Current Accounting System Research Articles

Construction and Empirical Research on the Dynamic Provisioning Model of China’s Banking Sector under the Macro-Prudential Framework

Since the international financial crisis in 2008, to achieve the political goal of financial stability, academic circles, financial industry, and regulatory authorities worldwide have deeply reflected on the current economic regulatory theories and policy adjustment tools through introducing the macroprudential policy. The dynamic provisioning system is a counter-cyclical policy tool in the macro-prudential adjustment framework widely used in the world. This paper uses the binary Gaussian Copula function to combine the measurement method of the default distance in the contingent claims analysis method with the risk warning idea based on the Probit model and proposes the contingent claims analysis (CCA)–Probit–Copula dynamic provisioning model based on nine forward-looking indicators. Based on China’s actual conditions, this model solves present problems faced by the current dynamic provisioning system in China, such as insufficient historical credit data reserves of commercial banks, excessive reliance on subjective judgments, and conflicts with the current accounting system. Moreover, this model can put forward corresponding counter-cyclical provisioning requirements according to the influence degree of macro-cyclical factors to different commercial banks’ own default risk, which not only takes into account the security and liquidity of commercial banks, but also ensures their profitability and competitiveness. Based on the empirical test of historical data from listed commercial banks in China, it proves that the dynamic provisioning requirements proposed in this model can effectively adjust the overall credit scale of the banking industry in counter-cyclical ways, thereby achieving the policy goals of counter-cyclical adjustment under the macro-prudential framework and maintaining the security of China’s financial system and the sustainable development of the macroeconomy.

Exploring the role of innovation in the level of readiness to adopt IPSAS

PurposeThe purpose of this study is to investigate the level of readiness of the public sector in Qatar to adopt International Public Sector Accounting Standards (IPSAS), based on the innovation diffusion theory. The responses of accountants (preparers) and auditors employed in the public sector are explored in this regard, and challenges faced in IPSAS implementation are highlighted.Design/methodology/approachA primary research approach was adopted using a questionnaire that yielded 101 responses. Five dimensions are focused on: relative advantage, top management support, satisfaction with the current accounting system, barriers to adopting IPSAS, and attitudes towards innovation.FindingsRelative advantage, barriers to adopting IPSAS and satisfaction with the current system were found to be the most significant. The influence of these variables appears to promote or hinder the implementation of IPSAS in the public sector of Qatar and, perhaps, the wider region.Practical implicationsEven if professionals understand the potential benefits of adopting IPSAS, they are unlikely to advance such adoption without upper echelon-sanctioned cost-benefit analyses and approval. Hence, policymakers should consider the need for a top-down shift in the way IPSASs are viewed and promoted to enable their successful implementation in the public sector.Social implicationsThe positive association between satisfaction with current systems and the level of IPSAS implementation suggests that respondents view the usefulness and ease of use of their current systems as a primary reason to adopt IPSAS as an ‘upgrade’.Originality/valueThis study advances the understanding of the pre-transition process by drawing on innovation theory, which reveals determinants of IPSAS implementation in the case of Qatar. This study adds to prior studies on government accounting in developing nations.

Professional success as a criterion for assessing efficiency of football clubs’ intellectual capital management

In response to the latest realities and patterns of economic relations, intellectual capital confidently received the status of the fourth factor of production. Companies must maintain a high level of their intellectual capital management efficiency and its components to obtain and develop their competitive advantages. Since the vast majority of intellectual capital components do not meet the criteria for recognition of assets, current accounting system cannot reflect them in public financial statements. Therefore, for effective intellectual capital management purposes its assessment is carried out with a number of special methods. The aims of this paper are: 1) to establish how much you can rely on the assessment of intellectual capital efficiency, carried out by such Market Capitalization Methods as the Price-to-Book value (P/B ratio) and Tobin’s q, by comparing the obtained results with indicators of companies’ professional success; 2) determine the application prospects of particular methods of intellectual capital assessment, taking into account the level of their results reliability. For this purpose the TOP 50 UEFA Club Ranking was used and intellectual capital efficiency of football clubs was calculated for 2014–2018. The obtained results of intellectual capital efficiency assessment had not always correlated with the professional success rating. Therefore, the authors suggest using the Return on Assets Methods for assessment of companies’ intellectual capital efficiency.

Rethinking the Concept of Equity in Accounting: Origin and Attribution of Business Profit

Abstract In this paper I reconsider the concept of equity in corporate accounting from the perspective of the origin and attribution of business profit. In both Financial Accounting Standards Board’s (FASB’s) and International Accounting Standards Board’s (IASB’s) Conceptual Frameworks, shareholders’ equity is synonymous with a firm’s net assets. However, it is not the sole definition of equity. We may regard equity as the interest in the corporate capital itself. From this viewpoint, shareholders’ equity consists of retained earnings attributable to shareholders’ as well as invested capital provided by them. We should note that, under the current corporate accounting system, shareholders are assumed to be the sole residual claimants. However, the existence of implicit contracts in corporate activities implies other residual claimants in addition to shareholders. If shareholders are not the sole residual claimants, it is necessary to revisit the proprietary theory under which equity is identical to shareholders’ equity. In this paper I reconsider the significance of the entity theory, which emphasizes an entity as an organization comprising various stakeholders and attributes business profit above shareholders’ expectations to an entity itself. The ownership interest cannot generate the excess profit by itself. Without firm-specific investments by employees and/or entrepreneurial activities by managers, the excess profit would never emerge. We should critically examine the foundation of the current corporate accounting in order to design a more equitable and efficient corporate accounting in which business profit is attributable not only to shareholders but also to other stakeholders who contribute to its generation.

Sustainability Accounting Concept in Higher Education Institution: A Case Study of an Indonesian Public University

The change in the accounting paradigm has now shifted from conventional accounting to sustainability accounting. This study seeks to develop a model for implementing sustainability accounting in educational sector organizations. The object of this research is the Universitas Pendidikan Ganesha, Bali. This research used a qualitative approach. This research is divided into two main stages. The first stage is the stage of observation regarding the current accounting system. At this stage, data will be searched for the development of the sustainability accounting implementation model. The method of collecting data in the first stage is to conduct interviews, observation, and document analysis. The second stage is the stage for designing the sustainability accounting implementation model. The output of this research is a concept or model regarding the application or implementation of sustainability accounting in the activities of educational sector organizations. The results of this study are expected to provide guidelines for educational sector organizations (universities) in the context of applying sustainability accounting concept.

Towards accounting harmonization in Europe: a multinational survey among budget experts

Severe fiscal problems, the insufficient comparability of financial information and increasing demands for better accountability require national governments and international organizations to change their current accounting regimes and to move towards a system of standardized accounting practices. As the International Public Sector Accounting Standards have insufficiently moved Europe towards accounting harmonization in recent years, the European Commission currently aims to suggest the adoption of European Public Sector Accounting Standards. Based on a multinational survey among budget experts, the current article investigates budget experts’ perceptions towards adopting the European Public Sector Accounting Standards. The findings compare attitudes towards new accounting practices and European Public Sector Accounting Standards reform expectations on a comparative basis, and relate them to the current national accounting system and contextual factors. Empirical results indicate great variation in terms of European Public Sector Accounting Standards reform expectations across countries. The study concludes with discussing the implications of the findings for international accounting research, accounting harmonization and the development of a European accounting system. Points for practitioners In this early stage of European Public Sector Accounting Standards development, understanding the factors associated with a country’s decision to adopt them could be helpful for practitioners and professionals. The current study identifies information technology costs as a potential barrier to implementing the European Public Sector Accounting Standards. Politicians and standard setters might take this into account while developing the European Public Sector Accounting Standards. Furthermore, this article reveals that encouraging the voluntary introduction of accrual accounting in the first stage of European Public Sector Accounting Standards development might be the appropriate approach of the European Commission.

COSTS OF THE HUMAN CAPITAL AND DEVELOPMENT OF THE SOCIAL POTENTIAL IN ACCOUNTING SYSTEM FOR CENTRAL AND EASTERN EUROPE

Nowadays, human capital and social potential become the most valuable resource for the harmonious development of the national economy. Expenditure on human capital and social development should occupy a significant part in the state budgets of countries. Therefore, accounting of such expenses is extremely important. The purpose of the study is to reveal the possibility of accounting for expenditures on the human capital and social potential development in the accounting system of the Central and Eastern Europe, provide recommendations for the current accounting system. The research revealed the plurality and ambiguity of the interpretation for the categories «human capital» and «social potential». The regulatory and legislative uncertainty complicates the accounting of the human capital costs and development of the social potential. These categories must be defined by law. As per normative and methodological basis for the accounting of the human capital, it would be better to apply the International Financial Reporting Standards. The absence or misrepresentation of information about available human capital are contrary to IFRS requirements and reduces or exaggerates the value of the organization. It is offered in IFRS, to provide a comprehensive accounting of the cost for the human capital and developing social capacity. The budget of the Central and Eastern European countries includes only the costs of social protection, health, education, recreation, culture, religion. After the budget analysis was conducted, the authors proposed to develop new objects of accounting (human capital, social potential), accounting standards for it. A part of the GDP expenses should be directed to the financing of the human capital expenditures and social potential development. JEL: E24, G41, H83.

Cost and management accounting in budget-funded organizations in Bosnia and Herzegovina

This article aims to provide information on the level of application of cost and management accounting practices in the budget-funded organizations in Bosnia and Herzegovina (hereinafter B&H) and the usefulness of these practices in the performance measurement in the B&H public sector. Namely, the current budget accounting system in B&H does not provide measurement and reporting on efficiency, effectiveness, and economy of the public administration, which results in a decrease in transparency and the creation of a favourable ground for corruption. Therefore, the study was conducted among 208 budget-funded organizations by using a survey questionnaire to evaluate the current level of theoretical and practical knowledge in the field of cost and management accounting and the possibilities for their application in the budget-funded organizations in B&H to improve current budget accounting system. Research results have shown that, even though respondents are less familiar with cost and management accounting practices, they believe that the introduction of new forms of accounting (cost and management accounting) into budget accounting system in B&H would improve the quality of accounting information as a basis for decision-making of the public management. This would enable performance measurement in the B&H public sector and therefore improve transparency and accountability of the public management.

ANALYSIS OF METHODS AND MEASURES OF MEASUREMENT OF HEAT OF COMBUSTION OF NATURAL GAS IN UKRAINE AND ABROAD

In connection with the increase in prices for natural gas, the urgent issue is to calculate not only the amount of gas consumed, but also its quality precisely with the consumer. The quality of gas is the compliance of its physicochemical parameters with established regulatory documents. With the current gas accounting and payment system in Ukraine, consumers using the same number of cubic meters receive different heat of combustion.
 The paper analyzes the regulatory framework for assessing the energy performance of natural gas. The necessity of the transition to accounting for natural gas in energy units is substantiated. Existing methods and means for determining the calorific value of natural gas that are used in Ukraine and abroad are considered. Currently, direct and indirect methods are used to determine the calorific value of natural value of natural gas. The most common is the calculation method based on chromatographic analysis, the implementation of which requires expensive equipment. Other methods for determining the calorific value of natural gas is correlation. The essence of which is to establish the relationship between a certain physicochemical property of natural gas and calorific value, which can be established by experimental observations and based on theoretical analysis, which makes it possible to draw a conclusion about the calorific value of natural gas. Based on the analysis, it was found that currently there are no simple in design and not expensive means of controlling the qualitative characteristics of natural gas commercially available. Therefore, it is relevant to solve the problem of operational control of the quality of natural gas, through scientific justification, development and improvement of tools that enable the indirect accounting of the energy value of natural gas in accordance with global trends in energy accounting.
 A correlation analysis was carried out to establish the relationship between the thermal conductivity and the calorific value of natural gas. The use of the thermocatalytic method for determining the calorific value of gas is proposed, which will allow designing a relatively cheap and easy-to-use device for monitoring the quality of natural gas specifically for the consumer.

Accountability from a social justice perspective: Criticism and proposals

When seen in a positive light, accountability systems are understood as a means for promoting transparency, improvement, responsibility and commitment to valuable goals, thus ensuring that State funding is invested in initiatives that are beneficial to all citizens. However, in education, there is extensive evidence about the negative effects of predominant accountability systems, which call their expected positive impacts into question. Some of the detrimental effects of these systems involve unequal distribution of knowledge as well as discrimination and stigmatisation of vulnerable students, minorities and powerless groups, and of the schools that serve them. This evidence, along with emerging demands for social justice in terms of participation and recognition, highlights the need to analyse the shortcomings of current accountability systems in connection to ideals of social justice in education. On the basis of a review of relevant literature that connects the areas of social justice, education and assessment and accountability systems, this paper aims at illustrating some of the significant challenges and potential new avenues for the development of more just and, therefore, more intelligent accountability systems.

Role of Internal Audit in Accounting Information Control in Public Departments: An Applied Study to the Sudanese Ministry of Interior (2009 - 2017)

The study aimed to identify the role that internal audit plays in the control of accounting information provided by accounting agencies in public departments as well as the rules and bylaws adopted by the Internal Audit Chamber at the Sudanese Ministry of Interior. The study adopted the descriptive as well as historical approach to analyze the previous studies.The study revealed that internal audit plays a role in keeping public funds, reducing the risks of theft as well as fraud, and evaluating accounting information. It recommends adopting modern methods in the current accounting system to evaluate and get the accurate as well as proper value of assets, and designing an effective internal audit system that serves to accomplish the desired objectives.

ACCOUNTING LAW IN THE REPUBLIC OF BULGARIA - SITUATION, PROBLEMS AND DECISIONS

The scientific research examines the productions included in the new Accounting Law adopted in 2015 and their impact on reporting in the Republic of Bulgaria. To this end, the requirements for current accounting and accounting systems in enterprises, for accounting documents and accounting information, for inventory of assets and liabilities have been studied; to the storage of accounting information; to the application of the financial reporting base; to the content and preparation of the financial statements, the activity reports and the payment reports to the governments of the enterprises and groups of enterprises; to conducting the independent financial audit and the publicity of the financial statements, the activity reports and the payment reports to the governments of the enterprises and groups of enterprises, as well as to the heads of the different types of enterprises. In addition, the scope of the entities applying the requirements of the Accounting Act and the principles according to which they evaluate and recognize the positions presented in the financial statements have been analyzed. The positive aspects of the new Accountancy Act and its weaknesses are also outlined. On this basis, concrete solutions to the identified problems were proposed, signaling to the legislator the need for adequate timely legislative changes in the following more significant directions:First. To eliminate the identified gaps and to resolve the discussion issues in the texts of the Accounting Act in force, as well as in the whole accounting legislation in order to achieve a high degree of synchronization with the requirements of the applicable accounting standards and the European Union, as well as high quality accounting information created for management and external data users.Second. To regulate through appropriate legal texts the activity and its accounting treatment in micro, small and medium-sized enterprises, which are the majority of the enterprises in the Republic of Bulgaria.Third. To carry out in-depth research in the field of accounting practices and standardization of accounting in other countries of the European Union and beyond, in order to select and apply in Bulgaria the best practices and experiences.Without claiming comprehensiveness and comprehensiveness, the present scientific work aims to draw attention to the outstanding issues in the current Accounting Act with a view to their faster effective resolution.

The Creation of One Truth: Single-Ledger Entries for Multiple Stakeholders Using Blockchain Technology to Address the Reconciliation Problem

Blockchain technology has evolved beyond its original uses as a methodology to record cryptocurrency transactions to support various business applications. Over the past few years, it has gained increased attention in the accounting profession. The current paper proposes a new conceptual framework to implement and apply blockchain technology in the accounting profession that is based on a single-ledger model. The paper addresses the reconciliation problem if more than one party is involved in a transaction. It defines the requirements to have an accounting system without reconciliation challenges. Following the paper approach, transaction details are recorded on the blockchain ledger before inserting the transaction details in the transacting parties’ ERP systems. This ledger is a single point of truth that can be viewed directly without the need for creating information silos in the ERP systems of transacting parties, hence addressing the reconciliation challenge. The presented framework creates one truth for all parties involved in a transaction eliminating much of the redundancy involved in current accounting systems.

Enhancement of Sustainable Development Statistics for the Russian Regions

Environmental and ecological statistics in Russia is still under formation. Despite the widespread recognition of the importance of providing economic growth within the environmental constraints, there continues to be significant lack of data that could be used to identify trends in the sustainable development, especially at the regional level. The authors argue that genuine savings, a complex indicator of sustainable development, could become such a statistic tool.The analysis shows that today Russia has gained extensive experience in assessing the sustainability of regional development using this indicator, but a comprehensive system for its assessment requires elaboration so that it could be established, as a regular practice in public administration.The article describes fundamental methodological issues of calculating the individual components of genuine savings through the current statistical accounting system in Russia. The paper considers conditions necessary to correctly estimate this indicator and ensure inter-regional and cross-country comparability of the results of such calculations.A version of the method for calculating genuine savings that is presented in this article requires an update of the system of statistical accounting in Russia. Practical application of this method along with the improvement of the system of statistical accounting shall allow for an adequate sustainability assessment of a particular region. This, in turn, shall provide a basis for establishing regional policies to compensate for resource depletion by investing in other types of capital.

Modern problems of accounting provision of strategic management

The necessity of improving the system of accounting provision of strategic management has been grounded. The inconsistency of the current accounting system with the needs and requests of the subjects of strategic management has been determined. Three main aspects (theoretical, methodological and organizational) of the improvement of the accounting system of strategic management have been distinguished. The peculiarities of consideration of strategic accounting as a separate type or direction of accounting science have been disclosed. The reasons for the allocation of a paradigm of accounting have been considered. The procedure of formation of strategic reporting based on the use of strategic accounting engineering has been disclosed. The role of strategic management accounting tools in forming strategic accounting information has been analyzed. The directions of improvement of the accounting system have been disclosed in order to meet the needs of strategic management subjects (development of a strategically oriented accounting system, strategic accounting, and the introduction of the position of strategic accountant).

Problems and Countermeasures in Environmental Cost Accounting: A Case Study of China's Coal Industry

In recent years, many scholars have carried out research on improving the environmental cost accounting of coal enterprises. Through the research, the traditional product cost accounting and environmental cost accounting are standardized. But the current cost accounting system still exists problems like wrong calculation of the cost of environmental damage and fraudulent accounting problems. In order to enhance the enterprise's environmental protection consciousness and improve the level of cost control management for the enterprise to provide scientific decision basis, this paper aims to find out the main composition of coal enterprise environment cost, analysis of the problems existing in coal enterprise environment cost accounting and puts forward corresponding solutions.

Putting the public back into public accountability

Although current accountability systems have received a great deal of criticism for being too narrow and too focused on sanctions, relatively little concern has been directed at a related problem: the failure of accountability systems to meaningfully engage the public. Derek Gottlieb and Jack Schneider suggest that a better system would consider the plural and often non-instrumental standards by which communities evaluate their schools. In such a system, state officials, district leaders, teachers, parents, students, and other stakeholders would come together to determine how schools will be evaluated and how to respond to the results of those evaluations.

Financial information in the management of the local gov-ernment unit

Changes occurring in the conditions under which local government units function require the adaptation of the type, scope and frequency of information provided that is used in decision-making processes. In business entities, relevant information used in management is provided by the accounting department and in particular its last stage of reporting. The current accounting system of territorial self-government units is simplified and directed towards the implementation of budgetary tasks and the maintenance of budgetary disci-pline. Accordingly, the information contained in those companies' reports is incomplete and insufficient for management purposes. Therefore, it would be necessary to transform this system in order to improve the use of information generated in the management process.

The Effects on Financial Leverage and Performance: The IFRS 16

This paper analyses the potential impacts of the introduction of a new accounting standard, International Financial Reporting Standard 16 (IFRS 16) – Leases, on financial leverage and performance of entities. This new accounting standard was introduced on 13 January 2016, and will become effective on 1 January 2019; it will have material impacts on the financial statements of listed companies adopting IFRS and change the basic principles of the current accounting system. Our aim is to estimate the impacts of the application of IFRS 16 on listed issuers of financial statements and the different impacts that the new standard could have in different activity sectors. This research estimates the effects of IFRS 16 on the ratios of debt/total assets, EBITDA/revenues and debt/equity. The conclusions summarize the effects on entity performance and net financial position. The research shows that in the financial statements of the lessee, there will be important changes. In particular, in the balance sheet, there will be an increase in lease assets, an increase in financial liabilities and a decrease in equity, while in the income statement, there will be an increase in EBITDA and an increase in finance costs. The impact of the application of IFRS 16 will be different depending on the use of operating lease contracts among the different business sectors. Leases are an important and flexible source of financing; listed companies, using IFRS and U.S. GAAP, are estimated to have around US$ 3.3 trillion in lease commitments. Finally, this study aims to analyse the possible impacts of communication of entities, focusing on alternative performance measures.

ОСОБЛИВОСТІ ВЕДЕННЯ БУХГАЛТЕРСЬКОГО ОБЛІКУ В УМОВАХ ЗАСТОСУВАННЯ СУЧАСНИХ ІНФОРМАЦІЙНИХ ТЕХНОЛОГІЙ

Accounting is undergoing constant changes in both legislation and methods of conducting it. Every year the need to improve accounting methods grows. This process is made possible by the growing impact of information technology on the world, the computerization of most routines, the need to reduce the time required to perform typical actions and, as a result, to increase efficiency. Information technology simplifies accounting and increases the efficiency of relevant staff by automating the standardized process. This automation of operations is performed by various types of software. On the one hand, their use greatly simplifies the work of the accountant, which allows him to engage in more creative work, such as the organization and improvement of accounting, more efficient use of time for management decisions. The importance of accounting in identifying, accumulating, summarizing, storing, processing and transmitting information about the business activities of the enterprise and found that it reaches about 80% of the entire database of information used by management to make decisions. The possible benefits of the introduction of automation of accounting processes are investigated and it is established that this will allow: 1) to increase the overall efficiency of the enterprise and control over its activities; 2) reduce the time spent on information processing and remuneration of a particular employee; 3) automate the accrual and payment of wages, inventory, accounting for working capital, the formation of financial and analytical reports, the process of buying and selling goods (works, services) and more; 4) timeliness of management decisions. Research shows that the current accounting system needs to be reformed because it is currently focused on mechanized accounting and requires a push for automation by the authorities.