Current Accounting Research Articles

The application of machine learning to study fraud in the accounting literature

PurposeThis study aims to objectively synthesize the volume of accounting literature on financial statement fraud (FSF) using a systematic literature review research method (SLRRM). This paper analyzes the vast FSF literature based on inclusion and exclusion criteria. These criteria filter articles that are present in the accounting fraud domain and are published in peer-reviewed quality journals based on Australian Business Deans Council (ABDC) journal ranking. Lastly, a reverse search, analyzing the articles' abstracts, further narrows the search to 88 peer-reviewed articles. After examining these 88 articles, the results imply that the current literature is shifting from traditional statistical approaches towards computational methods, specifically machine learning (ML), for predicting and detecting FSF. This evolution of the literature is influenced by the impact of micro and macro variables on FSF and the inadequacy of audit procedures to detect red flags of fraud. The findings also concluded that A* peer-reviewed journals accepted articles that showed a complete picture of performance measures of computational techniques in their results. Therefore, this paper contributes to the literature by providing insights to researchers about why ML articles on fraud do not make it to top accounting journals and which computational techniques are the best algorithms for predicting and detecting FSF.Design/methodology/approachThis paper chronicles the cluster of narratives surrounding the inadequacy of current accounting and auditing practices in preventing and detecting Financial Statement Fraud. The primary objective of this study is to objectively synthesize the volume of accounting literature on financial statement fraud. More specifically, this study will conduct a systematic literature review (SLR) to examine the evolution of financial statement fraud research and the emergence of new computational techniques to detect fraud in the accounting and finance literature.FindingsThe storyline of this study illustrates how the literature has evolved from conventional fraud detection mechanisms to computational techniques such as artificial intelligence (AI) and machine learning (ML). The findings also concluded that A* peer-reviewed journals accepted articles that showed a complete picture of performance measures of computational techniques in their results. Therefore, this paper contributes to the literature by providing insights to researchers about why ML articles on fraud do not make it to top accounting journals and which computational techniques are the best algorithms for predicting and detecting FSF.Originality/valueThis paper contributes to the literature by providing insights to researchers about why the evolution of accounting fraud literature from traditional statistical methods to machine learning algorithms in fraud detection and prediction.

Tax Indemnification and Unrecognized Tax Benefits in Mergers and Acquisitions

ABSTRACT Tax indemnification transfers the risk of potential tax settlements from a taxpayer to an external party. Current accounting standards require firms to reflect unrecognized tax benefits (UTBs) even when the underlying tax position has indemnification. Practitioners suggest that financial statement disclosures regarding tax indemnification are necessary to allow users to assess tax risk adequately. However, acquirers rarely disclose tax indemnification arrangements from merger and acquisition (M&A) contracts. Evidence suggests that tax indemnification attenuates the positive association between UTBs and future tax cash outflows. Moreover, results are consistent with indemnification agreements resulting in minimal settlements. Because of the effect that removing accounts associated with lapsed indemnification agreements has on effective tax rates and the attenuating effect that indemnification has on UTB’s association with future tax cash outflows, the findings could be of interest to the Financial Accounting Standards Board regarding their income tax disclosure project. JEL Classifications: M48; M41; G34.

Is Positive accounting theory still relevan?

This research studies the development, research and criticism of Positive Accounting Theory (TAP). This research uses a scoping review approach with five main steps to identify Positive Accounting Theory. total of 11 research articles were collected related to Positive Accounting Theory from 2012-2022 using internet search engines and library research. After going through the stages of literature selection and mapping, there were 3 articles which were explained further. This research uses literature study research, namely using secondary data. Data comes from previous research journals with discussions similar to the theme of this research. Positive accounting theory does not directly determine appropriate accounting policy choices for companies. In this case, choosing accounting policies will be easier if viewed from the management side. Because management has the desire to choose accounting policies for their company, this is also indicated for management to respond to changes that occur in the company environment, such as new accounting standards. Financial accounting standards were originally created by standards boards in each country, as a result, accounting standards between one country and another are very likely to differ. This causes several changes regarding the accounting methods that management can choose. This research concludes that Positive Accounting Theory is still relevant so that it can be used for current and future accounting research practices, although there are several criticisms of Positive Accounting Theory, in terms of methodology, philosophy and economic approach of Positive Accounting Theory. Therefore, future research will contribute to solving the TAP problem.

Historical approach to the study of “falsification” and “veiling” procedures in current accounting and financial reporting

Research conducted by Russian and foreign scientists has proven that distortion of financial statements harms not only a wider range of external, but also internal users of financial statements, including employees and management of an economic entity. At the same time, internal users of financial statements suffer both financial and non-financial losses, for example, loss of reputation. In economic theory and accounting practice, falsification and concealment are distinguished as methods of distorting financial statements. Distortion of financial statements as a phenomenon has now taken on a more complex form and has changed in content. It has been determined that the manifestations of distortions in financial statements are largely determined by the features of the process of preparing financial statements, that is, the mechanism of distortion itself, therefore, in order to form the most complete theoretical description of falsification and concealment, it is necessary to analyze the errors identified during inspections of economic entities, to classify them in order to develop methods identifying non-standard business situations, taking into account the historical approach to the study of “falsification” and “veiling” procedures.

Accounting for intangibles: a critical review

PurposeIn 2000, Cañibano et al. published a literature review entitled “Accounting for Intangibles: A Literature Review”. This paper revisits the conclusions drawn in that paper. We also discuss the intervening developments in scholarly research, standard setting and practice over the past 20+ years to outline the future challenges for research into accounting for intangibles.Design/methodology/approachWe conducted a literature review to identify past developments and link the findings to current accounting standard-setting developments to inform our view of the future.FindingsCurrent intangibles accounting practices are conservative and unlikely to change. Accounting standard setters are more interested in how companies report and disclose the value of intangibles rather than changing how they are determined. Standard setters are also interested in accounting for new forms of digital assets and reporting economic, social, governance and sustainability issues and how these link to financial outcomes. The IFRS has released complementary sustainability accounting standards for disclosing value creation in response to the latter. Therefore, the topic of intangibles stretches beyond merely how intangibles create value but how they are also part of a firm’s overall risk and value creation profile.Practical implicationsThere is much room academically, practically, and from a social perspective to influence the future of accounting for intangibles. Accounting standard setters and alternative standards, such as the Global Reporting Initiative (GRI) and European Union non-financial and sustainability reporting directives, are competing complementary initiatives.Originality/valueOur results reveal a window of opportunity for accounting scholars to research and influence how intangibles and other non-financial and sustainability accounting will progress based on current developments.

Optimal Reporting Systems in Bank Runs

ABSTRACT We study the role of reporting systems in the context of bank runs. In our model, a bank receives an early but imprecise estimate of its investment performance, and its financial reporting system generates a report. We find that, from a financial-stability standpoint, the optimal reporting system requires full disclosure when the bank’s early estimate is below a certain threshold, but no disclosure otherwise. Importantly, such optimal reporting threshold should be tailored to the bank’s exposure to bank-run risk. In particular, the threshold is nonmonotonic and U-shaped in the bank-run risk. We also relate our results to current accounting standards and discuss their implications for policy-making and empirical research. JEL Classifications: G21; G28; M41; M48.

INTANGIBLE ASSETS AND THEIR IMPACT ON THE BALANCE SHEET OF IRAQI BANKS

The most significant changes in the modern business environment during the 1990s have been the increasing importance of intangible elements of knowledge, technology, individual skills, and other factors that have become the main source of wealth and income and the enhancement of the competitive advantages of the business to survive and grow. This has been accompanied by a higher market value of the business than double its book value, especially in knowledge-intensive sectors such as communications, medicines, and software. This is due to the current accounting model's inadequate treatment of intangible assets, which are recognized as assets only when purchased from third parties. The research aims to attempt to provide an accounting framework for intangible assets that avoids previous deficiencies and criticisms to increase the effectiveness of financial reporting in light of contemporary developments in the business environment by assessing the accounting treatment of intangible assets purchased in the standards issued.

COSTS BASED ON CONSUMPTION ACCOUNTING AND THEIR IMPACT ON ACHIEVING COMPETITIVE ENERGY

The increase in local and foreign competition and technological developments in the modern manufacturing environment, as well as the continuous changes in the cost structure, have made the current accounting system insufficient to deal with the operational operations of the Iraqi Ministry of Industry and Minerals. Implementing a new accounting system that analyzes the cost activities that add value and can be exploited has become necessary. It excludes or improves cost activities that do not add value and can be used to achieve sustainable competitive energy. It is a cost system based on consumption accounting that is the primary basis in building and developing the product with the lowest cost and best quality compared to competitors.

Benefits evaluation of ecological restoration projects based on value realization of ecological products

Ecological restoration project is the premise to realize the value of ecological products. The current ecological product value accounting and ecological restoration project benefit evaluation methods are interlinked. The benefit evaluation of ecological restoration projects can not only analyze the completion of ecological restoration projects, but also quantify the impact of externalities on regional development. This study proposes a hypothesis that the benefit evaluation results of ecological restoration projects can affect the realization of urban ecological product value. In order to verify the above hypothesis, this study designed a benefit evaluation framework to evaluate the economic benefits, ecological benefits and project costs of ecological restoration projects. In this study, the benefit evaluation results are divided into three cases to calculate the benefit-cost ratio under different conditions. The three cases are only considering the direct economic benefits (DEB), considering the indirect economic benefits (TEB) and considering the comprehensive benefits (AEB). Taking Jiangyin City of Jiangsu Province as an example, the benefit evaluation of water source protection project in Jiangyin City is carried out. The results show that the benefit-cost ratios in the three cases are 6.68,7.60 and 9.36, respectively. The results show that the benefit-cost ratio is different in different benefit situations. Therefore, when discussing the realization path of ecological product value in ecological restoration areas, it is also necessary to discuss the situation. The evaluation system can provide reference for the benefit evaluation of ecological restoration projects, and also provide data and theoretical support for the realization of regional ecological product value.

The recovery and resilience plan on the long-term care system. Towards a deinstitutionalization?

After the crisis caused by Covid-19, among other socioeconomic problems, the fragility of the organizations that make up the Spanish Long-Term Care System was revealed. These events prompted the Recovery and Resilience Plan (RRP). The aim of this study is to estimate the socioeconomic impact on Long-Term Care (LTC) of the investment delivered by the RRP. In addition, to fulfil our main aim, a secondary and necessary aim was to calculate the most current social accounting matrix (SAM) of the Spanish economy. We analyse the components of the demand linked to the RRP investment allocated to LTC, and subsequently, based on Input-Output methodology, we calculate a social accounting matrix (SAM) of the Spanish economy to estimate the overall economic return. The results obtained using the SAM model proposed herein evidence the multiplier effect of the RRP invested in LTC. Every euro allocated to the RRP generates 4 euros in income for Households, Firms and the External Sector, 3.4 euros in industrial output, and returns 0.6 euros in taxes and social contributions to the Government. This also entails creating 26,410 direct and indirect jobs as well as 10,059 induced ones. Given the severe recession scenario triggered by the consequences of COVID-19, the results of this study highlight the significant multiplier effect that RRP investment may generate to alleviate the downturn in the Spanish economy and, more specifically, in the Spanish LTC System.

Научная дискуссия об экономической сущности нефинансовых активов в учреждениях высшего образования

Subject/topic. The subject area of our research is non-financial assets of educational organizations of higher education. In accordance with the Federal Law “On Education in the Russian Federation”, the main goals of the activities of these organizations are educational activities in educational programs of higher education and scientific activities.
 Goals/objectives. The purpose of the article is to study the economic essence of non-financial assets in higher education institutions. To achieve the set goal, the following tasks were set and solved within the framework of the study: definitions of assets in the economic literature were systematized; the characteristics of rights to receive economic benefits are presented in accordance with the conceptual framework for the presentation of financial statements; a comparative description of the concepts “useful potential” and “future economic benefits” is given in accordance with the current federal accounting standards for public sector organizations.
 Methodology. The methodological basis was such methods as comparison, method of systematization and generalization of data.
 Results. Based on a study of the definition of assets in the economic literature (Table 1), the author’s definition of assets of educational organizations of higher education is presented, a comparative description of the concepts of “useful potential” and “future economic benefits” is given in accordance with the current federal accounting standards for public sector organizations.
 Scope of application of the results. The results of the study can be used both in theory and in practice of the development of non-financial assets in higher education institutions.
 Conclusions/Significance. Research into the theoretical aspects of the economic essence of non-financial assets as an object of accounting supervision in higher education institutions contributed to the formation of our own definition of the essence of this type of asset.

Conceptualising accounting as a value-based concept in the context of alternative finance

PurposeThis study aims to investigate the claim that there is no coherent and homogeneous body of concepts and practices that can be classified as “Islamic accounting”.Design/methodology/approachThe study focuses specifically on Islamic accounting and uses a qualitative historical documentary analysis methodology to study an original manuscript from the 14th century.FindingsThe analysis of the manuscript argues that religious accounting can be seen as a value-based system for achieving social good and that in the context of Islamic accounting, it can be conceptualised as a coherent body of ideas and practices.Originality/valueFirstly, the study conceptualises Islamic accounting as a homogeneous discipline with its own knowledge, concepts and practices. Secondly, it contributes to current accounting literature by examining an ancient manuscript from the 14th century, which serves as a foundation for understanding the Islamic accounting system within the context of accounting, religion and spirituality. The paper further contributes by arguing that this conceptualisation of religious accounting as a value-based approach enables its practitioners to evaluate their own accountabilities in delivering on socioeconomic objectives related to inter-human/environmental, social and financial transactions within the context of religious accounting practices.

Historical cost vs current cost accounting method

Historical cost accounting indicates that assets, liabilities, and equity are recorded at the value of the transactions issued to acquire them. In contrast, current cost accounting (CCA), also known as present value accounting, reflects the cost required to replace an asset in the current period. This replacement cost encompasses the expenses incurred in producing a product using the current methods, materials, and specifications. Data collection was performed using qualitative research literature review. This study will illustrate the fundamental differences between historical cost accounting and the current cost accounting basis. Despite the shortcomings of historical cost accounting, there are still greater benefits obtained through it. Based on the literature review, this research finds that historical cost accounting remains relevant in decision-making.

Current Practices and Issues in the Accounting for Government Infrastructure Assets

Purpose: This paper aims to explore the current accounting practices and issues in accounting for infrastructure assets in Malaysian public sector organisations. Comparatively, this paper also provides an overview of current practices in other countries. Design/ Methodology/ Approach: Data collection was through reviews of extant literature, accounting standards and guidelines by the Accountant General’s Department of Malaysia (AGD), including guidelines and government publications in other countries. Findings: Accounting practice for infrastructure assets varies across countries. There is no specific accounting standard for infrastructure assets. Instead, most countries including Australia, Austria, Canada, France, New Zealand and Malaysia follow the accounting standards for property, plant and equipment to account for infrastructure assets. However, given the unique nature of infrastructure assets, there are issues in identifying what constitute infrastructure assets and determining which government organisations have control over their assets. In addition, challenges in recognition and valuation of infrastructure assets, which include initial and subsequent measurement, depreciation and disclosure also exist. Practical Implications: The government’s spending for infrastructure assets represents a significant proportion of its budget. Therefore, accurate accounting treatments and reporting of the assets is pivotal. This paper aimsto present an update to policy makers and practitioners on current pertinent accounting standards, issues and accounting practices at the international level as well as at the Malaysian federal government. Originality/ Value: Research on accounting for infrastructure assets is still limited. Findings from this research will add to the body of knowledge by highlighting the main issues and providing basis for further investigation. Keywords: Infrastructure assets, definition, recognition, IPSAS17, MPSAS17.

Territorial differences between the data of the current population registration and the results of the 2020 Census

The article analyzes population data by federal districts, subjects and municipalities of the Russian Federation, obtained from two different official sources of Rosstat for close dates: data from the current population registration as of January 1, 2022 and data from the All-Russian Population Census of 2020, the control point of which was October 1, 2021. Since population size changes rather slowly, theoretically these data should not differ significantly. In fact, it has turned out that the population size across the country, according to various data, differs by more than 1% (by 1.6 million people in the direction of the census data). The lower the level of administrative division, the greater the differences. At the level of some municipalities of the Russian Federation, the differences make almost 2 times. Moreover, with approximately equal frequency, there are both municipalities where, according to the census, the population is greater than according to the current population registration, and with the opposite situation. The article identifies the administrative units of the country where the differences between the census data and the current population registration are the largest, and the causes of the differences in one direction or another. The largest “overweight” of the population in favor of the census was found in the municipalities of the Central Federal District (especially in the Moscow urban agglomeration), and the maximum “shortage” of the population compared to the current accounting data was in the Far Eastern and Siberian Federal Districts.

Addressing the stagnation issue in accounting education research while incorporating mainstream publications and professional practice into the accounting curriculum

The accounting practice and academic research-oriented sides of the profession have had difficulties concerning the integration of their outputs. The practice side has maintained that very little of the “mainstream” research produced by academics has been of value in their day to day activities, and the research side has complained about the lack of cooperation as to the availability of data from the practice segment that is needed to conduct academic research. Add to this situation the teaching focused faculty of the profession, who contend that the research conducted in the “mainstream” is of little value to their efforts in teaching undergraduate and graduate students. Additionally, faculty in the classroom need input from the practice side to determine what information the students need to be successful after graduation. The problems were noted in 2012 by the AICPA and AAA supported Pathways Commission in their major report, with questionable efforts to date addressing the concerns. Take all of these components together and you have a view of our current “situation” in accounting.We attempt, in this paper, to further address the previously identified stagnation in accounting education research (Rebele and St. Pierre, 2015) and, at the same time, to bridge the gaps between these different accounting groups noted by the Pathways Commission. We do this by offering a potentially unique solution to address the current accounting environment. First, we analyze the findings from a mainstream research study that both examines the practice side of the equation and directly affects our classroom coverage of topics in several of the required undergraduate and graduate courses typically found in accounting programs around the country. Second, this paper breaks from many of the current education articles in that we examine what should be taught in the classroom based on actual real - world practice issues rather than hypothetical academic approaches to the topics covered. Third, our efforts in tying together the three components - mainstream research, practice, and classroom content - will hopefully move our colleagues in a direction that benefits our students and opens new accounting education research opportunities.

Development of management accounting functions in the corporate governance system

Problematic issues of the development of theory of management accounting in context of improving corporate governance and increasing requirements from various stakeholders to its information support are increasingly becoming the object of research by domestic and foreign scientists. The purpose of this study is to identify the trends in the development of management accounting in the conditions of digitalization of the economy, and the transformation of business processes under the influence of changes in business environment as well as justification and substantiation of the new functions of management accounting in connection with the changing requirements of corporate governance and the need to improve its information support. To achieve this goal, the methods of synthesis and analysis, abstraction, deduction and induction, comparison and systematization were used, as well as a critical analysis of existing views on the essence of management accounting, its functions and possible development scenarios, taking into account transformations in accounting science and practice observed in the third decade of the XXI century. In the process of work the results of own researches conducted and received within the framework of the scientific school of the Financial University “Accounting-analytical and control processes of economic subjects of information society” and in the course of practical activity of the authors were used. Based on the analysis of literary sources, the requirements of national and international standards in the field of both accounting and financial reporting and in sustainable development, current accounting practices and corporate governance practices, new management accounting functions have been identified and justified, the implementation of which is aimed at the formation and presentation of better quality data and information as part of corporate reporting with predictive value. The results obtained can be used by economic entities in optimizing accounting and control processes and developing internal regulations on management accounting, as well as by accounting regulatory entities and professional organizations in developing recommendations in the field of management accounting for various economic entities.

Assessement of Risk Control Activities on Financial Performance: A Case of Diocesian Secondary Schools in Moshi, Tanzania

The study was conducted to assess Risk Control activities of external audit on the financial performance in diocesan secondary school in Moshi, Tanzania. This study was guided by Stewardship Theory. and employed a quantitative approach and cross sectional survey design. Quantitative data were analyzed by using Statistical Package for Social Sciences (SPSS) version 22.Target population was 256 and the sample size was 156.Tables were used to present the study findings. The findings of this study revealed that although training and seminars are given to those Senior Management Teams (SMTs); to the schools on matters related to financial risk control activities ,little has been done to employ other strategies like dividing the schools in clusters and have specific time table to allow them to meet and share their ideas and knowledge. Subsequently, the findings revealed that most of the schools do not have current accounting software’s to the accounts deportments. In addition, the findings revealed that most of the secondary schools in the diocese have no reliable internets systems. The findings however, revealed that secondary schools in the diocese face a number of challenges in preparing financial statements. The study concludes that raising awareness on finance knowledge to other departments other than Accounts department is of paramount important in these diocesan secondary schools. So as to minimizes financial risks which might occur in the future. The study therefore recommends to have clusters meeting for short term training on matters related to risks control activities so as to end up with financial performance.

The predictive ability of tax contingencies for future income tax cash outflows

AbstractPrior research shows that contingent liabilities do not accurately predict future cash payments due to the managerial discretion afforded by accounting standards. We examine the extent to which current accounting guidance for a material contingent liability—the reserve for unrecognized tax benefits (UTBs) under Financial Interpretation No. 48 (FIN 48)—generates accruals that are predictive of future income tax cash outflows. We document that UTBs fully unwind as cash tax payments over the subsequent 5 years, suggesting that managers, on average, accurately incorporate their expectations of future tax liabilities. This result persists for firms that are (1) most affected by the implementation of FIN 48, (2) unable to impound detection risk into their reserves, (3) engaged in relatively more ex ante tax avoidance, (4) suspected to have engaged in earnings management through the tax accounts, and (5) subject to plausibly exogenous shocks to tax reporting. Overall, our results suggest that current accounting guidance under FIN 48 for contingent tax liabilities enables managers to accurately report, and financial statement users to reliably predict, future cash obligations.

FORENSIC ACCOUNTING IN THE DIGITAL AGE: A U.S. PERSPECTIVE: SCRUTINIZING METHODS AND CHALLENGES IN DIGITAL FINANCIAL FRAUD PREVENTION

This research provides a comprehensive review of forensic accounting in the digital age, focusing on its evolution, current practices, and future prospects in combating digital financial fraud. The study employs a systematic literature review methodology, analyzing peer-reviewed articles and case studies from 2015 to 2022. Key findings revealed the transformation of financial fraud in the digital era, marked by increasing complexity and the adoption of advanced technologies. The role of forensic accounting has evolved in response, integrating new tools and techniques for effective fraud detection and prevention. The research identifies various types of digital financial fraud prevalent in the U.S., highlighting the impact of technological advancements on their proliferation. It evaluates the effectiveness and limitations of current forensic accounting practices, emphasizing the need for continuous skill and tool enhancement. The future of forensic accounting is seen as promising yet challenging, with the integration of AI and predictive analytics expected to significantly improve fraud detection capabilities. However, this also presents challenges, including the need for forensic accountants to acquire new skills and adapt to rapidly changing technological landscapes. Recommendations for practitioners and policymakers include the necessity for continuous learning and adaptation, embracing new technologies, and developing robust regulatory frameworks that support advanced practices while ensuring ethical standards. The research concludes with suggestions for future research, particularly in exploring the long-term effectiveness of new technologies in forensic accounting and the impact of evolving regulatory landscapes on the profession. The study underscores the dynamic interplay between technological advancements and financial fraud as an ongoing area for scholarly inquiry and professional development.
 Keywords: Forensic Accounting, Fraud Detection, Financial Fraud, Technological Advancement.