Professional Accounting Bodies Research Articles

Is the accounting curricula keeping up with sustainability development?

ABSTRACT There is continuing demand from practitioners, standard setters, and regulators for accountants to have the knowledge and competencies to contribute to sustainable business practices, reporting, and assurance. Educators at all levels of the accounting curricula have a responsibility to upskill. This research examines the extent of sustainability education among all levels of accounting curricula. Publicly available course information at three levels in New Zealand – secondary school, university, and professional accounting – was analysed using content analysis. The research finds a lack of sustainability education at all accounting curricula levels, with uneven coverage that is focused on sustainability broadly with questionable breadth and depth. This inconsistency among accounting educators results in accounting graduates with varied exposure to sustainability. This research calls for collective responsibility and collaborative leadership among educators, professional accounting bodies, practitioners, standard setters, regulators, and society to ensure sustainability education keeps pace with the development of sustainability accounting practice globally.

Risk attitudes of tax practitioners and firm influence

PurposeThe purpose of this paper is to garner a deeper understanding of the site of influence of aspects of risk management for tax practitioners.Design/methodology/approachThe research design is twofold. Phase one consisted of a wide-scale international survey with 1,061 tax experts across 59 jurisdictions. In phase two, the authors followed up with 68 semi-structured interviews with tax practitioners working in 11 different countries.FindingsThe findings recognise the importance of the firm as a significant “site of influence” for tax practitioners in shaping their risk appetite in their tax work. The firm eclipses other influences of risk such as professional body oversight, public interest and demographic markers such as gender and career stage. The authors show that firm is significant, irrespective of size of firm.Practical implicationsThis work has practical implications as the findings highlight the importance of oversight of professional service firms by both the professional accountancy bodies and revenue authorities. The findings may have impact on the ethical training and guidance for trainee accountants in terms of an increased awareness on the employing firm as a site of influence for tax practitioners.Originality/valueThis research is important as it adds to the significant body of work on firm socialisation and highlights the important role that the firm holds in moderating (or exacerbating) the risk appetite of tax practitioners, which has significant implications in terms of pushing the boundaries of tax aggressive behaviours. The work aims to recognise the important role that tax practitioners can have in moderating aggressive tax practice, and, thus, reducing tax inequalities and shaping a better world of “Reduced Inequalities” (SDG10).

Barriers to the development of integrated thinking skills of prospective chartered accountants

Background: Globally professional accounting bodies expect of higher education institutions to develop integrated thinking skills in prospective chartered accountants. There are, however, many barriers in the way of both lecturers and students to achieve the development of integrated thinking skills.Aim: This article sought to identify the most significant barriers lecturers and students face when developing integrated thinking skills in prospective chartered accountants during higher education.Setting: Interviews were conducted and an online questionnaire ministered.Method: The mixed-method approach and a pragmatist paradigm are utilised. Both questionnaires and interviews were used to collect primary data. A triangulation between the quantitative data, qualitative data, and literature had been performed.Results: The three most significant barriers that lecturers face in developing integrated thinking skills are the volume of technical content, lack of expertise, and large classroom sizes. The three most significant barriers that students face in developing integrated thinking skills are students being overburdened with the technical content of the syllabus, not having been exposed to integrated thinking prior to higher education, and having to study in a second language.Conclusion: The most significant barriers for both lecturers and students in the development of integrated thinking skills during the higher education of prospective chartered accountants are identified in this study.Contribution: While much has been published on the barriers to developing integrated thinking skills, a limited amount of literature addresses the specific barriers that exist in the accounting education field.

Delineating the parameters of integrated thinking: A synthetic literature review

Background: Many accounting professional bodies, of which the South African Institute of Chartered Accountants (SAICA) is one, expect academics to develop integrated thinking skills in their students during higher education. Integrated thinking is, however, often confused with critical thinking, systems thinking and design thinking.Aim: This article aims to delineate the concept of integrated thinking by analysing the similarities and differences between integrated thinking, integrative thinking, critical thinking, systems thinking and design thinking.Conclusion: Integrated thinking is a higher-order thinking skill with a strong emphasis on the ability to think in a creative manner. Although there are differences between integrated thinking and other higher-order thinking skills, there are also similarities. This article sets integrated thinking apart from other higher-order thinking skills.Contribution: Limited research has been conducted to distinguish integrated thinking from integrative thinking, critical thinking, systems thinking and design thinking. This article endeavours to identify the true nature of integrated thinking by comparing it with other higher-order thinking skills. If lecturers at higher education institutions are to develop integrated thinking skills, it is important for them to have a clear understanding of what integrated thinking is, and how it differs from other thinking models. Without a grounded understanding of what integrated thinking is, it is nearly impossible to develop it in students.

Oligarchy in professional accounting bodies: Challenges for governance and leader‐member relations

AbstractDrawing on Robert Michels's “iron law” of oligarchy, this study examines a governance crisis that unfolded at one of the world's largest professional accounting bodies (PABs)—CPA Australia (CPAA). We leverage Michels's century‐old contribution to the social sciences to explore how this crisis sheds light on the challenges that PAB governance arrangements can pose when PAB leadership and membership priorities conflict. By applying Michels's seminal work to theorize the origins, escalation, leadership collapse, and eventual resolution of this PAB governance crisis, we illuminate how governance arrangements fueled conflict and fostered a democratic deficit that frustrated sections of the membership in their attempts to debate issues, exercise accountability on leadership matters, and become involved in governance reform. Overall, our analysis reveals that despite espoused principles of equity and participation, PABs are vulnerable to oligarchy impacting how their leaders relate to the interests of their members. Implications for the capacity of PABs to accommodate member conflict and for member participation in the current‐day professional context are discussed.This article is protected by copyright. All rights reserved.

Accounting and Finance Professionals’ Perception on The Current State of The Accountancy Profession in South Africa

Accountants, auditors, and other finance professionals have traditionally been well respected and held in high regard by the public. They are regarded as financial reporting overseers because they are responsible for ensuring that organisations follow relevant regulations and financial laws. Globally, accounting and finance professions have been tarnished by scandals involving intentional manipulation of financial information. The professional ethics of finance professionals are under scrutiny by the concerned public at large. This study is informed by the repercussions of these scandals and how they have influenced the public view of the profession. The quantitative approach was adopted, using systematic sampling. 165 accounting and finance professionals at government, corporate institutions and audit firms were considered. An anonymous online questionnaire was the instrument used for the collection of data. Majority of accountants and finance professionals agree are in consensus that they perceive themselves to have a strong knowledge of ethics. Further, also perceive their fellow accounting and finance professionals to be ethically responsible. Additionally, being a member of professional accounting body influences the ethical behaviour and professional conduct of accounting and finance professionals. Worth noting, considerable accountants and finance professionals face a substantial amount of pressure to compromise on ethics The study adds to the debate on the perception of accountants and finance professionals from their perspective. Further, ascertain the role that professional bodies play to nurture professionals be to inclined to ethical behavior so as to maintain positive perception about them and the profession.

Professional Accountants' Perception on the Mandatory Continuing Professional Development (MCPD) Programmes of the Institute of Chartered of Nigeria (ICAN) and Association of National Accountants of Nigeria (ANAN)

Mandatory Continuing Professional Development (MCPD) programmes are primarily organised by professional accounting bodies to train and update professional accountants with the latest development in the field. This study was carried out to explore the perspectives of ICAN and ANAN members on the MCPD programmes of their respective professional bodies. A qualitative case study design was adopted for the study. The study population comprised professional accountants affiliated with ICAN and ANAN. The study was carried out in Lagos and Abuja. Purposive and snowballing sampling techniques were used to select the study area and the samples. A semi-structured interview guide was used for data collection. The instrument was validated with expert opinion and pilot tested on some professional accountants. Twenty professional accountants were interviewed while the interview sessions were recorded. Recorded files were transcribed electronically and manually. The data were analysed with Braun and Clarke (2006) 's six steps analytical technique. Data analysis was conducted using Computer Assisted Qualitative Data Analysis Software (CAQDAS), MAXQDA and ATLAS.ti. Two themes, theme one with four sub-themes and theme two with three sub-themes, emerged from the data analysis. The study showed that the MCPD programmes organised by ICAN and ANAN were of high quality, worth attending, and largely attended. Members were satisfied with the contents and the resource persons invited. The programmes were rich in content, practically taught, and promoted the ICT skills development of the members. It was recommended that professional accountants should prioritise their participation in the MCPD programmes in their busy schedules. ICAN and ANAN should collaborate to organise professional development programmes to produce professional accountants equipped to compete with their counterparts in the global space.

New development: New public management values and public sector accounting education in Australia—A ‘reflection-in-action’ perspective

IMPACT This article contributes to the continuing debate on the impact of the new public management (NPM) values on public sector accounting education (PSAE) in universities. Informed by the author's personal experiences in Australian universities, it offers valuable insights into how NPM-driven financial rationales by top university management play a pivotal role in the fall of PSAE in universities. Higher education providers, policy-makers and professional accounting bodies worldwide will find this reflective piece valuable regarding their strategic thinking in producing next-generation professional accountants.

Accounting for resilience: the role of the accounting professions in promoting resilience

The rising incidence, variety and severity of extreme events that threaten both business and society has increased interest in promoting resilience to such threats. However, relatively little research has explored the potential contributions of the accounting profession to resilience at multiple scales and levels of analysis. To address the need for additional research, in this study we explore the contributions of the accounting profession to resilience during COVID-19. Drawing on a unique database of over 26,000 social media posts by the two principal professional accounting bodies in the UK context (ICAEW, ACCA) and UK-based accounts of the ‘Big 4’ professional services firms (PwC, Deloitte, EY, and KPMG), as well as user-engagement with those posts, we highlight processes by which the accounting profession encouraged resilience among individuals, organisations, and wider society. Our findings illuminate how the accounting profession contributed to resilience by supporting more effective crisis responses (by sharing trusted advice and shaping policy responses), better crisis adaptation (by crafting post-crisis futures and empowering the profession), and improved future crisis anticipation (by challenging complacency and being good citizens). We build on our analysis to propose a new framework characterising pathways for professions contributing to resilience.

ACCOUNTING OPTIMISED SKILL SET AND THE FOURTH INDUSTRIAL REVOLUTION - THE VIEW OF PROFESSIONAL ACCOUNTING BODIES

The digital transformation of the accounting field is triggering a reconfiguration of the optimized skill set that is required of practitioners worldwide. Emerging technologies have set foot into accounting daily processes, triggering the need that practitioners upskill their digital competences, while also emphasizing the relevance of soft and technical skills. The optimal accounting profile, adapted to the needs of the Fourth Industrial Revolution is being analyzed in the current paper through means of a thematic literature review of the reports of professional accounting bodies. Professional accounting bodies are key change-agents that enable the optimization of financial activities and help organizations improve activities and reach their goals. In this sense, they provide the most updated information in terms of skills and competencies required of accounting practitioners. The results of the literature review present three distinct skill categories. The three groups consist of technical skills, meaning traditional accounting skills, soft skills, meaning cognitive related and behavioral skills, and lastly the study addresses the topic of digital skills which are a direct result of technological innovations in the field. The digital skill group is being validated as an individual group through the recurrence and the interest that literature of accounting bodies has on these skills.

DOES INTERNATIONAL FINANCIAL REPORTING STANDARD NARROWS AUDIT EXPECTATION GAP?

The many arguments advanced by scholars as to International Financial Reporting Standard’s capacity to enhance audit procedures and outcomes underscores this research’s quest for determining whether International Financial Reporting Standard could help with the perceptional dilemma that triggered the long lingering Audit expectation gap crisis. To this end, this study assays stakeholders’ perception as to whether the adoption of International Financial Reporting Standard could have certain narrowing impact on Audit expectation gap. The study adopted a mixed research design (i.e. exploratory and survey designs) by which structured questionnaires were administered to a purposeful randomly selected sample of 400 respondents drawn from audit practitioners, academics, accounting standards issuers, and members of professional accounting bodies within the North Central States of Nigeria and the Federal Capital Territory to collect data which were analyzed using multiple regression with the help of STATA 13 software. Result of the analysis revealed that both International Financial Reporting Standard induced quality financial report and complexity of audit work could narrow audit performance expectation gap in a significant positive manner, while International Financial Reporting Standard’s induced audit quality was negative in narrowing the expectation gap. We recommend however, that even with the significant result leading to rejection of the null hypotheses, standard setters should look at ways to draw up standards that will harmonize accounting standards and auditing standards in a way that clearly spell out how every category of reportable transactions should be reviewed and reported so as to improve the quality of what auditors deliver to the public.

Audit Committee Attributes and Share Price Reaction of Listed Deposit Money Banks in Nigeria

This study investigated the effect of audit committee characteristics on share price reaction of listed Deposit Money Banks (DMBs) in Nigeria. Specifically, the study sought to examine the effect of audit committee independence, expertise, size, frequency of meetings and gender diversity on share price reaction of listed DMBs in Nigeria. The study adopted the ex-post facto research design. The study used a sample of 12 DMBs from a population of 14 DMBs listed on the Nigerian Exchange Group using the filtering method. Data were sourced from annual reports and accounts of the sampled DMBs in Nigeria. The study period covered ten (10) years from 2011-2020. Pooled Auto Regressive Distributive Lag (ARDL) Model was used for data analysis. The results of the study suggested that audit committee independence, size, frequency of meetings and gender diversity have a perverse and significant effect on share price reaction of DMBs listed in Nigeria. The result of the study also established that audit committee financial expertise positively but insignificantly affects share price reaction of DMBs listed in Nigeria. The study, therefore, recommended that financial expertise of the audit committee members should be given utmost attention by the board since it exerts a positive effect on share price reaction. This is supported by the requirements of CAMA 2020 which states in section 404 subsection (5) that all audit committee members should be financially literate and at least one of them should be a member of a professional accounting body established by an Act of the Nigerian Parliament. The study also recommended that DMBs should strive to maintain a small audit committee size below the stipulated maximum number of 5 as stipulated by CAMA 2020 for effective performance.

Enhancing students’ understanding and performance in a distance-learning setting: evidence from an audit simulation at a GCC university

PurposeDrawing on experiential learning theory (ELT), this study aims to examine students’ performance and perceptions after performing an experiential learning activity (ELA) by completing a mini-audit simulation (AS) on the purchase and cash disbursement processes in a distance-learning environment at a Gulf Cooperation Council (GCC) university.Design/methodology/approachAdopting a mixed-methods approach, we collected quantitative and qualitative data from 176 students using the grade centre on Blackboard and their responses to a semi-structured questionnaire.FindingsThe pre-and post-simulation tests indicate significant improvement in students’ understanding and performance after performing the mini-AS. The students’ responses also provide robust evidence of student engagement, active participation and positive recognition of the AS’s value.Practical implicationsThis study has several implications: for the accounting education literature, how AS strengthens in-depth learning through the lens of ELT; for professional accounting bodies, informing the need to maximise the awareness and benefits of adopting simulations in accounting education and examination; and for educators, considering simulations in their ELAs to enhance student learning.Originality/valueThis study introduces a new authentic mini-AS instrument that can be adapted to a distance-learning setting, adds to the very limited studies in AS using ELT, uses a mixed-methods approach and explores students who learn in an Arabic-speaking country.

The crazy rich phenomenon in the airline industry: The accountant’s perspective based on IFRS 16

This study aims to find out how the perspective of accountants in Indonesia on their knowledge of the International Financial Reporting Standards (IFRS) 16 which related to the recognition of ownership of private jets rented by Indonesian “crazy rich”. The respondents of this study were accountants in Indonesia with a total of 222 people consisting of 84 registered accountants who were members of professional accounting bodies such as the Indonesian Accountant Association, Institute of Indonesian Public Accountants, and Institute of Indonesia Management Accountants, and 138 accountants who were not registered. The data analysis method is using a different test (t-test) using the assumption of equal variance assumed and not assumed to see significant differences between the two categories of accountants regarding the perspective of recognizing leased assets. The results show that both categories of accountants have the same perspective for approving the recognition of private jets as assets because they are high-value assets even though the lease period is less than or equal to 12 months and agreeing to be part of business operations that increase revenue. Accounting standards for leases guide lessees to categorize them as finance leases that recognize right-of-use assets, lease liabilities, interest, and depreciation costs. Reports that use finance leases will change profitability and debt-to-equity ratios. By understanding the latest standards, accountants will react appropriately in relation to the existing phenomena. This research provides added value and general lessons for parties with an interest in business and especially for accountants that learning the latest standards is very important in order to be able to scientifically respond to social phenomena that occur around us.

Critical thinking: Stakeholder expectations and challenges for Accountancy educators

Developing future accountants who are critical thinkers, able to adapt in a volatile, uncertain, complex, and ambiguous (VUCA) world, remains one of the biggest challenges facing accounting educators. Competency frameworks of professional accounting bodies do provide some guidance in terms of the competencies and skills graduates should possess when entering the profession, but lack the inclusion of a clear, consensus-based definition of critical thinking and its related skills. The present study sought to explore the extent to which critical thinking and related concepts are present in and align across the competency frameworks of four professional accounting bodies. Employing a content analysis, the results indicated no agreed-upon definition for “critical thinking” or related terms. The term “critical thinking” only appeared in one framework with “decision-making”, “judgement” and “problem solving” serving as surrogate terms across the frameworks. Variations of “analyse”, “explain” and “evaluate”, that are considered to be core critical thinking skills, were extensively used in the frameworks, albeit not clearly defined. Professional bodies are crucial when creating a more mature demand for critical thinking acumen in graduates and workplace professionals. The researchers therefor advocate better agreement among accounting educators and professional bodies about the definition of critical thinking.

Integrity of assessments in challenging times

ABSTRACT A key role of universities is the credentialing of student learning by awarding degrees and diplomas. This requires universities to have confidence in the integrity of their assessment processes and in turn, external stakeholders to have the same confidence. This study investigates the following research question: ‘Has COVID-19 had an impact on the assessment and invigilation of accounting courses in Australia and New Zealand and, if so, how?’ This is a critical issue for accounting faculty in many countries as COVID-19 has forced a shift in the way assessments are administered – from face to face to online. The study involved a survey of accounting faculty in Australia and New Zealand and found changes occurred to how students were assessed because of COVID-19 and a variety of institutional responses to this. The paper makes recommendations for accounting educators, universities, and the professional accounting bodies.

Belief perseverance in students’ perceptions of accounting in a distance-learning environment: evidence from a GCC university

PurposeBy drawing on Belief Perseverance Theory (BPT), this study investigates the pre- and post-perceptions of the First Accounting Course (FAC) differentiating between accounting and non-accounting students in a virtual learning setting at a Gulf Cooperation Council (GCC) university, and explains why students' perceptions have formed.Design/methodology/approachAdopting a case study approach, this study employs quantitative (anonymous questionnaires) and qualitative (semi-structured interviews) methods.FindingsResponses from 142 financial accounting students indicate that non-accounting majors generally changed the students' perceptions significantly at the end of the semester, whereas students' accounting counterparts had relatively stable perceptions. This study also finds that a large number of non-accounting students perceived the benefits of taking the FAC and generally have less negative perceptions of the accounting profession, which supports the notion that non-accounting students evaluated discrediting information to reassess non-accounting students pre-established perceptions.Practical implicationsThis study has several implications as follows: for the accounting education literature on how FAC assists students in changing students' perceptions through the lens of BPT, for professional accounting bodies to find ways to promote accounting careers for students and for educators to increase students’ desire for accounting study and profession.Originality/valueThe findings from this study are expected to contribute to GCC society by providing clarifications towards increasing students’ desire for accounting studies and professions.

Corporate Governance and Earnings Quality of Selected Manufacturing Companies in Nigeria

The need to improve on earnings quality is a problem that corporate regulators strive to resolve through the establishment of various mechanisms. This study investigated the relationship between corporate governance and earnings quality of selected manufacturing companies in Nigeria. Specifically, the study examined the relationship between board of directors’ independence, internal audit quality, auditor independence and accrual quality value relevance of selected manufacturing companies in Nigeria. The ex-post facto research design was utilized while 65 selected manufacturing firms between 2008 to 2017 were used as the population. The published fact-books of companies were obtained from the Nigeria Stock Exchange. The entire 65 companies were used as the sample size for the study. The Ordinary Least Square method of regression analysis was employed to test the hypotheses through E-view 10 version software. The results revealed a positive and insignificant relationship between board of directors’ independence and accrual quality of selected manufacturing companies in Nigeria, and a positive and significant relationship between internal audit quality and accrual quality of selected manufacturing companies in Nigeria. Finally, the study revealed a positive and insignificant relationship between auditor independence and accrual quality of selected manufacturing companies in Nigeria. The study recommended that investors and managers of selected manufacturing companies that are viewed to be founded on company statute should never rely solely on the existence of non-executive board of directors to monitor and improve the quality of accruals, since in real life it may be near impossible to find board of directors that are truly “independent”. Also, company auditors saddled with the responsibility of the “policeman” and reviewing corporate financial records should collaborate with other corporate regulatory bodies, such as Financial Reporting Council of Nigeria and Security and Exchange Commission, to ensure that internal audit functions become legally independent and driven for improvement in accrual quality. Finally, professional accounting bodies in Nigeria such as Institute of Chartered Accountants of Nigeria (ICAN) and Association of National Accountants of Nigeria (ANAN), whose members belong to the big 4 audit firms in Nigeria, should advice corporate bodies in Nigeria to train and retrain their accounting staff, so as to place more reliance on them rather than on the external accounting firms. This is because the auditor independence which is related to the external environment cannot alone guarantee quality in reported accruals.

The Importance of the ESG Factors and Their Potential Impact on an Audit of a Financial Statement

This review paper aims to determine the potential impact of Environmental, Social, and Corporate Governance (ESG) factors on an audit of a financial statement. For this reason, a triangle of implications has been proposed, i.e., for: (1) audit clients whose business activity is reflected in a financial statement; (2) a financial statement; and (3) audit firms which perform an audit. The evidence represents a collection of a) scientific articles, b) publications offered by professional accounting bodies and consulting firms, and c) relevant standards and legal regulations. The paper finds that ESG has become a factor which must be considered, and the financial world will face multiple changes. For audit clients, the critical aspect will be ESG integration with a business model. Financial reporting will evolve under Exposure Drafts IFRS S1 and IFRS S2. A financial statement will require in-depth knowledge about existing accounting standards to reflect the financial implications of ESG-related products and transactions. Moreover, there is a distinction between “financial audit” and “ESG assurance” in audit and assurance services. However, some ESG-related risks and matters may be considered in the financial audit cycle. The paper’s findings are significant from the scientific research perspective as only a few studies contribute to ESG and auditing. The article also provides some practical implications that might be important for audit clients, firms, and regulators.

Measuring accounting educators’ views on the teaching–research nexus (TRN): an international comparative study

ABSTRACT The relationship between teaching and research in the modern university has been the subject of vigorous scholarly enquiry in the education literature for several decades. Few international comparative studies are reported in the literature. This study compares and discusses the teaching–research nexus (TRN) in accounting in three international regions: the UK and Ireland (UKI); Australia and New Zealand (ANZ); and South Africa (SA). The purpose of this study is to provide evidence of that the TRN empirical model operates in the different regions, and more so to describe the TRN that remains challenging for the accounting academic profession globally. Positive synergies from the TRN are evident in all jurisdictions in this study but are largely ignored by academic institutions and professional accounting bodies (PABs) that influence the university accounting curriculum. Formal government research assessment measures, coupled by PABs pressures, result in accounting becoming more a teaching-led rather than research-informed academic discipline. This has implications for: the status of accounting academics; the public perception of the professional standing of accounting in society; and the learning experiences of accounting students.