Pub Date : 2020-06-27DOI: 10.1142/s1094406020500067
Paul Chaney, Rita Gunn, Debra C. Jeter
The accounting standards related to mergers and acquisitions (M&A) have changed drastically in the past twenty years. In spite of significant debate and arguments that the proposed accounting chang...
{"title":"Implications of Changes in GAAP for Business Combinations (and Goodwill) on Accounting and Finance Research","authors":"Paul Chaney, Rita Gunn, Debra C. Jeter","doi":"10.1142/s1094406020500067","DOIUrl":"https://doi.org/10.1142/s1094406020500067","url":null,"abstract":"The accounting standards related to mergers and acquisitions (M&A) have changed drastically in the past twenty years. In spite of significant debate and arguments that the proposed accounting chang...","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"55 1","pages":"2050006"},"PeriodicalIF":2.0,"publicationDate":"2020-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/s1094406020500067","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47246469","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}
Purpose: Tax is an important stream of revenue for government’s development projects. However, tax compliance among SMEs is poor. Therefore, this study was conducted using SMEs in Lusaka, Zambia to evaluate and rank the factors that encourage non-compliance with tax obligation by SMEs. Methodology : The data analysis was done with the help of the statistical package for service solution (SPSS) and this hypothesis was tested with Microsoft Office Excel 2007 using the one sample z-test computed from the figures obtained in the summary statistics table. Findings: It was found that high tax rates and complex filing procedures are the most crucial factors causing non-compliance of SMEs. Other factors like multiple taxation and lack of proper enlightenment affect tax compliance among the SMEs interviewed only to a lesser extent. Unique contribution to theory, practice and policy: It is recommended that SMEs should be levied lower percentage of taxes to allow enough funds for business development and better chances of survival in a competitive market. The government should also consider increasing tax incentives such as exemptions and tax holidays as these will not only encourage voluntary compliance but also attract investors who are potential viable tax payers in the future.
{"title":"FACTORS THAT AFFECT TAX COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES (SMES) IN LUSAKA, ZAMBIA","authors":"Mazwi Thabani, Eng Kasongo Mwale Richard","doi":"10.47941/JACC.415","DOIUrl":"https://doi.org/10.47941/JACC.415","url":null,"abstract":"Purpose: Tax is an important stream of revenue for government’s development projects. However, tax compliance among SMEs is poor. Therefore, this study was conducted using SMEs in Lusaka, Zambia to evaluate and rank the factors that encourage non-compliance with tax obligation by SMEs. Methodology : The data analysis was done with the help of the statistical package for service solution (SPSS) and this hypothesis was tested with Microsoft Office Excel 2007 using the one sample z-test computed from the figures obtained in the summary statistics table. Findings: It was found that high tax rates and complex filing procedures are the most crucial factors causing non-compliance of SMEs. Other factors like multiple taxation and lack of proper enlightenment affect tax compliance among the SMEs interviewed only to a lesser extent. Unique contribution to theory, practice and policy: It is recommended that SMEs should be levied lower percentage of taxes to allow enough funds for business development and better chances of survival in a competitive market. The government should also consider increasing tax incentives such as exemptions and tax holidays as these will not only encourage voluntary compliance but also attract investors who are potential viable tax payers in the future.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"38 1","pages":"1-14"},"PeriodicalIF":2.0,"publicationDate":"2020-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86203401","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 : 2020-06-19DOI: 10.1142/s1094406019500185
Aaron S. Yoon
The study by Rosati, Gogolin, and Lynn (in this issue) examines the impact of cyber-security incidents on audit fees. Using audit fee as a proxy for audit effort and risk, it takes 168 cyber-securi...
{"title":"Discussion of “Audit Firm Assessments of Cyber-Security Risk: Evidence from Audit Fees and SEC Comment Letters”","authors":"Aaron S. Yoon","doi":"10.1142/s1094406019500185","DOIUrl":"https://doi.org/10.1142/s1094406019500185","url":null,"abstract":"The study by Rosati, Gogolin, and Lynn (in this issue) examines the impact of cyber-security incidents on audit fees. Using audit fee as a proxy for audit effort and risk, it takes 168 cyber-securi...","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"1 1","pages":"1950018"},"PeriodicalIF":2.0,"publicationDate":"2020-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/s1094406019500185","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42678377","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 : 2020-06-01DOI: 10.1142/S1094406020500080
Abongeh A. Tunyi, Dimu Ehalaiye, Ernest Gyapong, C. Ntim
This paper examines the value of managerial discretion in financial reporting by exploring the value relevance of intangible assets acquired in business combinations (AIA) before and after the 2008 International Financial Reporting Standard (IFRS) 3 amendment. The 2008 IFRS 3 amendment gave managers the discretion to recognize previously unrecognized intangibles in the target firm, hence, we posit that if managerial discretion improves the quality of financial reporting, we should observe an increase in the value relevance of AIA after the amendment. Our empirical analysis is based on a dataset of 603 mergers announced between 2004 and 2016, across seven African countries. Consistent with our main hypothesis, we find that the value relevance of AIA, predominantly acquired goodwill (AGW), increased after the amendment, suggesting that managerial discretion improves the quality of financial information. Our results further show that the value of discretion is moderated by the underlying institutional quality, with the value relevance of AIA being greater in high-quality institutional contexts. Our findings are robust to alternative measures of AIA, alternative models for testing value relevance, and various controls for endogeneity. Overall, our findings have important implications for accounting standard-setters, governments, investors, and practitioners.
{"title":"The Value of Discretion in Africa: Evidence from Acquired Intangible Assets Under IFRS 3","authors":"Abongeh A. Tunyi, Dimu Ehalaiye, Ernest Gyapong, C. Ntim","doi":"10.1142/S1094406020500080","DOIUrl":"https://doi.org/10.1142/S1094406020500080","url":null,"abstract":"This paper examines the value of managerial discretion in financial reporting by exploring the value relevance of intangible assets acquired in business combinations (AIA) before and after the 2008 International Financial Reporting Standard (IFRS) 3 amendment. The 2008 IFRS 3 amendment gave managers the discretion to recognize previously unrecognized intangibles in the target firm, hence, we posit that if managerial discretion improves the quality of financial reporting, we should observe an increase in the value relevance of AIA after the amendment. Our empirical analysis is based on a dataset of 603 mergers announced between 2004 and 2016, across seven African countries. Consistent with our main hypothesis, we find that the value relevance of AIA, predominantly acquired goodwill (AGW), increased after the amendment, suggesting that managerial discretion improves the quality of financial information. Our results further show that the value of discretion is moderated by the underlying institutional quality, with the value relevance of AIA being greater in high-quality institutional contexts. Our findings are robust to alternative measures of AIA, alternative models for testing value relevance, and various controls for endogeneity. Overall, our findings have important implications for accounting standard-setters, governments, investors, and practitioners.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/S1094406020500080","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43555385","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 : 2020-06-01DOI: 10.1142/S1094406020500092
Javeria Farooqi, S. Jory, T. Ngo
Using a sample of U.S. domestic deals from 1990 to 2016, we find that bidders adjust the amount of premium paid in mergers and acquisitions (M&As) based on the levels of earnings management at target firms. However, the way a firm manipulates earnings upward matters: earnings management via real activities manipulation is more detrimental than discretionary accruals. As a result, target firms that engage in real earnings management receive lower premiums in M&As, while accruals management has no effect on premiums. Correspondingly, we find that the targets’ M&A announcement-period cumulative abnormal returns are inversely related to their level of real earnings management, while the returns are not related to accruals management. Further analyses confirm that target shareholders’ wealth is not only driven by undervaluation, expected synergy, and managerial hubris, but also reflects bidders’ perception of the target firms’ earnings quality based on real earnings management.
{"title":"Target Firm Earnings Management, Acquisition Premium, and Shareholder Gains","authors":"Javeria Farooqi, S. Jory, T. Ngo","doi":"10.1142/S1094406020500092","DOIUrl":"https://doi.org/10.1142/S1094406020500092","url":null,"abstract":"Using a sample of U.S. domestic deals from 1990 to 2016, we find that bidders adjust the amount of premium paid in mergers and acquisitions (M&As) based on the levels of earnings management at target firms. However, the way a firm manipulates earnings upward matters: earnings management via real activities manipulation is more detrimental than discretionary accruals. As a result, target firms that engage in real earnings management receive lower premiums in M&As, while accruals management has no effect on premiums. Correspondingly, we find that the targets’ M&A announcement-period cumulative abnormal returns are inversely related to their level of real earnings management, while the returns are not related to accruals management. Further analyses confirm that target shareholders’ wealth is not only driven by undervaluation, expected synergy, and managerial hubris, but also reflects bidders’ perception of the target firms’ earnings quality based on real earnings management.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/S1094406020500092","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49235102","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 : 2020-04-14DOI: 10.1142/S109440602050002X
H. Al‐Shaer, Mostafa Harakeh
We exploit the effectiveness of the [Davies Report (2011). Women on Boards. London: Department for Business, Innovation & Skills], which urged FTSE 350 companies to increase female representation o...
我们利用了戴维斯报告(2011)的有效性。女性进入董事会。英国商业、创新与技能部(Department for Business, Innovation & Skills)敦促富时350指数成分股公司增加女性在……
{"title":"Gender Differences in Executive Compensation on British Corporate Boards: the Role of Conditional Conservatism","authors":"H. Al‐Shaer, Mostafa Harakeh","doi":"10.1142/S109440602050002X","DOIUrl":"https://doi.org/10.1142/S109440602050002X","url":null,"abstract":"We exploit the effectiveness of the [Davies Report (2011). Women on Boards. London: Department for Business, Innovation & Skills], which urged FTSE 350 companies to increase female representation o...","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"55 1","pages":"2050002"},"PeriodicalIF":2.0,"publicationDate":"2020-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/S109440602050002X","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47246876","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 : 2020-04-14DOI: 10.1142/s1094406020500018
K. Lopatta, Katarina Böttcher, Sumit K. Lodhia, S. A. Tideman
This paper examines the relationship between the presence of employee representatives and female directors at the board level and a firm’s environmental and corporate social responsibility (CSR) pe...
{"title":"The Relationship Between Gender Diversity and Employee Representation at the Board Level and Non-Financial Performance: A Cross-Country Study","authors":"K. Lopatta, Katarina Böttcher, Sumit K. Lodhia, S. A. Tideman","doi":"10.1142/s1094406020500018","DOIUrl":"https://doi.org/10.1142/s1094406020500018","url":null,"abstract":"This paper examines the relationship between the presence of employee representatives and female directors at the board level and a firm’s environmental and corporate social responsibility (CSR) pe...","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"55 1","pages":"2050001"},"PeriodicalIF":2.0,"publicationDate":"2020-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/s1094406020500018","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48387198","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 : 2020-03-10DOI: 10.1142/s1094406020500043
Hichem Khlif, Kamran Ahmed, M. Alam
This paper traces the historical developments of accounting regulations in Algeria, Morocco, and Tunisia and uses institutional theory to identify factors affecting International Financial Reporting Standards (IFRS) adoption as the national accounting standards in these countries. We find that the extent of convergence with IFRS in Algeria is higher compared to Morocco and Tunisia. This has been mostly due to greater foreign investor flows from Western countries in Algeria during the last decade, the dominant position of international Big-4 audit firms, and strong trade relationship of Algeria with the European Union (EU) compared with Morocco and Tunisia. We discuss the main challenges faced by these three countries in converging toward IFRS. These are underdeveloped equity markets, switching from French fiscal-oriented accounting systems to Anglo-Saxon accounting systems, and are characterized by lack of knowledge of principles-based IFRS by local professional accountants. Moreover, the convergence with IFRS in these countries is confronted by the prevailing small and medium-sized firms in the economic environment, difficulty in fair-value measurement in these settings, and the cost of convergence for companies. Our study has policy implications for those countries sharing similarities with these settings and have undertaken steps to implement IFRS.
{"title":"Accounting Regulations and IFRS Adoption in Francophone North African Countries: The Experience of Algeria, Morocco, and Tunisia","authors":"Hichem Khlif, Kamran Ahmed, M. Alam","doi":"10.1142/s1094406020500043","DOIUrl":"https://doi.org/10.1142/s1094406020500043","url":null,"abstract":"This paper traces the historical developments of accounting regulations in Algeria, Morocco, and Tunisia and uses institutional theory to identify factors affecting International Financial Reporting Standards (IFRS) adoption as the national accounting standards in these countries. We find that the extent of convergence with IFRS in Algeria is higher compared to Morocco and Tunisia. This has been mostly due to greater foreign investor flows from Western countries in Algeria during the last decade, the dominant position of international Big-4 audit firms, and strong trade relationship of Algeria with the European Union (EU) compared with Morocco and Tunisia. We discuss the main challenges faced by these three countries in converging toward IFRS. These are underdeveloped equity markets, switching from French fiscal-oriented accounting systems to Anglo-Saxon accounting systems, and are characterized by lack of knowledge of principles-based IFRS by local professional accountants. Moreover, the convergence with IFRS in these countries is confronted by the prevailing small and medium-sized firms in the economic environment, difficulty in fair-value measurement in these settings, and the cost of convergence for companies. Our study has policy implications for those countries sharing similarities with these settings and have undertaken steps to implement IFRS.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"55 1","pages":"2050004"},"PeriodicalIF":2.0,"publicationDate":"2020-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/s1094406020500043","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44169405","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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