Accounting Regulatory Framework Research Articles

CHARACTERISTICS OF THE ACCOUNTING SYSTEM AT COMPANIES

The article describes the main features of the contemporary accounting system and evaluates the impact of its development factors at the company level from the perspective of practicing accountants. In particular, the authors examine the influence of information technologies on the organization of accounting; the tendency to separate tax and financial accounting; overloading of the accounting regulatory framework, changes in accounting related to integration processes in Ukraine. In addition, the study defines the problems of contemporary accounting, including: the complexity of the regulatory and legal framework; risk of abuse; development of information technologies; the need for additional accountant qualifications; the need to standardize rules and formats of financial reporting; the complication of accounting associated with the development of the world economy. The authors proposed directions for solving problems of the accounting system.

Specific Regulations Regarding the Establishment, Operation and Organisation of Non-Profit Legal Entities

Considering the role of the expert accountant to submit information which is needed by any firm manager to management, it is necessary to be acquainted with the financial and accounting regulatory framework and the legislation specific to the establishment, operation and organisation of entities. In this article, we aim to provide a summary of the way non-profit legal entities are established, operated and organised, namely associations, foundations, political parties, trade unions and employers’ organisations, mutual aid houses, churches, so that expert accountants can support individuals in charge of the decision-making process in order to make the best decisions for the companies.

THE DETERMINANTS OF CORPORATE ENVIRONMENTAL DISCLOSURE IN SUBSAHARA AFRICA: AN EMPIRICAL STUDY OF INDUSTRIAL ENTERPRISES FROM CAMEROON

Environmental policies are increasingly being considered by industrial enterprises operating in Cameroon. This concern is materialized via the publication of environmental information (environmental disclosure) usually in stand alone reports (CSR reports) or other reporting media. The goal of this study is to find out the explanatory factors for the dissemination of environmental information in a country which is yet to have a consistent accounting regulatory framework regarding environmental reporting. In order to achieve this objective, a quantitative research strategy was conducted with the aim of finding out the internal and external factors explaining the practice of environmental disclosure by industrial enterprises. The data for this quantitative study which was analysed with the help of the logistic regression was obtained through questionnaires administered to 50 respondents (top management) from a sample size of 50 industrial enterprises. The logistic regression suggests that profitability, industry type, pressure from primary stakeholders (government) and pressure from secondary stakeholders (the media) appeared to be the main determinants susceptible of explaining the practice of environmental disclosure by industrial enterprises in Cameroon, not forgetting dispersed ownership, leverage and firm’s size which also revealed to be explanatory factors of environmental disclosure even though it degree of predictability is moderate as suggested by the logistic analysis.

Options for Selecting and Applying Accounting Policies in Assessing Financial Position and Performance

In writing this article, we noted that accounting policies can influence the size of the outcome, as it derives from the various valuation and calculation methods provided by national accounting regulations. Different financial outcomes result from an entity’s choosing of one approach over another. The research entails objective observation in order to gain a better understanding of the provisions of the accounting regulatory framework governing the selection and application of accounting policies for fixed assets and inventories. The descriptive method, which included elements of comparison, analysis, and deduction, was preferred in rendering the material. As an indirect research technique, the study of provisions of national accounting legislation was employed, and the search engine Web of Science was used according to various selection criteria to determine the performance of scientific research at the international level. The research results can be used both in the practice of entities and for teaching purposes.

Accounting Policies, Institutional Factors, and Firm Performance: Qualitative Insights in a Developing Country

This study aims to uncover the determinants for the formulation of accounting practices and their impact on firm performance in Pakistan through the lens of institutional theory. Based on a pragmatic approach, this study has collected data from 455 participants and 21 semi-structured interviews have been conducted. Firstly, it is noted that accounting practices can be traced back to the Mughal regime, and subsequently underwent a major development in the British colonial system. Secondly, our results indicate that institutional factors, namely, accounting regulatory framework, political factors, economic factors, cultural factors, and country-specific factors have also played a major role in the development of accounting practices after the creation of Pakistan as a separate state. Finally, this study suggests that the development of accounting practices have a novel contribution towards the performance of firms. This research thus provides a pathway for policymakers in this county to closing the gaps between accounting practices and the policies of the International Accounting Standard Board (IASB). Furthermore, firms can enhance their performance by implementing international accounting standards. This paper helps Pakistan’s regulatory institutions such as the SECP (Securities and Exchange Commission of Pakistan) and SBP (State Bank of Pakistan) in the process of developing new policies. Such decisions are related, but not limited to: attracting foreign investments, economic expansion, and international trade. Furthermore, it provides a pathway for firms to improve their performance. Ultimately, this research fills the gap as concerns international accounting standards by assessing, both empirically and theoretically, the role of various determinants for the formulation of accounting practices and their impact on the performance of firms.

Issues Relating to Goodwill Valuation

According to both theoretical and empirical research results, this paper has the aim to determine, the extent to which the current accounting regulatory framework (IFRS 3 and IAS 36) offers an adequate basis for correct valuation of goodwill. We have researched all the available critical reviews of the accounting treatment of goodwill and the quality of applying accounting regulations onto expression of the goodwill position in BH companies’ practices. The empirical research was conducted on all the companies in the Federation of Bosnia and Herzegovina (FBiH), which recorded goodwill in their balance sheets in the period from 2013 to 2018. The research results have shown a high level of subjectivity in the process of determining the value of goodwill, and great discrepancies in adhering to the accounting regulations in the part of additional valuation and expression of goodwill value in financial reports. This resulted in the fact that the share of companies in FBiH which express decreased values of goodwill is far greater than the share of companies in the European union (EU). The main contribution of this paper is the fact that this is the first comprehensive research on evaluation of goodwill in FBiH companies in comparison to the situation in the EU. Also, it confirms the Agency Theory and shows great subjectivity in evaluation which results in an unjustified expression of a higher operative success in financial reports.

The importance of information upon applying IFRS in financial entities that trade at the Colombian stock market

The aim of this research is to determine whether the implementation of the International Financial Reporting Standards (IFRS) in the companies of the financial sector listed on the Colombian Stock Exchange has greater relevance compared to the previous accounting regulatory framework known as Generally Accepted Accounting Principles (GAAP) in Colombia, for the years 2009 to 2016. Taking into account the concept of valorative relevance that indicates that the accounting information is relevant if it affects the stock price reflected in the capital market exchange. To determine this relationship, an adaptation of the model proposed by Ohlson (1995) is used, because it is the most frequently used to measure relevance. The modifications made to the model were to include accounting variables of financial instruments of assets and liabilities to better measure the impact of the IFRS. On a general level, the conclusion is reached that the valorative relevance of financial companies listed on the stock exchange between 2009 and 2016, does not change due to the application of the IFRS. The results are because the regulation that financial companies that are listed on the stock exchange of Colombia are subject to has contributed to the relevance being maintained before and after the application of the new regulatory framework. however, when carrying out the study of the information taking into account only the variables and taking into account the regulations under the IFRS, they present a greater degree of significance.

Efectos de la nueva regulación contable sobre ingresos de prestación de servicios en salud para una Empresa Social del Estado (Montería-Córdoba)

El presente trabajo tiene como finalidad analizar los efectos de la aplicación del Nuevo Marco Normativo Contable para el Reconocimiento, Medición y Revelación de los ingresos por la prestación de servicios de salud en los estados financieros de una Empresa Social del Estado en el municipio de Montería. Esta investigación fue realizada con metodología descriptiva a través del estudio de caso. Considerando el impacto financiero que tiene la incertidumbre de los ingresos de la Empresa Social del Estado de la ciudad de Montería, el análisis indica que la entidad debe realizar reingeniería inmediata de los procesos, procedimientos, políticas operativas y contables, así mismo dar celeridad a la implementación del sistema de costos, diseñar estrategias que permitan minimizar el riesgo administrativo, contable y financiero, toda vez que, además de impactar transversalmente a la Empresa Social del Estado, la información que suministra a los usuarios estratégicos no está siendo útil para la toma de decisiones y se ha generado deterioro en la salud financiera de la entidad.

Pojavni oblici kreativnog računovodstva i najčešće manipulacije u finansijskim izveštajima

Financial statements and accounting documents are a certificate of financial and financial position as well as the business performance of the entity. In its beginnings, creative accounting was conceived as an instrument of an objective presentation of the financial position and business results of business entities through the financial statements within the accounting regulatory framework. Initially, profit management efforts are legal and within the applicable financial reporting framework. However, over time, accounting techniques become inadmissible, unlawful and contrary to generally accepted accounting principles. Then the haircut of the financial result becomes illegal and turns into falsification of the financial statements. The aim of the paper is to synthesize knowledge about forms of creative accounting in order to indicate the importance and the need for reliable and quality financial reporting. Namely, this paper aims to contribute to the understanding and understanding of how accounting manipulations and the management of the financial result of an enterprise are manipulated.

ACCOUNTING CONSERVATISM AND INVESTMENT EFFICIENCY OF LISTED NIGERIAN CONGLOMERATE FIRMS

This study explores the relationship between Accounting conservatism and investment efficiency in Nigeria. The study model examined the relationship between the independent variables (Accounting conservatism) and the dependent variable of investment efficiency, by applying the simple regression analysis of 10 years data Ordinary Least Squares (OLS) which cover the period of 2005-2014. All of tests have been done using stata11 statistical software. The results obtained from this research indicate that there is a significant relationship between accounting conservatism and investment efficiency. The study concluded that there is a positive relationship between Accounting conservatism and investment efficiency in Nigerian conglomerate firms. The study suggest that need to embrace the element of conservatism in to the accounting regulatory framework, because of it role in constraining managers to act efficiently in an investment monitoring and decision making.

SMALL BUSINESS SUPPORT POLICY IN LATVIA

Economic growth is the important factor for improving competitiveness and to ensure the availability of financial resources at all stages of business development. The authors explore European Union activities to promote the development of small and medium enterprises, the Latvian business environment, the regulatory framework, the accounting regulatory framework for small and medium enterprises. The research study included an assessment of the business environment in the international context for the years 2010 – 2016, national support programmes providing financial resources, their availability and tax policy guidelines for small and medium enterprises. The research study results are summarized in a number of conclusions, and recommendations have been developed. Research methodology is based on the analysis of laws and regulations, statistical data and economic and scientific literature studies.  

Aplicación de la orden EHA/3360/2010 sobre aspectos contables de las sociedades cooperativas: efectos en los fondos propios de las cooperativas de la Comunidad Autónoma del País Vasco

The aim of this work is to study the effects that the implementation of a new accounting regulatory framework, which involved the application of the IAS 32, has caused on the equity of worker cooperatives in the Basque Country. On the one hand, we have analyzed different decisions that cooperatives have adopted in their assemblies to protect the consideration as equity of members´ shares and others funds that are recoverable by members when they leave the cooperative. Furthermore, we have studied the effect that the accounting policy change has on the core variables of equity and in financial solvency ratios of these companies. According to our results, the accounting policy change did not have a significant impact on the equity of most worker cooperatives of Basque Country, mainly due to the fact, they have opted to change their statutory rules in order to protect cooperative´s equity from the new accounting framework. However, we have found that the cooperatives have not adapted their statutes have been forced to make reclassifications from equity to liability, which have entailed a very significant impact on equity.

The role of the Securities and Exchange Commission in a developing economy: Implications for IFRS

Due to the widespread adoption of IFRSs throughout the world and little research on IFRS implementation in developing countries, this study investigates the role of the Securities & Exchange Commission (SEC) regarding IFRS implementation in a developing country. Adopting a mixed methodology (39 interviews and 1647 enforcement documents); the findings have raised concerns as to the adequacy of enforcement mechanisms in implementing IFRSs in Bangladesh. More specifically, only 2.6% of enforcement actions were issued over the period of 1998 to 2010. Political connectedness is the major contributing factor for uneven enforcement activities in Bangladesh. The study also finds that inconsistencies with accounting regulatory framework (Companies Act, BSEC ordinances and IFRSs), multiple regulators, and donor agencies' influence impede the effective implementation of IFRSs. The study also provides policy implications for local and national policy makers namely, IASB, the World Bank and the IMF to rethink about the regulation of IFRSs in developing countries.

DEMONSTRAÇÃO DE RESULTADO ECONÔMICO: PERCEPÇÃO DO COMANDO DA AERONÁUTICA DO BRASIL

No ano de 2010, uma alteração no quadro normativo brasileiro introduziu a Demonstração do Resultado Econômico (DRE) para o setor público, que busca comparar custos internos de produção com valores de mercado, segundo o conceito de custo de oportunidade. Este estudo procura analisar as possíveis respostas estratégicas dos gestores , buscando perceber se a cultura contábil existente no País permite a aceitação do novo instrumento. Por meio das percepções dos agentes públicos do Comando da Aeronáutica (Comaer), no Brasil, conclui-se que a resposta estratégica dos entrevistados tende para a atitude de aceitação da nova rotina, demonstrando traços de menor conservadorismo e maior interesse pela evidenciação de resultados.

‘Does accounting regulation matter?’: An experience of international financial reporting standards implementation in an emerging country

The study investigates the balance between accounting regulation and political influences in the implementation of International Financial Reporting Standards (IFRS) in an emerging country. Forty-three interviews were conducted, from 2010 to 2013. Additionally, enforcement documents from 1998 to 2013 in relation to IFRS were evaluated. The study reveals that lack of accounting regulatory framework and political influences are hindering the effective implementation of IFRS. Most importantly, regarding the balance between accounting regulation and political influences, a high level of political influences is adding more apprehension to the implementation of IFRS. The study contributes to the policymaking agenda of the IFRS implementation literature. The findings are relevant to other emerging economies. In particular, local and international policy makers should rethink the path of the global implementation of IFRS.

Study on the Alignment of the Accounting Regulatory Framework on the IFRS for Credit Institutions in Romania

Credit institutions have a key role in the financial system in the national economies, which means that the information provided by them through the financial statements can provide clues on the situation of the economy. On the other hand, we should acknowledge the impact of the activities of credit institutions on monetary statistics, such as the figures about monetary mass and crediting of the domestic private sector, all of them representing a concern of those who establish policies. It is known that normalization and harmonization of the Romanian accounting with international standards ensure that the financial statements of credit institutions to provide the necessary information to all categories of users in decision-making process, reflecting the differences on economic performance and at the same time, risks in the business environment. Regarding to the totally implementation of IFRS by the banking system, the Central Bank, in its capacity as regulator, it is obliged under the agreement concluded in 2009 with the IMF-EU-IFI as from 2012 to regulate the preparation of individual financial statements in accordance with IFRS. According to these reglementative changes, the financial situations related to credit institutions will be adjusted, where necessary, to approximate, in all significant aspects, with IFRS. In this article we plan to reveal which is the main retreatment's which must be made by credit institutions to harmonize individual accounts, in all significant aspects with IFRS. To reflect the differences between individual statutory financial statements and IFRS we analyzed the financial statements for the year 2010 for four credit institutions in Romania, chasing their impact on equity capital and net profit.

Board Monitoring and Earnings Management Pre- and Post-IFRS

In this paper, we address the question of whether the board of directors is more effective in constraining earnings management after the mandatory application of IFRS. Specifically, we explore how two board characteristics — board independence and (2) the existence of an audit committee impact earnings management. Our empirical results suggest that board independence and audit committees play an important and effective role in reducing earnings management after the introduction of IFRS and that the accounting regulatory framework significantly contributes to the effectiveness of the two corporate governance mechanisms. Our findings also confirm that a company's corporate governance characteristics remain an important determinant of earnings quality; therefore, an analysis of the effects of new regulations must consider firm-level determinants.

Convergence and harmonization of accounting standards in the South Pacific region

Over the last few years there has been a significant increase in the acceptance of International Financial Reporting Standards (IFRSs) which are issued by the International Accounting Standards Board (IASB). Although numerous countries are adopting IFRSs, the approaches used for convergence continue to differ significantly across countries. Using selected countries from the South Pacific region, this paper investigates the relationship between country-specific characteristics and the selection of the appropriate approach used for the adoption of IFRSs. The country-specific attributes that have been found to influence convergence are (1) the set of accounting standards that was prevailing in the country at the time when the selection was made, (2) the availability and experience of professional accountants, (3) the relevant education and professional training, (4) the presence of the Big 4 accounting firms and (5) the accounting regulatory framework. The results of this study suggest that complete comparability in financial reporting may be difficult to achieve across all countries even after adopting the IFRSs. These findings are important because they indicate that attention should be concentrated on theorizing and empirically testing the effects of the country-specific attributes on convergence efforts across various jurisdictions.

Development of Accounting Regulatory Framework in China: An Empirical Evaluation

In China, the government has long been involved in directly regulating accounting work. The rule-based accounting regulations have been formulated for different industry and business ownership structure by the central government since the founding of the People’s Republic in 1949. Remarkable changes have, however, taken place in Chinese accounting which have resulted from the wide-ranged economic and accounting reforms in the last two decades. Recently, an accounting regulatory framework based on accounting standards has been introduced, with great efforts to develop a set of practical accounting standards. A survey study was conducted to empirically investigate the prevailing perceptions of the users and providers of business accounting in respect of four major conceptual and practical issues underlying the construction of the accounting regulatory framework in the changing business environment in China. The study results demonstrate that the respondents from various interest groups possessed mixed views. They generally endorsed the current progress in the accounting reforms. On the other hand, the majority of the respondents were supportive of further changes in reshaping accounting regulatory framework to accommodate the growth of market-oriented economy in China.

Problems of accounting reform in the People's Republic of China

The promulgation of the Enterprise Accounting Standard (EAS) in 1992 signified a major accomplishment in unifying accounting practices in the People's Republic of China (PRC) and harmonizing them with international practices. This article identifies and analyzes the problems encountered in the PRC since the implementation of the EAS in July 1993. These problems result from the accounting regulatory framework itself and the incongruity betweem the new accounting regulations and the prevailing socioeconomic conditions. Some possible solutions are discussed.