Contemporary Accounting Research Research Articles

IFRS Adoption and Value Relevance of Accounting Information: Evidence from a Developing Country

The purpose of this study is to investigate the impact of International Financial Reporting Standard (IFRS) adoption on value relevance of accounting information in Sri Lanka by comparing value relevance of accounting information in pre- and post-IFRS adoption periods. This study employs Ohlson (1995, Contemporary Accounting Research, 11(2), 661–687) price regression model to explain value relevance of accounting information. It explains market value per share (MVPS) using earning per share (EPS) and book value of equity per share (BVEPS). The pre-IFRS period is designated as 2010 through to 2011, and the post-IFRS period is designated as 2012 through to 2014. The sample comprises 188 firms and 935 firm-year observations which nearly constitute to all firms listed in Colombo Stock Exchange except those not having at least two annual reports before and after the year 2012 and those having extreme and incomplete data. It is found that both BVEPS and EPS significantly and positively explain MVPS during the periods followed by IFRS adoption although EPS was not a significant predictor of MVPS prior to IFRS adoption. Pooled regression with data of both regimes, however, maintains that BVEPS and EPS significantly and positively explain MVPS. Although the overall predictive power of value relevance model improved in the years that followed IFRS adoption, value relevance of BVEPS has declined in post-IFRS implementation. However, the decline in value relevance of BVEPS perhaps has been compensated by improved quality of earning thereby making EPS as a significant predictor of market value of equity in the post-IFRS periods. These findings were not rebutted or changed even at the exclusion of the transitional year of 2012 from the sample. This study contributes to the extant value relevance literature and IFRS studies by investigating the impact of IFRS adoption in a developing economy and for the first time in Sri Lanka.

Exploring the Scientific Landscape of Internal Audit Research: A Bibliometric Analysis

Addressing the heavily increased attention on internal auditing in the post-SOX era, this paper aims to unravel the scientific metamorphosis of the topic within current accounting research, including the different scientific subareas that define it. In an attempt to extent the scant body of literature reviews that has focused on the internal audit function (IAF), we pursue an empirical approach to analyze the scientific structures and provide a variety of directions for future internal audit research. In this context, citation patterns extracted from 170 research articles published in five major accounting journals are being studied by combining co-citation and social network analysis in order to investigate different existing research domains of internal auditing and to discover the core work that has been done in this area. The scientific landscape of internal auditing can be characterized as profoundly fragmented and deeply rooted in different adjacent domains of accounting research. Identified subcategories from which research on internal auditing is derived can be summarized as Corporate Governance, Auditor Independence, Auditing Professionalization, Audit Committee Effectiveness, Reliance on Internal Auditing, Internal Control over Financial Reporting, and finally the Regulatory Framework. Additionally, results reveal the existence of a pivotal nucleus of research that emphasizes the increasingly important construct of internal audit quality. The focus of this study lies on the analysis of major accounting journals, namely The Accounting Review, Contemporary Accounting Research, Journal of Accounting Research, Journal of Accounting Economics and Accounting, Organizations and Society and is restricted to the years from 1926 to 2016.

Developments in accounting regulation: A synthesis and annotated bibliography of evidence and commentary in the 2016 academic literature

ABSTRACT In this paper key regulation-related findings and commentaries in the 2016 academic literature are synthesized in annotated form. This paper is one in a series of previously published annotated bibliographies published in this journal. Papers published in academic outlets including 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, and Research in Accounting Regulation were reviewed for potential inclusion. The 2016 literature featured strong regulation-related threads as follows: financial accounting regulation, analysis of individual pronouncements, SEC regulatory activity and its impact, international financial reporting standards, income tax reporting, and auditing.

CEO Characteristics and Timeliness of Financial Reporting of Vietnamese Listed Companies

CEO Characteristics and Timeliness of Financial Reporting of Vietnamese Listed Companies

Institutional Quality Matter and Vietnamese Corporate Debt Maturity

Institutional Quality Matter and Vietnamese Corporate Debt Maturity

Barriers to implementing the International Integrated Reporting Framework

PurposeThis paper is motivated by the call for feedback by the International Integrated Reporting Council (IIRC) from all stakeholders with knowledge of the International Integrated Reporting Framework (<IRF>) and specifically of the enablers, incentives and barriers to its implementation. The paper synthesises insights from contemporary accounting research into integrated reporting (IR) as a general concept and <IR> as espoused by the IIRC in the <IRF> (IIRC, 2013). The authors specifically focus on possible barriers and emphasise the specific issues the authors feel could be rectified to advance the <IRF>, along with the areas that may potentially hinder its wider adoption and implementation.Design/methodology/approachThe paper draws upon and synthesises academic analysis and insights provided in the IR and <IR> academic literature as well as various directives, policy and framework pronouncements.FindingsThe flexibility and lack of prescription concerning actual disclosures and metrics in the <IRF> could allow it to be used for compliance, regardless of the other benefits lauded by the IIRC. Thus the authors see forces, both external and internal, driving <IR> adoption, with one prominent example being the European Union Directive on non-financial reporting. Because of the different ways in which IR is understood and enacted, there are numerous theoretical and empirical challenges for academics. The authors paper highlights potential areas for further robust academic research and the need to contribute to <IR> policy and practice.Research limitations/implicationsThe paper provides the IIRC, academics, regulators and reporting organisations with insights into current practice and the <IRF>. The authors highlight the need for further development and evidence to help inform improvements both from a policy and a practice perspective. A key limitation of the authors’ work is that the authors draw upon a synthesis of the existing literature which is still in an early stage of development.Originality/valueThe paper provides the IIRC with several insights into the current <IRF> and specifically with the enablers, incentives and barriers to its implementation. Also, it provides academic researchers with a number of important observations and an agenda upon which the authors can build their future research.

A Literature Review on Ohlson (1995)

This paper presents the review of the literature focussed on Ohlson, J.A., 1995. (Earnings, book values and dividends in security valuation. Contemporary Accounting Research 11, 661—687). Firstly an overview then theoretical and empirical research directly related to this work are presented, based on articles cited this work. Further, some bibliometric facts about the study are added. The bibliometric analysis is based on twelve reputed journals of accounting: Journal of Accounting Research, Journal of Accounting and Economics, The Accounting Review, Contemporary Accounting Research, Review of Accounting Studies, Journal of Business Finance and Accounting, Accounting Horizons, The European Accounting Review, Journal of Accounting Auditing and Finance, Accounting and Business Research, A Journal of Accounting, Finance and Business Studies and The International Journal of Accounting. Our findings of bibliometric facts come up with most influenced author, university and country by Ohlson (1995) and followed by keyword analysis.

Signaling effects of scholarly profiles – The editorial teams of North American accounting association journals

Abstract This paper provides a longitudinal analysis of the editorial teams of Contemporary Accounting Research (CAR) and The Accounting Review (TAR) with regard to the subject areas and research methods as well as the doctoral degree schools represented by their members. From a signaling theory perspective, we consider the scholarly profiles of the editorial team members a powerful signal that the journals send to the academic community concerning the types of research preferred for publication. Accordingly, we first develop a signaling theory framework and introduce it to the sociology of accounting research literature, emphasizing the editorial team composition as a crucial aspect of the communication between senior editors and scholars intending to submit their manuscripts. Second, we compile scholarly profiles of 1564 CAR and TAR senior editors, editors and editorial board members serving within a 25-year time frame based on 10,200 papers (co-)authored by them. We then examine whether the papers published in CAR and TAR reflect the subject areas and research methods represented by the editorial teams. Our findings suggest that the two journals send distinctive signals toward the academic accounting community, particularly with regard to “acceptable” research methods. More precisely, CAR signals greater openness compared to TAR. Moreover, our results indicate that the journal publications reflect the scholarly profiles of the editorial teams with regard to research methods but not subject areas. We discuss the consequences of our findings for the further production and dissemination of accounting knowledge.

How is the Perception of Fairness of Performance Evaluation Practices Constructed? A Case Study of Shop Floor Workers Employed by the Large FMCG Retailer in Scandinavia

Prior research, investigating the perception of fairness of performance evaluation practices has researched the topic as a cause-effect phenomenon. This investigation takes a different approach. First, it adopts the bottom-up investigating, starting from the worker herself. Second, it investigates the reasons that influence the construction of fairness, by that gaining an underlying understanding of the perception of fairness. In order to answer the research question, a method of open qualitative interviews has been adopted. A sample of ten shop floor workers from the Danish fast-moving consumer goods (FMCG) retail industry has been chosen for the purpose of answering the research question. This study examines three sets of aspects of performance evaluation. The first set of characteristics analyzes the design of a performance measurement system. Second set of features investigates the formality of the performance evaluation procedures, and third set of characteristics explores the power of subordinate’s voice and its influence on the construction of fairness. I discovered three primary reasons, which collectively influence the construction of the perception of fairness. The first two are the contextual impacts of job design and logical mechanisms of workers. Both directly influence the construction of fairness, yet their impact is limited and strongly dependent on the job design and specific worker-manager relation. The third reason is the feelings. Feelings have the strongest impact on overall perception of fairness. They form an underlying condition, which is the wanted feeling of being appreciated. Performance evaluation managers need to evoke the feeling of being appreciated in order to positively influence the construction of fairness of the performance evaluation practices. The findings of this paper serve as tool for middle management when designing the performance evaluation practices for shop floor workers as well as a tool for evaluating managers when engaging in performance evaluating behavior. First, middle management should recognize that not all shop floor job designs are the same, and provisions for recognizing these differences should be implemented in the design of the performance evaluation system. Second, managers evaluating should recognize that workers want to feel appreciated and respected while receiving evaluation. Therefore, they should engage in a facilitating behavior, taking into consideration the needs of the individual worker, and by that positively influencing the construction of fairness. The contribution to the contemporary research is the provided insight into the process of constructing the perception of fairness, which is offered as an alternative to the established cause-effect studies. The researched population further contributes as it differs from those used prior in contemporary management accounting and behavioral research. The research subject of shop floor worker provides an interesting insight into the construction of the perception of fairness. It offers a unique perspective of an employee on the lowest level in organizational hierarchy, which differs from the perspective of prior researched white-collar workers.

Collaboration networks in accounting research

This paper employs social network analysis to explore the relational structure of co-authorship in five accounting journals: The Accounting Review, Accounting, Organizations and Society, the Journal of Accounting and Economics, the Journal of Accounting Research, and Contemporary Accounting Research. We discover that the network of authoring accounting academics exhibits “small-world” properties. These results bear implications on the quality of the production and dissemination of novel ideas in accounting scholarship: within a small-world of scholars, the dissemination of new ideas may be fast across the network, but on the other hand, a closely connected network may be less open to the influx of heterodox or radical ideas.

Developments in accounting regulation: A synthesis and annotated bibliography of evidence and commentary in the 2015 academic literature

In this paper, we synthesize in annotated bibliography form, recent regulation-related findings and commentaries in the academic literature. This annotated bibliography is one in a series of bibliographies that summarizes regulation-related academic research. We reviewed articles published in 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, Auditing: A Journal of Practice and Theory, and Research in Accounting Regulation. We annotate results of regulation-related research studies and key points from regulation-related commentaries. The literature featured some strong regulation-related threads in 2015 including the foundations of financial accounting and reporting, international financial reporting standards, Sarbanes–Oxley and the Public Company Accounting Oversight Board.

The struggle to fabricate accounting narrative obfuscation

Purpose The purpose of this paper is to analyse the accounting research project concerned with accounting narrative obfuscation, focusing on the translation of the concept of readability from educational psychology via an earlier literature concerned with the readability of accounting narratives per se. Design/methodology/approach This paper uses actor-network theory and examines, in particular, the need for a network to accommodate the interests of its actors and the consequent risk of failure. Findings The analysis shows that the project is failing because the network seeking to support it is failing, and failing because of its inability to adapt sufficiently to accommodate the interests of its constituents. This failure is contrasted with the earlier concern with readability per se, which did see a successful reconfiguration of actors’ interests. Research limitations/implications The puzzle of the maladjustment of the network concerned with obfuscation is examined and it is suggested that it is a consequence of interests prevailing in the wider academic research network within which the relevant human actors are embedded. Social implications The reasons for the failure of the project are bound up in the wider circumstances of the contemporary accounting research community and may affect scholars’ capacity to pursue knowledge effectively. Originality/value This paper contributes to a modest stream of actor–network analysis directed at accounting research itself.

Developments in accounting regulation: A synthesis and annotated bibliography of evidence and commentary in the 2014 academic literature

In this article, we synthesize, in annotated bibliography form, recent regulation-related findings and commentaries in the academic literature. This annotated bibliography is one in a series of bibliographies that summarizes regulation-related academic research. We reviewed articles published in 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, Auditing: A Journal of Practice and Theory, and Research in Accounting Regulation. We annotate results of regulation-related research studies and key points from regulation-related commentaries. The literature featured some strong regulation-related threads in 2014 including the foundations of financial reporting, international financial reporting standards, retrospectives on Sarbanes-Oxley and the Public Company Accounting Oversight Board ten years out, corporate governance and audit quality.

Accounting Research and Common Sense

The paper identifies some basic shortcomings of contemporary accounting research. Aside from issues related to how researchers pick topics—they are generally too remote from pre-existing realities—the main points concern the standard paradigm: explaining a dependent variable Y in terms of X, the primary variable of interest, while controlling for Z. The paper argues that just because the t-statistic related to X is significant does not mean that X helps to explain Y. To address this issue requires a goodness-of-fit analysis that evaluates the incremental contribution of X. Such tests can show that X effectively acts as noise though X's t-statistic is significant. Incremental goodness-of-fit analyses would potentially have dramatic consequences on research because rejection of the null would now take place much less often. The paper also considers problems associated with ordinary least squares, with specific emphasis on the scaling of dollar amount variables in linear cross-sectional settings.

Anatomy of a journal: A reflection on the evolution of Contemporary Accounting Research, 1984–2010

Our study outlines the evolution of a highly rated accounting journal, Contemporary Accounting Research ( CAR). We examine two tensions (high quality, global journal versus Canadian authorship and homogeneous versus diverse research) that arose during CAR’s history, using Canadian Academic Accounting Association documents (CAAA) and evidence from the main articles published in CAR’s first 27 volumes. We address three research questions relevant to exploring the identified tensions: Where have CAR’s published authors been concentrated in terms of geographical location? What types of research have been published in CAR over the period? How well has CAR succeeded in meeting its original and later editorial objectives? With respect to published main articles, our findings indicate that being a high quality, global journal has won over promoting Canadian authors and that articles published in CAR tend to be more homogeneous than might be expected from the original objectives and later editorial statements. Our findings should be relevant to those interested in the history of accounting research and to those trying to publish in CAR.

Developments in accounting regulation: A synthesis and annotated bibliography of evidence and commentary in the 2013 academic literature

In this article, we synthesize in annotated bibliography form, recent regulation-related findings and commentaries in the academic literature. This annotated bibliography is one in a series of bibliographies that summarizes regulation-related academic research. We reviewed articles published in 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, Auditing: A Journal of Practice and Theory, and Research in Accounting Regulation. We annotate results of regulation-related research studies and key points from regulation-related commentaries. The literature featured some strong regulation-related threads in 2013 including the foundations of financial reporting, the role of financial reporting in the financial crisis, accounting disclosure, financial reporting choices, International Financial Reporting Standards, and Sarbanes–Oxley and its impact on accounting and audit quality.

Mapping and exploring the topography of contemporary financial accounting research

This paper reports on a review of 1055 papers in the financial accounting literature published in eleven leading accounting journals in the period 2002 to 2007 inclusive. In contrast to most prior published literature reviews, which are located within a particular methodology and highly specialised, this is a broad literature review that covers both empirical/quantitative streams and critical/qualitative streams and is an attempt to draw a map of the overall structure and topography of published financial accounting research. The paper analyses a range of information collected from each paper about the authors, content, use of theories and research methods. The conclusions summarise the structure of the literature and give an insight into what journal editors and peer reviewers deem to be a contribution to knowledge in the field of financial accounting. Comments are included on the unique contribution made to the field by those authors within our sample writing and publishing outside the US. The paper is likely to be particularly relevant to new career researchers in financial accounting, PhD students reviewing the literature to locate their own research and academics looking for appropriate research outlets.

Value Relevance of Multinationality: Evidence from Korean Firms

AbstractThe purpose of this study is to examine the valuation effects of multinationality in Korean firms and to identify the role of multinationality in internalization theory. We hypothesize that the market positively values the multinational activities of Korean firms, which are operating in a small open economy in which firms have strong motivations for internationalization. We use Ohlson's (1995, Contemporary Accounting Research, 11, 661) value model and document the positive effect for multinational firms compared to domestic firms, as well as the positive effect of multinationality on firm value. These results are robust across studies, as indicated by Tobin's q measure, as well as across years. We also hypothesize that multinationality mediates or moderates the relationship between intangibility and firm value that is proposed in internalization theory. We do not find supporting evidence for a mediated influence of intangibility through multinationality on firm value nor for a moderated influence of intangibility on firm value. We find that multinationality and intangibility directly and independently influence firm value, without any interference from each other. These results are also robust across studies, as indicated by Tobin's q measure. Finally, we find that multinationality in Korean firms has never lost its importance, even during the global financial crisis in the year 2008.

Developments in accounting regulation: A synthesis and annotated bibliography of evidence and commentary in the 2012 academic literature

In this article, we synthesize in annotated bibliography form, recent regulation-related findings and commentaries in the academic literature. This annotated bibliography is one in a series of bibliographies that summarize regulation-related academic research. We reviewed academic 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, Auditing: A Journal of Practice and Theory, and Research in Accounting Regulation. We annotate results of regulation-related research studies and key points from regulation-related commentaries. The literature featured some strong regulation-related threads in 2012 including the foundations of financial reporting, the role of financial reporting in the financial crisis, accounting disclosure, financial reporting choices, international financial reporting standards, and Sarbanes–Oxley and its impact on accounting and auditing quality.

When Do Analysts Adjust for Biases in Management Guidance? Effects of Guidance Track Record and Analysts' Incentives

The above article has been retracted at the request of authors Robert Libby and Hun‐Tong Tan, in agreement with the Editor‐in‐Chief, Patricia C. O'Brien, the copyright holder, the Canadian Academic Accounting Association (CAAA), and Wiley Periodicals, Inc.Bentley University conducted an investigation confirming that Dr. J. E. Hunton, while a faculty member at Bentley University and without the knowledge of his co‐authors, engaged in research misconduct, specifically data fabrication. Dr. Hunton provided the data used in the above study, and did not respond to a request for comment. Based on Bentley's initial report and further investigation into details specific to this paper, we conclude that the validity of the data cannot be confirmed. To correct the academic literature and maintain standards of academic integrity, we therefore retract the paper.The article was published online in Contemporary Accounting Research on 13 May 2010, in Wiley Online (wileyonlinelibrary.com).ReferenceTan, H.‐T., R. Libby, and J. E. Hunton. 2010. . Contemporary Accounting Research 27 (): 187–208. doi: 10.1111/j.1911‐3846.2010.01006.x