General Purpose Financial Reports Research Articles

The gap between need and ability to use accounting information in public sector financial reports

This study focuses on predicting the needs, purposes, and usability of accounting information in general-purpose financial reports (GPFRs) to improve accounting theory significantly. Accounting reform in the public sector aims to provide reliable and valuable information to users. The study surveyed 374 public organizations using a survey questionnaire between March and June 2023. Collected data were tested for reliability using Cronbach's Alpha coefficient and regression analysis using SPSS 29 software. The research findings indicate that users of accounting information (AI) within an organization have a greater need for and a better understanding of the usefulness of AI compared to external users; users in the public sector tend to use AI more frequently for accountability purposes; and AI for decision-making plays a more significant role compared to AI for accountability in terms of enhancing organizational performance. The findings have important practical implications. Firstly, accountability should be prioritised when developing a GPFR framework for the public sector. Secondly, in order to increase the usability of the AI, it is important to improve the ability of external users to understand and use the information on GPFRs. Finally, the strength of the connection between internal and external information users determines the level of usability of accounting information.

Barriers to the Usefulness of Non‐profit Financial Statements: Perspectives From Key Internal Stakeholders

AbstractThe extent to which financial reports are useful is of central importance in relation to the accounting standards that underpin them. This is as true of non‐profit financial reporting as it is of financial reporting in the commercial and public sectors. In this paper we report on our findings related to a research project focused on examining the usefulness of Australian accounting standards from the point of view of non‐profit directors, preparers of non‐profit financial statements and their auditors. Undertaking a series of round tables specific to each cohort, we examine the question of who is responsible, for what and to whom in the context of financial reporting. Our research reinforces a number of issues negatively impacting the usefulness of General Purpose Financial Reports (GPFRs) in the non‐profit sector. We draw particular attention to concerns around the financial literacy of non‐profit directors, potential misunderstandings in relation to financial profitability, and complexity across a range of issues, including revenue recognition. Overall, the project finds that there are manifest specific issues and aspects particular to the sector and that simply adopting the same approach with regard to accounting standards as taken in the for‐profit sector is insufficient to ensure the utility of non‐profit GPFRs.Undertaking round tables for non‐profit directors, preparers of non‐profit financial statements and auditors, we examine the issues negatively impacting the utility of General Purpose Financial Reports in the non‐profit sector. We draw attention to concerns around the financial literacy of non‐profit directors, misunderstandings in relation to financial profitability, and complexity across a range of issues, including revenue recognition.

Groups of politically connected firms, political uncertainty and earnings credibility in Pakistan

PurposeThis paper examines the influence of different types of political connections and political uncertainty on earnings credibility in Pakistan. Based on discernible differences, connected firms are grouped into civil connected and military connected firms.Design/methodology/approachThe authors provide evidence concerning the earnings credibility incentives of groups of political connected firms and report that their incentives are significantly different. The findings remain robust to alternate methods of earnings credibility.FindingsThe findings evidence that civil (military) connected firms report less (more) credible earnings than the control group. High political uncertainty reduces the credibility of earnings. Results for the interaction of political connections and political uncertainty variables are not significant.Research limitations/implicationsThe paper investigates just one aspect of Pakistan's political economy, i.e. credibility of earnings; thus, it requires to be cautious on part of readers and policymakers. To reach a clearer conclusion, earnings credibility should be ex amined in the larger context, i.e. in conjunction with rent extractions, etc. A possible extension of the paper can be to investigate the channels of rent extractions used by the two types of connected firms.Practical implicationsThe paper has contribution for policymakers as well as users of general purpose financial reports. The findings indicate that the users of general purpose financial reports should be more careful in the use of financial information during political uncertain periods and also of politically connected firms. Furthermore, policymakers should keep the larger context at the forefront while attempting to strengthen the enforcemnet regime.Originality/valueThis paper adds to extant political connections literature by identifying two types of politically connected firms and report that both groups have divergent financial reporting incentives. Furthermore, political uncertainty reduces the credibility of earnings.

The International Accounting Standards Board’s 2018 Conceptual Framework on user perspective: An application of stakeholder theory

The Conceptual Framework (CF), published by the International Accounting Standards Board (IASB), serves as a guide for nations creating general-purpose financial reports (GPFRs) for organizations (Gore & Zimmerman, 2007). This study attempts to critically evaluate the decision of the IASB to limit the primary users of the GPFRs in the 2010 and 2018 CF to financiers only from a stakeholder theory perspective. This study used a qualitative meta-analysis method to incorporate earlier qualitative studies in the area to derive deeper meanings through an interpretive process. This study reaffirms the ongoing issue of why the IASB supports the financiers as the primary user group of GPFRs. We found that the managerial branch of stakeholder theory fully supports the decision of the IASB to limit the primary user of the GPFRs to financiers only as management considers the financiers as the most influential stakeholder group whose information needs must be fulfilled under all the circumstances. This study has added to the existing body of knowledge by bringing much-needed clarity to the preparers of GPFRs. However, from a broad user and other theoretical standpoint, we strongly advise future studies to critically analyze the implications of the IASB’s decision to reclassify financiers only as the primary users of GPFRs.

An Architecture for General-purpose Financial Reporting – The Development of ISSB Sustainability Disclosure Standards

An Architecture for General-purpose Financial Reporting – The Development of ISSB Sustainability Disclosure Standards

The impact of latest changes in Financial Reporting on Stakeholders’ Confidence and Satisfaction.

This paper focuses on how the latest changes in corporate financial reporting have an impact on the stakeholders i.e. the shareholders, employees, management, creditors, auditors, suppliers, and the public in general. Financial information serves as an important input and guides for informed decision-making in an economic environment. The financial statements are one of the most important bases on which the internal and external stakeholders reach effective decisions. The idea of “General Purpose Financial Reporting” is directed to the common information needs of users and stakeholders. This study attempts to assess whether the stakeholder’s confidence and satisfaction are enhanced by the nature and extent of information that is made available to the stakeholders and the practices of corporate disclosure in annual accounts.

ASSESSING THE QUALITY OF IPSAS-BASED FINANCIAL REPORTS OF THE SUPRANATIONAL ORGANIZATIONS

Abstract. The study aims at accessing the quality of IPSAS-based financial reports of intergovernmental organizations, which have fully adopted the accrual basis of accounting. The quality assessment contemplates the empirical estimation of the financial reports’ conformity with qualitative characteristics proclaimed in the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities. The research database encompasses 20 financial reports estimated by 190 disclosure requirements aggregated in 31 indicators. The score assessment of financial reports has provided the data to build a multiple linear regression model that depicts the relation between the quality and the qualitative characteristics of the IPSAS-based financial reports. Adequacy checking has shown that the model meets the adequacy requirements, while the F-testing and T-testing have proven the statistical significance of independent variables and β-parameters, respectively. In particular, qualitative characteristics of predictive value, completeness, neutrality, absence of material errors, timeliness, and verifiability have substantiated their significance, while the qualitative characteristics of confirmatory value, understandability, and comparability were identified as insignificant and, therefore, excluded from the model. The model can be applied for estimating whether financial reports prepared under the IPSAS comply with the qualitative characteristics of public sector financial reporting. These findings enable making judgments on transparency and relevance of information disclosed by public sector organizations in their financial reports. Findings meet up-to-date demand for estimating the financial reports’ quality in terms of the recent transition to IPSAS-based principles of accounting and reporting by governments and supranational organizations worldwide. Keywords: accounting, public sector, IPSAS, financial reporting quality, qualitative characteristics, regression model. JEL Classification H83, M41 Formulas: 3; fig.: 0; tabl.: 3; bibl.: 35.

Unrecognized assets created by public-sector investments in health and social services

PurposeThis paper analyzes two types of potential intangible public-sector assets for consideration by public-sector accounting boards. Government investments in health and social programs can create two potential intangible assets: the intangible infrastructure used to deliver the health or social program and the enhanced human capital embodied in the recipients of program services. Because neither of these assets is currently recognized in a government's year-end financial statements or broader general-purpose financial reports (GPFR), these reports may underrepresent the government's true fiscal and service capacity.Design/methodology/approachThe paper uses an international accounting standards framework to analyze: whether investments in health and social programs create intangible assets that meet the definition of an asset as set out by International Public Sector Accounting Standards (IPSAS), whether they are assets of the government and whether they are recognizable for the purpose of financial reporting.FindingsThe intangible infrastructure asset created to facilitate the delivery of health and social programs would often qualify as a recognizable asset of the government. However, the enhanced recipient human capital asset created through the delivery of health and social programs would, in most instances, not qualify as a recognizable asset of the government, though there likely would be benefits from reporting on it through GPFRs or other mechanisms.Originality/valueThis paper makes two contributions. First, it identifies a previously overlooked intangible asset – the infrastructure created to facilitate the delivery of health and social programs. Second, it presents an argument regarding why, even when it fails to generate a recognizable intangible asset to government, it would be valuable for government to report such investments in supplementary statements.

Comparability in IPSASs: Lessons to be Learned for the European Standards

In 2013 the European Commission started addressing issues concerning public sector accounting harmonization across EU Member States, embarking on a project to develop European Public Sector Accounting Standards (EPSASs). Although acknowledging the indisputable reference of the existing International Public Sector Accounting Standards (IPSASs), it highlighted that IPSASs, as they were, could not be suitably applied in the EU context (European Commission, 2013a). IPSASs were considered as not covering specific important matters of public sector accounting, not showing enough stability due to the need of constant convergence with IFRSs, and offering several options that compromised comparability. Comparability of public sector accounts across Member States is one of the main objectives of EPSASs (EUROSTAT, 2016, 2019), clearly established as a qualitative characteristic in the draft EPSAS Conceptual Framework (EUROSTAT, 2018). It is critical for EU economic and fiscal convergence that countries’ accounts allow for substantial comparison and standardized transition to the National Accounts (Jorge et al., 2014). The IPSAS Conceptual Framework (IPSASB, 2014), meanwhile issued, sustains that adopting these standards would improve comparability of General Purpose Financial Reporting (GPFR), in this way strengthening transparency and accountability of public sector finance. Given that, despite the above concerns, EPSASs are to be developed on the basis of IPSASs (European Commission, 2019), the purpose of this paper is to show that IPSASs are not an adequate reference for EPSASs in terms of allowing the desired comparability of countries’ accounts in the EU. It relies on evidence gathered from IPSAS-based financial reports prepared by some Agencies of the United Nations System and from audit reports of the UN Board of Auditors. The research illustrates that IPSASs only allow for de jure comparability of financial reports at a very broad level. Their implementation and interpretation in practice (due to the options permitted and the judgement required) does not allow for de facto comparable GPFR. European standard-setters need to be aware that the comparability EPSASs need to address across EU Member States’ accounts must go beyond the one that is permitted by IPSASs – EPSASs need to stretch IPSASs harmonization to a higher level of standardization.

EVALUASI PENERAPAN LAPORAN ARUS KAS BERDASARKAN STANDAR AKUNTANSI KEUANGAN ENTITAS TANPA AKUNTABILITAS PUBLIK (SAK ETAP) PADA PERUSAHAAN PT. AIR MANADO

The cash flow report presents information on historical changes in cash and cash equivalents of the entity, which shows separately the changes that occur during one period of operating, investing and funding activities. The main purpose of the cash flow statement is the financial position report provides information on net cash inflows in a period, the results of the three main activities of the company are operations, investments and funding. SAK ETAP provides many facilities for companies compared to PSAK with more complex reporting provisions. In accordance with the scope of SAK ETAP, this standard is intended to be used by entities without public accountability (entities that do not have significant public accountability; and do not publish general-purpose financial statements). The presence of Entity Accounting Standards without Public Accountability (SAK ETAP) is expected to provide convenience for PT. Air Manado in presenting financial statements. The purpose of SAK ETAP itself is to provide facilities for small and medium scale entities. In accordance with SAK-ETAP, Entities without intended public accountability are entities that do not have significant public accountability and publish general-purpose financial reports for external users. This study uses a type of descriptive research - comparative. The results showed that PT. Air Manado has implemented financial statements in accordance with applicable standards but there are still items or elements in the cash flow statement that have not fully implemented the Entity Financial Accounting Standards without Public Accountability (SAK ETAP) in the cash flow statement. Keyword : SAK ETAP, Cash Flow Report,Financial Accounting,PT. Air Manado,Public Accountability

국가회계 개념체계 제정을 위한 기초(안)에 관한 연구

우리나라는 국가회계법, 국가회계기준에 관한 규칙 등 법령체계를 갖추고 2011회계연도부터 발생주의 국가재무제표를 공시하게 되었다. 그러나 국가회계기준 및 국가회계예규의 제정 및 개정, 해석의논리적 근거가 되는 개념체계는 제정되지 않았다. 이로 인하여 국가회계기준이나 예규가 상충되거나일관성을 결여하는 경우가 발생하고 있는 상황이다. 본 연구에서는 일반목적 국가회계 재무보고를 위한 개념체계의 기초(안)을 제시하고자 하였다. 본 연구는 국제적 정합성을 높이기 위해 IPSASB에서 제정한 국제공공부문 일반목적 재무보고를 위한 개념체계를 기초로 개념체계의 초안을 작성하였다. 그리고 개념체계(안)의 작성과정에서 우리나라와 국가회계 법령체계가 유사한 프랑스의 개념체계를 참조하였다. 국가회계 개념체계의 제정과 관련하여 향후에는 다음의 과제가 논의될 필요가 있다. 첫째, 국가회계실체와 보고실체에 대한 논의가 필요하다. 현재는 국가회계실체만 국가회계기준에 관한 규칙에 열거하고 있다. 개념체계(안)에서는 국가회계실체와 보고실체를 각각 달리 정의하고 있다. 이러한 정의에 의하여 현행 국가회계실체와 보고실체는크게 달라질 수 있다. 둘째, 현금흐름에 대한 정보를 재무제표에 포함시켜야 하는지에 대한 논의가 필요하다. 현재 개념체계(안)에서는 현금흐름에 대한 정보를 재무제표에 포함시키는 것으로 정리하였으나 현행 국가결산서의 세입･세출결산서로 대체할 수도 있을 것이다. 셋째, 개념체계의 제정과 함께 기존의 국가회계기준에 관한 규칙이나 예규 등에 포함되어 있는 개념체계와 관련된 내용을 재정비 할 필요가 있다. 넷째, 해외 선진사례에서는 수년에 걸쳐 개념보고서의 기초(안)을 작성하고 공청회 등을 거쳐 의견을 수렴하여 개념체계의 전체적인 틀을 완성하는 접근방법을 사용하고 있다. 우리나라의 경우에도 개념체계의 제정과정에 관한 로드맵을 작성하고 추진할 수 있는 계획의 수립이 필요하다. 다섯째, 개념체계를 법령체계에 포함시키고 있는 국가는 없는 것으로 판단된다. 그러나 개념체계의 역할과 권위가 인정될 수 있도록 개념체계에 대한 위상을 정립할 필요가 있다.

Standards-compliant accounting valuations of ecosystems

PurposeThere is a great deal of interest in ecosystem or natural capital accounting and in methods to estimate monetary valuations of ecosystems. This paper aims to explore methods that may assist agricultural (livestock grazing) enterprises to estimate the monetary value of the productive capacity of the ecosystems they use. Such estimations are expected to provide a more complete set of information about the performance of pastoral operations and may assist them to assure ecological and economic sustainability.Design/methodology/approachThis paper applies five different methods for valuation of the productive ecosystems used in extensive agricultural (grazing) systems. The methods apply different approaches to valuation described in the United Nations System of Environmental-Economic Accounting (SEEA) and Australian Accounting Standards (AASs). To do this, the paper uses financial information drawn from the long-term performance of an economically and environmentally sustainable pastoral enterprise.FindingsSEEA- and AAS-compliant methods to measure the value in use of provisioning ecosystems are practical and useful. The estimations contribute to a reasonable range of fair values required by AASs and improve the availability of information that would be useful in improving the performance of the operation and compare it to reasonable alternate management strategies.Research limitations/implicationsThe SEEA is an international standard and AASs are closely aligned to the International Accounting Standards, so the methods described in this paper are likely to be generalisable to enterprises grazing low-rainfall rangelands in other countries. However, their ability to appropriately accommodate the extensive modifications to ecosystems caused by cultivation and fertilisation needs to be tested before they are applied to grazing operations in high-rainfall areas or other forms of agriculture such as cropping or horticulture.Practical implicationsThe availability of standards-compliant methods for ecosystem valuation means that companies who wish to include ecosystems on a voluntary and informal basis as sub-classes of land in their general purpose financial reports may be able to do so. If these methods are SEEA-compliant, they could be combined with information about the ecosystem type, extent and condition to produce a set of national ecosystem accounts so that the contribution of ecosystems to the economy can be estimated.Social implicationsMany of the enterprises that rely on extensive agricultural ecosystems are unable to generate sufficient financial returns to cover their obligations to owners and creditors. The ability to determine the monetary value of the annual inputs provided by the ecosystems may assist landowners and citizens to detect and avoid depletion of their economic and ecological resources.Originality/valueThis paper applies an explicit interpretation of AAS and draws from valuation methods recommended in the SEEA to demonstrate that current accounting standards (national and corporate) provide a strong foundation for the valuation of the ecosystems used as economically significant factors of production.

CONCEPTUAL FRAMEWORK OF INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS: WORLD EXPERIENCE AND UKRAINE

The article discusses the role of the "Conceptual framework for general purpose financial reporting of public sector entities" in connection with the reform of the accounting and reporting system in the public sector of Ukraine on the basis of harmonization with International Accounting Standards. The chronology of the development of the Conceptual Framework and its brief content are generalized. An analysis of the purpose of the Conceptual Framework for General Purpose Financial Statements was conducted. Conclusions on the need to develop a national conceptual framework are made.

Infrastructure reporting by New Zealand local authorities – perceptions and expectations

PurposeThe purpose of this paper is to identify the contextual factors affecting infrastructure reporting by New Zealand local authorities.Design/methodology/approachThe paper includes a survey and interview of Annual Report Recipients (ARRs) and Infrastructure Information Preparers (IIPs), together with an assessment of the extent of infrastructure information disclosure in the annual reports of New Zealand local authorities.FindingsThis study finds that contrary to the expectations of Lüder’s contingency model (1992), there is an information dissemination gap between the perceptions of ARRs and IIPs regarding infrastructure information reporting in the annual reports of New Zealand local authorities. This finding is consistent with decades of concern about the application of private sector Generally Accepted Accounting Principles to the public sector and the Controller and Auditor General’s (CAG, 2009) concern about the inadequacy of private sector General Purpose Financial Reports in meeting public sector accountability. On the other hand, the study reports that the perceptions of the two groups, ARRs and IIPs, are similar with regard to the importance of infrastructure information items, which is consistent with the expectations of Lüder’s model.Originality/valueThe paper contributes towards theoretical development by adopting Lüder’s (1992) contingency model in the context of infrastructure reporting by New Zealand local authorities and proposing a model of contextual factors by extending Lüder’s model. The practical contribution of the study is in the area of accounting practice and public policy.

Is There a Conflict between Principles-Based Accounting and Structured Electronic Reporting? A Literature Review

National standard-setters continue to express concerns over a principles-based developed taxonomy. Recent comments to the IASB consultation on the IFRS Taxonomy Due Process contain more arguments why principles-based accounting and the taxonomy are perceived as a conceptual conflict. A comment from the Accounting Standards Committee of Germany: Whilst we acknowledge that standard-setting and taxonomy development can and should inform each other, we are concerned that mandatorily bearing taxonomy constraints and limitations in mind when developing standards bears the risk of the standards themselves becoming more rules- and less principles-based. certainly agree that the pronouncements must be articulated clearly enough to enable appropriate representation through the taxonomy; however, a taxonomy’s requirements should not be the key driver for developing standards and interpretations. Similar arguments are expressed by the Accounting Standards Council Singapore: We are particularly concerned that the prescriptive nature of Taxonomy would not align well with the principles-based IFRS. The Swedish Financial Reporting Board wrote, We fear that bringing XBRL into standard setting will be detrimental to the principles-based approach, particularly as regards the presentation of The Korean Accounting Standards Board also comment, It should be more conspicuously clarified that the Taxonomy is not guidance for in order not to deteriorate the principles-based standard-setting approach. Another commentator from a Big-4 audit firm: There is a risk that the design and content of a taxonomy that is intended to be used to capture information in general purpose financial reports will, or be perceived to, influence how those reports are prepared. Filing requirements that used prescribed data structures could undermine principles-based reporting requirements. understand and share those concerns. this is the very reason that the IASB should be involved with the development and maintenance of the Taxonomy. If the IASB is not, others will develop taxonomies and we are more concerned about the risk that those taxonomies pose to the application of IFRS. EFRAG has expressed on several occasions the view that the development of the taxonomy should not drive the IASB standard-setting process, because it risked moving away from a principles-based approach, in particular in the area of Considering the Italian Standard Setter, However, we reiterate our comments made with references to the Request for Views Trustees' Review of structure and Effectiveness: Issues for the Review that the Taxonomy should not be integrated in the IASB standard-setting process because we see the risk that this may take the IASB away from a principles-based approach when it develops accounting standards, in particular in the area of disclosures. taxonomy-related issues should be kept separate from the standard setting process as we fear that considerations that regard the Taxonomy may have a negative impact on the principles-based approach.

The Purpose of Financial Reporting: The Case for Coherence in the Conceptual Framework and Standards

This paper proposes a basis for progress in the development of the conceptual framework (CF) as a foundation for developing accounting standards. This topic has gained increased prominence following the IASB's (2013) release of its Review of the Conceptual Framework for Financial Reporting (RCFFR) proposing changes to the CF. In this paper the broad socio‐economic environment is seen as determining the primary purpose of General Purpose Financial Reporting (GPFR), which, in turn, establishes the high‐level properties of a CF suitable to meet that primary purpose. This is to support market stability and efficiency through the provision of an account of the financial position and performance of an entity that accords with economic reality.The case is made that the primary purpose of a CF is to provide the principles for the development of accounting standards that will result in GPFR that is useful. This requires theoretical coherence. The CF should drive the standards and if standards depart from the CF principles, such departures should be justified. This proposal is consistent with the position adopted in the RCFFR. However, in contrast to the RCFFR, this paper accents the purposive approach and links the formation of standards directly to the CF. This approach implies that standards are subordinate to CF principles; therefore compliance with standards should not provide a basis for compromising the faithful representation of economic reality. From the purpose identified for GPFR, the paper argues for a default presumption in favour of Fair Value Accounting, a retreat from the asset/liability approach, and a re‐casting of the income statement to focus on operational flows.

Asset reliability and security prices: evidence from credit markets

We assess the relation between asset reliability and security prices. Concerns about asset reliability are increasing with the move to fair value accounting in general purpose financial reports. We provide pertinent evidence from credit markets. A key benefit of using credit market data to explore the capital market implications of asset reliability is the theoretical basis of Duffie and Lando (Econometrica 69(3):633–664, 2001). They show that asset reliability (measurement) concerns should be concentrated in short-term credit spreads. Thus a focus on credit term structure can facilitate a cleaner identification of the impact of asset reliability on security prices. We find that asset reliability issues, attributable to SFAS 157 disclosures of Level 2 and, especially, Level 3 financial assets for a set of US financial institutions over the period of August 2007 to March 2009, are a significant determinant of short-term credit spreads and the shape of the general credit term structure. Our findings are robust to a variety of control variables and research design choices.

Privatizing Australian Airports: Ownership, Divestment and Financial Performance

This article addresses the performance of the three largest Australian airports following their privatization. The airports represent cases of divestment of government business enterprises into privately-owned businesses each with differing ownership arrangements. The performances of the privatized airports are considered using financial data obtained from general purpose financial reports of the entities. There are significant implications for future divestment policies, including the value of divestment as a policy response in uncompetitive environments, the use of particular infrastructure investment models, and the nature of the linkage between ownership structure and financial performance.

Jaraf Editorial, Volume 7 (2) December 2012

Welcome to this edition of the Journal of Applied Research in Accounting and Finance. Now in its eighth year, JARAF continues to encourage and promote applied research that has practical applications in the contemporary teaching and practice of accounting and corporate finance. In this issue, we examine topics related to M&A activity and corporate governance, financial reporting under IAS and legal aspect of fundraising.In our first article, Brett Cotten, Douglas Schneider and Mark McCarthy examine the new lease accounting standard proposed by The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB). The proposed standard requires lessees to record operating leases as debt. The authors examine whether the debt impact of operating leases is reflected in bond ratings by comparing firms’ actual credit ratings with synthetic ratings calculated using actual and adjusted financial statement data. Their findings suggest that the debt impact of operating leases is important to ratings agencies and that ratings may become more accurate under the proposed standard. Next, George Athanassakos looks at the value premium of a sample of Canadian non-interlisted stocks for the period May 1, 1985–April 30, 2009 and investigates whether an additional screening step for undervalued, valued and growth stocks can be employed to predict future stock returns. The author documents a consistently strong value premium over the period and constructed a composite score indicator (SCORE), enabling them to separate the winning stock from the losing stocks. He details numerous strategies that would have beaten the P/E portfolio over that period. This article would be of interest to investors and also researchers looking to apply such findings in sample US and global stocks. Finally, Mark Hughes and Simon Hoy criticise the International Accounting Standards Board’s (IASB) response to the call to improve the quality of accounting rules relating to investments in other entities. The paper argues that the IASB’s response has led to an increase in opportunities for entities to engage in off-balance sheet financing through the use of potential voting rights and supermajorities. They find that the entities that use supermajorities characteristically do not have consolidated majority-held investees, are larger, have less favourable leverage and better efficiency ratios. Using a case study, the paper demonstrates the impact of this off-balance sheet financing on the general-purpose financial reports of investing companies.

Light-Handed Charity Regulation: Its Effect on Reporting Practice in New Zealand

Internationally, there has been a steady increase in the number of countries instigating charity regulation. While the Charity Commission for England and Wales was established by the Charitable Trusts Acts of 1853, since 2005 the Office of the Scottish Charity Regulator, Charity Commission for Northern Ireland and the Singaporean Charity Council were established almost contemporaneously with New Zealand’s Charities Commission. In other countries (such as Canada and the United States) tax authorities register and monitor charitable activity leading to a perception that charities need regulation if the donating public's trust and confidence is to increase.Public interest theory suggests that regulation increases organisational transparency through reducing information asymmetry, protects (or encourages) a competitive market, leading to a distribution of resources which is in the public interest (Gaffikin, 2005). While these arguments are commonly used to call for regulation in the private (for profit) sphere, nonetheless they may explain the increase in the number of bodies regulating charities internationally.Notwithstanding a need for regulation, the cost of complying with these regimes is often an issue, especially for small and medium-sized charities and therefore regulator tend to take a light-handed approach to small and medium charities' information provision (for example, Hind, 2011; Morgan, 2010a). Responding to the call by Hyndman and McDonnell (2009) for research into charities regulation, its rationale and operation, this paper ascertains the impact of a light-handed enforcement regime on small and medium charities' reporting. In so doing, it analyses the General Purpose Financial Reporting (GPFR) practices of a selection of 300 small and medium-sized charities registered with the New Zealand Charities Commission against the Charities Act requirements and hence the rationale for this regulator. It uses this analysis to predict how the regulator's activities