Personality and Cultural Influences on Aggressive Financial Reporting Practices

2000 ◽  
Vol 8 (2) ◽  
pp. 60-80 ◽  
Author(s):  
Dawn Cable ◽  
Chris Patel
Keyword(s):  
Financial Reporting ◽  
Cultural Influences ◽  
Reporting Practices ◽  
Aggressive Financial Reporting

An Examination of Corporate Tax Shelter Participants

2009 ◽  
Vol 84 (3) ◽  
pp. 969-999 ◽  
Author(s):  
Ryan J. Wilson
Keyword(s):  
Financial Reporting ◽  
Abnormal Returns ◽  
Wealth Creation ◽  
Corporate Tax ◽  
Managerial Opportunism ◽  
Reporting Practices ◽  
Tax Shelter ◽  
Ex Post ◽  
Tax Shelters ◽  
Aggressive Financial Reporting

ABSTRACT: Recent evidence suggests that corporate tax shelters have become important corporate instruments for reducing tax burden. Based on a sample of identified tax shelter participants, I develop a profile of the type of firm that likely engages in tax sheltering. The model detects tax shelter participants through the use of variables predicted to be either affected by or associated with tax sheltering. I find that firms actively engaged in tax sheltering exhibit larger ex post book-tax differences and more aggressive financial reporting practices. Using this model of tax shelter firm characteristics, I identify a broad sample of predicted tax shelter firms from the population of firms. I then examine whether tax sheltering is associated with wealth creation for shareholders or with managerial opportunism. I find that active tax shelter firms with strong corporate governance exhibit positive abnormal returns. This finding is consistent with tax sheltering being a tool for wealth creation in well-governed firms.

Construal of self and Chinese accountants’ aggressive financial reporting judgments

2017 ◽  
Vol 30 (8) ◽  
pp. 1771-1795 ◽  
Author(s):  
Peipei Pan ◽  
Chris Patel
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Cultural Influences ◽  
Significant Loss ◽  
Reporting Standards ◽  
Personality Variable ◽  
Content Type ◽  
Personality Variables ◽  
Financial Reporting Standards ◽  
Aggressive Financial Reporting

Purpose The purpose of this paper is to respond to calls in the literature to examine personality variables which may provide sharper insights into accountants’ judgments in applying principles-based International Financial Reporting Standards (IFRS). This paper contributes to the literature on the global convergence of financial reporting by examining the influence of an important personality variable, construal of self, on Chinese accountants’ aggressive financial reporting judgments. Design/methodology/approach A between-subjects quasi-experiment was applied. In total, 122 Chinese professional accountants were categorized as either independents or interdependents, on the basis of their scores on construal of self scales. Subjects made their consolidation reporting judgments in the manipulated situations based on the financial performance of the investee entity, which refers to the situation where the investee entity makes a significant profit or a significant loss in the reporting period. Findings Compared to interdependent accountants, independent accountants used the flexibility allowed in the principles-based standards to make more aggressive consolidation reporting judgments. Also, adoption of IFRS may not necessarily ensure consistent judgments even within China. Originality/value This paper provides empirical evidence of the importance of construal of self in examining accountants’ aggressive judgments. The authors suggest that it may be premature to assume that adoption of IFRS will lead to comparable financial reporting. The findings are relevant to researchers who are interested in examining personality and cultural influences on accountants’ judgments both within and across countries. Companies and organizations may incorporate appropriate strategies to recruit and train independent and interdependent accountants, particularly by addressing the influence of construal of self on aggressive financial reporting judgments.

Attention to Evidence of Aggressive Financial Reporting and Intentional Misstatement Judgments: Effects of Experience and Trust

2007 ◽  
Vol 19 (1) ◽  
pp. 215-229 ◽  
Author(s):  
Jacob M. Rose
Keyword(s):  
Financial Reporting ◽  
Experimental Analysis ◽  
Reporting Practices ◽  
Specific Experience ◽  
Aggressive Financial Reporting ◽  
Dispositional Trust

This study extends prior research by examining the effects of dispositional trust, induced skepticism, and fraud-specific audit experience on attention to aggressive financial reporting practices and judgments of potential misstatement. In an experimental analysis using 125 practicing auditors, this study finds that auditors who are less trusting of others attend more to evidence of aggressive reporting than do more trusting auditors, and higher levels of induced skepticism increase attention to aggressive reporting. Further, auditors who pay more attention to evidence of aggressive reporting are more likely to believe that intentional misstatement occurred. General audit experience was not a predictor of auditors' attention to aggressive reporting or auditors' judgments about intentional misstatements. Auditors with more fraud-specific experience, however, were more likely than auditors with less fraud-specific experience to believe that intentional misstatement had occurred when evidence of aggressive reporting exists.

Does the Presence of a General Counsel in Top Management Affect Audit Effort and Audit Outcomes?

2020 ◽  
Vol 34 (3) ◽  
pp. 39-59
Author(s):  
Marcus R. Brooks ◽  
Stephanie A. Hairston ◽  
Phillip Kamau Njoroge ◽  
Ji Woo Ryou
Keyword(s):  
Financial Reporting ◽  
Reporting Quality ◽  
Data Availability ◽  
Top Management ◽  
General Counsel ◽  
Audit Risk ◽  
Reporting Practices ◽  
Audit Market ◽  
Reporting Process ◽  
Aggressive Financial Reporting

SYNOPSIS This study examines whether the presence of a general counsel (GC) in top management affects audit effort and audit outcomes. Hopkins, Maydew, and Venkatachalam (2015) find that firms with GCs in top management have lower financial reporting quality and tolerate more aggressive financial reporting practices, which likely influences audit risk. Given the GCs' influence on the financial reporting process, we posit that auditors of firms with GCs in top management increase the amount of effort they expend to provide reasonable assurance that financial statements are stated fairly. We find that the presence of GCs in firms' top management is positively associated with audit effort but does not directly affect the likelihood that these firms will receive unqualified audit opinions that contain explanatory language. Our findings suggest that GCs influence the external audit market by participating in the financial reporting process. JEL Classifications: M42. Data Availability: Data are available from the public sources cited in the text.

scholarly journals The Impact of CSR on the Capital Structure of High-Tech Companies in Poland

2021 ◽  
Vol 13 (10) ◽  
pp. 5467
Author(s):  
Barbara Grabinska ◽  
Dorota Kedzior ◽  
Marcin Kedzior ◽  
Konrad Grabinski
Keyword(s):  
Capital Structure ◽  
Financial Reporting ◽  
Academic Research ◽  
Debt Financing ◽  
High Tech ◽  
High Tech Industry ◽  
Reporting Practices ◽  
Csr Reporting ◽  
The Impact ◽  
The Capital Structure

So far, CSR’s role in the high-tech industry is not fully explained by academic research, especially concerning the most burdensome obstacle to firms’ growth: acquiring debt financing. The paper aims to solve this puzzle and investigate whether young high-tech companies can attract more debt by engaging in CSR activity. To address the high-tech industry specificity, we divided CSR-reporting practice into three broad categories: employee, social, and environmental and analyzed their impact on the capital structure. Our sample consists of 92 firm-year observations covering the period 2014–2018. Using a regression method, we found out that only employee CSR plays a statistically significant role in shaping capital structure. We did not find evidence for the influence of the other types of CSR-reporting practices. The results suggest that employees are the key resource of high-tech companies, and, for this reason, they are at the management’s focus. This fact is visible at the financial reporting level and, as we interpret results, is also considered by credit providers. In a more general way, our results suggest that firms tend to choose CSR based on the importance of crucial resources.

Financial Reporting Practices in France

1976 ◽  
Vol 32 (1) ◽  
pp. 39-49 ◽  
Author(s):  
M. Edgar Barrett ◽  
Jean-Louis Roy
Keyword(s):  
Financial Reporting ◽  
Reporting Practices

scholarly journals The Attenuating Effect of Intelligent Agents and Agent Autonomy on Managers' Ability to Diffuse Responsibility for and Engage in Earnings Management

2020 ◽  
Vol 34 (4) ◽  
pp. 143-164
Author(s):  
Peter C. Kipp ◽  
Mary B. Curtis ◽  
Ziyin Li
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Intelligent Agents ◽  
Autonomous Agents ◽  
Ethical Conduct ◽  
Human Agent ◽  
Perception Of Control ◽  
Reporting Decisions ◽  
Aggressive Financial Reporting

SYNOPSIS Advances in IT suggest that computerized intelligent agents (IAs) may soon occupy many roles that presently employ human agents. A significant concern is the ethical conduct of those who use IAs, including their possible utilization by managers to engage in earnings management. We investigate how financial reporting decisions are affected when they are supported by the work of an IA versus a human agent, with varying autonomy. In an experiment with experienced managers, we vary agent type (human versus IA) and autonomy (more versus less), finding that managers engage in less aggressive financial reporting decisions with IAs than with human agents, and engage in less aggressive reporting decisions with less autonomous agents than with more autonomous agents. Managers' perception of control over their agent and ability to diffuse their own responsibility for financial reporting decisions explain the effect of agent type and autonomy on managers' financial reporting decisions.

scholarly journals Financial Disclosure and Budgetary Practices of Religious Organization: A Study of Qaryah Mosques in Kuala Terengganu

2015 ◽  
Vol 17 (1) ◽  
pp. 83
Author(s):  
Shahida Bt Shaharuddin ◽  
Maliah Bt Sulaiman
Keyword(s):  
Financial Reporting ◽  
Mixed Method ◽  
Financial Management ◽  
Peninsular Malaysia ◽  
Financial Accounting ◽  
Financial Disclosure ◽  
Religious Organization ◽  
Structured Interviews ◽  
Reporting Practices ◽  
Budgetary Control

This paper aims to examine the financial reporting and budgeting practices of qaryah mosques in Kuala Terengganu, a state in the east of Peninsular Malaysia. Data was collected using a mixed method (quantitative and qualitative) approach. The questionnaire was disseminated to qaryah mosques in Kuala Terengganu and 39 responded. To address the limitations of a questionnaire survey, semi-structured interviews were then conducted with a few of the respondents. The results revealed that qaryah mosques in Kuala Terengganu do have a satisfactory system in place in terms of their financial reporting practices. However, budgetary control practices appear to be lacking. This indicates accounting, as is practiced by qaryah mosques in Kuala Terengganu appears to be limited to financial accounting. Hence, the financial management in qaryah mosques needs to be improved so that the risk of embezzlement can be reduced.

The Development of Accounting and Financial Reporting Practices in Sri Lanka: An Exploratory Investigation

2019 ◽  
Vol 54 (02) ◽  
pp. 1950008
Author(s):  
Jayasinghe Hewa Dulige ◽  
Nadana Abayadeera ◽  
Muhammad Jahangir Ali ◽  
Paul Mather
Keyword(s):  
Sri Lanka ◽  
Financial Reporting ◽  
Reporting Quality ◽  
Sri Lankan ◽  
Reporting Practices ◽  
Political Interference ◽  
Key Stakeholders ◽  
Exploratory Investigation ◽  
Chartered Accountants

In this paper, we examine the factors that influence the development of accounting and reporting practices in Sri Lanka in the backdrop of its political and economic environment. We find that the early days of accounting in Sri Lanka were heavily influenced by the British colonial system. Subsequently, its greatest influence was derived from the regulatory and institutional framework backed by local and British professional accounting bodies. We also interview key stakeholders to draw insights on how the institutional factors contribute to the development of financial reporting in Sri Lanka. We discover that the Institute of Chartered Accountants of Sri Lanka (ICASL) is a key player in developing and implementing accounting standards and the best financial reporting practices. We observe that although the Sri Lankan Government has undertaken many initiatives to improve the quality of financial reporting, monitoring and enforcing regulations remain weak partly due to political interference. Therefore, we suggest that strengthening the existing regulatory mechanisms will help to improve the reporting quality and build investor confidence.

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