Company Accounting Research Articles

THE STRATEGIC ROLE OF ENVIRONMENTAL ACCOUNTING IN PROMOTING BUSINESS SUSTAINABILITY IN INDONESIA

Environmental accounting is increasingly recognized as an important strategic instrument for organizations faced with sustainability challenges. This article investigates the utilization of environmental accounting in Indonesian companies, with a particular emphasis on how this practice can improve transparency, operational efficiency, and corporate reputation. Using document analysis methodology, the research examined related reports on sustainability, environmental policies, and government regulations. The results showed that companies implementing environmental accounting successfully achieved reductions in carbon emissions and waste, in addition to improving energy efficiency. In addition, the adoption of environmental accounting resulted in substantial financial benefits, including reduced operating expenditures. Nonetheless, barriers such as initial investment requirements and regulatory intricacies continue to pose challenges for many companies. Consequently, collaboration between government entities, private companies, and non-governmental organizations is essential to promote wider adoption of environmental accounting practices. This study sheds light on the importance of environmental accounting in fostering a more sustainable future for Indonesia.

Analisis perlakuan akuntansi sewa berdasarkan PSAK No. 73 pada PT. PLN (Persero) Unit Induk Distribusi Suluttenggo

State-Owned Enterprises (BUMN) must follow changes in the applicable accounting standards policy. This includes the lease accounting policy in accordance with PSAK No. 73. These standards are designed to ensure consistency and transparency in financial reporting. The transition from PSAK No. 30 to PSAK No. 73 will have a significant impact on the accounting treatment of leases and the company's financial statements. This study will analyse the accounting treatment of leases and their impact on State Electricity Company (PT PLN Persero) Unit Induk Distribusi Suluttenggo. This study employs a qualitative research method with a descriptive analysis approach. The data was obtained through interviews with the relevant parties and a thorough examination of the company's financial statements. The results clearly show that the company's accounting treatment of leases is in line with PSAK No. 73. However, there are some areas where the presentation of leases could be improved. The transition has had a positive impact on the company's financial statements, with an increase in total assets and liabilities due to the recognition of lease assets and liabilities on the balance sheet and a decrease in total operating expenses.

The impact of integration between lean accounting and just-in-time technique on cost reduction in modern sustainable manufacturing environment in Saudi companies

This article examines the impact of integration between Lean Accounting (LA) tools and Just-in-Time (JIT) techniques on Cost Reduction (CR) in a modern sustainable manufacturing environment in Saudi companies, Ethical Standards (ESs) mediate these two variables. A quantitative methodology was used for realizing the study goals and answering study questions. The main tool used for producing the primary data was a fully structured questionnaire with closed-ended questions which was designed and distributed online through a chosen sample of 109 managers and accountants in Saudi industrialization companies. Descriptive and deductive statistics were adopted to deduce the findings. The gathered responses analyzed by SPSS and AMOS and the results pointed out that there is a direct and indirect impact of LA tools and JIT techniques on CR in Saudi industrial companies especially when using ESs. Moreover, these findings could provide decision- makers in Saudi manufacturing companies with the importance of adopting both methods in an integrated way to maximize the profits of these firms. The practical implications of this study are that the implementation of these methods has a positive impact on the promotion of sustainable manufacturing and consequently the achievement of distinct sustainable performance.

Societal Trust and Modified Audit Opinions: International Evidence

ABSTRACT This study examines how societal trust influences auditors’ likelihood of issuing modified audit opinions. Analyzing cross-country data, we find that auditors in countries with high levels of societal trust are less prone to issue modified audit opinions. Specifically, our findings indicate that this effect is moderated by formal audit-related institutions, such as heightened auditor liabilities, the presence of Public Company Accounting Oversight Board (PCAOB) inspections, and a more advanced audit profession. These results are consistent even when applying a difference-in-differences (DiD) approach. Further analysis shows that the moderating impact of formal institutions is more pronounced for clients operating domestically, clients of non-Big N auditors, and auditors with long tenure. Overall, our findings highlight societal trust as a significant informal institution influencing auditor opinions, with a complex interplay between this trust and formal audit-related institutions. The study offers important implications for policy, practice, and future research. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M40; M41.

Regulating AI in Mental Health: Ethics of Care Perspective.

This article contends that the responsible artificial intelligence (AI) approach-which is the dominant ethics approach ruling most regulatory and ethical guidance-falls short because it overlooks the impact of AI on human relationships. Focusing only on responsible AI principles reinforces a narrow concept of accountability and responsibility of companies developing AI. This article proposes that applying the ethics of care approach to AI regulation can offer a more comprehensive regulatory and ethical framework that addresses AI's impact on human relationships. This dual approach is essential for the effective regulation of AI in the domain of mental health care. The article delves into the emergence of the new "therapeutic" area facilitated by AI-based bots, which operate without a therapist. The article highlights the difficulties involved, mainly the absence of a defined duty of care toward users, and shows how implementing ethics of care can establish clear responsibilities for developers. It also sheds light on the potential for emotional manipulation and the risks involved. In conclusion, the article proposes a series of considerations grounded in the ethics of care for the developmental process of AI-powered therapeutic tools.

How hours allocated to year-round auditing procedures affect audit quality

PurposeThis paper aims to examine how the allocation of audit hours to the year-round procedures, based on the risk of material misstatements in financial statements, impacts audit quality.Design/methodology/approachUsing a data set on audit hours spent on year-round and year-end procedures, the authors build an empirical model for testing the effectiveness of year-round auditing of Korean public firms during the period of 2014–2018.FindingsThe initial tests do not show that proportionate increases in year-round procedures increase audit quality. However, after the authors control for the risk of material misstatements, the authors find that proportionate increases in year-round audit hours generally increase audit quality, except for high-risk firms where audit quality increases only as year-end hours proportionately increase. For high-risk firms, the results suggest that increases in year-round audit procedures occur at the cost of the essential year-end work. Similarly, except for high-risk firms, the authors find that the allocation of more audit effort to year-round procedures improves audit efficiency.Originality/valueTo the best of the authors’ knowledge, this study provides some of the first empirical evidence showing how a risk-based approach to allocating audit effort over the duration of an audit can impact audit quality and efficiency. Regulatory bodies, such as the International Auditing and Assurance Standards Board and Public Company Accounting Oversight Board, which consider the proper allocation of audit hours as a key audit quality indicator, should find the results useful.

Cost Management in an Agro-Industrial Company in a District of Lambayeque

Cost management has positively impacted the accounting and tax processes of companies in Peru. The present research aimed to determine the factors in cost management in an agro-industrial company in a district of Lambayeque. The methodology was based on a quantitative approach and non-experimental design. The survey technique was used, and a Likert-type questionnaire related to the study variable was used as an instrument. These data collection means were answered by 30 workers of said company through a questionnaire of 15 questions corresponding to the study variable, which was validated by three experts on the subject. Obtaining as results, with respect to the variable, that there is a high level of factors in cost management with a percentage of 86.67%; following the dimensions such as the budget with a percentage of 86.67% at a high level; consequently, we have planning with 86.67% at a high level; finally, cost calculation with a percentage of 86.67% at a high level. Therefore, we infer that the budget, planning, and cost calculation are factors that affect cost management in an agro-industrial company in a district of Lambayeque.

Additional Comments of the American Accounting Association Auditing Section Auditing Standards Committee on the PCAOB’s Amendments to PCAOB Auditing Standards Related to a Company’s Noncompliance with Laws and Regulations and Other Related Amendments

SUMMARY In June 2023, the Public Company Accounting Oversight Board (the Board or PCAOB) issued a request for comment on its Amendments to PCAOB Auditing Standards Related to a Company’s Noncompliance with Laws and Regulations and Other Related Amendments (“NOCLAR”; PCAOB 2023a). On February 26, 2024, the PCAOB (2024) reopened the comment period for additional feedback, in conjunction with a March 2024 public roundtable about the proposal. This commentary summarizes the participating committee members’ views on the proposal that are incremental to our original comments provided previously (Boland et al. 2024). Due to ongoing fundamental concerns, as well as new evidence of extraordinarily different interpretations of the proposed standard, our lack of support for the proposal remains unchanged. We strongly encourage the PCAOB to issue a revised proposal for public comment before any final standard is issued or to consider other alternatives.

Comments of the Auditing Standards Committee of the Auditing Section of the American Accounting Association on the PCAOB’s Proposal on Firm Reporting

SUMMARY On April 9, 2024, the Public Company Accounting Oversight Board (the Board or PCAOB) issued a request for comment on its proposal Firm Reporting (PCAOB 2024). This comment letter summarizes the views of the participating members of the Auditing Standards Committee of the Auditing Section of the American Accounting Association. We commend the PCAOB for its efforts to promote audit firm transparency. Our comments include overall observations and perspectives on the Board’s economic analysis.

The Research of Financial Analysis of Li Auto Based on Harvard Analysis Framework

The new energy vehicle industry is currently experiencing robust growth, with numerous companies actively engaged in various business activities of the industrial chain. Recognizing its potential, the Chinese government has placed significant emphasis on the new energy vehicle industry, considering it a key driver of economic growth. Focusing on the financial reports from 2021 to 2023 for Li Auto Inc., this essay employs the Harvard Analysis Framework to comprehensively assess the company's financial landscape, encompassing strategic, accounting, finance, and future prospects. Employing the strategic model, which involves a PEST and SWOT analysis for Li Auto, along with a detailed examination of key accounting and financial data, the findings indicate that the company's solvency, while on average, displayed a declining trend, and its profitability was less than stellar. However, the operating ability exhibited a favorable condition. The recommended solutions for addressing the company's challenges primarily revolve around internal management strategies, emphasizing the reduction of operating expenses, enhancement of profitability, and the cultivation of a technological competitive advantage. These measures aim to improve the company's financial performance and overall development in the dynamic landscape of the new energy vehicle industry.

The Association between PCAOB Revenue-Deficient Audit Engagements and Revenue Quality

ABSTRACT The Big 4 auditors are inspected annually by the Public Company Accounting Oversight Board (PCAOB), with the summarized findings (labeled “audit deficiencies”) being publicly available on its website. Although the PCAOB claims that its inspection findings and process are designed to increase audit quality, there is limited empirical evidence to support this claim. We examine whether changes in revenue-deficient audit engagements are associated with subsequent year changes in client revenue quality. A revenue-deficient audit engagement is an inspected engagement that has at least one revenue-related audit deficiency. To infer audit quality, we link year-over-year changes in revenue-deficient audit engagements to the subsequent year’s change in engagement-level revenue quality—a common financial reporting quality proxy. We predict that audit firms will react asymmetrically to changes in revenue-deficient audit engagements: increases will prompt audit quality improving actions, but decreases will not. Our results support our prediction. JEL Classifications: M42.

ANALISIS PERAN AUDIT INTERNAL TERHADAP PENCEGAHAN FRAUD BERDASARKAN LITERATURE REVIEW TERINDEKS SINTA

Fraud is currently a concern for business stakeholders in companies and institutions, many entities are experiencing setbacks and even bankruptcy due to a lack of prevention and discipline regarding actions that can lead to fraud so that public trust in a company decreases. Fraud should be detected and prevented from the start, to avoid the company's credibility and accountability. Therefore, the aim of this research was to find out and comprehensively analyze the role of internal audit in the context of fraud prevention efforts. The research design uses qualitative descriptive analysis using a literature review approach. Data was collected in the form of journals or scientific articles totaling 16 articles from journal provider websites. Based on the results of analysis of 16 Sinta indexed articles for 2019-2024. There are 14 articles which state that internal audit has a role in preventing fraud. This finding is supported by the results of data analysis from several studies which show a positive and significant correlation between the role of internal audit and fraud prevention efforts. Then 2 research articles stated that the role of internal audit did not have a significant influence on fraud prevention efforts

Preventing Practices of Manipulating Accident Data in the Coal Mining Sector Using Mobile Applications in East Kalimantan, Indonesia

Objective: The practice of manipulating data on work accidents and potential hazards still occurs, especially in the coal mining sector. A mobile application for reporting work accidents and potential hazards is required so that data manipulation practices can be prevented.Material and Methods: The research design used was exploratory, which aimed to introduce and explore the capabilities of the SIKAP mobile application (Information System for Occupational Accidents, Occupational Diseases and Potential Hazards) to prevent data manipulation practices. Researchers involved thirty coal mine workers, using the SIKAP application, which had been tested on three information systems experts using the black box testing method. Results: Every worker had the opportunity to report work accidents and potential dangers via the SIKAP application on the worker’s account. Companies can receive and follow up on worker reports via the company account. Regional governments in the field of labor development and inspection can monitor reports through government accounts. The SIKAP application is integrated and synchronized between workers, companies and the government.Conclusion: The SIKAP application is able to prevent the practice of manipulating work accident reporting data and potential hazards in the coal mining sector.

The Influence of Eco-Control, Company Size, Environmental Performance on Sustainability Reporting Disclosure

Sustainability reporting in Indonesia has become a mandatory report published by financial institutions and public companies listed on the Indonesia Stock Exchange. Obligations related to sustainability reporting refer to Statement of Financial Accounting Standards (PSAK) No.1 Revised 2019, namely that companies are required to disclose additional reports related to environmental life. Under the Global Reporting Initiative (GRI) 2021 standards, the information on a company's applicant list can build stakeholder trust, maintain reputation, increase company value and demonstrate company accountability. Factors that can encourage disclosure of sustainability reporting are Eco-control, company size and environmental performance. One industry that is closely related to the environment and natural resources is the agricultural industry, apart from having a positive impact, there are also negative impacts that also cause harm to the environment. The sample in this research is agricultural sector companies listed on the IDX for 2018-2022. The research uses multiple linear analysis methods with SPSS 23 statistical software. After testing the hypothesis, the results obtained are that Eco-control has a positive influence on sustainability reporting disclosures, while the company size variable has no influence on sustainability reporting disclosures, starting with the environmental performance variable. .

Determinants of Carbon Emission Disclosure in Non-Financial Companies Listed on IDX

According to a report by the Climate Transparency organization, Indonesia is in a critical situation. The organization states that the Indonesian government is not taking adequate steps to meet the Paris Agreement's target of limiting global temperature rise to 1.5°C. As the world's fifth-largest carbon emitter, Indonesia requires concrete actions to reduce its carbon emissions. One approach is to enhance the responsibility and accountability of companies in carbon-intensive industries to disclose their emissions. This study aims to identify the factors influencing carbon emission disclosure. The research uses a population of non-financial sector companies listed on the Indonesia Stock Exchange (IDX) for the period 2021-2023, with 52 samples selected through purposive sampling. Multiple linear regression analysis is applied in this study to examine the relationship between the independent variables and the dependent variable. The results show that firm size affects carbon emission disclosure, while leverage and managerial ownership do not impact carbon emission disclosure.

Accounting System Development Methodology

An accounting system development methodology is a series of procedures implemented by systems analysts to improve a company's current accounting system. Library Research (Library Research) is a method or approach used by researchers. Library research and inquiry have more than just the functions mentioned in the context of obtaining research data. This means that library research is only limited to library collection materials and does not require field research. However, library research is a method of obtaining data that involves reviewing books, literature, notes and various reports that are relevant to the problem at hand, in accordance with the opinions of experts. In the process of implementing an inadequate Accounting Information System (AIS) in a company, there are several irregularities that occur. Because of this, the company's Accounting Information System needs to be developed in a better direction. This is to ensure that the information the company needs is more appropriate.

Pondok Pesantren's Transformational Leadership Analysis of the Financial Reporting Company's Accountability

Purpose: It is not possible to evaluate the accountability of Islamic boarding schools in terms of openness as ideal, efficient, or successful. The question that arises is whether transformational leadership and trust affect the accountability of Darul Istiqomah Hutapadang Islamic Boarding School’s financial reports. This study sought to ascertain how transformational leadership and trust affect financial report accountability at Darul Istiqomah Hutapadang Islamic Boarding School. Methodology/approach: The research method used in this study was to use quantitative methods with multiple linear regression analysis using descriptive statistics, validity test, reliability test, normality test, classical assumption test, multicollinearity test, heteroscedasticity test, hypothesis test and multiple linear regression analysis test to obtain the results of the study used the SPSS version 26 application, the data used in this study were primary data obtained directly from the answers of 30 respondents who were teachers and staff of the Islamic boarding school office. Results: The findings indicate that while transformational leadership has a largely negative impact on accountability, the trust variable has a partially positive impact. Accountability is simultaneously influenced by both transformative leadership and trust. Limitations: Ownership structure and ownership has no relationship with debt policy Contribution: Ayu Lestari Indri (2022) The study's findings show that dividend policy, domestic institutional ownership, and foreign institutional ownership all significantly and favorably affect firm value. The effect of foreign institutional ownership on dividend policies is substantial and detrimental. Domestic institutional ownership has no impact on dividend policy. Foreign Institutional Ownership of Firm Value cannot be mediated by Dividend Policy as an intervening variable. Dividend Policy cannot mediate Domestic Institutional Ownership of Firm Value as an intervening variable.

Comments of the Auditing Standards Committee of the Auditing Section of the American Accounting Association on the PCAOB’s Proposal on Firm and Engagement Metrics

SUMMARY On April 9, 2024, the Public Company Accounting Oversight Board (the Board or PCAOB) issued a request for comment on its proposal Firm and Engagement Metrics (PCAOB 2024a). This comment letter summarizes the views of the participating members of the Auditing Standards Committee of the Auditing Section of the American Accounting Association. We commend the PCAOB for its efforts to promote audit quality by emphasizing firm and engagement metrics. Based on our evaluation of the proposal, we offer some overall observations, key takeaways from academic research, and perspectives on the PCAOB’s economic analysis.

Audit Partner Characteristics and Their Impacts on Audit Quality: Evidence from around the World

Public company audits are not homogenous. Varying audit partner attributes, including gender, age, location, and expertise, play important roles in explaining audit outcome disparities. The extant literature underscores the influence of firm-level and office-level differences, in areas such as size, culture, and industry expertise, in shaping audit outcomes. Commonwealth countries, such as the U.K., Australia, New Zealand, and Continental European countries, along with Asian economic entities, mandate the disclosure of audit partner names. Consequently, significant research efforts have been devoted to investigating the impact of audit partner characteristics on audit outcomes in these jurisdictions. With the adoption of Public Company Accounting Oversight Board (PCAOB) Rule 3211, mandating disclosure of audit engagement partner details for U.S.-registered public accounting firms on Form AP, there has been a surge in U.S. firm research exploring the significance of audit partner characteristics on audit outcomes in recent years. This paper outlines research that considers audit partner attributes’ influence on audit partner selection and audit quality across different economic entities. This entry contributes by synthesizing findings from recent research across diverse economic contexts, including the recently available insights from U.S.-based audits. The analysis of this entry not only provides insights into the current state of audit partner research but also delineates avenues for future research on this topic.

*Thinking on the Delisting of ST Collin due to Financial Fraud

The Securities and Futures Commission (SFC) announced 2022 financial fraud cases are common, but because of the professional managers of false manipulation is rare, so this paper selected Collin environmental protection equipment Co., Ltd. based on business ethics and professional ethics perspective on its delisting due to financial fraud analysis, respectively, on the company's accounting staff and professional managers to reflect on the perspective, and to address the problem of the corresponding solutions and recommendations, hoping for the current corporate moral governance imbalance in the reality of the problem of reflection, the company's accounting staff and professional managers. We also propose corresponding measures and suggestions to solve the problem, hoping to provide reflection and reference for the reality of the imbalance of corporate moral governance, and expecting practitioners to improve the quality of professional ethics and to be alert to the ethical edges.