sampel sebanyak 14 perusahaan selama periode pengamatan 5 tahun sehingga menjadi 70 sampel. Teknik analisis data yang digunakan adalah Analisis Regresi Linier Berganda. Hasil penelitian menunjukkan bahwa Intellectual Capital berpengaruh positif dan signifikan terhadap Profitabilitas, Working Capital Turnover berpengaruh positif signifikan terhadap Profitabilitas, dan secara simultan Intellectual Capital dan Working Capital Turnover berpengaruh signifikan terhadap Profitabilitas.\u0000Keywords: Intellectual Capital, Working Capital Turnover, Profitabilitas","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41990844","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 : 2023-08-11DOI: 10.56244/accrual.v1i2.705
Asep Mulyana
Taxes are the biggest income for the government in running the wheels of government, therefore citizens or here the public so that they can obey and comply with the obligation to pay taxes, therefore it is necessary to see from the income tax how it increases and it is necessary to examine the taxpayer so that the income tax increases. Increasing and according to the target every year with this inspection it is hoped that the public will be aware of paying taxes. This study aims to find out increasing individual income tax receipts through tax audits whether there is a big effect after conducting an examination of individuals. The method used in this study is a quantitative method. With a descriptive approach and the data used is secondary data. The results of the study show that partially it does not have a significant effect on Individual Income Tax Receipts. Through tax audits from the statistical results, it is necessary for tax officers to examine taxpayers to be more intense and always make taxpayers aware that taxes always increase from the results of examiners to do it regularly and continuously. Keywords: Tax, compliance, Personal Income Tax, Tax Audit
{"title":"INCREASE IN INCOME TAX OF INDIVIDUALS THROUGH TAX AUDIT","authors":"Asep Mulyana","doi":"10.56244/accrual.v1i2.705","DOIUrl":"https://doi.org/10.56244/accrual.v1i2.705","url":null,"abstract":"Taxes are the biggest income for the government in running the wheels of government, therefore citizens or here the public so that they can obey and comply with the obligation to pay taxes, therefore it is necessary to see from the income tax how it increases and it is necessary to examine the taxpayer so that the income tax increases. Increasing and according to the target every year with this inspection it is hoped that the public will be aware of paying taxes. This study aims to find out increasing individual income tax receipts through tax audits whether there is a big effect after conducting an examination of individuals. The method used in this study is a quantitative method. With a descriptive approach and the data used is secondary data. The results of the study show that partially it does not have a significant effect on Individual Income Tax Receipts. Through tax audits from the statistical results, it is necessary for tax officers to examine taxpayers to be more intense and always make taxpayers aware that taxes always increase from the results of examiners to do it regularly and continuously.\u0000Keywords: Tax, compliance, Personal Income Tax, Tax Audit","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45747429","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 : 2023-08-11DOI: 10.56244/accrual.v1i2.685
Patria Prasetio Adi
Sistem pengendalian manajemen terbagi menjadi pengendalianformal dan pengendalian informal. Pada prakteknya, pengendalian formalcenderung mendominasi system pengendalian manajemen dalamorganisasi. Meskipun terdapat dampak psikologis akibat pengendalianformal, pengendalian informal kerap terabaikan. Pengukuran terhadappengendalian informal memang sulit dilakukan. Karena systempengendalian manajemen pada hakikatnya mengendalikan perilaku dariorganisasi untuk mencapai tujuannya, maka pengendalian informaltidakdapatdiabaikan karena unsur perilaku justru mendominasipengendalian informal. Penelitian ini menggunakan studi literature dengantopik sistem pengendalian manajemen, khususnya system pengendalianinformal untuk mengungkapkan dominasi dari pengendalian formal dankesulitan dalam menggunakan pengendalian informal sehingga seringkalimenjadi terabaikan. Tujuan dari studi literature ini adalah memberikanpandangan mengenai pentingnya pengendalian informal dalam upayamewujudkan tujuan organisasi. Hasil penelitian ini adalah kehadiranpengendalian informal dalam system pengendalian manajemen, dimana halini dapat menjadi motivasi bagi pengelola organisasi dan pelaku bisnisuntuk menggunakan pengendalian informal selain pengendalian formal. Kata kunci: pengendalian; formal; informal; dampak; dominasi
{"title":"Sistem Pengendalian Manajemen Informal yang Terabaikan","authors":"Patria Prasetio Adi","doi":"10.56244/accrual.v1i2.685","DOIUrl":"https://doi.org/10.56244/accrual.v1i2.685","url":null,"abstract":" Sistem pengendalian manajemen terbagi menjadi pengendalianformal dan pengendalian informal. Pada prakteknya, pengendalian formalcenderung mendominasi system pengendalian manajemen dalamorganisasi. Meskipun terdapat dampak psikologis akibat pengendalianformal, pengendalian informal kerap terabaikan. Pengukuran terhadappengendalian informal memang sulit dilakukan. Karena systempengendalian manajemen pada hakikatnya mengendalikan perilaku dariorganisasi untuk mencapai tujuannya, maka pengendalian informaltidakdapatdiabaikan karena unsur perilaku justru mendominasipengendalian informal. Penelitian ini menggunakan studi literature dengantopik sistem pengendalian manajemen, khususnya system pengendalianinformal untuk mengungkapkan dominasi dari pengendalian formal dankesulitan dalam menggunakan pengendalian informal sehingga seringkalimenjadi terabaikan. Tujuan dari studi literature ini adalah memberikanpandangan mengenai pentingnya pengendalian informal dalam upayamewujudkan tujuan organisasi. Hasil penelitian ini adalah kehadiranpengendalian informal dalam system pengendalian manajemen, dimana halini dapat menjadi motivasi bagi pengelola organisasi dan pelaku bisnisuntuk menggunakan pengendalian informal selain pengendalian formal.\u0000Kata kunci: pengendalian; formal; informal; dampak; dominasi","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46561061","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 : 2023-08-11DOI: 10.56244/accrual.v1i2.683
K. Lesmana, W. Sutrisna
Dari hasil penelitian menunjukan bahwa pengaruh efektifitassystem pengendalian intern berpengaruh terhadap kecurangan pengelolaandana desa tujuan penelitia ini melihat berapa besar efektipitas dana desadalam pengendalian dari dana desa yang di alokasikan pemerintah untukpembangaunan desa agar keuangan dana desa bisa di jaga dan terserapsesuia sasaran serta tujuan dari pembangunana desa demi kesejahteraandesa, responden yaitu apartur desa di profinsi jawabarat dengan mengambilsempel 100 apartur desa yang ada di provinsi jawa barat dari metodeexsplanatory research dan hasilnya menunjukan bahwa pengendalian internsangat perlu dilakukan dalam kegiatan pengelolaan dana desa supaya danadesa terserap secara benar untuk pengembangan dan pembangunan desayang lebih mandiri menjadi pelopor desa untuk kemajuan desa dan hasilpenelitian menunjukan bahwa ada penurunan tindakan kecurangan danadesa dari tahun ketahun semakin membaik yaitu dengan sumber dayamempuni dan pendapingan desa yang optimal. Kata kunci: efektifitas system pengendalian intrn, kecurangan pengelolaandana desa
{"title":"PENGARUH EFEKTIVITAS SISTEM PENGENDALIAN INTERN, TERHADAP KECURANGAN PENGELOLAAN DANA DESA DIPROVINSI JAWA BARAT","authors":"K. Lesmana, W. Sutrisna","doi":"10.56244/accrual.v1i2.683","DOIUrl":"https://doi.org/10.56244/accrual.v1i2.683","url":null,"abstract":"Dari hasil penelitian menunjukan bahwa pengaruh efektifitassystem pengendalian intern berpengaruh terhadap kecurangan pengelolaandana desa tujuan penelitia ini melihat berapa besar efektipitas dana desadalam pengendalian dari dana desa yang di alokasikan pemerintah untukpembangaunan desa agar keuangan dana desa bisa di jaga dan terserapsesuia sasaran serta tujuan dari pembangunana desa demi kesejahteraandesa, responden yaitu apartur desa di profinsi jawabarat dengan mengambilsempel 100 apartur desa yang ada di provinsi jawa barat dari metodeexsplanatory research dan hasilnya menunjukan bahwa pengendalian internsangat perlu dilakukan dalam kegiatan pengelolaan dana desa supaya danadesa terserap secara benar untuk pengembangan dan pembangunan desayang lebih mandiri menjadi pelopor desa untuk kemajuan desa dan hasilpenelitian menunjukan bahwa ada penurunan tindakan kecurangan danadesa dari tahun ketahun semakin membaik yaitu dengan sumber dayamempuni dan pendapingan desa yang optimal.\u0000Kata kunci: efektifitas system pengendalian intrn, kecurangan pengelolaandana desa","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":"1 1","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41322681","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 : 2023-08-11DOI: 10.56244/accrual.v1i2.691
Endang Susilawati, Asep Mulyana
This study aims to determine the implementation of taxcollection to increase personal income tax revenue whether there is abig effect after billing individuals’ domestic private person. Taxeshave a very large role in generating domestic cash receipts in order torealize continuity and increase in national development. The methodused in this research is a quantitative method with a descriptiveapproach and the data used is secondary data. The results of the studyshow that partially Billing does not have a significant effect onIndividual Income Tax Receipts. Keywords: Implementation of Tax Collection, Increasing IndividualIncome Tax Revenue
{"title":"IMPLEMENTATION OF TAX COLLECTION TO INCREASE INDIVIDUAL INCOME TAX REVENUE","authors":"Endang Susilawati, Asep Mulyana","doi":"10.56244/accrual.v1i2.691","DOIUrl":"https://doi.org/10.56244/accrual.v1i2.691","url":null,"abstract":" This study aims to determine the implementation of taxcollection to increase personal income tax revenue whether there is abig effect after billing individuals’ domestic private person. Taxeshave a very large role in generating domestic cash receipts in order torealize continuity and increase in national development. The methodused in this research is a quantitative method with a descriptiveapproach and the data used is secondary data. The results of the studyshow that partially Billing does not have a significant effect onIndividual Income Tax Receipts.\u0000Keywords: Implementation of Tax Collection, Increasing IndividualIncome Tax Revenue","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45884349","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 : 2023-08-08DOI: 10.1108/arj-02-2023-0063
Roslee Uyob, Ku Maisurah Ku Bahador, R. Saad
Purpose This study aims to investigate the usage behaviour associated with adopting the extensible business reporting language-based Malaysia business reporting system (MBRS). An extended technology acceptance model (TAM) was used, which was tested and examined using both the TAM and the diffusion of innovation theory (DIT). Design/methodology/approach The empirical results were obtained from 267 members of the Malaysian Institute of Accountants, who are responsible for preparing and filing company reports with the Companies Commission of Malaysia. Findings The findings show that user intention has a significant impact on MBRS usage behaviour. Perceived usefulness, perceived ease of use and cost have an impact on users’ intention to use, while attitude and compatibility have no impact. Only perceived ease of use has a significant impact on user attitude. For perceived usefulness, cost and compatibility are found to have a significant impact but not perceived ease of use. Originality/value To the best of the authors’ knowledge, this is the first study that integrates TAM and DIT to analyse MBRS usage behaviour.
{"title":"Integrating technology acceptance model with diffusion of innovation theory: an empirical investigation of the usage behaviour of XBRL-based Malaysia business reporting system","authors":"Roslee Uyob, Ku Maisurah Ku Bahador, R. Saad","doi":"10.1108/arj-02-2023-0063","DOIUrl":"https://doi.org/10.1108/arj-02-2023-0063","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate the usage behaviour associated with adopting the extensible business reporting language-based Malaysia business reporting system (MBRS). An extended technology acceptance model (TAM) was used, which was tested and examined using both the TAM and the diffusion of innovation theory (DIT).\u0000\u0000\u0000Design/methodology/approach\u0000The empirical results were obtained from 267 members of the Malaysian Institute of Accountants, who are responsible for preparing and filing company reports with the Companies Commission of Malaysia.\u0000\u0000\u0000Findings\u0000The findings show that user intention has a significant impact on MBRS usage behaviour. Perceived usefulness, perceived ease of use and cost have an impact on users’ intention to use, while attitude and compatibility have no impact. Only perceived ease of use has a significant impact on user attitude. For perceived usefulness, cost and compatibility are found to have a significant impact but not perceived ease of use.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first study that integrates TAM and DIT to analyse MBRS usage behaviour.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46294120","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 : 2023-07-27DOI: 10.1108/arj-09-2022-0231
Suham Cahyono, I. Harymawan, Damara Ardelia Kusuma Wardani, K. A. Kamarudin
Purpose This study aims to investigate the presence of the audit partner ethnicity on audit fees within the Indonesian context. Design/methodology/approach The sample consists of 803 firm-year observations from the Indonesia Stock Exchange during the period of 2014–2018. The study uses fixed-effect regression analysis to examine the relationship between audit partner ethnicity and audit fees. Findings This study reveals that firms audited by audit partners from the main ethnic group demonstrate lower audit fees, indicating a more extensive audit business network for this particular group of auditors compared to those from minority ethnic groups. Particularly, the study finds that firms audited by audit partners from the three largest ethnicities, namely, Balinese, Javanese and West Sumatranese, are associated with lower audit fees compared to others. These findings further contribute to the existing narrative and literature that highlight the ethnic background of audit partners as a form of social capital that influences lower audit fees. Research limitations/implications This study provides valuable practical and academic implications regarding the impact of audit partner ethnicity on audit fees. The findings highlight the importance for audit firms to strive for a balanced representation of ethnic diversity in their auditor characteristics, as it can positively influence both governance and marketing strategies. By recognizing and addressing the significance of ethnic diversity among audit partners, firms can enhance their overall effectiveness and success in the auditing profession. Originality/value This study makes a unique contribution by providing empirical data on audit pricing theory in Indonesia, specifically focusing on the role of ethnic diversity as a determinant of audit pricing. Previous research has not extensively explored the connection between auditor ethnicity and audit fees, particularly in relation to the business network as a channel mechanism. The theoretical explanations for the fee differentials have also been limited in prior studies. The current study addresses this gap by offering a theoretical basis that highlights the advantage of the dominant ethnic group in establishing an efficient audit market system. Consequently, these auditors are able to charge lower fees to clients without compromising on the quality of their services. This finding aligns with the existing literature on audit fees and underscores the importance of the main ethnic group in fostering an effective audit market, resulting in lower audit fees compared to mixed audit markets.
{"title":"Does auditor ethnicity matter in determining audit fees? Some empirical evidence from Indonesia","authors":"Suham Cahyono, I. Harymawan, Damara Ardelia Kusuma Wardani, K. A. Kamarudin","doi":"10.1108/arj-09-2022-0231","DOIUrl":"https://doi.org/10.1108/arj-09-2022-0231","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate the presence of the audit partner ethnicity on audit fees within the Indonesian context.\u0000\u0000\u0000Design/methodology/approach\u0000The sample consists of 803 firm-year observations from the Indonesia Stock Exchange during the period of 2014–2018. The study uses fixed-effect regression analysis to examine the relationship between audit partner ethnicity and audit fees.\u0000\u0000\u0000Findings\u0000This study reveals that firms audited by audit partners from the main ethnic group demonstrate lower audit fees, indicating a more extensive audit business network for this particular group of auditors compared to those from minority ethnic groups. Particularly, the study finds that firms audited by audit partners from the three largest ethnicities, namely, Balinese, Javanese and West Sumatranese, are associated with lower audit fees compared to others. These findings further contribute to the existing narrative and literature that highlight the ethnic background of audit partners as a form of social capital that influences lower audit fees.\u0000\u0000\u0000Research limitations/implications\u0000This study provides valuable practical and academic implications regarding the impact of audit partner ethnicity on audit fees. The findings highlight the importance for audit firms to strive for a balanced representation of ethnic diversity in their auditor characteristics, as it can positively influence both governance and marketing strategies. By recognizing and addressing the significance of ethnic diversity among audit partners, firms can enhance their overall effectiveness and success in the auditing profession.\u0000\u0000\u0000Originality/value\u0000This study makes a unique contribution by providing empirical data on audit pricing theory in Indonesia, specifically focusing on the role of ethnic diversity as a determinant of audit pricing. Previous research has not extensively explored the connection between auditor ethnicity and audit fees, particularly in relation to the business network as a channel mechanism. The theoretical explanations for the fee differentials have also been limited in prior studies. The current study addresses this gap by offering a theoretical basis that highlights the advantage of the dominant ethnic group in establishing an efficient audit market system. Consequently, these auditors are able to charge lower fees to clients without compromising on the quality of their services. This finding aligns with the existing literature on audit fees and underscores the importance of the main ethnic group in fostering an effective audit market, resulting in lower audit fees compared to mixed audit markets.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48528968","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 : 2023-07-21DOI: 10.1108/arj-09-2022-0234
Paulina Sutrisno, S. Utama, A. Hermawan, E. Fatima
Purpose In the context of a two-tier governance system, this study aims to investigate whether CEO overconfidence affects firm risk. In addition, this study examines the moderating role of the founder CEO on CEO overconfidence and firm risk. Design/methodology/approach This study uses a composite score index of CEO overconfidence with a sample of nonfinancial firms listed on the Indonesia Stock Exchange from 2012 to 2019. It tests the research hypothesis with multiple linear regression analysis. Findings The findings indicate that CEO overconfidence reduces firm risk. In contrast, the founder CEO does not affect the relationship between CEO overconfidence and firm risk. Research limitations/implications This study supports the upper echelon theory that argues that firms’ top management affects firms’ outcomes and behaviors. Practical implications The top management team heavily affects firms’ outcomes and behaviors in a two-tier governance system. Furthermore, firms’ selection policy of overconfident CEOs will be improved because these CEOs can diversify firm risks more effectively. Originality/value To the best of the authors’ knowledge, this study is the first to examine the role of the founder in the relationship between CEO overconfidence and firm risk.
{"title":"Do founder CEOs and overconfidence affect firm risk?","authors":"Paulina Sutrisno, S. Utama, A. Hermawan, E. Fatima","doi":"10.1108/arj-09-2022-0234","DOIUrl":"https://doi.org/10.1108/arj-09-2022-0234","url":null,"abstract":"\u0000Purpose\u0000In the context of a two-tier governance system, this study aims to investigate whether CEO overconfidence affects firm risk. In addition, this study examines the moderating role of the founder CEO on CEO overconfidence and firm risk.\u0000\u0000\u0000Design/methodology/approach\u0000This study uses a composite score index of CEO overconfidence with a sample of nonfinancial firms listed on the Indonesia Stock Exchange from 2012 to 2019. It tests the research hypothesis with multiple linear regression analysis.\u0000\u0000\u0000Findings\u0000The findings indicate that CEO overconfidence reduces firm risk. In contrast, the founder CEO does not affect the relationship between CEO overconfidence and firm risk.\u0000\u0000\u0000Research limitations/implications\u0000This study supports the upper echelon theory that argues that firms’ top management affects firms’ outcomes and behaviors.\u0000\u0000\u0000Practical implications\u0000The top management team heavily affects firms’ outcomes and behaviors in a two-tier governance system. Furthermore, firms’ selection policy of overconfident CEOs will be improved because these CEOs can diversify firm risks more effectively.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this study is the first to examine the role of the founder in the relationship between CEO overconfidence and firm risk.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-07-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45875813","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 : 2023-06-23DOI: 10.1108/arj-10-2022-0279
Benjamin Hubbard
Purpose The purpose of this paper is to examine potential financial accounting treatments for cryptocurrencies, including the current guidance, and compare the benefits and shortcomings of each method. It proposes the introduction and use of an intangible asset revaluation model. The study aims to inform both standard setters and financial statement preparers of the most appropriate accounting treatment of this digital asset. Design/methodology/approach This paper uses an exploratory analysis and conceptualizes each technical treatment option. For each potential treatment, this paper describes the technical accounting guidance and financial statement implications. The study also uses an illustration to compare the outcomes of each treatment option. Findings This paper provides insights into the most appropriate financial accounting treatment of cryptocurrencies. Findings indicate the best option is an intangible asset revaluation model that allows firms to elect a fair value option and record fluctuations in market value to other comprehensive income. This model would improve the accuracy of asset numbers while maintaining the relevance of income amounts by preventing large gains or losses from fair value fluctuations from flowing through the income statement. Research limitations/implications The number of firms that hold cryptocurrencies on their balance sheet remains small, thus the research is limited to anecdotal and expository analysis. Practical implications The study includes implications for accounting standard setters as they continue to deliberate the appropriate financial accounting treatment for cryptocurrencies. The study can inform the standard setting process and impact future authoritative guidance. Social implications The use of cryptocurrency is extremely popular among individual investors and consumers. Updating accounting guidance on crypto can help support a robust crypto market through a useful, informative approach to measurement and reporting. This can also aid in improving the economic prosperity of crypto investors. Originality/value This paper fulfills an identified need to examine and understand appropriate accounting guidance for cryptocurrencies. Current guidance has been deemed ineffective and there is debate regarding the proper treatment moving forward. This paper contextualizes this debate and provides suggested solutions.
{"title":"Decrypting crypto: implications of potential financial accounting treatments of cryptocurrency","authors":"Benjamin Hubbard","doi":"10.1108/arj-10-2022-0279","DOIUrl":"https://doi.org/10.1108/arj-10-2022-0279","url":null,"abstract":"Purpose The purpose of this paper is to examine potential financial accounting treatments for cryptocurrencies, including the current guidance, and compare the benefits and shortcomings of each method. It proposes the introduction and use of an intangible asset revaluation model. The study aims to inform both standard setters and financial statement preparers of the most appropriate accounting treatment of this digital asset. Design/methodology/approach This paper uses an exploratory analysis and conceptualizes each technical treatment option. For each potential treatment, this paper describes the technical accounting guidance and financial statement implications. The study also uses an illustration to compare the outcomes of each treatment option. Findings This paper provides insights into the most appropriate financial accounting treatment of cryptocurrencies. Findings indicate the best option is an intangible asset revaluation model that allows firms to elect a fair value option and record fluctuations in market value to other comprehensive income. This model would improve the accuracy of asset numbers while maintaining the relevance of income amounts by preventing large gains or losses from fair value fluctuations from flowing through the income statement. Research limitations/implications The number of firms that hold cryptocurrencies on their balance sheet remains small, thus the research is limited to anecdotal and expository analysis. Practical implications The study includes implications for accounting standard setters as they continue to deliberate the appropriate financial accounting treatment for cryptocurrencies. The study can inform the standard setting process and impact future authoritative guidance. Social implications The use of cryptocurrency is extremely popular among individual investors and consumers. Updating accounting guidance on crypto can help support a robust crypto market through a useful, informative approach to measurement and reporting. This can also aid in improving the economic prosperity of crypto investors. Originality/value This paper fulfills an identified need to examine and understand appropriate accounting guidance for cryptocurrencies. Current guidance has been deemed ineffective and there is debate regarding the proper treatment moving forward. This paper contextualizes this debate and provides suggested solutions.","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":"131 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135904405","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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