Pub Date : 2023-09-07DOI: 10.1080/17449480.2023.2253808
Erlend Kvaal, Edgar Löw, Zoltán Novotny-Farkas, Argyro Panaretou, Annelies Renders, Peter Sampers
{"title":"Classification and Measurement under IFRS 9: A Commentary and Suggestions for Future Research","authors":"Erlend Kvaal, Edgar Löw, Zoltán Novotny-Farkas, Argyro Panaretou, Annelies Renders, Peter Sampers","doi":"10.1080/17449480.2023.2253808","DOIUrl":"https://doi.org/10.1080/17449480.2023.2253808","url":null,"abstract":"","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2023-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42785801","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 : 2023-08-27DOI: 10.1080/17449480.2023.2251996
Abiot Tessema
{"title":"Does mandatory recognition of derivatives and hedging activities influence investors’ uncertainty and diversity of opinion? The moderating role of product market competition","authors":"Abiot Tessema","doi":"10.1080/17449480.2023.2251996","DOIUrl":"https://doi.org/10.1080/17449480.2023.2251996","url":null,"abstract":"","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2023-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48848907","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 : 2023-08-20DOI: 10.1080/17449480.2023.2247410
Jere R. Francis
{"title":"What exactly do we mean by audit quality?","authors":"Jere R. Francis","doi":"10.1080/17449480.2023.2247410","DOIUrl":"https://doi.org/10.1080/17449480.2023.2247410","url":null,"abstract":"","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135876938","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 : 2023-08-13DOI: 10.1080/17449480.2023.2244509
A. Rautiainen, Jani Saastamoinen, Kati Pajunen
Alternative performance measures (APMs) and alternative ways of presenting financial information pose a threat to the comparability of financial statement information and the assessment of alternative information may rouse increased professional skepticism (PS). The alternative performance measures or “alternative truths” presented in financial statements range from excluding few non-recurrent items to stating full “ non-IFRS”, “non - GAAP” or “ p ro forma” results. In a case where the presentation selected leads either to profit or loss, two differing figures may increase uncertainty in audit work and affect the perceived risks in the case. In this paper, we study how Finnish public auditors perceive audit work and professional skepticism related to APMs, with a survey (N=220) with statements focusing on the professional skepticism (PS) both generally (as a personal trait, trait skepticism ) and as case-specific state skepticism . We develop a measurement instrument for state skepticism. We find that state skepticism related to APMs is a largely separate component of professional (trait) skepticism. State skepticism seems to be helpful, together with considerations of the practical usefulness of those measures, in assessing APMs. Further, we find that auditors hold various views on APMs, and that search for knowledge seems a key feature in coping with APMs.
{"title":"Auditors’ perceptions of alternative performance measures – alternative truths and professional skepticism","authors":"A. Rautiainen, Jani Saastamoinen, Kati Pajunen","doi":"10.1080/17449480.2023.2244509","DOIUrl":"https://doi.org/10.1080/17449480.2023.2244509","url":null,"abstract":"Alternative performance measures (APMs) and alternative ways of presenting financial information pose a threat to the comparability of financial statement information and the assessment of alternative information may rouse increased professional skepticism (PS). The alternative performance measures or “alternative truths” presented in financial statements range from excluding few non-recurrent items to stating full “ non-IFRS”, “non - GAAP” or “ p ro forma” results. In a case where the presentation selected leads either to profit or loss, two differing figures may increase uncertainty in audit work and affect the perceived risks in the case. In this paper, we study how Finnish public auditors perceive audit work and professional skepticism related to APMs, with a survey (N=220) with statements focusing on the professional skepticism (PS) both generally (as a personal trait, trait skepticism ) and as case-specific state skepticism . We develop a measurement instrument for state skepticism. We find that state skepticism related to APMs is a largely separate component of professional (trait) skepticism. State skepticism seems to be helpful, together with considerations of the practical usefulness of those measures, in assessing APMs. Further, we find that auditors hold various views on APMs, and that search for knowledge seems a key feature in coping with APMs.","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2023-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49582310","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: 10.1080/17449480.2023.2241871
Frederik Verplancke, Stefanie De Bruyckere, P. Everaert, Carine Coppens, Eva Blondeel
{"title":"Small and Medium-Sized Accounting Practices (SMPs): Explaining Financial Performance based on Human Capital and Organisational Resources","authors":"Frederik Verplancke, Stefanie De Bruyckere, P. Everaert, Carine Coppens, Eva Blondeel","doi":"10.1080/17449480.2023.2241871","DOIUrl":"https://doi.org/10.1080/17449480.2023.2241871","url":null,"abstract":"","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2023-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41480841","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 : 2023-07-19DOI: 10.1080/17449480.2023.2237056
M. Bengtsson, D. Argento
Abstract By bridging the two main approaches examining de jure adoption of IFRS, namely, convergence and divergence studies, we provide a framework that more fully captures the totality, dynamics, and complexity of voluntary adoption of IFRS by country. The framework offers an understanding of accounting regulators’ efforts to balance between pressure to adopt IFRS and national specific conditions that may conflict with IFRS requirements. The suggested framework depicts four propositions which are built on four institutional dimensions: the degree of IFRS diffusion, national accounting system compatibility with IFRS, country dependence on external financing, and accounting regulator’s international networking. These four propositions jointly predict national adoption level of IFRS, ranging from non-adoption to partial adoption, and to full adoption. The framework assumes that the current IFRS adoption status by country is not static and may change over time. The voluntary adoption of IFRS standards by country is understood as the result of tradeoffs among multiple factors. In doing so, the developed framework solves a theoretical dichotomy in IFRS studies: the tendency of using institutional isomorphism to examine convergence versus accounting classification to understand divergence.
{"title":"International Accounting Convergence and Divergence: Towards a Framework for Understanding De Jure Adoption of IFRS","authors":"M. Bengtsson, D. Argento","doi":"10.1080/17449480.2023.2237056","DOIUrl":"https://doi.org/10.1080/17449480.2023.2237056","url":null,"abstract":"Abstract\u0000 By bridging the two main approaches examining de jure adoption of IFRS, namely, convergence and divergence studies, we provide a framework that more fully captures the totality, dynamics, and complexity of voluntary adoption of IFRS by country. The framework offers an understanding of accounting regulators’ efforts to balance between pressure to adopt IFRS and national specific conditions that may conflict with IFRS requirements. The suggested framework depicts four propositions which are built on four institutional dimensions: the degree of IFRS diffusion, national accounting system compatibility with IFRS, country dependence on external financing, and accounting regulator’s international networking. These four propositions jointly predict national adoption level of IFRS, ranging from non-adoption to partial adoption, and to full adoption. The framework assumes that the current IFRS adoption status by country is not static and may change over time. The voluntary adoption of IFRS standards by country is understood as the result of tradeoffs among multiple factors. In doing so, the developed framework solves a theoretical dichotomy in IFRS studies: the tendency of using institutional isomorphism to examine convergence versus accounting classification to understand divergence.","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2023-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44348974","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 : 2023-07-13DOI: 10.1080/17449480.2023.2231964
Cédric Poretti, Tiphaine Jérôme, Carl Brousseau
Abstract In this paper, we investigate the earnings management behavior of listed family firms holding the name of the family (eponymous FF). Specifically, we use a Swiss sample of 1,544 firm-year observations from 2006 to 2018 to examine the association of eponymous FF with accrual-based earnings management in general, and identify circumstances where this association does not hold. First, we find that, on average, eponymous FF exhibit less earnings management than non-FF. Second, we exploit a Swiss-specific option to voluntarily turn away from IFRS to local GAAP. Using a difference-in-differences approach, we find that eponymous FF exhibit higher levels of earnings management immediately after the switch. Finally, we show that eponymous FF exhibit higher earnings management when the family is directly involved in the board of directors or the managing board. Our findings provide a more nuanced understanding of the effects of family identification on earnings management incentives in listed firms.
{"title":"Family identification and earnings management in listed firms","authors":"Cédric Poretti, Tiphaine Jérôme, Carl Brousseau","doi":"10.1080/17449480.2023.2231964","DOIUrl":"https://doi.org/10.1080/17449480.2023.2231964","url":null,"abstract":"Abstract In this paper, we investigate the earnings management behavior of listed family firms holding the name of the family (eponymous FF). Specifically, we use a Swiss sample of 1,544 firm-year observations from 2006 to 2018 to examine the association of eponymous FF with accrual-based earnings management in general, and identify circumstances where this association does not hold. First, we find that, on average, eponymous FF exhibit less earnings management than non-FF. Second, we exploit a Swiss-specific option to voluntarily turn away from IFRS to local GAAP. Using a difference-in-differences approach, we find that eponymous FF exhibit higher levels of earnings management immediately after the switch. Finally, we show that eponymous FF exhibit higher earnings management when the family is directly involved in the board of directors or the managing board. Our findings provide a more nuanced understanding of the effects of family identification on earnings management incentives in listed firms.","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2023-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42453098","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 : 2023-06-03DOI: 10.1080/17449480.2023.2213242
K. Klimczak, Dominika Hadro, Marcel Meyer
Abstract Sustainability reporting is rapidly developing in the European Union – from voluntary Corporate Social Responsibility (CSR) disclosure over to mandatory non-financial reporting (NFR), then over to Economic, Social and Governance (ESG) – with the ambition of becoming as important as financial reporting. This paper investigates whether executives act as change agents in this process by setting a tone at the top, and how their communication changes as time progresses. We use methods from computational corpus linguistics to analyze commentaries by companies listed at the Warsaw Stock Exchange between 2017 and 2021. Results show how top managers are not aligned with the sustainability transition. Their commentaries are bluntly positive and lack performance information. Over time, change and environmental challenges gain attention. In sum, executives appear to respond primarily to investor needs. While showing respect to stakeholders, they avoid setting goals and reporting effects. Effective regulation may bring about the necessary change.
{"title":"Executive communication with stakeholders on sustainability: the case of Poland","authors":"K. Klimczak, Dominika Hadro, Marcel Meyer","doi":"10.1080/17449480.2023.2213242","DOIUrl":"https://doi.org/10.1080/17449480.2023.2213242","url":null,"abstract":"Abstract\u0000 Sustainability reporting is rapidly developing in the European Union – from voluntary Corporate Social Responsibility (CSR) disclosure over to mandatory non-financial reporting (NFR), then over to Economic, Social and Governance (ESG) – with the ambition of becoming as important as financial reporting. This paper investigates whether executives act as change agents in this process by setting a tone at the top, and how their communication changes as time progresses. We use methods from computational corpus linguistics to analyze commentaries by companies listed at the Warsaw Stock Exchange between 2017 and 2021. Results show how top managers are not aligned with the sustainability transition. Their commentaries are bluntly positive and lack performance information. Over time, change and environmental challenges gain attention. In sum, executives appear to respond primarily to investor needs. While showing respect to stakeholders, they avoid setting goals and reporting effects. Effective regulation may bring about the necessary change.","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2023-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47301933","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 : 2023-06-03DOI: 10.1080/17449480.2023.2218398
Alfred Wagenhofer
{"title":"Sustainability Reporting: A Financial Reporting Perspective","authors":"Alfred Wagenhofer","doi":"10.1080/17449480.2023.2218398","DOIUrl":"https://doi.org/10.1080/17449480.2023.2218398","url":null,"abstract":"","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2023-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47741435","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 : 2023-05-20DOI: 10.1080/17449480.2023.2213249
Alessandro Mura
Abstract This paper contributes to the growing literature on earnings management in private firms by focusing on deferred taxes. This accounting treatment requires sophisticated use of accruals that provides the chance to manage earnings and net assets without affecting the tax payable. We argue that in a setting with high book-tax conformity, the small room that allegedly exists to recognise deferred taxes remains a comfortable avenue to reach reporting objectives that a tax-minimisation strategy may preclude. We use a sample of private firms operating in a credit- and tax-driven environment such as Italy to test this expectation. Our results show that private firms use deferred taxes to extract multiple financial reporting benefits that may facilitate debt contracting: smoothing earnings over time, meeting/beating historical earnings, avoiding reporting accounting losses, and managing leverage. Tax loss carryforwards are the source of deferred tax assets where the exercise of discretion becomes more critical.
{"title":"Reconciling Competing Reporting Objectives Through Deferred Tax Accounts: Evidence on Private Italian Firms","authors":"Alessandro Mura","doi":"10.1080/17449480.2023.2213249","DOIUrl":"https://doi.org/10.1080/17449480.2023.2213249","url":null,"abstract":"Abstract This paper contributes to the growing literature on earnings management in private firms by focusing on deferred taxes. This accounting treatment requires sophisticated use of accruals that provides the chance to manage earnings and net assets without affecting the tax payable. We argue that in a setting with high book-tax conformity, the small room that allegedly exists to recognise deferred taxes remains a comfortable avenue to reach reporting objectives that a tax-minimisation strategy may preclude. We use a sample of private firms operating in a credit- and tax-driven environment such as Italy to test this expectation. Our results show that private firms use deferred taxes to extract multiple financial reporting benefits that may facilitate debt contracting: smoothing earnings over time, meeting/beating historical earnings, avoiding reporting accounting losses, and managing leverage. Tax loss carryforwards are the source of deferred tax assets where the exercise of discretion becomes more critical.","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2023-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41256563","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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