International Accounting Research Research Articles

Globalization and International Accounting Research: an agenda for the future

The study of international accounting is increasing in importance because of its ramifications upon business practices world-wide. International accounting is inextricably linked to the globalization movement that is sweeping all economies. Indeed, the availability of accounting information constitutes an integral and indispensable input to the existence and acceleration of this movement. This paper provides a step toward the examination of such beliefs and their impact on international accounting through a historical investigation of the academic literature in this field as exemplified by two journals: Advances in International Accounting and the International Journal of Accounting Education and Research. The wider project involved a hermeneutic interpretation of documents in an attempt to analyze trends in international accounting research appearing in academic accounting journals from 1987 to 1996 through the lens of postcolonialism. However, due to space constraints this paper focuses on the predominance and the championing of the globalization theme in this literature and its impact on research. This section of the paper provides a description of the methods employed in selecting the journals, the relevant time period, the articles constituting the data set, and the procedure followed in constructing the qualitative themes.

Goodwill Impairment: A Comparative Country Analysis

In response to proposed convergence of accounting standards, we investigate whether non-U.S. firms (which list their shares on U.S. secondary markets and report under U.S. standards) are more likely to interpret and apply the accounting rules in a different manner than their U.S. counterparts. Specifically, this paper evaluates a mediation effect that non-U.S. firms will take greater goodwill impairment charges under SFAS 142 than U.S. firms. Extending earlier international accounting research (e.g., d'Arcy 2006), the study illustrates the difference between de jure harmonization (harmonized rules) and de facto harmonization (harmonized practices) and examines the impact of legal, accounting, and cultural values upon the accounting for goodwill. The findings indicate that both firm-level and country-level characteristics affect the goodwill impairment decision.

Effective experimental controls for research in international accounting: Further thoughts

This paper responds to recent research by Ruland et al. [Ruland, W., Shon, J., Zhou, P., 2007. Effective controls for research in international accounting. Journal of Accounting and Public Policy, 26(1), 96–116.] that addresses the effectiveness of experimental controls for research in international accounting, with focus on Ndubizu and Sanchez [Ndubizu, G.A., Sanchez, M.H., 2006. The valuation properties of earnings and book value prepared under US GAAP in Chile and IAS in Peru. Journal of Accounting and Public Policy 25 (2)]. We attempt to remove some misconceptions about effective experimental controls that have surfaced in the debate. We argue that theory and refined proxies alleviate many of the control issues that have surfaced in the literature.

Effective controls for research in international accounting

Numerous studies have examined the value relevance and other characteristics of international and country-specific accounting standards. This paper evaluates the experimental designs of selected studies with respect to the controls essential for effective research. Both cross-country and within-country research designs share a common need for controls. Perhaps the most distinctive element of effective design in these studies is the control for institutional, cultural, and structural differences between countries. Previous research shows that the key outputs of various country-specific accounting standards are functions of a variety of factors including accounting-related issues, legal origin, shareholder protection, the information environment, financial markets, and enforcement of these standards. In addition, effective studies of country-specific or international accounting principles require control for firm and industry-specific effects and for self-selection bias, as in conventional within-country examinations. When controls are not sufficient, observed differences in the outputs of alternative accounting standards may result from differences between countries or firms rather than from different accounting principles. We review a sample of recent research with attention to these control considerations.

Earnings Thresholds Related to Dividend Cover

An important line of international accounting research is the comparative quality of earnings across various jurisdictions. Several studies use earnings thresholds as a measure of earnings quality (e.g., Bhattacharya et al. 2003; Lang et al. 2003; Barth et al. 2005; Lang et al. 2005; Peasnell et al. 2005). An implicit assumption in these studies is that firms in all countries are managing earnings towards the same objective (Land and Lang 2002). We argue that international research ought to consider the possibility of an earnings threshold relating to dividend cover. Given that firms are reluctant to reduce dividends (DeAngelo and DeAngelo 1990; DeAngelo et al. 1992), the dividend-cover earnings threshold is economically important. We examine earnings distributions for the dividend-cover earnings threshold for a sample of 2,264 observations from New Zealand firms over the period 1986 to 2002. We find an asymmetry in the distribution of earnings associated with the dividend-cover earnings threshold. We also find that this asymmetry disappears after a change in legislation that removed the nexus between earnings and dividends. Similar to prior research, we find that an asymmetry exists for the zero earnings threshold, but it is not as pronounced as that found in U.S. data. An implication of our results is that research using international data ought to consider country-specific institutional settings when considering earnings thresholds.

A multidimensional measure in accounting ethics research

This study contributes to accounting ethics research by providing empirical evidence and some suggestions for the selection of variables to measure ethical judgements and ethical intentions of professional accountants. The senior professional accountants from big accounting firms located in Australia, India and Malaysia were investigated to gather evidence on measures of ethical judgements and intentions on 11 dependent variables. The study specifically suggests that a combination of unidimensional and multidimensional be used to gain an insight into the complex ethical judgements and intentions of accountants. More importantly, this study finds support for the hypothesis that the explanatory powers of the multidimensional ethics measure are greater than the unidimensional variables. This study also extends prior research by finding support for the hypothesis that social desirability response bias exists among accountants from the three countries. Furthermore, the study contributes to comparative international accounting research by showing that these suggested variables also provide useful insights into ethical judgements and intentions of accountants in countries that differ significantly in their cultural characteristics.

Effects of database choice on international accounting research

Data availability is one of the traditional obstacles confronting researchers carrying out international empirical studies in accounting. In recent years several databases have claimed to offer comprehensive coverage of accounting and financial data of firms worldwide. We analyse whether the choice of database has an effect on the results of empirical studies. We find that the results of a simple empirical adaptation of the Ohlson (1995) model for fourteen member states of the European Union change significantly depending on the database chosen (Datastream, Global Vantage, Company Analysis, Worldscope, Thomson Financial, Financials and BvD Osiris). These differences are mainly attributable to differences in the samples across databases. When we match observations across all databases the differences persist but are much less pronounced. Our main conclusion is that database choice matters, as it leads to different results when the same research design is used.

Does Stock Price Synchronicity Represent Firm-Specific Information? The International Evidence

Note: This paper has been superseded by Gassen, LaFond, Skaife and Veenman: Illiquidity and Stock Price Synchronicity, http://ssrn.com/abstract=2405465. Much of prior international accounting research implicitly assumes that stock prices capture similar amounts of firm-specific information across countries. Recent research asserts that stock price synchronicity, defined as the R2 from asset pricing regressions, is a useful measure of the amount of firm-specific information impounded in stock prices in international markets. However, the results of our empirical tests provide little support for using stock price synchronicity as a measure of firm-specific information internationally. We develop an alternative measure of firm-specific information impounded in stock price based on the percentage of zero-return days, i.e., the zero-return metric, and repeat the analyses. Overall, our results suggest that the zero-return metric is a better measure of firm-specific information impounded into share prices than the synchronicity measure internationally.

The Impact of Financial Reporting Regulation on the Market Valuation of Reported Environmental Liabilities: Preliminary Evidence from US and Canadian Public Companies

This study investigates the economic consequences of four financial reporting regulations relating to environmental liability reporting in samples of 170 US and 156 Canadian public companies during the period 1984 to 1997. The study's purpose is to investigate the factors that make financial reporting regulation effective in enhancing the relevance and reliability of accounting information. Prior research provides the theory that financial reporting regulations impose costs on managers and create incentives for them to report accounting information that is relevant and unbiased. This study assesses these regulations' enforceability, which is viewed as arising from the regulator's power to enforce its regulations by sanctions or penalties. It tests whether the relation between market valuation and reported environmental liability accruals changes when the new regulations are enacted, and whether regulation with high enforceability has a more significant impact than regulation with low enforceability. This study uses a residual-income valuation model to measure the valuation coefficient, or multiplier, on reported environmental liability accruals. Changes in this coefficient are used as indicators of changes in the market's assessment of the value relevance and bias of the reported accounting information. This study provides preliminary evidence indicating that financial reporting regulations issued by the securities market regulator and the accounting profession are associated with changes in the relation between market value and reported environmental liabilities in some cases, and suggests avenues for further international accounting research on the factors involved in financial reporting regulation's impact.

An Analysis of International Accounting Research in U.S.- and Non-U.S.-Based Academic Accounting Journals

ABSTRACT: Faculty and administrators are called upon to evaluate international accounting researchers' performance, which requires knowledge of international accounting research journal outlets, journal rankings, topics, methods, and authorship. Both seasoned and novice international researchers are faced with the need to know the placement, turnaround review time, rankings, topics, methods, and authorship of potential international accounting research outlets. Thus, the objective of this study is to provide timely information to the international accounting research evaluator as well as to international accounting researchers, whether at the entrance, mid-career, or senior level. We compare and analyze accounting research published in 41 U.S.- and non-U.S.-based academic journals from 1981–2000 in order to describe and discern the trends of international accounting research within five dimensions: quantity, internationality, topic, method, and author. Our regression-based growth comparisons reveal an increase in international accounting research, a greater broadness/diversity in internationality topic and authorship across countries, and more broadness in research method over time from 1981 to 2000. Interestingly, one top-tier journal shows a decline in international accounting studies published. These findings are among those reported in our analyses that provide timely information to those pursuing or evaluating international accounting research.

A Review of Markets-Based International Accounting Research

ABSTRACT: This paper discusses challenges and opportunities facing international accounting researchers and demonstrates the relevance of markets-based international accounting research to those new to the area. We review recent research in the following areas: required GAAP for foreign-listed firms and adoption of international standards, accounting classifications, earnings management, the impact of foreign operations on firm valuation, capital market anomalies, and accounting reforms. We also provide suggestions for future research in each area and examples of domestic research issues that can be addressed with international data. The opportunities for conducting international accounting research are many and growing.

International managerial accounting research: A contracting framework and opportunities

The objective of this paper is to provide an international managerial accounting contracting-based framework that organizes a broad sample of published research and (based on that sample) identifies research opportunities. Organizations that operate in cross-border markets constantly face contracting challenges that arise because of different factor and product market characteristics. Accounting has a role in defining, implementing, monitoring, and negotiating the implicit and explicit contracts firms use in these markets. Thus, a useful framework for considering international managerial accounting research would incorporate different international market characteristics that impact the contracting role of firms. Using such a theoretical framework, this paper examines the role of managerial accounting by focusing on operating and strategic decisions that require knowledge transfer, decision-rights assignment, and decision-rights control within international organizations.

A Review of Markets-Based International Accounting Research

This paper discusses challenges and opportunities facing international accounting researchers and demonstrates the relevance of markets-based international accounting research to those new to the area. We review recent research in the areas of required GAAP for foreign-listed firms and adoption of international standards, accounting classifications, earnings management, the impact of foreign operations on firm valuation, capital market anomalies, and accounting reforms. Suggestions for future research are provided in each area. Examples of domestic research issues that can be addressed with international data are also provided. The opportunities for conducting international accounting research are many and growing.

Violent Crime: Does Social Capital Matter?

This paper examines empirically the effect of some commonly used indicators of social capital, such as the prevalence of trust on community members and the participation in voluntary secular and religious organizations, on the incidence of violent crimes. This is a cross-country study whose basic sample consists of 39 developed and developing countries and whose dependent variable is the national intentional homicide rate. The paper identifies and deals with three challenges in the empirical estimation of the effect of social capital on the incidence of violent crimes. The omittedvariable problem is dealt with by including income inequality and economic growth as additional determinants of a country’s violent crime rate. The joint endogeneity (or reverse-causation) problem is accounted for by using instrumental variables for social capital in the crime regression. The specificity problem, that is the potentially opposite effects of group-specific and society-wide social capital, is noted and addressed only indirectly by emphasizing the results applied to the social capital indicators that have application for society as a whole. The main result of the paper is that only the component of social capital measured by trust on community members has the effect of reducing the incidence of violent crimes. The results regarding measures of other indicators of social capital are rather unclear. This may be due to a combination of limited samples, inability to fully control for reverse causation, and most likely, the opposite effects that society-wide and group-specific social capital may have on violent crime. ∗ Lederman and Menendez are economists with the Office of the Chief Economist for Latin America and the Caribbean of the World Bank. Loayza is a senior economist with the research department of the Central Bank of Chile, and he is currently on leave from the Development Economics Research Group of the World Bank. The opinions expressed herein should not be attributed to the World Bank. The authors are grateful to Ed Glaeser, Jeff Grogger, Gale Johnson, Sanjay Marwah, Steve Messner, Nicholas Sambanis, and an anonymous referee for invaluable comments and suggestions. The authors are responsible for any remaining errors.

An analysis of international accounting research in Journal of International Accounting Auditing & Taxation: 1992–2001

This study analyzes the research published in Journal of International Accounting Auditing & Taxation (JIAAT) between 1992 and 2001 in terms of topical focus, methodology, and international dimensionality. The results suggest that the research published in the journal spans a broad spectrum of topical areas, uses several methodological approaches, and covers a wide area of international dimensionality. Additionally, this study analyzes the published research by author attributes. While the majority of the authors contributing to the journal have been from the U.S., there has been an increase in co-authorship between U.S. and non-U.S. authors over time. The results of the study indicate that the journal has served as an important forum to promote and disseminate international accounting research.

The intellectual structure of international accounting in the early 1990s

This paper derives an intellectual structure of the international accounting literature using co-citation analysis. The structure is found to be fragmented, with a number of areas needing further research to integrate them. The paper identifies the 10 most frequently cited documents. These are predominantly books and standards. It appears that books written by key researchers provide a foundation for the development of related research. The paper also identifies a core literature in international accounting, which focuses on the areas of comparative systems, classification studies, foreign currency, and inflation. By examining the structure and nature of international accounting research in the early 1990s, this study provides insights into the antecedents to contemporary international research. This is useful in assessing how this area of research has developed since then as it creates a benchmark for comparison. The study also contributes to defining the boundaries of the area. Finally, the paper provides a measure of the degree of fragmentation of the international accounting literature and identifies areas that may be integrated through further research.

An analysis of the authorship of international accounting research in U.S. journals and AOS: 1980 through 1996

We analyze the international accounting research published in 30 U.S. academic journals and Accounting Organizations and Society ( AOS) from 1980 to 1996 to provide strategies for those interested in pursuing academic careers in international accounting. We focus on the relationship between the most prolific authors and their academic environment. Our findings show that the set of authors and schools of the most prolific authors in international accounting in the U.S. are not the same as the set of the most prolific authors and schools of AOS. Neither the international accounting authors nor their academic affiliations were dominated by U.S. or U.K. academic institutions. The authors in international accounting were promoted within and between schools and many were full professors with professorships. The dominant research methods used and topics researched in AOS were different from those of U.S. journals. Young faculty should develop their career objective and align their employment and publication goals accordingly because they have a broad selection of mentors, universities and journals for which to target their research. Aligning research interests with academic environment choices should maximize an international accounting faculty's publication productivity and academic rank.

Internationalising international accounting research: A conference sponsored by accounting, organizations & society and the city university of Hong Kong

Internationalising international accounting research: A conference sponsored by accounting, organizations & society and the city university of Hong Kong

Internationalising international accounting research: A conference sponsored by accounting, organizations & society and the city university of Hong Kong

Internationalising international accounting research: A conference sponsored by accounting, organizations & society and the city university of Hong Kong

Internationalising international accounting research: A Conference Sponsored by Accounting, Organizations & Society and the City University of Hong Kong Hong Kong, Spring 1998

Internationalising international accounting research: A Conference Sponsored by Accounting, Organizations & Society and the City University of Hong Kong Hong Kong, Spring 1998