Accounting Standard Precision, Corporate Governance, and Accounting Restatements

2018 ◽  
Author(s):  
Li Fang ◽  
Jeffrey Pittman ◽  
Yinqi Zhang ◽  
Yuping Zhao
Keyword(s):  
Corporate Governance ◽  
Accounting Standard ◽  
Accounting Restatements ◽  
Standard Precision

scholarly journals Non-GAAP earnings: international overview and suggestions for future research

2017 ◽  
Vol 25 (3) ◽  
pp. 318-335 ◽  
Author(s):  
Ana Marques
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Point Of View ◽  
Future Research ◽  
Accounting Standard ◽  
Content Type ◽  
Generally Accepted Accounting Principles ◽  
Accounting Principles ◽  
Corporate Governance Mechanisms ◽  
Academic Researchers

Purpose The purpose of this paper is to synthesize insights from existing research on the disclosure of non-generally accepted accounting principles (GAAP) earnings, from an international point of view, and to suggest several avenues for future research in this area. Design/methodology/approach In conjunction with the analysis of existing research, the paper examines how different regulators and accounting standard setters have approached the topic of non-GAAP earnings disclosure. Findings The paper shows how non-GAAP earnings have been found to be more informative than GAAP earnings in several scenarios (countries where non-GAAP disclosures are compulsory, countries where these disclosures are voluntary but regulated and countries where they are not regulated). However, in certain circumstances, these disclosures may also mislead investors. Corporate governance mechanisms can curb managers’ opportunistic use of these measures. Originality/value The paper provides the growing number of academic researchers in this emerging area with a foundation and agenda upon which they can build their research.

scholarly journals New Frontiers: Training Forensic Accountants Within The Accounting Program

2007 ◽  
Vol 4 (9) ◽  
Author(s):  
Vinita Ramaswamy
Keyword(s):  
Corporate Governance ◽  
Financial Statements ◽  
Accounting Restatements ◽  
Business World

Accountants have recently been subject to very unpleasant publicity following the collapse of Enron and other major companies.  There has been a plethora of accounting failures and accounting restatements of falsified earnings, with litigations and prosecutions taking place every day.  As the FASB struggles to tighten the loopholes in accounting, and Congress and the SEC try to build safeguards for corporate governance, one group of accountants has been quietly helping corporations and investors alike in rebuilding confidence in financial statements.  These are the forensic accountants.  The forensic accountant actively looks for fraudulent transactions and misrepresentations.  Such an accountant has a major role to play in this new environment, and universities have the responsibility to train future accountants to adequately meet the demands of the business world.

scholarly journals PENGARUH CORPORATE GOVERNANCE TERHADAP RESTATEMENT LAPORAN KEUANGAN

2019 ◽  
Vol 24 (1) ◽  
pp. 76-88
Author(s):  
Sari Indah Oktanti Sembiring ◽  
Mega Metalia
Keyword(s):  
Corporate Governance ◽  
Error Correction ◽  
Audit Committee ◽  
Institutional Ownership ◽  
The Other ◽  
Managerial Ownership ◽  
Accounting Standard ◽  
Financial Report ◽  
Financial Restatement ◽  
Independent Variable

Using independent variable institutional ownership, managerial ownership, independent commissioner, audit committee, and BIG4, this research wanted to see the influence of corporate governance to financial restatement. By using sample of financial report from 2015 until 2017, this research found that institutional ownership is significant but unaccordance with the analyzed hypothesis. And the other independent variable is not significant with financial restatement. This founding may happened because the sample used in this research was not separated between the restated company because of error correction and because of the changes in accounting method that happened because the changes in accounting standard.

scholarly journals The Effects of Accounting Standard Precision, Auditor Task Expertise, and Judgment Frameworks on Audit Firm Litigation Exposure

2020 ◽  
Vol 14 (2) ◽  
pp. P19-P30
Author(s):  
Jonathan H. Grenier ◽  
Bradley Pomeroy ◽  
Matthew T. Stern ◽  
Natalie B. Zielinski
Keyword(s):  
Accounting Standards ◽  
Cost Effective ◽  
Effective Alternative ◽  
Technical Expertise ◽  
High Quality ◽  
Accounting Standard ◽  
Audit Firm ◽  
Cost Effective Alternative ◽  
Professional Judgments ◽  
Standard Precision

SUMMARY This article summarizes the published study “The Effects of Accounting Standard Precision, Auditor Task Expertise, and Judgment Frameworks on Audit Firm Litigation Exposure” (Grenier, Pomeroy, and Stern 2015), where the authors examine ways that auditors can defend their judgment during litigation regarding the appropriateness of clients' application of imprecise accounting standards. The authors find that utilizing technical experts will reduce litigation exposure arising from imprecise accounting standards because it is difficult to challenge judgments made by a recognized expert. However, the study also finds that using a framework for making high-quality professional judgments represents a cost-effective alternative to technical expertise, as doing so also constrains jurors' ability to challenge auditors' judgments. In sum, the study suggests that auditors are well equipped to handle the increased litigation exposure associated with imprecise accounting standards, and the ongoing worldwide transition to such standards is unlikely to lead to auditor herding to industry norms.

The Effects of Critical Audit Matter Paragraphs and Accounting Standard Precision on Auditor Liability

2016 ◽  
Vol 91 (6) ◽  
pp. 1629-1646 ◽  
Author(s):  
Christine Gimbar ◽  
Bowe Hansen ◽  
Michael E. Ozlanski
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Securities And Exchange Commission ◽  
Accounting Standard ◽  
Generally Accepted Accounting Principles ◽  
Auditor Liability ◽  
The Public ◽  
Regulatory Changes ◽  
Public Company ◽  
Standard Precision

ABSTRACT The Public Company Accounting Oversight Board recently proposed amendments to the standard audit report that would require the disclosure of critical audit matters (CAMs), and the Securities and Exchange Commission continues to evaluate the use of principles-based (imprecise) accounting standards within U.S. generally accepted accounting principles. We assert that jurors perceive precise accounting standards to constrain auditors' control over financial reporting outcomes, resulting in a lower propensity for negligence verdicts when the accounting treatment conforms to the precise standard. However, we hypothesize that the use of either imprecise standards or CAMs reduces the extent to which jurors perceive this constraint to exist, leading to increased auditor liability. We present experimental evidence supporting this argument. Our results highlight the similarities between the effects of imprecise accounting standards and CAMs on negligence assessments. These results provide insight for regulators and the auditing profession about the potential consequences of the proposed regulatory changes.

scholarly journals Research and development accounting treatment: effects of CEO characteristics and corporate governance mechanisms

2017 ◽  
Vol 5 (2) ◽  
pp. 124
Author(s):  
Sana Triki Damak
Keyword(s):  
Corporate Governance ◽  
Research And Development ◽  
Audit Quality ◽  
Chief Executive ◽  
Governance Mechanisms ◽  
Accounting Standard ◽  
Financial Firms ◽  
Corporate Governance Mechanisms ◽  
Development Accounting ◽  
Ceo Characteristics

This study aims to examine empirically the influence of Chief Executive Officer (CEO) characteristics and corporate governance mechanisms on Research and Development (R&D) capitalization in France.Using data drawn from a sample of non-financial firms listed in SBF 120, this study provides empirical evidence for the influence of CEO characteristics and audit quality on R&D capitalization. As results, we find that R&D capitalization is likely to be increased in firms managed by younger managers, CEOs with higher ownership, shorter tenure and higher educational level. Also, R&D capitalization is likely to be increased in firms with lower audit quality, in higher leveraged firms, in less performed and larger firms.This study offers insights to investors and accounting standard setters interested about the subject of R&D capitalization determinants. Importantly, it confirms that some CEO characteristics and corporate governance mechanisms are likely to affect the CEO’s behavior regarding the R&D accounting treatment.

scholarly journals The role of investor protection in corporate governance and accounting harmonization: Cross-country analysis in Asia

2015 ◽  
Vol 18 (2) ◽  
pp. 267
Author(s):  
Ratna Wardhani
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Investor Protection ◽  
Accounting Standards ◽  
Governance Mechanisms ◽  
Firm Level ◽  
Accounting Standard ◽  
Law System ◽  
Degree Of Convergence

The purpose of this research is to analyze the effect of law system for investor protection on implementation of corporate governance at company level and degree of convergence of local accounting standards to IFRS (International Financial Reporting Standards). The result shows that investor protection has positive effect on implementation of corporate governance and degree of convergence of local standard to IFRS. The evidence is consistent with the argument that firm can establish law environment well for their own, but the quality of corporate investor protection via implementation of corporate governance mechanisms will depend on efficiency of judicial system of the country where the firm operates; and the quality of accounting standard in one country is a signal of country’s commitment to investor protection in order to provide good protection for its investor; a country will tend to adopt higher quality of accounting standard to ensure financial reporting transparency. This indicates that investor protection can be the key to the quality of other governance mechanisms, both at institutional level such as accounting standards, and also at firm level such as corporate governance implementation.

scholarly journals Transparency, corporate governance and firm performance in The Netherlands

2016 ◽  
Vol 90 (7/8) ◽  
pp. 308-322 ◽  
Author(s):  
Henry van Beusichem ◽  
Abe de Jong ◽  
Douglas DeJong ◽  
Gerard Mertens
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
The Netherlands ◽  
Firm Size ◽  
Annual Report ◽  
Annual Reports ◽  
Accounting Standard ◽  
Listed Firms ◽  
And Performance

We explore the relations between transparency, corporate governance, and performance for Dutch exchange-listed firms over 1997-2007. Our measure for transparency is based on annual report information. In 2005 a new accounting standard (IFRS) became mandatory and applicable to the annual reports of Dutch listed firms. We investigate the effects of IFRS by comparing pre and post IFRS periods. We find that under IFRS transparency has increased substantially, and that the determinants of transparency have also changed. Pre-IFRS, disclosure is mainly driven by firm size, leverage and protective preference shares. Post-IFRS, we observe very little variation in disclosure practices.

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