Regulation Of Financial Accounting Research Articles

Conceptual problems of financial accounting in a digital economy

The article shows modern problems of financial accounting associated with formation of conceptual accounting provisions in the context of digitalisation of society and economy. An open system of financial accounting, consisting of interrelated and interdependent elements, functions in the new economic conditions. The accounting concept created by regulatory legal acts does not meet the requirements of practice and does not meet current users’ needs. There are prerequisites for changing the entire accounting system due to modern technologies (blockchain, artificial intelligence), which can completely change the traditional ideas about the formation of accounting and analytical information as well as main functions of accountant. The study of the current financial accounting concept and the formulation of directions for its development in the digital economy formation conditions based on the identification of conceptual problems of the modern accounting system characteristic is the purpose of the work. An analysis of the digital economy impact on the accounting system formation, a review of the main system elements that are undergoing the greatest transformation and the identification of problem areas that need to be addressed in the formation of the digital economy are the objectives of the study. The most relevant problem is the legal regulation of financial accounting, as well as issues of methodological nature related to the need for internal content, proposed by the authors of the accounting system in accordance with the changed digital economy information needs.

Differences of Legal Regulatiom in Financial Accounting and Corporate Income Tax

This paper discloses cases in which permanent differences between the legal regulation of financial accounting and corporate income tax arise, while revealing the significance of these differences in the fulfillment of a tax liability (corporate income tax)

The European Commission Proposal for a Council Directive on a Common Corporate Tax Base (CCCTB) as an Example of Applying Financial Accounting Standards in Taxation on the Corporate Income Tax

This article discloses the conception of CCCTB and the relations between CCCTB and the legal regulation of financial accounting, including an analysis of concrete examples of how financial accounting rules are applied in CCCTB. The research highlights the necessity of applying financial accounting standards in CCCTB.

Why Did Politicians Intervene in the Fair Value Debate? The Role of Ideology and Special Interests

Politicians frequently intervene in the regulation of financial accounting. Evidence from the accounting literature shows that regulatory capture by special interests helps explain these interventions. However, many accounting rules have broad economic or social consequences, such as their effects on income distribution or private-sector subsidies. The perception of these consequences varies with a politician’s ideology. Therefore, if accounting rules produce those consequences, ideology plausibly spills over and explains a politician’s stance on the technical accounting issue, beyond special interest pressure. We use two prominent U.S. political debates about fair value accounting and the expensing of employee stock options to disentangle the role of ideology from special interest pressure. In both debates, ideology explains politicians’ involvement at exactly those points when the debate focuses on the economic consequences of accounting regulation (i.e., bank bailouts and top-management compensation). Once the debates focus on more technical issues, connections to special interests remain the most dominant force.

Why Do Politicians Intervene in Accounting Regulation? The Role of Ideology and Special Interests

ABSTRACTPoliticians frequently intervene in the regulation of financial accounting. Evidence from the accounting literature shows that regulatory capture by special interests helps explain these interventions. However, many accounting rules have broad economic or social consequences, such as their effects on income distribution or private sector subsidies. The perception of these consequences varies with a politician's ideology. Therefore, if accounting rules produce those consequences, ideology plausibly spills over and explains a politician's stance on the technical accounting issue, beyond special interest pressure. We use two prominent U.S. political debates about fair value accounting and the expensing of employee stock options to disentangle the role of ideology from special interest pressure. In both debates, ideology explains politicians’ involvement at exactly those points when the debate focuses on the economic consequences of accounting regulation (i.e., bank bailouts and top management compensation). Once the debates focus on more technical issues, connections to special interests remain the dominant force.

INTANGIBLE ASSETS: ISSUES OF ACCOUNTING AND MANAGEMENT IN THE CONTEXT OF DIGITALIZATION OF THE ECONOMY

The issues of classification and approaches to management of intangible assets of companies have been considered. Main features of intangible assets have been examined, as well as normative regulation of financial accounting of them. The important point of intangible assets management is their classification and distribution to homogeneous groups, that allows us create and clarify intangibles’ management policy in terms of digitalization. In addition, the authors have paid attention in the article to the issues of intangible assets valuation. Basic stages of intangible`s assessment have been analyzed, as well as current problems of estimation of true value of intangible assets.

Finansinės apskaitos ir audito teisinis reguliavimas kaip viešųjų finansų teisės institutas

[only abstract in English; full article, abstract in Lithuanian]
 The article reveals that legal regulation of financial accounting and audit must be defined (and separated) as self-dependent, separated and no doubt very important legal institute of public finance law. There are concrete arguments disclosed validating the resolution to define this legal institute as self-dependent and very important legal institute of public finance law.
 As a consequence, the purpose of this article is to prove that legal regulation of financial accounting and audit is self-dependent legal institute of public finance law.
 The object of this article is disclosure of legal regulation of financial accounting and audit in the view of public finance law.
 Performed analysis of problematical questions discloses that legal regulation of financial accounting and audit shall be described as system of international, EU, national and local (adopted by entity) sources of law which has the characteristic for permanent development (renewal, addition) of legal norms. Consequently, the trend is observed that this system is liable to detailed legal regulation of specific legal relations of public finance.
 The article reveals that main features of basic concepts of law (positive law, legal realism, natural law) are identified in legal regulation of financial accounting and audit as, no doubt, this legal institution can be defined (and separated) as self-dependent, separated and very important legal institute of public finance law. Main features are clear creation of legal sources; formally described legal norms; the core of legal regulation - legal norms of legal behavior; system of legal norms; forcible nature; reflexion and dynamics of legal norms; efficiency of legal norms coming from legal realism (development of case-court practice); verification of the mainstream of value-system by which concrete legal norms must follow (verification of operation of generally accepted financial accounting principles).
 This scientific research reveals that articles main legal arguments, why legal regulation of financial accounting and audit must be defined (and separated) as self-dependent, separated and very important legal institute of public finance law, allow to identify main features of legal institute of public finance law: 1) legal regulation of financial accounting and audit regulates specific social relations; 2) these legal norms have social importance; 3) there are concrete, special, self-dependent sources of law applied only for this legal institution; 4) the main legal regulation method is dispositive method, although there can be found imperative method.

Normas para contabilidad de costos

Este documento identifica la normatividad en materia de contabilidad de costos, considerando de manera particular las Normas Internacionales de Contabilidad (NIC), las Normas Internacionales de Información Financiera (NIIF), así como las Normas Internacionales del Sector Público (NICSP). Por otra parte, se pretende identificar los estándares o modelos en costos que se han implementado en países como Canadá, Estados Unidos y España, los cuales han sido referentes para empresas colombianas; entre otros, el Costeo Basado en Actividades (ABC), costos estándar y Grenzplankostenrechnung (GPK). Esto se desarrolla con el propósito de reconocer y generar discusión en torno a la desarticulación que suele presentarse entre la normatividad contable financiera y la contabilidad administrativa en las organizaciones.

APPLICATION OF ACCRUAL PRINCIPLE FOR THE PURPOSE OF LEGAL ENTITIES TAXATION ON CORPORATE INCOME TAX

Foreign scientists recently have given more attention to problematic questions of corporate income tax connection with legal regulation of financial accounting, and have also emphasized financial accounting importance to tax law. However, despite the fact that there are some publications which assess transactions for financial accounting and taxation purposes in practical view in special press, there is not any scientific research on corporate income tax connection with financial accounting in Republic of Lithuania. In addition, scientists of Republic of Lithuania analysis the accrual principle and only define and describe this principle in financial accounting. Consequently, application of the terms by which income and costs are recognized for the purpose to calculate corporate income tax base has not been analyzed.This article aims to define the basic statement on taxation “income is recorded when earned and costs – when they occur”, and to show how the accrual principle should be applied by legal entities to pay corporate income tax. Analysis is based on the systemic review of the Law on Corporate Income Tax, Business accounting standards framed by The Authority of Audit and Accounting, scientific literature and Tax dispute settlement institutions case-law.With reference to the purpose of this article, there are defined the terms which are necessary for recognision income and costs for taxation purpose. The article disclose that for taxable income recognision using the accrual principle must be followed these conditions: 1) the selling entity has transferred to the buyer the risks and rewards of ownership of the goods; 2) it is probable that the economic benefits associated with the transaction will flow to the entity and the amount of revenue can be measured reliably; 3) the costs related to the sale transaction can be measured reliably. Consequently, costs recognision terms for taxation purpose are: 1) only that portion of expenses of the previous and reporting periods that is related to the income earned during the reporting period is recognised as costs; 2) the costs related to the sale transaction can be measured reliably. In addition to this, there is a special term for the appropriate executing of tax burden – to answer the question whether Law on Corporate Income Tax does not provide otherwise?This scientific research reveals substance and application of accrual principle on taxation with corporate income tax aiming to prove importance of financial accounting norms to assessing corporate income tax base.

Is the Accrual Principle Fully Applied in Corporate Income Taxation in the Czech Republic?

Abstract This paper analyses the relation between accounting and taxes in the Czech Republic using a specific example of the accrual principle. It asks the question whether the accrual principle applied in accounting is also fully applied in the area of direct taxation. The paper first discusses general considerations on tax collection in the Czech Republic and its constitutional and legal aspects, followed by reflections on how a tax base is constructed when the accounting profit according to Czech accounting regulations is used in the case of accounting units. The core of all considerations is the discussion about whether all revenues reported in accounting (unless specified otherwise in particular cases) are income that is subject to tax. The considerations are made in the context of decision making practice of the Supreme Administrative Court, while attention is also paid to the questions of legal regulation of financial accounting in the Czech Republic.

Impact of Regulatory Framework and Environmental Factors on Accounting Practices by Firms in Nigeria

This paper looked at development of accounting practice in Nigeria and analyzes how the country's economic, taxation, and other factors affect the development of financial accounting regulations in Nigeria. The study observed that political issues, privatization and capital market growth brought about several reforms that have improved financial reporting and disclosure requirements in Nigeria. The study suggests the strengthening the capacity of accounting regulatory bodies for monitoring and enforcing accounting standards, and building the capacity of accounting professional bodies to build the confidence of stakeholders in the accounting function and to inspire potential investors.

The development of integrated accounting in small and medium-sized companies in the agri- and foodsector f the Russian federation

This paper focuses on the regulation of financial accounting in SMEs in the agri- and food sector in Russia. The paper presents the factors which influence the accounting system and the quality of the information it provides. The information and reports that are prepared according to international standards are not comparable with reports prepared by Russian standards. They do not facilitate external users in gathering relevant information on the current financial position. The present usage of different systems for procuring information to satisfy the needs of multiple stakeholder groups takes time, distorts information, and often does not provide a true and fair view on business performance. One way to overcome this is the use of an integrated accounting system which allows, within the limits of Russian legislation, to provide a broad information base for external reporting. International standards could be used like IAS41 or those applied in the Farm Accountancy Data Network (FADN). The derived data could be used for attraction of investments, presentation of information to all interested users, comparison of results of activities in similar companies, and as a benchmark for the activities of companies in various regions and/or segments. They could be used to compare Russian companies with similar ones in the European Union. This paper describes the benefits and pitfalls which companies potentially experience from implementing an integrated accounting information system for company management and financial reporting purposes in the Russian Federation.

The Pros and Cons of Regulating Corporate Reporting: A Critical Review of the Arguments

In this paper, we distil essential insights about the regulation of financial reporting from the academic literature. The key objective is to synthesize extant theory to provide a basis for evaluating implications of pressures on the regulation of financial accounting following the recent financial crisis. We succinctly lay out arguments put forth both for and against the regulation of corporate disclosure and standard setting. We then examine current developments suggesting that accounting standard setting is at risk of becoming entangled in a web of political forces with potentially significant consequences. The crisis has brought into sharp focus the reality that the regulation of corporate reporting is just one piece of a larger regulatory configuration, and that forces are at play that would subjugate accounting standard setting to broader regulatory demands. Recent actions by the European Commission relating to IFRS 9 and proposed legislation in the U.S. Congress to create a systemic risk council serve to illustrate this point. We conclude by discussing in detail the recent fair value debate as a case study of the way in which bank regulatory policy and accounting standard decisions were jointly determined as a potentially socially optimal means to mitigate the effects of the financial crisis.

Financial accounting regulations and organizational change: a Habermasian perspective

PurposeThis paper seeks to understand the role of financial accounting regulations in a less developed country in transition, Egypt. It explores the social, political as well as economic contexts that underlie the processes of setting the Egyptian Financial Accounting Regulations (EFAR) in a harmony with International Accounting Standards (IASs).Design/methodology/approachThe paper is based on in‐depth interviews and an analysis of documents. It relies on Habermas' notions of society's lifeworld, institutional steering mechanisms and systems in order to link the changes in EFAR to the changes in the wider social, political and economic contexts wherein organizations operate. The paper also explores the role of EFAR, as “regulative” or “constitutive” steering mechanisms, throughout two longitudinal episodes; starting with the beginning of socialism and extending to liberalism.FindingsThe paper finds that the EFAR have had a constitutive tendency during the Egyptian transformation towards a market‐based economy. Although there are remarkable changes in political philosophy in Egypt, the regulators' motivations and the processes of the accountancy profession that mobilized the formulation of EFAR in harmony with IASs, those regulations were acted upon to constitute organizational members' values, norms and knowledge in order to overcome the persistence of the socialist accounting practices. The regulations were also aimed at enhancing professional conduct and, at same time, increasing organizational members' adherence to the processes of privatization as a part of a wider movement towards transparency, democracy, full disclosure and liberalisation.Research limitations/implicationsThe paper emphasises the interface between a macro social transformation and micro organizational responses in order to understand the role of EFAR. However, it does not stress how the actual implementation of those regulations is implicated at a micro organizational change level. Furthermore, the paper covers a timeframe – 1952 to 2000 – that extends from the start of socialism extending to liberalism. Although the IASs are now known as International Financial Reporting Standards (IFRS), the paper covers a period in which such IFRS were not applicable in Egypt.Originality/valueThe paper contributes to the understanding of the social, political as well as economic role(s) of financial accounting regulations in a transitional country during that country's transformation towards the market economy.

The development of accounting regulations in Egypt

PurposeThis paper seeks to understand the processes of setting accounting standards in a developing country in transition, namely Egypt. It explores the social, political as well as economic forces that underlie the development of financial accounting regulations implemented throughout two longitudinal periods; starting with the beginning of socialism and extending to liberalism.Design/methodology/approachThe paper is based on in‐depth interviews and an analysis of documents. It relies on the institutional theory notions of coercive, mimic and normative isomorphic mechanisms to link the changes in the financial accounting regulations to the changes in the wider social and institutional context wherein organizations operate, while, at the same time, exploring the legitimation processes underlying the development of domestic accounting standards similar to the International Accounting Standards (IASs).FindingsThe paper finds that the major changes in the state's political philosophy, the regulators' motivations and the processes of the accountancy profession provided a momentum to the formulation of Egyptian Accounting Standards (EAS). Though similar to IASs, they were acted upon to overcome the pre‐existing socialist accounting practices, while, at same time, increasing organizational members' adherence to the processes of privatization.Research limitations/implicationsAlthough the empirical findings suggest that “globalization forces” through technical as well as financial assistance programmes created pressures during the standard‐setting processes, a full investigation and explanation of such pressures are an area of future research.Originality/valueThe paper contributes to the understanding of how IASs are diffused in a country in transition and the role of these standards during that country's transformation processes towards the market economy.

The relationship between accounting and taxation in Norway

The financial accounting regulations in Norway have not been motivated by corporate income taxation. Nevertheless, historically there has been a close relationship between financial accounting and income taxation. As a general taxation rule, the reported financial income has been the basis for the computation of the taxable income. This has made financial reporting sensitive to tax considerations. Stricter financial accounting requirements and an innovation in the financial reporting format in the mid-1970s gradually decreased tax-induced financial reporting. The promulgation of a larger number of specific and standardized tax rules in 1992 made the computation of taxable income less dependent on accounting income. The Tax Reform in 1992 also initiated a requirement in the accounting legislation to recognize deferred taxes in financial statements.

The Development of Financial Accounting and Reporting Standards in the United Kingdom

The Acounting Standards Committee (ASC) has recently been reconstituted, its membership revised and its agenda drastically reduced. Such sweeping changes in the body responsible for the formulation of accounting standards in Britain necessarily invite speculation concerning the future of accounting standards in this country. However, we believe that the current problems of the ASC have to be seen in the context of the historical development of financial accounting and reporting standards in the United Kingdom. The ASC was only formed in 1969 and its work on the regulation of financial accounting, that is of financial measurement, has to be set against the background of a tradition of statutory regulation of financial reporting, that is the presentation and disclosure of financial information, which dates back to the early nineteenth century. The purpose of this paper is therefore to put the issues surrounding the recent upheavals in the ASC in the context of the historical experience.