Professional Accounting Firms Research Articles

Ecological underpinnings of niche identity and diversity within the profession

PurposeDiversity and inclusion is a key focus of the profession. This paper investigates the ecological inherited niche of Indonesia and which employers accounting students choose and whether this will result in a diverse and inclusive profession. The authors conceptualise diversity as the demand-from the profession encompassing professional accounting firms, and inclusion as the supply of individuals wishing to enter the profession.Design/methodology/approachThe 1377 responses to a questionnaire survey of students deciding on their career paths were analysed using a multinomial logistic regression and path model.FindingsThe findings show that a lack of diversity in the profession is caused by the ecological background, constructing a local niche, that prevents diversity. This is manifest in ethnicity, gender and education, whereby the local niche consists of Chinese males recruited from B-rated private universities. To bring diversity and inclusivity into the workplace, the profession needs to entice people from multi-faceted groups and match ecological niche underpinnings to expectations of the professional landscape. Non-Chinese females are needed to become role models and trail blazers to establish a diverse profession. The public interest will then be better served.Originality/valueThis study uses niche construction as the theoretical framing and demonstrates that the profession needs to take action to become truly diverse and inclusive.

Arm's Length Principle vs. Formulary Apportionment in BEPS Action 13: Stakeholders’ Perspectives

ABSTRACT This paper analyses comment-letter lobbying by different stakeholders to influence OECD’s documentation rules on transfer pricing within the Base Erosion and Profit Shifting (BEPS) project. Using a content analysis of stakeholders’ comments to a discussion draft on documentation requirements of Action 13 of OECD’s BEPS policies, we offer some evidence that professional accounting firms may have viewed the new documentation requirements as a stealth paradigm shift away from the arm’s length principle (ALP) to formulary allocation (FA). Our analysis suggests that other stakeholders from academia and civil society were sceptical of the comments expressed by the professional tax firms, regarding them as a means to resist changes in transfer pricing documentation. We suggest that professional accounting firms’ comments may have represented implicit lobbying against changes to the ALP regime that may have been considered beneficial to taxpayers in reducing their aggregate tax burden despite its implementation and rule complexity.

Off-ramps and on-ramps: Career continuity and discontinuity in professional accountancy

The gender and accounting literature is replete with evidence highlighting the existence of gender regimes in professional accounting firms which increase the potential for conflict arising from the management of work and family life for women with caring responsibilities. Nonlinear career paths have been shown to be more applicable to the careers of professional women in accountancy, who, presented with these conflicting demands resort to career interruptions (off-ramp) and only later return to work (on-ramp) as family commitments recede. Whilst the former may be facilitated with relative ease, opportunities for the latter are few and are fraught with difficulties. This study examines the experiences of professional women in accounting firms who have interrupted their careers for family-related reasons and subsequently returned to work through participation in a government-driven programme, which sought to connect skilled professional women with potential employers. The study is set in Malaysia, where flexible work arrangements are not commonplace and where the Government has sought to assist on-ramping in order to meet stated national economic and development targets. Adopting a feminist methodology, the study draws on documentary sources, semi-structured interviews and participatory observation.

The Impact of COVID-19 on Accounting and Financial Reporting: An Analysis of Global Contributions

The purpose of the study: Explain the impact of COVID-19 on accounting and financial reporting by describing the analysis and evaluation of the global contributions of organizations, bodies, institutes, commissions, European banks and professional accounting firms and firms and in light of the application of IFRSs and the pandemic conditions, which are likely to last for a longer period. Design / Methodology / Approach: This study is based on the use of the inductive deductive approach, as the study looks at the accounting issues most affected by the Covid-19 pandemic by describing, analyzing and evaluating the reality of studies, bulletins and alerts issued by organizations and bodies, institutes, committees, European banks and international professional accounting offices and companies, with the aim of extrapolating the effects of pandemic events Covid-19 on accounting and financial reporting, in light of IFRSs and pandemic conditions that may last for longer accounting periods. Findings: Analysis and evaluation of the effects of the Covid-19 pandemic on accounting and financial reporting, and their implications for the application of IFRSs and the work of financial reporting prepareing, revealed the following: (1) There is a very significant impact on leasing contracts, which necessitated the IASB to introduce amendments to the IFRS (16) and there is also a significant impact of pandemic events Covid-19 on events after the financial reporting period, whether events that require adjust or not that require adjust but require disclosure, and management’s assessment of the company’s going concern to the prolonged period of the pandemic and uncertainty as basic factors and also on measuring fair values and the Impirment in the value of non-financial assets, especially financial instruments and investments Real Estate to ensure that the values reflect conditions at the balance sheet date based on unobservable inputs, and also on expected credit losses of lenders and borrowers. (2) There is, to some extent, an effect on revenue recognition due to the modification of rights or obligations applicable under a contract with a client International Journal of Accounting and Management Sciences ISSN: 2832-8175 (Special Issue – Arabic – September 2022) https://scipubhouse.com/?page_id=1035 تأثير جائحة كوفيد 91 على املحاسبة واعداد التقاريراملالية……………………………… جمعة واملعتاز )ص 46 – 19) 65 as a price concession due to the pandemic, taking into account that the IASB has voted for a general extension to all private companies and non-profit companies that have not yet issued their financial statements and the effective date of application will be for fiscal years beginning after 15 December 2021. (3) There is little impact on hedging transactions as the Covid-19 pandemic may reduce the likelihood of an expectation of a hedging transaction or affect its timing, and also on deferred taxes on assets where there are some doubts or uncertainty at the end of the year in estimating whether there is Sufficient future profits are subject to tax, as well as government support, possibly due to the conditions that the state may set for obtaining support. Originality / value: This paper sheds light on the current and expected effects of the events of the Covid-19 pandemic on accounting and financial reporting in listed companies by describing, analyzing and evaluating the accounting contributions of organizations, bodies, councils, institutes, committees, professional associations, European banks and international professional accounting offices or companies since the time of the pandemic at the end The year 2019 and the beginning of 2020 – until now – and in light of the application of IFRSs issued by the IASB and the pandemic circumstances that may last for a longer period.

Positioning Prem Sikka’s academic activism in the third space

PurposeThis paper applies Bhabha’s concept of the third space to frame an understanding of Prem Sikka’s use of digital media to bridge the academic–activist binary. In doing this, the paper makes two contributions. First, it conceptualises Sikka’s engagement, and second, through the lens of the third space, it analyses it to establish whether, in the era of the neoliberal corporatised university, public intervention has the potential to generate new perspectives and new knowledge.Design/methodology/approachSikka’s articles and blogs for the period 20 February 2002 to 15 April 2020 were analysed using Leximancer, a textual analysis software programme that displays the output visually. A discriminant analysis was used to identify where each year of the study is situated in the overall semantic analysis. Netnography, the examination of archived published texts, was then used to analyse the responses by members of the public, academics, accountants and auditors, tax experts, policy makers and regulators to Sikka’s digital media engagement.FindingsAs a third space practitioner, Sikka has overcome some of the shortcomings associated with academic research to challenge the activities of professional accounting firms, regulatory bodies and multinational corporations. Through extending the boundaries of accounting and accountability, he has facilitated new radical alliances aiming to create a just and equitable society. The paper also finds that by opening up a third space of engagement, academic activists’ work can play an essential part in social transformation and emancipatory change framed in terms of social justice and equity.Originality/valueThis is one of the few papers to provide an in-depth examination of the activities of an accounting activist over twenty years.

The consequences of the auditor’s choice in group companies and expectations gap

PurposeThe purpose of this paper is to investigate the consequences of the auditor’s choice in group companies and the expectation gap of listed firms on the Tehran Stock Exchange (TSE).Design/methodology/approachIn this study, 128 companies (768 observations) listed on the TSE during the period 2012 to 2017 have been investigated. To test the hypotheses, logistic regression has been used.FindingsThe results showed that companies that are members of business groups are more likely to choose their auditors from large audit firms. The research findings also showed no significant relationship between the business group firms that have used the large auditor and the financial reporting quality. The results showed a positive and meaningful relationship between the member firms that use the large auditor and the audit fees. The results showed a negative and significant relationship between membership in business groups and the audit expectations gap.Originality/valueDespite the importance of the audit performance, defining auditors’ roles most acceptably has always been challenging to create a gap through the diverse understanding of auditors’ role, which is the distance of perception between users’ auditors. For this reason, over the past years, the audit expectation gap and how to reduce it have focused on academics, professional accounting firms and users of financial statements. As any unmet expectations from the community will reduce the audit firm’s credibility and ability to gain and be widely detrimental to stakeholders, the audit study’s expectation gap in performing audit study is critical. Although there are extensive studies on the gap in auditing expectations in developed economies, most conclusions cannot be attributed to developing countries such as Iran due to cultural and legal differences. Besides, the audit environment in Iran and existing laws can have different results. This research also helps to bridge this gap by providing additional guidance to regulators. Besides, as all recent studies on the expectation gap were qualitative, the present study measures the expectation gap through quantitative statistical methods.

Behavioural Framework for Managing Conflicts of Interest in Professional Accounting Firms

AbstractThis paper proposes a behavioural framework to complement professional accounting firms’ measures for managing conflicts of interest. Following an empirical examination of the process through which conflicts of interest affect accounting professionals’ decision‐making, we develop guidance for practitioners that will enable them to incorporate behavioural interventions while establishing the context, assessing, treating, controlling and monitoring conflicts of interest. The interventions are aimed at strengthening accounting professionals’ independence in fact by increasing the professionals’ expectation that compliant decision‐making will result in positive outcomes, increasing their perception that making compliant decisions is less difficult than making the alternative decisions, facilitating the formation of highly ethical judgements and lowering their propensity to disengage.The data were collected through a quasi‐experiment with 105 professionals from the Big Four accounting firms in the UK. Our work offers practical implications for professional accountants, executive directors, regulatory bodies, executive training and academic research. Other professions facing the ramifications of conflicts of interest (e.g. law, engineering, medicine and architecture) may also use the proposed framework to improve their ethics policies and corporate governance codes for managing conflicts of interest.

Managing Conflict of Interests in Professional Accounting Firms: A Research Synthesis

This paper synthesises the research related to managing conflict of interests in professional accounting firms. The main purpose is to provide information about the current state of knowledge on this topic and to highlight the areas requiring further research. The extant research has been reviewed by developing a framework through the integration of Risk Management Framework by ISO 31000:2009 and the International Code of Ethics for Professional Accountants. Specifically, literature has been classified across the establishment of context, assessment, treatment, control and monitoring of conflict of interests. The literature reveals that there is a lack of understanding about how the conflict of interests operates at the level of an individual accounting professional. Addressing this gap will help to develop behavioural interventions for strengthening the professionals’ independence in fact and, thereby, facilitating the management of conflict of interests. The key message this synthesised research provides for professional accounting firms and the regulators is that, for effective management of conflict of interests, behavioural interventions should be informed by the professionals’ unconscious (automatic) as well as their conscious (controlled) cognitive processes. This study is the first one to view the conflict of interests in a professional accounting environment through the lens of behavioural risk management. Moreover, the framework adopted for reviewing the extant literature provides a comprehensive view of the issues surrounding the ineffective management of the conflict of interests.

The role of accounting in conflicts resolution

Purpose This study aims to examine an alternative use of accounting information and technology (forensic audit) for resolving conflicts between two government agents and consequently enhancing accountability in Nigeria. Design/methodology/approach The study adopts contextualised explanation of case study theorising. Data for the study were gathered from two primary documents: the forensic audit report of PricewaterhouseCoopers (PwC) and the report of the Senate Committee on Finance and Appropriation. The theory of mediation is used to illuminate the mediation process and its implication for accountability. Findings The study finds that the mediator (PwC) was able to resolve the dispute using different problem-solving techniques (data gathering and fact finding) of accounting and provide guidance on the necessary steps to be taken to enhance accountability. Whilst the disputants agreed to the audit firm’s findings, further actions to hold relevant parties accountable were not taken by the government. Accounting aids in realising accountability, but it is not the ultimate tool, as it operates within a host of other accountability infrastructures that subvert its impact. Research limitations/implications This study uses a single case to understand the role of accounting in conflicts resolution. Therefore, as a general limitation of a case study design, we do not generalize beyond the case examined in this study. Practical implications The study has implications for accounting practice in developing countries. Firstly, the paper finds that accounting is held in high esteem as having the ability to unravel mysteries through its problem-solving techniques. Secondly, professional accounting firms need to maintain a high level of competence and integrity to sustain this position. Thirdly, accounting can help answer the question “Who should be held accountable?” Originality/value The study examines a novel case of how accounting is used in resolving conflicts in a rare setting and in ensuring accountability over public funds.

Forensic Account in Public Finance Management

The growing spate of corruption, fraud and financial crimes with devastating consequences on companies and national economies has compelled regulatory changes across national, regional and even international boundaries. In fact, the general perception was that such vices were largely an internal event, primarily impacting the organization's net earnings or earnings per share (EPS). They were not conceived to have a major impact in the way businesses were conducted. Unfortunately, that perception has considerably changed in recent times. Today, the world understands better with organizations knowing that the negative effect of these offences goes beyond the bottom line of any organisation. Basically, these vices serve to attenuate optimum pursuit of organizational goals; they limit organizational ability to economize on scarce resources, including information processing and decision-making capability, in transaction cost terms; they promote information hoarding, opportunism, bounded rationality and distortions. The associated negative publicity of corporate fraud breeds high reputational risks, stifles business prospects, and threatens business survival. These are the core transactional issues on which a comparative assessment of the rise of fraud examination and forensic accounting in Africa turns. Corruption is rife in state-owned enterprises (SOEs) and government agencies which have become a conduit by Government officials, legislators and politicians to divert funds through inflated contracts, bloated staff strength, and overpriced procurement of goods and services. The fraudulent monies would then be laundered into the financial system through concealed deposits in private pseudonym accounts, ‘non-existent corporate’ accounts, purchase of real estate, or donations to political parties, religious bodies and charities involved in the scheme. (Herbert, Tsegba, Ene and Onyilo 2017:2) Nowadays, the audacity of corruption is not just an act of the mind but a deliberate one perpetrated with total disregard for the law and its consequences. As fraudsters have become more dangerously creative with devastating consequences, so has the configuration of fraud investigation become increasingly sophisticated with encouraging results. Forensic accounting, which has evolved to combat the growing rate and economic consequences of fraud and abuse, financial crimes and corruption, encapsulates specialized knowledge and specific skills to stumble up on the evidence of economic transactions. (Joshi, 2003). Traditional accountants, however effective they may be, are not necessarily forensic accountants. The global economic consequences of recent accounting scandals juxtaposing the increasing spate of fraud and corruption have occasioned new national and international antifraud and anti-money laundering legislations. These have created a huge demand for fraud investigation and forensic accounting work. Increasingly, many professional accountancy firms are establishing specialized fraud examination and forensic accounting units to keep up with the workload. At the same time, organizations and government agencies are finding it difficult to recruit experienced and highly skilled forensic accountants and fraud examiners. (Herbert et al. 2017:5) This last point will be developed in the next paragraph. This paper is addressing the need for forensic accountants with the public finance management reforms. The need and the definition of forensic accounting will be developed. The public financial management is discussed along with various actions for an effective implementation.

Intellectual capital disclosure: evidence from UK accounting firms

PurposeThe purpose of this paper is to examine the extent and quality of voluntary intellectual capital disclosures (ICD) by professional accounting firms (PAFs) in the UK.Design/methodology/approachThe research method adopted for this study is content analysis considering the ICD in firms’ annual reports, corporate social responsibility reports, websites and recruitment materials. The sample for this research is based on 20 PAFs ranked by fee income. The paper employs institutional theory as its theoretical lens.FindingsThe findings of this paper show that ICDs vary across different forms of reports. The most frequently reported disclosure category is human capital, while the least reported category is internal capital. Monetary disclosures are most likely to relate to internal capital, while pictorial disclosures are most likely to relate to human capital.Research limitations/implicationsThe sample size of the study is relatively small reflecting the extreme market concentration of accounting services in the UK and internationally. Future research can conduct a longitudinal study to capture the trend of reporting practices and consider narrative and discursive approaches to ICD.Originality/valueNo previous studies of intellectual capital (IC) disclosure have considered ICDs in professional service firms that are in themselves rich sources of human capital. Furthermore, the investigation uses a wide range of communications and assesses monetary, non-monetary, narrative and pictorial disclosures. This research extends both the IC disclosure and PAFs’ literatures.

Cultural values and students’ intentions of choosing accounting career

PurposeThis paper aims to explore whether cultural values identified by Hofstede (1980) are relevant with respect to the relationship between career drivers and students’ intentions of pursuing a career in accounting.Design/methodology/approachA total of 266 Turkish, East African, West African, Iranian and Arabic business-related students studying at Eastern Mediterranean University in North Cyprus have participated in this study. To test the hypotheses, a t-statistic at the univariate level and a discriminant analysis at the multivariate level have been performed.FindingsThe results reveal that collectivism and/or large power distance are associated with the statistically significant relationship between parental and peers’ influence and students’ intentions of choosing an accounting career. The results further demonstrate that collectivism and/or strong uncertainty avoidance is/are relevant to insignificant relationship between beliefs factors and students’ career aspirations into accounting profession.Research limitations/implicationsThe main implication derived from this study states that the accounting educators and professional accounting firms should mostly target parents and convince them of the positive aspects of accounting study and profession to attract more students from cultures characterized by collectivism and large power distance. Parallel to this, the results suggest that universities and professional accounting firms should use their current students to attract more students into their accounting-related programs.Practical implicationsGiven evidence that cost of education is an important issue for the students opting to pursue a career in accounting, educators could attract more students into their accounting programs by providing scholarships to bright students intending to study accounting. They could also increase attractiveness by offering reductions in tuition fees to the students for obtaining good grades in accounting courses.Originality/valueThis study is unique in the sense that it takes a new step to investigate the influence of career-choice factors by using multiple dimensions of cultural values. In addition, this could be the first study exploring the factors that may influence decision of the students studying in North Cyprus in choosing accounting career.

Importance of Generic Skills in Accounting Education: Evidence from Egypt

Nowadays, globalization, new economic challenges and innovations in information technologies (IT) influenced the role and domain of professional accountants. The current accreditation requirements and educational frameworks of the contemporary accounting profession emphasize the importance of broad ‘generic skills’. This research aims to fill the gap in studying generic skills in Egypt by examining the importance of generic skills in accounting education. The research results are consistent with the International Education Standard IES 3 and several studies, and highlighted the importance of five factors: intellectual and communication, interpersonal, creative ability, organization, research and analytical skills. Moreover, it is recommended that universities in Egypt should reevaluate their accounting education process and establish strong links with professional accounting firms.

A Longitudinal Examination of Print Advertising by Professional Accounting Firms

This study provides a longitudinal analysis of print advertising by professional accounting firms for the period 1988 to 2012. Findings indicate that the most common messages of recent ads pertain to general image of the firm, auditing services, and tax services. The majority of ads in the most recent time period include a web address. Print advertisements were used by firms of all sizes in all three time periods examined. Print advertising would appear to continue to be an effective way to market a CPA firm's services to potential clients.

Corporate social responsibility reporting in professional accounting firms

This paper examines the corporate social responsibility (CSR) reporting undertaken by the 20 largest professional accounting firms in the United Kingdom. Professional service firms are knowledge-intensive organisations, eager to communicate their legitimacy, status and reputation, to an external world. These social evaluations (prestige) allow them to enhance their intellectual capital and consequently charge premium fees and, effectively increasing partner wealth. This investigation undertakes a content analysis of firms' annual reviews, corporate social responsibility reports, websites, and recruitment literature.

Forensic Accounting Technique : A Means of Successful Eradication of Corruption Through Fraud Prevention , Bribery Prevention and Embezzlement Prevention in Nigeria

One of the issues mostly discussed in Nigeria today is about corruption. Almost every section of the country is affected by corruption ranging from education sector to the various organs of government. In the corporate world, many businesses have collapsed due to mismanagement by the corrupt directors appointed to manage them. This study examined the need for application of forensic accounting technique to successfully investigate and detect cases of corruption in Nigeria. Survey research design has been employed in this study. This research design was chosen because it ensures that reliable empirical data is obtained to test the relationship that exist between the dependent and independent variables in order to achieve the research objective and test the hypothesis formulated. The result of the regression analysis, the p-value (0.142) associated with the coefficient of β0 is greater than 0.05 level of significance; R² of 0.129 has low explanatory power on the dependent variable (corruption prevention), and the F calculated of 1.920 is less than the F tabulated of 4.08, hence the Null hypothesis (Ho) (Fraud prevention, bribery prevention and embezzlement prevention will not significantly ensure effective prevention of corruption through the application of forensic accounting technique) is therefore accepted. This study has been able to establish the need for application of forensic accounting technique to investigate and detect cases of corruption in Nigeria. The court system that usually causes delays in the trial of accused persons needs to be strengthened, to ensure the success of the efforts of EFCC. There is no forensic accounting unit in EFCC, and the professional firms that have forensic expertise are not consulted to carry out proper investigation of corrupt cases. It is recommended that EFCC should set up a forensic accounting unit where trained expert should be employed to carry out investigation. Forensic accounting experts from the professional accounting firms should be retained by EFCC to carry out investigations

The Association between Sustainability Governance Characteristics and the Assurance of Corporate Sustainability Reports

SUMMARYThis study provides evidence on whether sustainability-oriented corporate governance mechanisms impact the voluntary assurance of corporate sustainability reports. Specifically, we consider the presence and characteristics of environmental committees on the Board of Directors and a Chief Sustainability Officer (CSO) among the management team. When examining assurance services, we make a distinction between those services performed by professional accountants, consultants, and internal auditors. We find that the presence of a CSO is positively associated with corporate sustainability report assurance services, and this association increases when the CSO has sustainability expertise. Supporting the position that some firms establish sustainability-related governance merely to conform to socially desired behavior, we find that only those environmental committees containing directors with related expertise influence the likelihood of adopting sustainability assurance. Presently, environmental committees with greater expertise appear to prefer the higher-quality assurance services of professional accounting firms. Expert CSOs, on the other hand, prefer assurance services from their peers with sustainability expertise, as evidenced by their choice to employ consultants. When analyzing firms' environmental contextual characteristics, we find that firms employing a CSO and exhibiting poor environmental performance, relative to other firms in their industry, prefer to report sustainability results without assurance. While we do find that larger firms in the U.S. are significantly less likely to employ assurance, this result decreases over time. Further, we provide initial evidence that the value-relevance of sustainability assurance is increasing with time.

Exploring The Relationship Between Accounting Professionals And Small And Medium Enterprises (SMEs)

This study explores the relationship between SMEs and professional accountants and the expectations that they hold for each other. The findings show that SMEs use a combination of insourcing and outsourcing to meet their accounting needs; however, how to balance the two is a very important decision making issue. SMEs frequent reliance on external accountants extends well beyond the normal scope of accounting into other aspects of business administration. The study has important implications for growth and survival of professional accounting firms, education providers, and SMEs.

From four to zero? The social mechanisms of symbolic domination in the UK accounting field

Corporate failures and financial crises periodically lead to speculation and critique of the Big Four in the UK. Wide-reaching regulatory changes and reforms have emerged as a consequence, yet the overall dominance of the large accounting firms remains an immutable truth. This paper explores the dominance of the Big Four drawing on Bourdieu's rich system of thought, and in particular the role of symbolic productions, and how symbolic power and symbolic violence are deployed to secure the social integration of an arbitrary order. We document the social mechanisms of symbolic domination that secure the Big Four's position in the social structure of professional accounting firms. We identify a circular system of double-structured domination, where three mechanisms of euphemised discourse, rites of institution and socialisation normalise symbolic systems and disabling constraints for smaller firms. In addition to interviewing informants working in the field, this paper examines recent political challenges that have placed the role of the Big Four and their domination under increasing scrutiny. These challenges bring into focus issues of recognition and resistance to symbolic modes of domination, and we contemplate the impact of such discourses on the dynamics of the UK accounting field, and the Big Four's continued influence.

Women and the prospects for partnership in professional accountancy firms

AbstractThis paper examines three possible reasons (stereotypical discrimination, structural obstacles and employee's preferences) for the lack of women partners in professional accountancy firms in Australia, UK and New Zealand. Data are collected from an experimental survey and interviews of current partners. Whilst women's perceived preferences and organisational structural barriers contributed strongly to the lack of women partners in all sizes of firms, traditional stereotypical discrimination against women at the partnership decision point was only displayed in metropolitan large non‐Big 4 firms, and it is suggested that this is related to intense competitive pressure and a constrained partnership resource.