Implementation Of New Accounting Standards Research Articles

Analysis of the Impact of the Implementation of PSAK 73 on Leases on Financial Performance in Transportation & Logistics sub-sector companies listed on the Indonesia Stock Exchange in 2020-2022 with DER as a Moderating Variable

Growing business and economic activities cause the level of industrial competition to be more competitive. This study aims to analyze the impact of the implementation of PSAK 73 on leases on the financial performance of companies in the transportation & logistics sub-sector listed on the Indonesia Stock Exchange during the period of 2017 - 2022. PSAK 73 was introduced as an accounting standard that regulates the recognition, measurement, and disclosure of rental transactions, which can affect a company's financial statements. The research used is quantitative with a descriptive analysis method by looking at the impact of the implementation of PSAK 73 on the financial performance of companies in the transportation & logistics sub-sector. The data used is sourced from the company's published financial statements listed on the Indonesia Stock Exchange. The results of this study are expected to provide a better understanding of the impact of the implementation of PSAK 73 on the financial performance of companies in the transportation & logistics sub-sector, as well as provide input for practitioners and regulators in facing the implementation of new accounting standards. The results of this study concluded that liability recognition has an effect on financial performance, asset recognition has no effect on financial performance, equity recognition has no effect on financial performance, debt to equity ratio strengthens liability recognition to financial performance, debt to equity ratio strengthens asset recognition Debt to Equity Ratio weakens Equity Recognition to Financial Performance.

Innovations in accounting and auditing: A comprehensive review of current trends and their impact on U.S. businesses

The landscape of accounting and auditing is undergoing a transformative evolution, driven by rapid technological advancements, regulatory changes, and shifting business paradigms. This comprehensive review delves into the contemporary innovations shaping the realm of accounting and auditing and assesses their profound implications for U.S. businesses. Technological innovations, particularly the integration of artificial intelligence and machine learning, have revolutionized traditional accounting processes. Automation tools and advanced data analytics are streamlining routine tasks, enhancing accuracy, and enabling accountants to focus on more strategic, value-added activities. The paper explores how these technological advancements are reshaping the skill sets required in the accounting profession and the consequent impact on professional development and education. Furthermore, the study investigates the evolving role of auditors in an era dominated by Big Data. The adoption of data analytics and blockchain technology is enhancing audit efficiency, transparency, and the overall quality of financial reporting. The analysis emphasizes the importance of auditors embracing these innovations to provide more timely, accurate, and insightful assessments of financial statements. Regulatory changes, such as the implementation of new accounting standards and reporting requirements, also feature prominently in this review. The study examines the challenges and opportunities arising from these regulatory shifts and assesses their impact on financial reporting practices in U.S. businesses. As businesses adapt to these innovations, the paper explores the broader implications for decision-making, risk management, and corporate governance. It sheds light on how the changing landscape of accounting and auditing influences the strategic decision-making processes of organizations, with a focus on fostering transparency and accountability. In conclusion, this comprehensive review synthesizes the multifaceted innovations in accounting and auditing, offering insights into the current trends shaping the industry and their far-reaching consequences for U.S. businesses. The research contributes to a deeper understanding of the challenges and opportunities associated with these transformations, guiding stakeholders in navigating this dynamic landscape effectively.

Replicating and Digesting Anomalies in the Chinese A-Share Market

We replicate 469 anomaly variables similar to those studied by Hou et al. (2020) using Chinese A-share data and a reliable testing procedure with mainboard breakpoints and value-weighted returns. We find that 83.37% of the anomaly variables do not generate significant high-minus-low quintile raw return spreads. Further adjusting risk increases the failure rate slightly to 84.22% based on CAPM alphas and 86.99% based on Fama–French three-factor alphas. We show that the conventional procedure using all A-share breakpoints with equal-weighted returns for the anomaly test is indeed problematic as it assigns too much weight to microcaps and has a very limited investment capacity. The CH3-factor, CH4-factor, and q-factor models show the best performance over the whole sample period. The q-factor model is the best performer in the post-2007 subsample period after significant improvements occurred in China’s financial market environment, such as the completion of the split-share structure reform and the implementation of new accounting standards conforming to the International Financial Reporting Standards. The non–state-owned enterprise subsample in the post-2007 period is a cleaner sample in which the CH4-factor and q-factor models are the best performers. This paper was accepted by Lukas Schmid, finance. Funding: Z. Li acknowledges financial support from the National Natural Science Foundation of China [Grant 72103043] and the Fundamental Research Funds for the Central Universities in UIBE [Grants 19QN01 and 22PY053-72103043]. L. X. Liu acknowledges financial support from the National Natural Science Foundation of China [Grants 71872006 and 72273006]. L. X. Liu and X. Liu acknowledge financial support from the Guanghua Thought Leadership Platform of Peking University. K. C. J. Wei acknowledges partial financial support from the Research Grants Council of the Hong Kong Special Administrative Region, China [Grant 15507320]. The authors acknowledge financial support from the Guanghua School of Management, Peking University; the School of Banking and Finance, University of International Business and Economics; and the Non-PAIR Research Centre “Research Centre for Quantitative Finance” at Hong Kong Polytechnic University. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2023.4904 .

The Role of Auditing Firms in the Implementation of New Accounting Standards: Evidence from China

This paper explores the impact of auditing firms on the implementation of the new Chinese Accounting Standards for Enterprises 22 (new CAS 22), which converges with IFRS 9. We find that the Big4 firms focus on fair value measurement and application of the expected credit loss (ECL) impairment model, whereas the LocalTop6 firms primarily focus on the classification of financial assets. The results indicate that effective implementation of the new standards mainly depends on standardized procedures and professional techniques of auditing firms, as the Big4 firms exhibit better implementation of the new standards in terms of items that generate greater risk and uncertainty than do local large auditing firms in China. In addition, we further test how cross‐listing affects the role of auditing firms in implementing the new standards and find that the Big4 firms play a more significant role for A‐share only companies than A + H companies. The findings reveal the challenges associated with implementation of IFRS 9‐based new CAS 22 in China.

Fair value accounting implementation challenges in South Africa

PurposeThe objective of this research is to explore the challenges being encountered when applying and implementing fair value accounting requirements, focusing specifically on the determination of fair value per International Financial Reporting Standards (IFRS) 13: Fair value measurement (IFRS 13) in the South African capital market.Design/methodology/approachData are collected from 20 detailed interviews, primarily with preparers and interpretively analysed to identify how individuals internalise the requirements of IFRS 13 and the challenges associated with its application. The researchers focus specifically on South Africa because of its status as a developing economy and, at the same time, its extensive experience in applying IFRS.FindingsSouth African preparers appear reluctant to change from a conventional cost-based measurement approach to one grounded in fair value. Primary concerns include the perceived usefulness of fair value accounting and its conceptual appropriateness, given its perceived de-emphasis of the traditional stewardship role of financial reporting. Related challenges to the application of IFRS 13 include concerns about the cost of determining fair value; the inherent subjectivity of fair value measures and the practical difficulty of calculating fair values when markets are not efficient or where business environments are complex and dynamic where Level 1 inputs are not widely available for all assets and liabilities. These challenges encourage preparers to choose accounting policies, which minimise the use of fair value or apply the provisions of IFRS 13 legalistically.Research limitations/implicationsData are collected from a group of respondents from a single developing economy. Additional research on the application of IFRS 13 in other developing markets will be required to conclude on the relevance of economic, cultural and social factors for the understanding and implementation of new accounting standards by practitioners.Practical implicationsStandard setters and regulators cannot assume that new accounting standards will be interpreted and applied as intended. Even when compliance with IFRS is mandatory, preparers have considerable discretion when it comes to operationalising accounting prescriptions. Unless the challenges raised by preparers are addressed, misapplication of IFRS is likely to continue.Originality/valueThe research makes an important empirical and practical contribution by providing primary evidence on the operationalisation of IFRS 13 in a novel setting. It complements earlier research which has focused primarily on the conceptual/theoretical dimension and on American and European perspectives.

The Impact of Public Pension Deficits on Households' Investment and Economic Activity

US public state pension deficits are very large, accounting for 18.5% of an average state's GDP and up to 50% in Illinois. In principle, households should respond to this heavy future burden by increasing current savings, particularly in safe assets, since pension deficits are countercyclical. Comparing households residing on opposing sides of states' borders, I document that households in larger-deficit states save more, investing more in safe bank deposits and less in risky stocks. Specifically, households hold 0.70 dollars more in deposits and 0.35 dollars less in stocks for each additional dollar of pension deficit. This effect strengthened further following the implementation of new accounting standards in 2015 that made deficits more salient by requiring states to publicly disclose them. Exploiting staggered state pension reforms, I also find that households respond consistently when states reduce pension deficits; they shift savings from deposits to stocks. These reallocations spill over onto local economic activity: as households withdraw deposits following a pension reform, exposed local banks cut lending to local businesses, lowering employment and wages, especially in the non-tradable sector.

The Influence of IFRS Adoption on Banks’ Cost of Equity: Evidence from European Banks

This study examines how mandatory adoption of International Financial Reporting Standards (IFRS) in European countries affects banks’ cost of equity. Supporters of IFRS argue that its adoption improves the quality of accounting information, which in turn decreases the cost of equity. However, banking regulators could intervene in the implementation of new accounting standards to protect the stability of the banking system, which would deteriorate banks’ information environment and thereby increase the cost of equity. Using a regression analysis of European listed bank data, I find that banks’ cost of equity increases after the adoption of IFRS in countries with strong bank supervisory offices. I also find that strong legal enforcement and additional disclosure requirements jointly reduce banks’ cost of equity, but pre-IFRS inconsistencies between local accounting standards and regulatory standards jointly increase banks’ cost of equity. This study contributes to the literature on market discipline in banking and has policy implications: The findings suggest that, when implementing new accounting standards, potential conflicts between financial reporting and banking regulations should be considered.

Annual report readability and corporate agency costs

Annual reports are the main sources of information for outside investors’ investment decisions and enable shareholders to supervise the management. Difficulties with the readability of these reports may therefore have serious consequences. Using 19,221 firm-year observations of Chinese A-share listed firms from 2001 to 2015, we investigate the association between annual report readability and corporate agency costs, where readability is proxied by report file length and/or file size. We find that firms with better annual report readability experience lower agency costs, and the negative association between readability and agency costs is more pronounced in firms with higher external audit quality, internal control quality or analyst coverage. These results hold after several robustness checks. The positive effect of annual report readability is stronger in private firms than in state-owned enterprises, and becomes stronger after the implementation of new accounting standards in 2007. Readable annual reports can help in monitoring corporate insiders’ opportunistic behavior and thus reduce agency costs.

Toward Implementation of Accural Basis in Indonesia Government: Key Success Factors

AbstractIn 2015, the government's financial statement presentation has to be based on Government Regulation numbers 71 of 2010 is concerning the Government Accounting Standards accrual basis. With the recording of changes in government accounting basis of the cash basis into the accrual basis, then a paradigm shift in financial reporting. This study describes the factors that affect the readiness of local governments in implementing the Government Regulation number 71 of 2010. Readiness of local government is very important given the Government Accounting Standards Board will formally applied simultaneously in 2015. The previous researchers used human factor, organizational commitment and information technology that is expected to affect the readiness of the implementation of Government Regulation number 71 of 2010. Human resource is the area of financial management personnel competency and development efforts and increase their competence. Changes in accounting standards to be followed by the development and improvement of human resource competencies that will run the standard. Organizational commitment is needed from the highest level to the lowest must have a strong commitment for the changes to accounting standards that can be applied to both. Changes in accounting standards should also be followed by information technology that will support the implementation of new accounting standards.

Konsep Nilai Wajar (Fair Value) dalam Standar Akuntansi Berbasis IFRS di Indonesia Apa dan Bagaimana?

This paper is intended to explain the use of the concept of fair value instead of book value. The accounting world in Indonesia during the last few years have made convergency implementation of new accounting standards oriented to the International Financial Reporting Standards (IFRS) issued by International Accounting Standard Boars (IASB). This new accounting standard that emphasizes the concept of fair value compared with book value concept is outdated. The use of the concept of fair value of the difference and it turned out to be a trigger konvergency change the paradigm of the book value of a simpler, but less information is less transparent. The implementation of accounting standards konverjensi done gradually raises serious problems, this can be seen from postponed the application of PSAK 50 & PSAK 55 in the banking industry. Knowledge and experience of inadequate is a priority of fair value implementation difficulties.

Changes In Financial And Accounting Environment In Albania And The Impact On Practitioners

This paper presents a theoretical discussion about the organization of the professions of accounting and auditing in Albania and the most recent changes that have encompassed the Albanian financial and accounting landscape after the implementation of new accounting standards, the increased requirements for electronic financial and tax reporting and the ongoing improvement and adaptation of the higher education curricula. All these factors present major challenges for the field practitioners in accounting and auditing. We try to identify which are the most prominent challenges faced by the practitioners today and identify that the ICT impact, ethical values and the globalization trend in accounting and financial reporting are some of the most emergent ones. These factors make the work of the practitioners more and more demanding and as it seems difficult to remain competitive in such a dynamic environment, we conclude with the recommendations that the curricula of the financial and accounting higher education should be adapted to include topics such as IAS/IFRS, ICT, Code of Ethics and that the professional accountancy and auditing organizations in Albania should provide ongoing training and qualification sessions on the same topics to the existing practitioners.

Efficiency of public sector banks operating in India: post-reforms period analysis

The Indian banking sector has witnessed a series of reforms since 1991 with the major objective to promote flexibility, operational autonomy and competition in the system and to raise the banking standards in India to the international best practices. There is a change in the importance of public sector banks because of the entry of foreign and private sector banks. In the recent past, the banking industry has succeeded to draw attention of investors by its steady performance and tremendous prospects to grow and to meet broad challenges like threats of risks from globalisation; implementation of Basel II; improvement of risk management systems; implementation of new accounting standards; enhancement of transparency and disclosures etc. The competitive pressures force banks to improve their efficiency scores, and mapping the progressive pathway is an education tool for investors. In this backdrop, this study evaluates the technical efficiency (TE) of public sector banks (PSBs) operating in India during the...

The Implementation of New Accounting Standards of the Economic Consequences of Regional Differences: Analysis from the Perspective of Institutional Economics

Based on the new institutional economics perspective of the research hypothesis is: the same set of accounting standards for different extent economically developed region with a significant difference, the rate of economic growth in different parts of the impact of the company, there are also significant differences. We take advantage of new accounting standards starting in 2007 after the implementation of the first quarter of data, analysis of new accounting standards before and after the changes in the profitability of listed companies. The study found that the implementation of new accounting standards consequences of significant regional differences. The use of annual data robustness testing, empirical conclusions of this study support the hypothesis. In this study, the discovery of accounting standards for the formulation and the effect of pre-judgment, has significance. IFRS for the understanding of the implementation of the worldwide consequences have significance.