Effects Of Statements Research Articles

The effect of financial statements on financial review results. Statement of financial position or income statement

The effect of financial statements on financial review results. Statement of financial position or income statement

Analysis of The Effect of Bankruptcy Predictions with Models Altman, Springate, Ohlson, Foster, Zmijewski, and Grover on The Return of Shares in Entertainment and Film Companies Listed on The Indonesia Stock Exchange in 2018-2021

A company will not be free from the risk of bankruptcy, especially when where the conditions of entertainment and movies are consumed at home, while producers' activities are disrupted because they usually produce in the field. This study aims to determine the effect of financial statements on bankruptcy prediction analysis, including financial ratios to stock returns in entertainment and film companies listed on the Indonesia Stock Exchange. This research uses a descriptive quantitative method with panel data and secondary data obtained on the Indonesia Stock Exchange from 2018 to 2021. Data analysis using the E-Views program. The results of the bankruptcy prediction from this study using the Altman, Springate, Ohlson, Foster, Zmijewski, and Grover models has no significant effect on stock returns, but this bankruptcy prediction must always be done periodically to avoid actual bankruptcy conditions and as an effort to save the company's performance, especially financial performance. Keywords: Altman; Springate; Ohlson; Foster; Stock Return.

Client importance and unconditional conservatism in complex accounting estimates

In this paper, we examine the relation between client importance to Big 4 audit firm local offices and unconditional conservatism in complex accounting estimates; specifically, stock option volatility, pension expected asset rates of return, and pension discount rates. Changes in these estimates, which can appear small, can have material financial statement effects, have been used in earnings management schemes, and pose greater audit risk. We find that more important audit clients are associated with the use of more unconditionally conservative accounting estimates. These results are consistent with auditor reputation protection rather than important client economic dependence, and suggest client importance does not impair auditor independence with respect to complex accounting estimates.Data are available from the public sources cited in the text.

The Disclosure Effect of Sustainability Reporting and Financial Statements on Investment Efficiency: Evidence in Indonesia

This study aims to provide empirical evidence regarding the effect of the quality of financial statements and the intensity of reporting on a company’s sustainability efforts on investment efficiency. The research was conducted on all companies listed on the Indonesia Stock Exchange (IDX) sectors in 2018–2019. This study implemented a purposive sampling technique. The population derives from 52 companies with a combined sample of 104 data, uses multiple linear regression, and performs a classical assumption test. Hypothesis testing in this study used a simultaneous significance test and partial regression test appropriately. This study found that the quality of financial reports directly affects investment efficiency. The intensity of the sustainability report does not affect the company's investment efficiency; therefore, the sustainability report does not become a reference point for making investment decisions for greater efficiency. The author concluded that non-financial information does not affect investment decisions. This research proves that public companies in Indonesia can use financial reports to affect investment efficiency, whereas sustainability reports cannot be used for this purpose.

The Effect of Audit Committee Effectiveness and Potential Fraudulent Financial Statements

This study aims to determine the relationship formed between the effectiveness of the audit committee and fraudulent financial statements. The effectiveness of the audit committee in this study will be proxied through the expertise of the audit committee members, the frequency of audit committee meetings, the size of the audit committee, and also the tenure of the audit committee members. Financial statement fraud in this study will be measured using the Beneish M-Score formula. This study uses financial sector companies listed on the Indonesia Stock Exchange during the 2019-2020 period as the object of research. The population used in this study was 174 companies. The test results in this study show that the expertise of the audit committee members, frequency of audit committee meetings and the tenure of the audit committee members have a negative and significant influence on the occurrence of fraudulent financial statements in the company.

Accounting for Revenue Recognition in the Gig Economy: An Instructional Case

ABSTRACTThe “gig” economy has exploded as more consumers purchase products and services from gig businesses and more workers pursue gig employment. This case uses a fictional gig company, HungryHound (HH), mirroring services provided by Grubhub, DoorDash, and UberEats, to expose students to the complexities of gig businesses and to areas requiring judgment in the revenue recognition standard. Specifically, students determine the appropriate revenue treatment among varying alternatives and apply the guidance in identifying the customer(s), determining principal and/or agent classifications, and reporting the financial statement effect for transactions. Completion of the case requires critical thinking in evaluating and applying ambiguous revenue guidance. Students also learn about current variation in accounting treatments among gig companies. The case is designed to give instructors flexibility, where case deliverables can be used together or as standalone assignments and can be deployed in an undergraduate or graduate intermediate accounting course or capstone course.

International Financial Reporting Standards (IFRS): Exploring Financial Evidence from Listed Companies in the US

This paper relates to the financial effects of the official adoption of International Financial Reporting Standards (IFRS) in the US. IFRS is a set of unique, high-quality accounting standards that listed firms have been obliged to implement since 2005 in Europe. However, in 2007, the SEC decided to allow foreign firms listed in the US stock markets to publish their financials under IFRS without the need to reconciliate to the US GAAP. That fact increased the proportion of the converging process between the two regimes but provoked several core questions of interest to both academics and market professionals. In this order, the paper aims to detect any financial statement effects under IFRS for firms that used to follow US GAAP, to analyse whether the acceptance of IFRS in the US has improved the level of convergence between the two regimes, and provide evidence on whether listed firms in US markets exhibited fewer earnings management under IFRS. In this way, the paper tested a total of three Hypotheses, by involving quantitative analysis of secondary numerical data, from firms listed in the US stock markets that followed IFRS during the first allowance year (2007). The findings reveal that IFRS has not succeeded in eliminating falsified statements entirely but has performed better compared to other countries where they have been introduced. It seems that the US environment is appropriate for IFRS. Additionally, there are indications for fewer earnings management in the first IFRS adoption year, keeping a high level of accurate accounting interpretation. However, special attention is needed for any emerging issues in the future.

International Financial Reporting Standards (IFRS): Exploring Financial Evidence from Listed Companies in the US

This paper relates to the financial effects of the official adoption of International Financial Reporting Standards (IFRS) in the US. IFRS is a set of unique, high-quality accounting standards that listed firms have been obliged to implement since 2005 in Europe. However, in 2007, the SEC decided to allow foreign firms listed in the US stock markets to publish their financials under IFRS without the need to reconciliate to the US GAAP. That fact increased the proportion of the converging process between the two regimes but provoked several core questions of interest to both academics and market professionals. In this order, the paper aims to detect any financial statement effects under IFRS for firms that used to follow US GAAP, to analyse whether the acceptance of IFRS in the US has improved the level of convergence between the two regimes, and provide evidence on whether listed firms in US markets exhibited fewer earnings management under IFRS. In this way, the paper tested a total of three Hypotheses, by involving quantitative analysis of secondary numerical data, from firms listed in the US stock markets that followed IFRS during the first allowance year (2007). The findings reveal that IFRS has not succeeded in eliminating falsified statements entirely but has performed better compared to other countries where they have been introduced. It seems that the US environment is appropriate for IFRS. Additionally, there are indications for fewer earnings management in the first IFRS adoption year, keeping a high level of accurate accounting interpretation. However, special attention is needed for any emerging issues in the future.

AGRESIVITAS PELAPORAN KEUANGAN DAN PENGHINDARAN PAJAK

Identification of tax avoidance is one of the substantial issues for tax authorities. Success in this stage ensure optimal tax compliance. To do that, financial statements become the object of critical analysis. This study seeks to identify the effect of financial statements (aggressive) on tax avoidance. The mineral and coal mining sector is chosen as the sample because it is one of the business sectors with a fairly high level of tax avoidance. There are 26 companies on the IDX that are the samples of this study. By regressing fixed effect panel data in the form of financial reports for 2012-2018, the results show that aggressive financial reporting has a positive effect on tax avoidance. With a confidence level of 99%, every 1% increase in the level of aggressiveness of financial reporting equivalent to an increase in tax avoidance efforts of 4.6%. For tax authorities, these findings can be used to assess the risk of non-compliance by taxpayers.

PENGARUH LAPORAN KEUANGAN TERHADAP KINERJA KEUANGAN BADAN PENGELOLAAN KEUANGAN DAERAH DI KABUPATEN PINRANG

This study aims to determine the effect of financial statements on the financial performance of regional financial management agencies in Pinrang Regency. The data collection techniques used in this study were observation and questionnaires. The sample in this study amounted to 66 ASN employees. The data analysis technique used in this research is using simple regression analysis. The results of this study found that financial statements have a significant effect on financial performance. The results of this study also show that the R Square value is 0.760 which explains that in this regression model the ability of financial statements to explain financial performance is 76.0% and the remaining 24% is explained by other variables. The results of the regression equation in this study were 0.810. The results of the regression coefficient of 81.4%. And for hypothesis testing (β 0) then the partial test results in this study are (β = 0.981) for the financial statement variable with a significant 0.00, this result states that the financial statements have a significant effect on financial performance.

Dampak Kualitas Laporan Keuangan Perusahaan Badan Usaha Milik Negara Terhadap Efisiensi Investasi

This study aims to investigate the effects of financial statements’ quality towards over/under investment, the internal controls’ implementation towards over/under investment, and moreover the internal control as a moderating variable to strengthen the financial statements’ quality to over/under investment on state-owned listed companies in Indonesia Stock Exchange and state-owned non-listed companies as well. The data analysis techniques namely logistic regression analysis is used to measure the research problems. There are 96 listed and non-listed state-owned companies (not including financial services and insurance) used as research sample during period from 2015 to 2018. The findings of this study reject first and third hypotheses stating that the financial statements’ quality does not affect over/under investment and moreover, internal control as a moderating variable could not strengthen the effect of financial statements’ quality towards over/under investment. However, on the other hand, the second hypothesis in this study is accepted proofing that the implementation of internal control has positive effect on over/under investment.
 Keywords: Quality of Financial Statements, The Internal Control, Investment Efficiency, State Owned Enterprises

High-precision Solution of Differential Equations for Corporate Accounting and Financial Statement Based on Stochastic Galerkin Spectrum Method

Based on the high-precision guidance, the main high-precision points in each link of the supply chain in accounting and financial statements are analyzed systematically, and effective control activities are performed. It can significantly improve the quality of accounting and financial statements and enhance the forecast effect of accounting and financial statements on economic activities and the availability for decision-making, which allows economic activities to be carried out more orderly.

Transition to IFRS: Financial statement effects and taxation at the construction industry in Greece

This study evaluates the IFRS adoption on the financial statements and taxation of Greek companies at the construction industry in Greece, which are listed at the Athens Stock Exchange. The research computes the taxation amount paid and employs twelve accounting measures for the analysis of financial statements for the IFRS transition period (three years before and after their adoption in Greece). Regarding the taxation, the amount paid in the pre- to post-IFRS period was considerably decreased (about 28%). Regarding the examined accounting measures, the transition to IFRS lead to a deterioration of some basic financial ratios (more specifically, five profitability ratios) and could, therefore, affect the overall profitability and performance of the examined companies in their industry sector. Our results provide also evidence that IFRS adoption increased firm value, while a lower level of earnings can influence accounting quality and could be examined further as a red flag for earnings manipulation. The present study, as a recent empirical result of the IFRS impact and taxation on the construction sector in Greece, could be useful for policy makers, tax and other state authorities or managers.

Comparability and Predictive Ability of Loan Loss Allowances The Role of Accounting Regulation versus Bank Supervision

We investigate whether and how the shift from discretionary forward-looking provisioning to the restrictive incurred loss approach under International Financial Reporting Standards (IFRS) in the European Union (EU) affects the cross-country comparability and predictive ability of loan loss allowances. Given bank supervisors’ keen interest in comparable and adequate loan loss allowances, we also examine the role of supervisors in determining financial statement effects around IFRS adoption. We find that the application of the incurred loss approach has led to more comparable loan loss allowances. However, some differences persist in countries where supervisors were reluctant to enforce the incurred loss approach. Our results also suggest that the predictive ability of loan loss allowances improved following IFRS adoption. Finally, in supplemental analyses we document that increased comparability of loan loss allowances is associated with the cross-country convergence of the risk sensitivity of bank leverage indicating an improvement in the effectiveness of market discipline in the EU.

The Valuation Consequences of Voluntary Accounting Changes

Firm management typically claims that voluntary accounting method changes (VACs) are made to enhance the informativeness of earnings by better matching accounting practices with economic reality. In contrast, skeptics argue that managers adopt new accounting procedures to opportunistically manage earnings and influence their firm's stock price. In this paper, we investigate these alternative motives for VACs. Specifically, we investigate whether VACs cause equity prices to deviate from their fundamental values in the short-term by studying the long-run stock price performance for a sample of firms that voluntarily change accounting methods. In addition, we investigate changes in earnings informativeness by examining the behavior of earning response coefficients and the relationship between earnings and future cash flows in years surrounding the VAC event. In contrast to prior research, we find little evidence that a strategy based solely on the earnings effect of a VAC can generate abnormal returns. While we find weak evidence of post-VAC abnormal returns for extreme VACs, this result appears to be driven by the accruals anomaly documented in Sloan (1996). Our evidence further suggests that earnings informativeness is not significantly altered by voluntary changes in accounting methods. Taken together, our evidence suggests the market recognizes the financial statement effects of alternative acceptable accounting methods and efficiently processes the valuation implications of VACs.

Do Financial Reporting Quality and Corporate Governance Have Simultaneous Effect? Evidence from Indonesian Manufacturing Companies

Financial reporting reflects transparency of the firm and if it could not explain the changes in shareholders’ value in a timely manner; shareholders need additional monitoring mechanism. This study aims to investigate the effect of financial statements’ quality on corporate governance mechanism and to examine the simultaneous effect between both. This study uses earnings timelines as a proxy of financial reporting’s quality; proportion of independent board and board size as proxies of corporate governance mechanism. Using Two Stage Linear Regression (TSLS) and samples consist of manufacturing companies listed on Indonesian Stock Exchange (IDX) in 2015, this study finds that earnings timelines have significant influence on board size; earnings timelines and proportion of independent board have the simultaneous effect; however, it fails to document the simultaneous effect of earnings timelines and ownership concentration. This study is the first that investigates the simultaneous effects of financial reporting quality and corporate governance.

Pengaruh Proses Reviu Terhadap Kualitas Laporan Keuangan Pemerintah Daerah

This study aimes to determine the effect of financial statements review on the quality of local financial statement reports with an understanding of the goverment accounting standards as a moderation variable. This research is a quantitative research, with survey method conducted through questionnaire. The population in this study are all inspectorate in all regions of the Province of Lampung. Respondents in this study are all functional officers and other officials who are members of the Review team at each inspectorate at all regions in Lampung Province. The result of data analysis shows that the process of review for local government financial statements has a positive effect on the quality of local government financial reports, and an understanding of the government accounting standards by APIP did not moderate the relationship between the review process with the quality of local government financial reports

Financial statement effects of adopting IFRS: the Canadian experience

PurposeThe purpose of this study is to examine the effects of adopting International Financial Reporting Standards (IFRS) on financial statements of the largest Canadian firms (S&P/TSX 60) listed on the Toronto Stock Exchange (TSX).Design/methodology/approachThis study investigates the financial statement effects of 46 companies from the S&P/TSX 60 index which report under IFRS in 2011 and switched to IFRS from CGAAP. This study used panel data analysis, which can be considered as more powerful when conducting cross-sectional and in time analysis among companies. Because of weakness of Cramer statistic on R-square, the authors used interaction terms as suggested by Hope (2007).FindingsConsistent with the authors’ perceptions, this study finds that significant effects of adopting IFRS are associated with industry practices. The empirical results show that the adoption of IFRS in Canada created more relevant financial reporting for book value of equity and net income in the post-adoption periods.Originality/valueThis study should be of interest to the US regulators considering IFRS adoption by US publicly traded companies as well as to regulators, standard setters and listed companies in all countries worldwide that are in transition to IFRS.

Pension Risk and Equity Returns

We develop an analytical framework that divides the contribution of pension risk to the total systematic risk of the firm into two parts: (1) the risk due to the investment strategy of the pension plan (“Mismatch Risk”); and (2) the risk due to the funded status of the pension plan (“Deficit Risk”). We then use this framework to show that the financial statement treatment of pension plan obligations has implications for how pension risk is impounded into equity returns. Our empirical strategy uses variation in the financial statement effect of two new accounting standards as natural experiments to generate inferences. In contrast with the empirical finding in Jin, Merton and Bodie (2006), we find that pension risk is only reflected in equity returns when the underlying drivers of risk are disclosed and recognized on the firm’s financial statements.

IFRS framework-based case study: Barrick Gold Corporation—Goodwill for Gold

• IFRS case study utilizing a framework-based approach. • Requires student to research actual IFRS standards. • Questions progressively lead from broad concepts to specific regulations. • Specific focus on recognition, measurement and subsequent treatment of goodwill. • Practically applies broad accounting research to a real world corporation. The case of Barrick Gold Corporation: Goodwill for Gold utilizes a framework-based approach to examine the objectives, underlying concepts, and relevant IFRS guidance applied to goodwill. The questions presented in the case study progressively lead from the broad concepts underlying the preparation of financial data, in general, to the International Accounting Standards concerning recognition, measurement, and subsequent treatment of goodwill, specifically IFRS 3, IAS 36, and IAS 38. It challenges you to determine if these standards are consistent with the underlying concepts set forth in the IFRS’s conceptual Framework . This case illustrates the importance of professional judgment in the standard setting process by requiring you to examine the IASB’s published supporting documents including the Board’s Basis for Conclusions . In addition, the case includes a practical application problem that requires you to determine the financial statement effects of the subsequent treatment of goodwill.