Contemporary Accounting Research Research Articles

Integrating contemporary accounting and international business research: progress so far and opportunities for the future

To date, the accounting and international business (IB) research fields have been developing rather independently, although some cross-discipline fertilisation is emerging. This paper aims to illustrate the conceptual and empirical bridges between the two disciplines. Specifically, we highlight how contributions originating in either field have influenced theory and research in such diverse areas as corporate governance, risk management, taxation and strategic decision making in multinational enterprises (MNEs). Further, we identify examples where attention by accounting researchers to the IB literature has resulted in innovative research, including studies focusing on control systems and financial reporting in MNEs. Based on our discussion of the state of mutual contributions between the disciplines, we highlight various areas where future research could benefit from further integration of the accounting and IB literatures.

What is accounting? What should it be? What should we profess and teach?

Differences between accounting researchers and many accounting practitioners and professional institutions on what constitutes the domain of accounting has grown considerably over the past fifty years. In contrast to the frequent allegations that accounting researchers pay insufficient attention to the needs and problems of practice, this paper argues the converse, namely that accounting education and training within universities and professional courses neglect accounting research. This has consequences for the legitimacy of accounting as a profession, inhibits developing skills sought by prospective employers, and can blind practice to the emergence of important new issues. Recently, there have been calls from academics to redefine accounting. In addition to including technical practices, they seek greater emphasis on ethics, morality, theory, sustainability, and accountability. This broader, interdisciplinary approach focuses on public rather than private interests; seeks broader, often non-financial reporting on sustainability goals; serving a wider range of stakeholders; and devising new processes of accountability, especially to empower civil society groups. Illustrations of these themes are explored in the paper. It concludes by offering ways to reform accounting courses. Ideally academic and professional leaders could devise, on an equal footing, courses leading to qualification as a professional accounting that better serve the needs of employers and utilise scientific academic research. Failing this universities could offer two accounting degrees, one emphasising technical material and exemptions from professional examinations, and another more oriented to contemporary accounting research and develops skills sought by employers relating to communication, continuouslearning, critical analysis, and multi-functional teamwork.

The Positivism Paradigm in Internal Audit Research: A Perspective of Contemporary Accounting Research

ABSTRACTThis study aims to investigate the dominance of research with the paradigm of positivism in accounting, especially research related to the internal function of audit. The dominant paradigm in accounting research to date is the positivist paradigm. In internal audit, all things are not only seen from the facts that are on the surface and concluded directly from the existing data, but also must understand the meaning contained on it. Therefore, it is necessary to have another paradigm that contradicts positivism and covers its limitations. Anti-positivist paradigms, that are interpretivism, radical humanist, radical structuralist, critical, and postmodernist paradigm, should be widely used in internal audit research. The anti-positivism paradigm raises the heterogeneity of the mainstream paradigm which has a positive impact on the development of internal audit research.Keyword: Paradigma Positivism, Internal Audit, Qualitative Research Method

Addressing the Replication Crisis in Accounting

The prominence of the “replication crisis” in social sciences has spurred concern regarding the reliability of published research. Accounting researchers share such apprehensions, acknowledging the perceived scarcity of published accounting replication studies. To investigate this belief, we analyze annual replication rates and the number of replicated original articles from three prominent accounting journals: Contemporary Accounting Research (CAR), Journal of Accounting and Economics (JAE), and Review of Accounting Studies (RAST). Two sample periods, spanning from 1970-2015 and 2016-2021, reveal a more than doubled increase in both 1) the average annual replication rate, rising from 3.13 to 8.67 times, respectively and 2) the average number of replicated original articles per year, advancing from 5.33 to 12.77 original articles, respectively. These findings challenge conventional beliefs surrounding the replication crisis in accounting, revealing a growing volume of published accounting replication research and replicated original articles. The significant increase observed, even within this small sample of three journals, suggests that accounting replication is more prevalent than thought. As ongoing analysis extends to a broad selection of prominent and smaller journals, the distinguished pattern emerging within the current sample suggests a potential continuation of this trend across accounting research.

Business strategy and strategic deviation in accounting, finance, and corporate governance: A review of the empirical literature

AbstractWe review the empirical archival literature on the consequences of business strategy and strategic deviation on accounting, finance, and corporate governance outcomes. We use Miles and Snow's (Organizational strategy, structure, and process. McGraw‐Hill, 1978; Organizational strategy, structure and process. Stanford University Press, 2003) strategy typology that has been quantified using financial statement data by Bentley et al. (Contemporary Accounting Research, 2013, 30, 780). Research has used this strategy score to investigate the consequences of firms following two distinct strategies namely, prospectors versus defenders, on various organisational outcomes. Our survey provides mixed evidence on the relationship between business strategy, financial reporting quality, finance outcomes, and corporate governance including corporate social responsibility (CSR) activities. We offer some suggestions for future research.

Deviations from the Mandatory Adoption of IFRS in Europe? Why Non-Adoption Does Not Mean Non-Compliance

Using Worldscope data, Pownall and Wieczynska (2018) [Deviations from the mandatory adoption of IFRS in the European Union: Implementation, enforcement, incentives, and compliance. Contemporary Accounting Research, 35(2), 1029–1066] show that there was extensive non-adoption of International Financial Reporting Standards (IFRS) by European listed firms in 2005–2012. They also suggest that much of this non-adoption is illegal. This would constitute a serious failing by European firms, auditors and regulators. However, in this note we show that there is no non-compliance with mandatory requirements to use IFRS in Germany and the UK in various years including 2012 and 2020. We also find no non-compliance in Austria and Portugal, two countries with less highly regarded enforcement. The reasons for legitimate non-adoption vary by country and by year. Our analysis is based on hand-collected data and it documents that the Worldscope database contains many errors in various fields. Therefore, we provide researchers with a hand-collected database for German and UK firms for the period 2005–2020, which can be used to supplement Worldscope. The database includes information on country of incorporation, whether consolidated financial statements are prepared, the accounting standards applied, and whether the firm is listed on an EU-regulated market. We use the database to provide some evidence on voluntary adoption of IFRS.

Integrating Contemporary Accounting and International Business Research: Progress so far and Opportunities for the Future

Integrating Contemporary Accounting and International Business Research: Progress so far and Opportunities for the Future

Accounting and Econometrics: From Paweł Ciompa to Contemporary Research

This paper examines the little-known connection between econometrics and accounting invoked by Paweł Ciompa, who first introduced the term econometrics in 1910. Since then, research in accounting and in statistical (econometric) analysis has developed in parallel. It is argued that contemporary accounting research is methodologically closer to econometrics than ever before. This paper concentrates on the accounting origins of econometrics and on the econometric methodologies currently in use in accounting research, beginning with Paweł Ciompa’s introduction of the term econometrics in accounting. The major contribution of this paper is a review of the occurrence of econometric methods in five leading journals in accounting research. The author identified 246 papers, and these were examined regarding the use of econometric methods. Two-thirds of the papers used methodologies that belong to econometrics—specifically, to financial microeconometrics. The most common methods were panel data models, qualitative variables models, and causality models.

Global Diversification and the Cost of Equity

The conventional view in the standard finance textbooks is that organizational form does not matter for a firm’s cost of capital because firm diversification reduces only idiosyncratic risk and not systematic risk. In this study, we investigate the effect of global diversification on the ex-ante cost of equity implied by the residual income valuation model (Ohlson, Earnings, book value and dividends in security valuations. Contemporary Accounting Research, 11(2), 661–687, 1995), using a sample of US firms from 1997 to 2019. Employing the empirical approach developed in Easton et al. (Using forecasts of earnings to simultaneously estimate growth and the rate of return on equity investment. Journal of Accounting Research, 40(3), 657–676, 2002), our results suggest that global diversification reduces the cost of equity capital for both single-segment firms and multi-segment firms. Our results highlight the effect of global diversification on the equity risk reduction, which may explain the increasing proliferation of foreign operations among US firms — a trend that neither the cash flow effect nor the capital structure effect proposed in previous studies can explain.

Contemporary Accounting Research: A Retrospective between 1984 and 2021 using Bibliometric Analysis*

ABSTRACTThis study critically evaluates research published by Contemporary Accounting Research (CAR) between 1984 and 2021 using bibliometric analysis. We examine the following: (i) CAR's publication quality and the factors associated with its citations and (ii) CAR's scope regarding research diversity, methods, authors geographical dispersion, and collaborative networks. The methodology permits observation of finer collaboration details and research patterns not apparent by simply categorizing the data. We use tools such as performance analysis, coauthorship analysis, bibliographic coupling, and regression analysis. The bibliometric analysis shows improvement in CAR's CiteScore and source‐normalized impact per paper over time, consistent with publishing high‐quality research. Our analysis reveals that authors' geographical affiliations, research subject areas, and research methods are not systematically associated with citations across our various subsamples. A notable exception is that research on audit topics generates more citations than studies examining financial accounting topics. Other factors significantly and positively associated with citations include article age, article length, number of authors, order of author names, and number of references. We also show that CAR has become more diverse regarding author affiliations, subject areas, and research methods than most leading accounting journals. Only Accounting, Organizations and Society emerges as more diverse, thereby serving as a benchmark for CAR in the future. CAR should consider focusing on high‐interest areas to boost citations and tightening its acceptance criteria.

Exploring the “theory is king” thesis in accounting research: the case of actor-network theory

PurposeThis paper examines the influence of the normal science tradition, epitomized by the notion that “theory is king”, on contemporary accounting research and the epistemological tensions that may emerge as this idea is applied to particular ways of studying accounting. For illustrative purposes, the authors focus on research informed by actor-network theory (ANT) which can be seen as an “extreme case” in the sense that it is, in principle, difficult to reconcile with the normal science aspirations.Design/methodology/approachThe paper offers an analysis based on a close reading of how accounting scholars, using ANT, theorize, and if they do engage in explicit theorizing, how they deal with the tensions that might emerge from the need to reconcile its epistemological underpinnings with those of the normal science tradition.FindingsThe findings of this paper show that the tensions between normal science thinking and the epistemological principles of ANT have, in a few cases, been avoided, as researchers stay relatively faithful to ANT and largely refrain from further theory development. However, in most cases, the tensions have ostensibly been ignored as researchers blend the epistemology of ANT and that of normal science without reflecting on the implications of doing so.Originality/valueThe paper contributes to emerging debates on the role of the normal science tradition in contemporary accounting research, and also extends recent discussions on the role of theory in accounting research inspired by ANT. The paper proposes three reasons for the observed blending of epistemologies: unawareness of tensions, epistemological eclecticism and various political considerations.

Corporate Governance Mechanisms and Earnings Management Activities: Evidence from the UAE Banking Sector

This study investigates the impacts of corporate governance mechanisms (CGMs) on earnings management (EM). Data covering 12 years (2009–2020) were collected via annual reports of the listed national banks in the UAE. Data were analyzed using descriptive statistics, correlation analysis, ordinary least squares (OLS) estimator, generalized least square (GLS) estimator and panel-corrected standard error (PCSE) estimator. Discretionary accruals were estimated using the adjusted Jones model as suggested by Dechow ( Contemporary Accounting Research, 1996, vol. 13, pp. 1–36). The overall findings of the study indicate that audit committee and ownership structure are not effective in mitigating managers’ opportunistic earnings management activities in the UAE banking sector. Hence, the assumption that audit committee and ownership structure have a negative impact on earnings management could not be ascertained. However, board characteristic was found to exert a diminishing effect on earnings management. Given that weak CGMs could fail to deter earnings management practices, the policymakers of the financial institution such as the banking sector should ensure that the CGMs are strengthened, and efforts should be exerted to facilitate strict adherence to measures that will diminish earnings management activities. The present study has contextual limitations to the UAE. Hence, the interpretation of the result is limited within this context.

A review and synthesis of contemporary sustainability accounting research and the development of a research agenda

AbstractThe study provides a comprehensive overview of contemporary sustainability accounting research, comprising 1,283 academic articles published in 54 journals (2014–2020). Sustainability disclosure is the most frequently researched topic and a substantial proportion of publications analyse a national setting, examine a European context, investigate listed firms, adopt an empirical archival research method, apply social and political theories, or focus broadly on sustainability. Based on this analysis, we develop a conceptual framework of sustainability accounting influences. We discuss prevalent themes, empirical findings and apparent inconsistencies, reflecting on recent trends and the state of sustainability accounting knowledge, developing an agenda for future research.

Mediating Effects of Accounting Conservatism on The Relationship Between Corporate Governance and Cost of Capital

Mediating Effects of Accounting Conservatism on The Relationship Between Corporate Governance and Cost of Capital

Acknowledgments Networks in Accounting Scholarship: A Note

Abstract We explore social networks in accounting research. Our sample spans the 1996–2015 period and includes all research articles that were published in the Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, Accounting Organizations and Society, Review of Accounting Studies, and Contemporary Accounting Research. Employing social network analysis, we delineate and discuss the structure of scientific collaboration as it appears in the acknowledgments of published research articles. We identify the most central nodes in this nexus of intellectual partnership. Furthermore, we discover that acknowledgments constitute a small-world social network, with high average clustering coefficient and small average distance within a giant component which covers the biggest part of the acknowledgment network.

When to consult precision-recall curves

Receiver operating characteristic (ROC) curves are commonly used to evaluate predictions of binary outcomes. When there is a small percentage of items of interest (as would be the case with fraud detection, for example), ROC curves can provide an inflated view of performance. This can cause challenges in determining which set of predictions is better. In this article, we discuss the conditions under which precision-recall curves may be preferable to ROC curves. As an illustrative example, we compare two commonly used fraud predictors (Beneish’s [1999, Financial Analysts Journal 55: 24–36] M score and Dechow et al.’s [2011, Contemporary Accounting Research 28: 17–82] F score) using both ROC and precision-recall curves. To aid the reader with using precision-recall curves, we also introduce the command prcurve to plot them.

Innovative Approaches in the Accounting and Audit of the Book Value of Assets: Bibliometric Analysis

The paper deals with the analysis on the innovative approaches in the accounting and audit of the book value of assets. The results of analyses proved that of the book value of assets in the accounting and audit, especially in the context of financial crises, implementation of the new or modified standard of accounting and reporting becomes an important part of the issues. Herewith, financial and management decision, which compare book and market value, trying to predict the future (fair) value of assets or even a company (firm). The main goal of the paper is analysed of the tendency in the scientific literature on the accounting and audit of the book value of assets to identify future research directions. For the analysis, the VOSviewer and Scopus tools were used. This study reviews 714 papers from the Scopus database. The time for analysis was all timeline of the Scopus database. The results showed the growing tendency in publishing the documents in the Scopus database focused on the accounting and audit of the book value of assets issues. It began to increase from 1997 to 1999, from 2007 to 2009, and from 2014 to 2017. Moreover, the focus of investigation moved from general issues to problem of the fair value of assets, implementation of modifying standards of reporting and accounting. In 2018, the number of documents increased by 1225% compared to 1997. It was the year with the biggest number of paper devoted to analysing the innovative approaches in the accounting and audit of the book value of assets. Mostly the innovative approaches in the accounting and audit of the book value of assets were analysed under the subject area as follows: Business, Management and Accounting; Economics, Econometrics and Finance; Social Sciences; Engineering. Besides, the biggest share of the scientists which investigated issues the innovative approaches in the accounting and audit of the book value of assets was from the USA, United Kingdom, Australia and China. In 2019 papers focused on analyses of the innovative approaches in the accounting and audit of the book value of assets were published in journals with high impact factor as follows: Contemporary Accounting Research, Accounting Review, International Journal of Accounting, Managerial Finance,Accounting And Business Research. Such results proved that theme on the innovative approaches in the accounting and audit of the book value of assets is actually in the ongoing trends of the modern accounting, finance, management and audit. The findings from VOSviewer identified 6 clusters of the papers which investigated innovative approaches in the accounting and audit of the book value of assets from the different points of views. The first most significant cluster merged the keywords as follows: accounting information, fair value, financial reporting, fair value accounting, firm value, intangible assets, intellectual capital etc. The second biggest cluster merged the keywords as follows: costs, cost accounting, accounting method, assets value, assets valuation, depreciation, cost-benefit analyse, balance sheet etc. The third biggest cluster focused on criminal aspects of value relevance, book value, the book value of equity, equity valuation, earnings, dividend etc. Such tendency allows making a conclusion, financial and management decision, which compare book and market value, trying to predict future (fair) value of assets or even a company (firm) are very close and popular in different issues. Keywords book value, asset value, accounting, financial accounting, audit, innovative approaches.

Perkembangan Penelitian Sejarah Akuntansi di Indonesia dalam Bingkai Perspektif NAH

This study aims to capture the development of new accounting history research in order to understand the extent to which accounting history has been carried out and the possible direction of research in the future. This study use literature review to collect the data. The result shows that the NAH research in Indonesia has been carried out such as accounting research during the colonioal period, the early era of Indonesia’s independence, the ancient java and bali period. However, the opportunity to do the New accounting history research in Indonesia is still widely open considering that Indonesia is a country with many cultures and dynamics. Some opportunities in this field are accounting research during the Islamic Kingdom and contemporary accounting research which can describe various current accounting dynamics that impact the development of accounting.

Evaluating qualitative research in management accounting using the criteria of “convincingness”

PurposeThe purpose of this paper is to extend the knowledge claim of management accounting research using qualitative research methods, in particular, the interpretive case study, and its evaluation using “convincingness” criteria demonstrating the textual authenticity, plausibility and criticality of case study findings.Design/methodology/approachQualitative research in the management accounting field considers both context and function (Burchell et al., 1980). This study sets out the rationale for adopting qualitative methodologies such as interpretive case studies in which rich, contextual and detailed data were collected and analyzed (Miles and Huberman, 1994; Mason, 2002). Methodological issues related to research design, analysis and evaluation are discussed by drawing on frameworks of social science research design. The paper sets out the procedures of an interpretive case study essential to ensuring the procedural validity of research which can be evaluated more accurately using the criteria of “convincingness” rather than positivist measures of the reliability, validity of data and the generalization of results. Textual authenticity, plausibility and critical interpretation, and how these hallmarks of “convincingness” can reflect the procedural validity of accounting research are described.FindingsQualitative research strategies such as the interpretive case study, which consider the complex settings of accounting change and practice, are found to offer deep understandings and convincing explanations of accounting change. Affirming that accounting is firmly established as a social science, the paper finds that the authenticity, plausibility and criticality of research in this field.Research limitations/implicationsThe relevance of qualitative research to contemporary accounting research is considered as an effective method to explicate theory and inform practice, which suggests that new measures to evaluate related research are required to develop the potential of selected qualitative research methodologies in accounting domains.Originality/valueQualitative research in management accounting focuses on the interpretation of meanings found in people and organizations that are subject to the influence of contextual variables. Human attributes underpin accounting conventions and change resulting from continuous technological and regulatory advances. This paper’s comprehensive account of interpretive case study research emphasizes the significance of evaluative criteria that relate, beyond reliability, to the richness of the text. This, thus, encourages and supports new and emerging researchers to seek qualitatively coherent and critical interpretations in management accounting research.

Developments in accounting regulation: A synthesis and annotated bibliography of evidence and commentary in the 2017 academic literature

ABSTRACT In this paper, recent regulation-related findings and commentaries in the academic literature are synthesized in annotated bibliography form. This annotated bibliography is one in a series of bibliographies that summarizes regulation-related academic research. Papers in top accounting outlets such as The Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, Contemporary Accounting Research, Accounting Horizons, The Journal of Accounting, Auditing & Finance, Journal of Accounting and Public Policy, Journal of Business, Finance & Accounting, The Journal of Financial Reporting, Auditing: A Journal of Practice and Theory, Research in Accounting Regulation and Review of Accounting Studies are included. Threads in the 2017 literature included general regulatory accounting issues, general financial reporting issues, examinations of the impact of specific guidance, and examination of issues surrounding the independent audit.