Reliability Of Financial Information Research Articles

THE IMPACT OF THE USE OF ACCOUNTING SOFTWARE ON THE ACCURACY OF FINANCIAL INFORMATION AN ANALYTICAL STUDY OF THE OPINIONS OF A SAMPLE OF EMPLOYEES AT AL-MURABBA SOFTWARE SOLUTIONS COMPANY

In today's dynamic business landscape, the use of accounting software has become increasingly widespread, promising to enhance efficiency and accuracy in financial management processes. This study aims to know the impact of using accounting software on the accuracy of financial information within organizations. To achieve the research objectives, a questionnaire was distributed to employees of Al-Murabba Software Solutions Company, and by compiling results from both theoretical frameworks and practical insights, this research provides valuable implications for companies that aim to benefit from accounting software for financial management. It provides recommendations to improve program implementation strategies, enhance user training programs, and enhance data security measures to increase the accuracy and reliability of financial information. This study also contributes to the ongoing discourse on the role of technology in modern accounting practices and emphasizes the importance of aligning software adoption with organizational goals to achieve greater financial accuracy and effective decision-making.

Impact of Financial Distress on Earnings Management with the Moderating Role of Audit Quality: Evidence from Pakistan

The core aim of the financial reports is to provide a firm’s annual results of financial performance and position to stakeholders on time. Several accounting scandals led to the default of many large-scale corporations, leading to investors’ lack of confidence in the reliability of financial information and also putting a question mark on the effectiveness of internal control mechanisms and external audits. Business managers of financially distressed firms use the choice of accrual accounting methods which gives them leverage to misuse their powers and expropriate stakeholders by showing good financial results. So, this study fills this gap by investigating the presence of Financial Distress (FD) and its effect on Earnings Management (EM) with the moderating role of Audit Quality (AQ). The sample of this study contains the data of 96 non-financial listed companies for the period 2017-2022 on the Pakistan Stock Exchange (PSX). This study uses the discretionary accruals as a proxy for the EM and Z-score for FD. The results and analysis find that FD and EM have a significant positive relationship, which reveals that corporate managers of distressed companies do EM while AQ weakens this relationship. This study recommends that professional bodies, regulatory authorities, and corporate governance institutions must design policies that restrict corporate managers from getting involved in earning management practices, especially in the time of FD.

Using the power query system for processing and data mining SAP ERP

The article discusses the use of an intelligent Power Query system for processing data from SAP ERP. When used with SAP ERP data, Power Query can greatly simplify the data analysis process, as well as improve the accuracy and reliability of results. The article provides an overview of the main features of Power Query and how they can be used for data processing in conjunction with the SAP ERP system. It highlights the benefits of using Power Query, including speeding up data processing time, improving data accuracy, and the ability to easily exchange and reuse data processing procedures. Using Power Query to process and analyze bank statements via SAP ERP provides many advantages. Power Query's powerful data processing and transformation capabilities enable organizations to analyze their financial data quickly and accurately, making it easier to identify trends, improve decision-making and stimulate business growth. In addition, the integration of Power Query with SAP ERP provides organizations with a centralized representation of financial data in real time, which allows them to make informed decisions and optimize their activities. Using Power Query to analyze bank statements can also help organizations reduce manual data processing and minimize the risk of errors, increasing the accuracy and reliability of financial information. In general, Power Query offers a powerful solution for organizations seeking to optimize financial analysis processes and ensure business success.

Determinants of the quality of financial reports in regional government: A literature review

Government financial reports act as an essential tool for accountability and transparency of financial performance to the public, but their quality is still a big concern in Indonesia. This research aims to dive deeper into these crucial factors and their impact on the quality of financial reports, providing in-depth insights into their relationships and providing guidance for further research in the context of financial management. The method used in this research is a systematic review of related articles from the SINTA database. The results show that implementing an effective internal control system is critical in minimizing errors in financial reports and increasing their credibility. Human Resource Competency, especially related to government accounting principles, is also a determining factor in ensuring the integrity and reliability of financial information. A high level of commitment from employees and management is essential to provide better accounting information. In addition, using information technology through government websites is crucial in strengthening the management process of regional government financial reports.

Effect of Whistleblowing Mechanisms on the Financial Reporting Quality of Quoted Multinational Oil and Gas Firms in Nigeria

In the dynamic landscape of corporate governance, the role of whistleblowing mechanisms has become increasingly prominent, serving as a crucial tool in promoting transparency, accountability, and ethical conduct within organizations. This study aimed to explore the effect of whistleblowing mechanisms on financial reporting quality in quoted multinational oil and gas firms in Nigeria. This study utilized a qualitative method to examine financial data, incorporating qualitative perspectives gathered through the distribution of questionnaires among accountants and key stakeholders of quoted multinational oil and gas firms in Nigeria. Out of the 185 questionnaires disseminated, 168 were appropriately completed and returned. The analysis of the collected data in this research employed both descriptive and inferential statistical methods. The study found a positive and significant correlation between well-established whistleblowing mechanisms and improved financial reporting quality. Specifically, Reporting Mechanisms (REM), Protection Mechanisms (PRM), and Investigation Mechanisms (INM) were individually analyzed, and all demonstrated a statistically significant and positive effect on financial reporting quality. The findings highlight the importance of effective reporting processes, protection measures for whistleblowers, and robust investigation procedures in enhancing transparency, accountability, and the reliability of financial information within multinational oil and gas firms. In conclusion, the study affirms that a well-functioning whistleblowing system, comprising reporting, protection, and investigation mechanisms, is crucial for enhancing financial reporting quality in the multinational oil and gas firms in Nigeria. The study recommends that the multinational oil and gas sector should invest in and enhance reporting mechanisms to ensure effective and reliable channels for employees to report concerns related to financial matters.

The Influence of Auditor Ethics and Auditor Experience on Company Financial Reports

This research investigates the influence of auditor ethics and auditor experience on the quality of financial reports in the garment sector of West Java, Indonesia. This study employs a quantitative approach to measure auditor ethics and experience, utilizing statistical tools for analysis. The research targets financial auditors in Indonesia, with a sample size of 150 auditors selected purposively based on specific criteria.The study emphasizes the importance of auditors in ensuring the accuracy and reliability of financial information. The garment industry in West Java holds significance in Indonesia's manufacturing sector, particularly in terms of employment and export revenue. The research aims to contribute to the understanding of how auditor ethics and experience impact financial reporting quality in this specific industry.

Analysis Of Internal Control Of The Cash Management System In Medan Mayor's Office

This study aims to analyze the internal control implemented in the cash management system at the Medan Mayor's Office. Internal control is a series of actions implemented within an organization to protect assets, ensure the accuracy and reliability of financial information, and promote operational effectiveness and efficiency. In the context of cash management at the Medan Mayor's Office, internal control has an important role in maintaining the integrity and reliability of the cash management process in a timely and accurate manner. The problems identified in this study include several aspects related to internal control in the cash management system. First, aspects of inadequate segregation of duties and responsibilities can result in potential errors and abuse. Second, unclear and nonstandardized policies and procedures can hinder the efficiency and transparency of cash management. Third, the lack of effective oversight and monitoring can increase the risk of inaccuracies and cash losses. Fourth, information systems that are not well integrated can hinder the accessibility and reliability of financial data.

AI in Auditing: A Comprehensive Review of Applications, Benefits and Challenges

The rapid evolution of artificial intelligence (AI) technologies has brought about transformative changes in various industries, and the field of auditing is no exception. This research paper presents a comprehensive review of the integration of AI in auditing practices, highlighting its applications, benefits, and associated challenges. Auditing, a critical process for ensuring the accuracy and reliability of financial information, has traditionally been a labor-intensive and time-consuming endeavor. The emergence of AI technologies, such as machine learning, natural language processing, and data analytics, has revolutionized the way audits are conducted. AI-powered auditing tools offer advanced capabilities for data analysis, pattern recognition, anomaly detection, and risk assessment. These capabilities enhance the effectiveness and efficiency of audits by allowing auditors to focus on high-risk areas and perform more in-depth analysis. The paper explores various applications of AI in auditing, including: Automated Data Analysis, Predictive Analytics, Fraud Detection, and Natural Language Processing (NLP), Continuous Monitoring. While AI brings significant benefits to the auditing process, its adoption also presents certain challenges like Data Quality and Integration, Interpretability, Ethical Considerations, Technical Expertise, Regulatory Frame Work. In conclusion, AI has the potential to revolutionize auditing practices by enhancing efficiency, accuracy, and risk assessment. However, successful integration requires addressing challenges related to data quality, transparency, ethics, skills, and regulations. As AI technologies continue to evolve, auditors and stakeholders must collaborate to harness the full potential of AI while maintaining the integrity and credibility of the auditing process. This paper serves as a comprehensive resource for auditors, researchers, and policymakers seeking to understand the current landscape and future directions of AI in auditing.

Social capital accounting and financial performance improvement: the role of financial information reliability as a mediator

Purpose The purpose of this paper is to investigate the role of accounting measurement and disclosure of social capital (AMDSC) in improving financial performance (FP) in industrial companies in the Kurdistan Region of Iraq (KRG) and Sulaimani city. The research also examines the mediating role of reliability of financial information (RFI) between AMDSC and FP. Design/methodology/approach This research uses SmartPLS to analyze the questionnaire that was sent to 10 industrial companies operating in the iron sector during 2021. Findings The findings reveal that AMDSC has a significant effect on improving the FP of the industrial companies in KRG. The results also confirm that the RFI mediates between AMDSC and FP. Thus, this suggests that social capital (SC) needs to be considered in the companies’ strategy to secure future financing in this area. Research limitations/implications This paper is limited to the iron sector of KRG/Sulaimani city. Future studies could address other sectors, such as sugar, cement, clothes, automobiles and medicines. Originality/value This paper focuses on improving FP in industrial companies in KRG and Sulaimani city through considering SC in their companies’ strategies, as there was no concern for SC in KRG before.

The impact of accounting information systems on audit quality: the case of Lebanese SMES

This research examines the impact of accounting information systems (AIS) on audit quality in Lebanese SMEs. A sample of 123 respondents from Lebanese SMEs was used in the research. The data was collected through a survey questionnaire and analyzed using multiple regression analysis. The research findings indicate that AIS significantly positively impacts audit quality in Lebanese SMEs. Specifically, using AIS enhances the accuracy and reliability of financial information, improving the quality of the audit. In addition, the research reveals that several factors, such as the size of the SME, the level of internal control, and the level of accounting expertise, influence the effectiveness of AIS in improving audit quality. The results of this research have important implications for SMEs in Lebanon, as they suggest that using AIS can help improve audit quality and enhance the company's overall financial performance. Therefore, SMEs in Lebanon should invest in AIS to improve their financial reporting and enhance the quality of their audit. This research contributes to the literature on AIS and audit quality in SMEs, particularly in Lebanon. The findings highlight AIS's importance in improving audit quality and provide insights for SMEs in Lebanon to improve their financial reporting and enhance their overall financial performance.

Application of Statistical Inference Using Entropy to Characterize the Transfer of Data Across Financial Systems

This paper explores the application of statistical inference using entropy to characterize the transfer of data across financial systems. The transfer of data between financial systems is a critical process that affects the accuracy and reliability of financial information. In this study, we propose a new approach to quantify the amount of information transferred between two financial systems based on entropy measures. Specifically, we use Transfer entropy to measure the information content of data transferred between financial systems. The Kullback-Leibler separation of conditional probabilities is a design statistic known as Transfer entropy. This method enables the determination, measurement, and testing of information transmission without being limited to linear movements. We demonstrate the effectiveness of our approach by analyzing using this empirical technique, the importance of the borrowing exchange industry in comparison to the exchanges for debt securities. In addition to this, this paper investigates the greater connectivity that exists among operational risks, as represented, respectively, by iTraxx and VIX Europe. We show that our entropy-based approach can detect changes in the information content of data transferred between the two exchanges, which can be indicative of changes in market conditions or the behavior of market participants. Overall, this study highlights the potential of entropy-based statistical inference methods for characterizing the transfer of data across financial systems. This approach has the potential to provide valuable insights into the behavior of financial markets and the efficiency of financial systems, which can inform policy decisions and improve the accuracy and reliability of financial information.

Influence of e-auditing on credibility and reliability of financial information within public shareholding companies

The current study aimed to find out the role of electronic auditing (e-auditing) in the positive impact on the reliability and credibility of financial information by adopting the dimensions and specifications of e-auditing (relevance, competence, sufficiency, and timeliness) and demonstrating the ability of these specifications to impart reliability and credibility to the financial information. The quantitative approach was adopted for this purpose and a questionnaire was distributed to a sample of 117 financial managers in public shareholding organizations in various sectors in Jordan. Relying on Statistical Package for the Social Sciences (SPSS), the study concluded that all e-audit variables have a positive impact on increasing the reliability and credibility of financial statements, and the most influential was timeliness with a value of R = 0.851. The study recommended intensifying the possibility of using external expertise with better knowledge in the field of software and technology, if there is a need to do so, and focused on the need for a periodic and permanent update of the accounting audit systems. Further recommendations were presented in the study.

Effectiveness of Internal Audit- A Tool for Management Control System: An Action Research Approach

Internal audit emerged to have been an indispensable tool of management control system in Large Public Ltd. Companies in particular and Public Ltd Companies in general. Research on internal audit and its effectiveness has mainly so far focused on Public Limited Companies though an effective internal control system is a must for any organization including Private Limited Companies. Present study was administered in DMM Enterprise Private Ltd. Company within the meaning of the Companies Act, 2013 in order to examine the degree of effectiveness of internal audit for Private Limited Companies. The findings reveal that internal audit is a powerful tool to ensure that operational and financial functions carried out in succinct manner by timely detecting errors, financial frauds, exposing the risks involved and guiding the management in day-to-day commercial operations of the concerned organization. The appointment of internal auditor is mandatory for all the Listed Companies and ‘Producer Companies’. Unlisted Public Limited Companies having been subject to either of the criteria of a Paid-up Capital of INR 50 Cr. or more, the Turnover of INR 200 Cr or more and Loans and Borrowings of INR 100 Cr. from banks and financial institutions or having Outstanding Deposits of INR 25 Cr. at any point of time during the preceding financial year. As far as Private Limited Companies are concerned, internal audit has to be in place whenever the Turnover is INR 200 Cr. or more or the amount of Outstanding Loans and Borrowing is INR 100 Cr. or more at any point of time during the immediately preceding financial year. Internal audit for Private Limited Companies not covered within the criteria mentioned above assists efficiently in early detection of financial scam, frauds, errors, risk exposure , organizational performance evaluation and ensuring exercise of a robust management control throughout the length and breadth of the organization and save financial resources, ensures accuracy, authenticity, validity and reliability of financial information which in turn contribute to ensure quality decision making by the management. Moreover, effective internal audit system can save financial resources from being spent on non- or non-timely compliances. This paper aims at examining effectiveness of internal audit through the ’Action Research Approach’. Effective internal audit has emerged to be a tool for exercising management control over large organizations for which it is mandatory and also the companies not covered under the canvas of mandatory internal audit requirements and any other organizations including and medium sized enterprises. Scope of internal audit includes identifying and assessing the financial and non-financial risks and the hurdles in achieving the mission, goals and objectives of an organization. The study has been conducted on the Action Research Model developed by Kurt Lewin in the 1930s. This approach helps the organizations bring about sustainable efficiency in the economic operations of a business in terms of improving productivity, profitability and financial solvency.

The Role of Auditing in the Reliability of Financial Information (a Case Study of a Telecommunications Sector Company in Iraq)

All economic organizations and establishments seek to achieve the best possible level of financial and economic performance, in order to be able to face intense competition with other establishments, and to reach a competitive advantage that raises the market share of the company or institution, and to achieve this, companies are interested in conducting a comprehensive and continuous audit of the organization’s financial and economic performance, so that it can to reach the best possible level . Economic establishments implement multiple policies and strategies, and follow means and procedures that help improve the quality of financial statements and reports, and through which financial statements can be shown in the best possible way to help make decisions related to future planning and forecasting of economic activity. Organizations are keen to apply auditing standards based on scientific methodology, which helps to avoid any financial and accounting imbalances or lapses that may lead to the preparation of questionable financial statements, which supports the decision-making process according to information validated and trusted. The problem of the study is to identify the extent of the ability of the accounting audit to improve the quality of the financial statements, and to obtain the best possible level of credibility of the financial information obtained through those reports and financial statements.

The effect of the adoption of International Financial Reporting Standards on foreign portfolio investment in Africa

The adoption and implementation of International Financial Reporting Standards (IFRS) are anticipated to enhance the quality and credibility of financial statement in terms of reliability, transparency and comparability. Consequently, it presupposes improving the functioning of the capital market and influence foreign investments to flow into adopting countries. This study examines the effect of the adoption of IFRS on foreign portfolio investment (FPI) in Africa. Annual FPI data from the Balance of Payments and International Investment Position from 1994 to 2015 were employed. The panel data regression considered fixed-effects and random-effects models. Besides, the system generalised method of moments estimator is employed for the robustness of the model and to address the problem of endogeneity. In correspondence with the decision-usefulness theory, our findings indicate that FPI is promoted in the African countries that apply IFRS-based financial statement. The adoption of IFRS is assumed to be an informational change that would eliminate information barriers facing the users of financial statements. Therefore, the development of IFRS is aimed at improving the usefulness of financial reporting by facilitating the comparability and reliability of financial information in African countries. This will influence foreign investors to shift their capital to such an economy, consequently increasing the inflow of FPI.

ОЦЕНКА ДОСТОВЕРНОСТИ ИНФОРМАЦИИ УЧЕТНОЙ СИСТЕМЫ ХОЗЯЙСТВУЮЩЕГО СУБЪЕКТА

The information base of management decision-making makes it necessary to include a threat to the accounting system of an economic entity in the information security objects. The article proposes two criteria for classifying threats to the accounting system: the content of threats and the impact on the reliability of financial information. The conclusion is made about the construction of indicators for assessing only threats that have a direct impact on the reliability of information. Based on the principles of validity, measurability and simplicity, indicators corresponding to the threat of accounting activities are constructed. The total value of these indicators and the level of materiality of information are elements of the model for assessing the level of security of accounting activities proposed by the author.

The nexus between governance structure and cost of debt

The purpose of this study is to investigate whether creditors consider the governance characteristics of the enterprise in deciding the cost of the debt. Starting from a sample of 486 American firms during the period from 1998 to 2017, we integrate governance in six factorial axes by using estimation by OLS regressors. We validate that audit quality as well as financial expertise are informative tools for creditors who provide information on the quality and reliability of financial information. They negatively and significantly affect the cost of the debt. Moreover, the creditors appreciate the existence of independent directors on the board of directors and reduce the cost of indebtedness required. Then, the attributes of the board of directors are poorly perceived by the creditors who will improve the interest rate. Additionally, the cost of debt improves with the concentration of managerial property and majority shareholders.

Financial Transparency, Media Coverage, and Momentum in China

ABSTRACT This paper digests the influences of financial transparency and media coverage in the Chinese stock market. In China, media performs under a regulatory system and media information is regarded as the direction of news. In addition, the Chinese market is dominated by retail investors and financial information is always manipulated, so the reliability of financial information is quite intriguing. The effect of ostensible financial information on the stock market through the media hype is a crucial issue. We employ media and transparency to analyze over 3,000 stocks in China. First of all, the Chinese stock market is characterized by significantly negative momentum profit and thus exhibits price reversal. However, when high media coverage and high transparency jointly come into play, the significantly negative momentum profit turns to be significantly positive. This dramatic change alters the price reversal to be price momentum. By contrast, low media coverage and low transparency still result in price reversal.

Discount rate behaviour in fair value reporting

Despite the importance of reliable financial information to financial professionals, little is known in the behavioural finance literature about the opportunistic behaviour in discount rate selection for fair value measurement, and its adverse impact on the reliability of financial information. This short communication contributes to the literature on discount rate behaviour by revealing the potential opportunistic behaviour in the selection of discount rates. Using biological assets where the market price is usually not available, I show that a wide range of discount rates are applied for estimating fair values, but the range of rates used does not seem to be related to economic factors. Further, firms that report both larger fair value gains and larger fair value losses use higher discount rates suggesting that the discretion available to managers is used opportunistically in some cases. To gain more insights into behavioural aspects of discount rate selection, I also suggest a set of research questions pertaining to discount rate behaviour. This helps to form the agenda for future research in this area.

Change Management Over Financial Information: A Multi-Criteria Evaluation of System Change Controls Using Desirability Functions

The increasing complexity of information technology, attacks on confidential information, and the passing of new laws and regulations have shifted the focus around internal controls in organizations. Particularly, general information technology controls related to change management (i.e., system change controls) are critical in ensuring the integrity, completeness, and reliability of financial information. The literature points to various evaluation methods for these controls to determine which ones to implement. However, these methods do not necessarily consider relevant organization constraints, preventing the inclusion of required controls or the exclusion of unnecessary controls. This paper proposes a novel approach, using Desirability Functions, for evaluating system change controls providing management with a measurement that is representative of the overall quality of each control based solely on organizational goals and objectives. Through a case assessment, the approach is proven successful in providing a way for measuring the quality of system change controls in organizations.