Qualitative Characteristics Of Financial Statements Research Articles

Determinants of The Need for SAK EMKM for EMKM (Empirical Study on EMKM In Jember District)

Micro, Small and Medium Entities (EMKM) are productive business opportunities owned by individuals or individual business entities that meet the criteria of micro businesses regulated by law. The purpose of this research is to implement and analyze the factors of SAK EMKM needs for EMKM in Jember Regency. The data used in this study are primary data sourced from questionnaires given to EMKM owners in Jember Regency. The results showed that simultaneously the independent variables consisting of owner education, IT understanding, qualitative characteristics of financial statements, SAK EMKM socialization, and business scale had a significant effect on the dependent variable, namely the perceived need for SAK EMKM in Jember Regency. Partially, owner education, IT understanding, qualitative characteristics of financial statements, SAK EMKM socialization, and business scale have a positive effect on the perception of SAK EMKM in Jember Regency.

Financial Statement Analysis of Infosys and Wipro through DUPONT Analysis

Abstract: Uniformity, Timeliness, Understandability, Relevance, Reliability and Comparability are some of the qualitative characteristics of financial statements. Every company aims at providing the financial information to its users about the operations of a company through formal reports in the form of financial statements. It summarizes the operations of a business and transactions conducted in a particular accounting period. Financial statements are the trueindicators of the financial health of the company at a particular point of time. The study deployed secondary data published in the form of annual reports of the selected companies. In this context, the present paper aims at analyzing the financial statements of the year 2020- 21 and 2021- 22 prepared as per new accounting standards i.e., Indian Accounting Standards (IND-AS) of two different companies that is Infosys and Wipro through DUPONT analysis. The study highlights there is an increase in Return on Equity (ROE) of both the companies which is the one of the important measures used to find out the direction of the company.

The Financial Reporting Quality for Commercial Banks - Empirical Evidence in Vietnam

Purpose: The financial reporting quality for enterprises in general and commercial banks in Vietnam in particular plays a very important role because it is used by many stakeholders (internal and external) to make relevant decisions. In this study, the author assessed the current status of financial reporting quality for Vietnamese commercial banks through the qualitative characteristics of financial statements.   Theoretical framework: In this study, the author assessed the current status of financial reporting quality for Vietnamese commercial banks through the qualitative characteristics of financial statements according to IASB 2018 including 2 fundamental characteristics including relevance and faithful presentation, 4 enhancing characteristics including understandability, comparability, verifiability, and timeliness.  Design/Methodology: The author used a set of measures on the qualitative characteristics of financial statements according to some previous studies in the world. The author collected data from the financial statements from 24 commercial banks in the period of 2019 - 2021. Findings: The research results show that financial reporting quality for Vietnamese commercial banks is not high. Specifically, for the financial reporting quality characteristics according to IASB (2018), the timeliness characteristics were assessed to have the highest value, followed by understandability characteristics. The two enhancing characteristics including relevance and faithful representation of the financial statements for Vietnamese commercial banks were rated as low. The remaining two enhancing characteristics which were the understandability and verifiability characteristics were also rated as low.   Research, Practical & Social implication: The study shows The financial reporting quality for enterprises in general and commercial banks in Vietnam in particular plays a very important role because it is used by many stakeholders (internal and external) to make relevant decisions.     Originality/ value: The research results will be a useful reference for relevant stakeholders such as the Ministry of Finance, the State Bank of Vietnam, bank managers, shareholders, investors, etc. in management and other related fields.

Analisis Fraud Pentagon terhadap 4 Perusahaan yang Terdeteksi Melakukan Kecurangan Laporan Keuangan

The company will have a good quality of financial reports if the company have 5 qualitative characteristics of financial statements, namely: relevant, comparable, reliable, and understandable. The quality of company’s financial statements will decrease if it doesn’t have these characteristics. With poor quality financial statements, there’s the possibility of fraudulent financial statement. Financial statement fraud is an action taken by changing material value in the financial statements, so it doesn’t show the company’s actual conditions. This study aims to prove that the fraud pentagon theory is able to detect fraudulent financial statements by applying it to 4 cases of companies that were detected to commit fraudulent financial statements in Indonesia. This study uses 12 indicators with a qualitative research using case studies, descriptive and comparative analysis. The object of the research is annual report of company under study. The selected cases of fraudulent financial statement are PT Tiga Pilar Sejahtera Tbk, PT Garuda Indonesia Tbk, PT Hanson International Tbk, PT Bank Bukopin Tbk. The study was conducted by comparing the results of the calculation trough the company’s annual report. The results showed that Financial targets, Financial stability, Nature of industry, and Company existence were able to detect fraudulent financial statements. Meanwhile, External pressure, Ineffective monitoring, Quality of external audit, change in auditor, audit reports, change in director, change in age, number of CEO’s picture were not able to detect fraudulent financial statements.

Qualitative Characteristics of Financial Reporting: An Evaluation According to the Albanian Users’ Perception

The last 20 years’ changes in accounting has led to an essential review process of national accounting standards due to the main objective of improving financial reporting information for stakeholders. Financial reporting as a communication tool has become extremely important for appropriate decision making to economic reporting entities and also financial information users such as analysts, creditors, managers, auditors and government agencies in Albania and all over the world. The absence of a generally accepted definition for qualitative financial reporting has created a gap for continuous research on this matter. The main objective of this study is to examine users’ perception of qualitative financial reporting, toward their perceptions of some selected qualitative characteristics of financial statements. This study aims to determine the attitudes of financial statements’ users toward the importance of qualitative characteristics of financial information reported on these published financial statements. The chosen   qualitative characteristics were relevance, faithful representation, comparability, timeliness, verifiability and understandability. An opinion survey was conducted on three hundred external users of financial statements, such as managers, bank officers, financial analysts, government officers and auditors. Each single characteristic has been operationalized using a structured questionnaire, and a five point Likert type scale was used. Selection process of qualitative characteristics of reported financial information will be based on the data taken from conceptual framework of international financial reporting standards published by the International Accounting Standards Board in a continuous process of improving financial reporting. This research examined primary data taken through an opinion survey directed to three hundred daily users of financial statements ‘information, reported by economic entities in Albania. Results of the study show a very strong positive correlation between users ‘perception and qualitative characteristic of faithful representation, a relatively strong positive correlation with relevance, comparability and understandability, and a moderate correlation with timeliness and verifiability. Users of financial reporting in Albania generally have a very positive attitude towards the qualitative characteristics of financial reporting.
  
 Received: 3 July 2021 / Accepted: 23 August 2021 / Published: 5 November 2021

PENGARUH PENERAPAN SISTEM PENGENDALIAN INTERN,PEMAHAMAN STANDAR AKUNTANSI PEMERINTAH,SISTEM INFORMASI AKUNTANSI KEUANGAN DAERAH, DAN PRINSIP PENGELOLAAN KEUANGAN TERHADAP KUALITAS LAPORAN KEUANGAN PEMERINTAH KABUPATEN BADUNG

The Government Regulation regarding Government Accounting Standards states that financial statements are structured reports of financial position and transactions conducted by a reporting entity. The quality of financial reports can be said to be of quality if they can meet the qualitative characteristics of financial statements contained in Government Regulation Number 71 of 2010 concerning Government Accounting Standards, namely: Relevant, Reliable, Comparable, Understandable. Many factors affect the quality of financial reports, this research uses internal control system variables, understanding of government accounting standards, regional financial accounting information systems, and regional financial management.
 The main objective of this research is to find out whether there is an influence from the internal control system, understanding of government accounting standards, regional financial accounting information systems, and regional financial management on the quality of financial reports at 38 OPDs of Badung Regency. The number of samples taken was 114 people, with purposive sampling technique. Data collection was carried out using a questionnaire. The data analysis technique used is multiple linear regression. The results showed that the application of the internal control system, understanding of government accounting standards, regional financial accounting information systems, and financial management principles had a positive effect on the quality of financial reports.

Corporate governance, internal audit quality and financial reporting quality of financial institutions

PurposeThe purpose of this study is to establish the relationship between corporate governance attributes (board expertise, board independence and board role performance), internal audit quality and financial reporting quality using evidence from Uganda's financial institutions.Design/methodology/approachThis study research design is cross sectional and correlational. The study used a questionnaire survey of Chief Finance Officers, Senior Accountants and Internal audit managers of financial institutions in Uganda. Data were analyzed with the help of Statistical Package for Social Sciences.FindingsResults indicate that board expertise and board role performance are significantly associated with financial reporting quality. Also, internal audit quality is significantly associated with financial reporting quality. Board independence is not a significant predictor of financial reporting quality.Originality/valueThis paper provides insights of what matters for financial reporting quality in Uganda's financial reporting quality. It uses the qualitative characteristics of financial statements to measure financial reporting quality. This paper focuses mainly on the conceptual framework developed by the International Accounting Standards Board.

Качественные характеристики финансовой информации: возможны ли изменения?

Th e article discusses the development trends of modern society, their interdependence on the quality of information flows provided by the accounting system at the international level. An analysis of the transformation of the socio-economic formation of capitalism leads to a new understanding of the qualitative characteristics of financial statements in accordance with the requirements of International Financial Reporting Standards. Th e author comes to the conclusion that it is necessary to provide users with reporting data not only predicted, but also real information that corresponds to economic reality.

Divergence within IFRS adoption: the case of depreciation practices of listed banks in Bangladesh

Comparability is one of the qualitative characteristics of financial statements that are prepared in compliance with the International Financial Reporting Standards (IFRS). The objective of this research is to identify whether this qualitative characteristic can be negated even when entities apply IFRS. In achieving the research objective, the depreciation policies adopted by the listed banks in Bangladesh are identified and compared with each other. This research finds that despite increasing effort by accounting standard setters and pressure groups to achieve IFRS-compliance and harmonization in accounting practices, non-compliance and divergence still exists. This research also finds that the divergence in depreciation practices can be of enough significance to negate comparability. The findings of this research expected to assist the international and national standard setters as well as the regulators in understanding the practical issues in implementing accounting standards and developing clearer IFRS implementation guidelines.

Composition and characteristics of the financial statements elements in accordance with IFRS

In a market economy, the role of International Financial Reporting Standards is increasing. In order to understand their significance in modern conditions it seems necessary to consider the peculiarities of evolution of IFRS formation. The article reflects actual issues concerning the role and significance of International Accounting and Reporting Standards in modern conditions. The author has defined the necessity of applying International Accounting and Reporting Standards by Russian companies. The article highlights the main elements and users of financial statements prepared on the basis of IFRS, and analyzes the similarities and differences that exist in the formation of financial statements, based on the requirements of IFRS and RAS. The main qualitative characteristics of financial statements are considered in detail. Based on the results of the research, the author has identified current trends in the transition to international financial reporting standards.

Interactions of Financial Assistance and Financial Reporting Competency: Evidence From Local Government in Papua and West Papua Indonesia

Good local government financial statements are financial statements according to the qualitative characteristics of financial statements, which are relevant, reliable, comparable and understandable. However, the phenomenon shows that there are still weaknesses in financial reporting in several local governments in Indonesia, especially in the provinces of Papua and West Papua based on the findings of the Audit Board of the Republic of Indonesia (IHPS II BPK, 2017). The purpose of this study is to obtain empirical evidence of the role of moderating financial assistance and apparatus competency on the quality of government financial reports. Explanation of the relationship between variables was using an institutional theory perspective. The survey was conducted in 2018 on 42 Local Governments in Papua and West Papua. Methods of processing and analyzing data were using SEM-PLS with WarpPLS 6.0 statistical software. The results of the apparatus competency research have a positive effect on the quality of financial statements. A financial resistance positively strengthens the influence of apparatus competency on the quality of local government financial reports. Thus, efforts to overcome the presentation of quality financial statements require competent apparatus through the existence of financial assistance policies. Limitations of the study are the method of collecting data using a questionnaire and that it is very possible for the bias to occur. Therefore, efforts to achieve better results need to be accompanied by an interview method in order to obtain additional information as a comparison of respondents' answers; 2) the determination coefficient value of R- square is 0.41 or 41% indicating that there are still 0.59 or 59% variability in the quality of Local Government Financial Statements (LKPD) which can be explained by other variables outside the research model. 

Financial reporting quality in Lithuanian state-owned enterprises

The aim of the research is to assess the quality of financial reporting of state-owned enterprises in Lithuania. Having evaluated the methods of quality assessment of financial statements presented in scientific sources, it was identified that financial accounting quality is often defined in the literature considering its qualitative characteristics. In the paper, fundamental and enhancing qualitative characteristics and the chosen methods of assessment were briefly discussed. The selected method of data collection for research was a content analysis of financial statements in 2017. The indexes for the qualitative characteristics of each individual financial statement were calculated. After the analysis of qualitative characteristics of financial statements, it may be stated that 45.90 % of enterprises have a sufficient and 50.8 % of them an average quality of financial statements. The maximum and the mean values of faithful representation, understandability, comparability and timeliness also reveal similar results that the quality of information is more than average. The total quality index is positively related to the sum of assets, revenues and the number of employees of the enterprise. The state-owned enterprise size indicators (assets, revenues, number of employees) can be considered as the determinants which influence information disclosure in the financial statements.

Pengaruh Struktur Kepemilikan Terhadap Manajemen Laba Pada Perbankan di Indonesia

Important information for investors that contains information about the company's performance and its accomplishments over a certain period is included in the income statement. One of the qualitative characteristics of financial statements is that they are presented fairly. Public companies and private companies differ in their demands for accounting information and manager's opportunistic behavior. This study aims to obtain new empirical evidence whether there is an influence of ownership structure on earnings management in banks in Indonesia. The population used is all commercial banks in Indonesia in 2012-2014. Sample by using purposive sampling method. The procedure of collecting data by method of documentation. Hypothesis testing using Mann-Whitney U test. The results of the faithful representation side calculated by earnings management, obtained the earnings management of public banks higher than private banks and the difference is both significant. This result concluded that opportunistic behavior is more dominant than demand of high quality of accounting information at public bank in Indonesia.

Improving  the  Financial  Reporting of  Organizations  in the Digital Economy

The article systematizes the impact of the digital economy development on the following aspects related to financial reporting: the operational information used; preparation and processing of input information for compiling reporting forms; interpretation of financial statements; presentation of output information; processing and use of information that financial statements include. The article analyzes the problem of the relationship between the development of the digital economy and ensuring the qualitative characteristics of financial statements, such as relevance, predictive value, confirming value, materiality, fair representation, completeness, neutrality, comparability, verifiability, timeliness, clarity and being error-free. The article proposed the authors’ vision of the development of approaches to the formation and presentation of financial statements under the influence of increasing digitalization of the economy. The article justifies the possibility of presenting financial reports in a modified digital format using the user menu. This menu allows the users to get additional information on the activities of the organization, the regulatory framework used; calculate the indicators using alternative methods, compute the ratios for economic analysis on the basis of these indicators, make a forecast for the organization’s prospects, interact on-line with those who compile reports.

Impact of Implementing IPSAS on Public Organizations in Lebanon: An Empirical Study

Reform in the public sector organizations starts with reforming the accounting information system. The idea of reform boosted the attempts of certain countries to take steps toward developing the accounting systems in their managements in order to improve their efficiency and to cope with the fast political and economic changes in addition to satisfying the public opinion about getting better services. International organizations, including the International Monetary Fund (IMF) have realized the importance of improving the efficiency of the public sector to improve development rates in developing countries and to get international grants and loans. Thus, a unified way to communicate among countries was needed. This study investigates the impact and impediments of implementing International Public Sector Accounting Standards (IPSAS) in Lebanon. The researchers adopted the analytical descriptive approach utilizing an empirical study. A questionnaire was constructed and distributed among a sample of Lebanese certified public accountants. The research yielded some important findings mainly that adopting and implementing IPSAS lead to the advancement in the qualitative characteristics of financial statements in public organizations in Lebanon. It also concluded that there are some obstacles in adopting and implementing IPSAS in public organizations in Lebanon.

The adoption of IFRS, comparability of financial statements and foreign investors’ ownership

PurposeThe purpose of this paper is to examine the indirect effect of the International Financial Reporting Standard (IFRS) adoption in increasing the foreign investors’ ownership through the improvement of comparability of financial statements.Design/methodology/approachThis study employs listed companies in 18 countries across Europe, Asia, Africa, and Australia with an observation period from 2003 to 2012. Unlike previous studies, this study uses a continuous variable to measure the level of IFRS adoption which is measured at the country level. This study includes countries that do not fully adopt the IFRS, partially adopt, make some delays in adoption or some modifications to IFRS.FindingsThe results show that the level of IFRS adoption has a positive effect on the comparability of financial statements. The level of IFRS adoption indirectly increases the foreign investors’ ownership through the comparability of financial statements. These results are consistent with proponents for IFRS adoption which argue that the adoption improves the comparability of financial statements that in turn attracts greater cross-border investment.Research limitations/implicationsThe findings of this study need to be interpreted with caution due to limitations. Although this research provides a detail measurement on the IFRS adoption, this study only looks at three general items of difference in adopting the IFRS. “Differences in text” used in this research has not quantified detail differences for each adopted standards. Therefore, future research can use a more in-depth measurement of the IFRS adoption level that considers differences or exceptions of accounting treatment.Practical implicationsThe results suggest that the standards setting bodies’ (IASB) strategy on promoting the IFRS and objectives to develop a standard that leads to increase the financial statement comparability have been achieved. This research shows that the IFRS adoption plays a role in ensuring the financial statement quality in terms of its comparability. It implies that the standard-setting bodies in every country, as one of the responsible institutions regulating the business environment, can be entrusted with a greater role in order to ensure better financial information quality.Originality/valueThis study introduces novel measurement that is more detailed in measuring the IFRS adoption level instead of applying the discrete variable approach (“adopt” and “not adopt”) performed by previous studies (DeFond et al., 2011; Tan et al., 2011; Lee and Fargher, 2010). This study does not only cover some EU countries but also covers some countries in Asia, Africa, and Australia, so it can be better at capturing the variation of the IFRS adoption outside the EU. This broader coverage will show the consistency of the benefits of IFRS adoption. This study is most closely related to that of DeFond et al. (2011). This research extends DeFond’s study with some important differences as follows: it uses output-based and firm-specific measurement of the comparability from DeFranco et al. (2011), which is deemed to be more appropriate because it represents the qualitative characteristics of financial statements from a user’s perspective, i.e., investors, who evaluate historical performance and predict future performance in their investment decisions; it uses a broader scope of institutional investors; and it covers IFRS adoption in countries outside the EU for a longer observation period.

The Influence of Profitability, Solvency, Auditor’s Opinion and Reputation to Audit Delay (The Empirial Study of Manufacturing Companies Listed on Indonesia Stock Exchange 2012-2013)

The presentation of financial statements of a go public company towards its concerned parties requires a punctual publishing of financial statements. Punctuality reflects the qualitative characteristics of financial statements reporting according to the accounting principal that is generally used in Indonesia. Such qualitative characteristic is relevant, meaning that the information contained in the financial statements must be able to influence the decision makers, so the reports must be delivered punctually. Relevant has the close connection to timeliness of reporting. Timeliness also related to the time difference between date of financial statements and date of auditor’s report, which indicates the length of time of auditing settlements, or called as audit delay as the dependent variable. This study aims to measure empirically the factors affecting audit delay of the listed manufacturing companies on Indonesia Stock Exchange. They are profitability, solvency, auditor’s opinion and reputation as the independent variables. The samples of this research consist of 147 manufacturing companies in Indonesia Stock Exchange during 2012-2013 and selected by purposive sampling. The data used is secondary data; which are audited financial statements of 147 samples. The data analysis used methods to prove the hypothesis are descriptive statistics, classic assumptions test, multiple regression models, and the determinant coefficient. 
 The study finds that three out of four independent variables influence insignificantly to audit delay; they are profitability, solvency and auditor’s opinion. Only auditor reputation influences audit delay significantly. The simultaneous testing concluded that all independent variables influence the dependent variable significantly.

Hierarchy of qualitative characteristics of financial statements of enterprises during insolvency proceedings

According to IFRS, if financial information is to be considered useful to users, it must have certain quali- tative characteristics, such as relevance and faithful representation. Complementary features are compa- rability, verifiability, timeliness and understandability. These features are designed to meet the infor- mation needs of the users who are indicated by IFRS as priority groups when high quality of financial statements needs to be ensured. Bankruptcy proceedings create new groups of stakeholders who have specific information needs. In this article, an assumption was made that the loss of the ability to continue operations and the provisions of the Bankruptcy Law in Poland may determine the information needs of the main users of the financial statements of a company in bankruptcy, and thus affect the hierarchy of quali-tative features of the financial statements. In the case of bankruptcy, the stakeholders that use information contained in financial statements are primarily the court, judges, commissioners, trustees and creditors. The purpose of this paper was to determine the hierarchy of the importance of qualitative features of financial statements, specific to insolvency proceedings. In order to fulfill this goal, questionnaire surveys were car-ried out among specialists in the field of bankruptcy. The methods of mathematical statistics were used, which helped in the interpretation of the obtained results. A hierarchy of qualitative characteristics of fi-nancial statements specific to the insolvency proceedings was built as a result of the conducted research. Despite the specificity of bankruptcy proceedings, the opinions of bankruptcy specialists indicate a differ-ent, though partially similar, approach to the one presented in the IFRS Conceptual Framework. As the most important qualitative characteristics of financial statements, bankruptcy specialists indicated three: understandability, faithful representation and relevance. In their assessment, the least important qualitative characteristic of financial statements is comparability of financial data between entities. The significance of differences in the assessment of individual characteristics was shown in the study.

THE ROLE OF QUALITATIVE CHARACTERISTICS OF ACCOUNTING INFORMATION ON THE INVESTMENT EFFICIENCY AT MANUFACTURING COMPANIES IN INDONESIA

This study aims to examine whether the attributes of the quality of accounting information reflect the qualitative characteristics of financial statements and examine the effect of the quality of accounting information on investment efficiency. The attributes of the quality of accounting information are predictability, discretionary revenue, discretionary accruals. Investment efficiency is measured by investment inefficiency as underinvestment and overinvestment. The sample was a manufacturing companies listed on the Indonesia Stock Exchange in 2012 until 2015 as many as 493 observations for examine the attributes of the accounting information quality to form factors that reflect the quality of the financial statements. While the sample of 479 observations used to test the influence of the quality of accounting information against underinvestment. Observation of overinvestment was not analyzed in this study because it has only 14 observations. Data analysis technique used is factor analysis and multiple linear regression. The results showed that the three attributes of the accounting information quality form two factors, the first factor called predictability and the second factor is called discretion. Both of these factors reflect the qualitative characteristics of the accounting information. However, the quality of accounting information measured by these two factors has no significant effect on underinvestment. Likewise, the operating cycle, ROA, and age have no effect on underinvestment. Meanwhile, firm size, tangibility, and dummy loss have a significant effect on underinvestment.

The Analysis of Human Resources Policies and Regional Financial Accounting System on Regional Government Financial Statements’ Quality

Accountability of local governments in the implementation of policies should be carried out with the financial statements present the quality. Qualitative characteristics of financial statements described in PP 24/ 2005 that the qualitative characteristics of financial statements is a normative measurement that needs to be realized in the accounting information that can be fulfil its purpose. To be able to raise the normative requirements, this characteristics is absolutely necessary in order to meet the government 's financial statements desired qualities are: relevant, reliable, comparable, and understandable.The population of this research is PPK-SKPD in Karesidenan Pati. Consisting of: Regency Jepara, Kudus, Pati , Rembang, Blora, and Grobogan, totally 113 SKPD with 73 respondents with a random sampling technique . Data analysis technique used is multiple regression analysis. The results mentioned that human resource policies affect the quality of financial reporting by 4.167. Implementation of the system accounting effect on the quality of financial reporting by 3.309 % . Human resources policies and implementation of accounting systems affect the quality of financial statements. This study did not succeed accept hypothesis 5 proved that the value of t = -1.021 and p = 0.311, which means that the BPK audit does not affect the relationship between the Application System Accounting for the Quality of Regional Financial Statements.