Identifying the Roles of Accounting Accruals in Corporate Financial Reporting

Research in corporate financial reporting identifies two important roles of accounting accruals. First, accruals smooth fluctuations in operating cash flows. Second, accruals allow recognition of losses in an asymmetric timely manner. While these two roles imply different relations between individual accrual components and operating cash flow news, prior research often focuses on the properties of aggregate accruals. We investigate the role of individual accrual components and identify asymmetry in the relation of investment with operating cash flow news as a confounding factor. We show that this investment factor operates through depreciation and amortization accruals, which typically account for the bulk of aggregate accruals. Overall, our article demonstrates the importance of adopting a granular approach to identifying the different roles of individual accrual components.

Digital corporate reporting and value relevance: evidence from the US and Japan

PurposeThe study improves current understanding concerning the implications of digital corporate reporting technology on the informativeness of accounting information.Design/methodology/approachIt looks at how XBRL, an exemplar digital corporate financial reporting technology, affects value relevance of accounting information in the US and Japan, two key jurisdictions where XBRL has been mandated. We operationalise stock price and return value relevance models to assess and compare predicted associations between selected accounting measures and market value of equity in these countries.FindingsWe predict that the selected accounting measures are more value relevant after XBRL was mandated than before. We find evidence to support our prediction for the US sample. We also predict and find that the contribution of XBRL to the value relevance of the selected accounting measures is greater in the US than in Japan. Overall, our evidence provides support that digital corporate reporting technology enhances relevance and reliability of accounting measures.Originality/valueThe study appears to be the first to have examined the impact of XBRL on value relevance whilst comparing between two major jurisdictions. The study extends emerging but limited literature concerning the benefits of digital corporate financial reporting for enhancing the communication between firms and users of financial information. The findings are useful to both users of financial information and standard setters.

Pengaruh Profitabilitas, Umur Perusahaan Dan Ukuran Perusahaan Terhadap Ketepatan Waktu Penyampaian Laporan Keuangan Perusahaan

Financial information will have benefits if delivered on time to the wearer who is closely related to the agency theory (agency theory) where in the theory of this agency explained that the owner oversees the agency (employee) to perform more efficient performance. The value of timeliness of financial reporting is important for the level of benefit of the report. This study aims to test the profitability, age of the company and the size of the company to the timeliness of corporate financial reporting. The sample of this study consists of 13 food and beverage companies with 65 financial report data listed on the Stock Exchange 2012-2016. To test the hypothesis, used secondary data with purposive sampling method. Data analysis techniques used logistic regression analysis. After the data in the analysis, found that the profitability variable has a significance value of 0.045 means that the hypothesis X1 positive effect on timeliness of corporate financial reporting due to the significance value less than 0.05. Variable of company age have significance value equal to 0,066 and company size have significance value equal to 0,412 meaning hypothesis X2 and X3 have no effect to variable Y because significance value greater than 0,05.