Users Of Financial Information Research Articles

ASSESSMENT AND WAYS TO INCREASE THE FINANCIAL STRENGTH OF THE ENTERPRISE

Today we are witnessing the deepest financial crisis, which has affected almost all sectors of the economy. In conditions of competition and constant struggle, some enterprises and organizations were doomed to extinction. The rest, who managed to endure and endure, had to learn to survive in conditions of great risk and uncertainty, when all decisions have to be made independently without instructions and orders from above. In the new market conditions, organizations found themselves in close contact with the external environment, to which it was necessary to adapt. In today's business environment, one of the most important tasks is to find a balance between the level of solvency and financial stability of the company. Although each of these categories is a component of the company's financial balance sheet, financial independence as a forecast of the company's solvency in the long run can be analyzed using indicators of financial stability. Unlike liquidity and creditworthiness indicators, financial stability indicators are important for internal users of financial information in the organization. Financial stability is the most important characteristic of financial and economic activity of the enterprise. If the company is financially stable and solvent, it has an advantage over other companies of the same profile in attracting investment, obtaining loans, choosing suppliers and hiring qualified personnel. Finally, it does not enter into a conflict between the state and society, as it pays taxes to the budget, contributions to social funds, salaries of employees, dividends to shareholders on time and guarantees the repayment of loans and interest to banks. Despite numerous studies of financial stability, the methodological framework for analyzing the role of financial instruments in ensuring the financial stability of the enterprise has shortcomings and controversial issues. Therefore, our article is devoted to the study of the economic essence and methodological foundations of financial stability assessment, theoretical aspects of the influence of factors on ensuring the financial stability of enterprises. The essence, purposes and sequence of management of financial stability of the enterprise are investigated. The set of theoretical, methodological and practical aspects of assessing the financial stability of the enterprise and ways to improve it, the technology of assessing the financial stability of the enterprise, the system of indicators of financial stability of the enterprise are considered. The main methods of maintaining the financial stability of the enterprise are analyzed, the dynamics of indicators of financial stability of the enterprise are analyzed. The economic essence of financial stability and its value in the analysis of a financial condition of the enterprise are analyzed, the system of indicators for an estimation of financial stability of the enterprise is investigated, the maintenance and tasks of management of financial stability of the enterprise are defined. The necessity and importance of a systematic assessment of the financial condition of the enterprise, the expediency of developing the correct strategy and tactics of enterprise development are substantiated. The problems which can arise at the enterprise at definition of financial stability are investigated. Considered the optimization of accounting processes at the parent company; factor model of financial stability of the enterprise; ways to ensure the financial stability of the enterprise are proposed.

Determinan Kualitas Laporan Keuangan di Al Azhar Syifa Budi Solo

This study aims to determine the effect of intellectual capital, internal control systems, and information technology on the quality of financial reports at Al Azhar Syifa Budi Solo, Surakarta City. The population of this study is the employees of Al Azhar Syifa Budi Solo, Surakarta City for users of financial statement information. And the sample is 100 employees. Data collection was obtained by distributing Likert scale questionnaires. The data were tested by: (1) Testing data quality, namely validity testing and reliability testing (2) classical assumption testing in the form of normality test, multicollinearity test, and heteroscedasticity test, (3) hypothesis in the form of descriptive statistical analysis, multiple linear regression analysis, F test, t test, and coefficient of determination test. The research revealed that intellectual capital had a significant effect on the quality of financial statements at Al Azhar Syifa Budi Solo, Surakarta City. The system of internal control has a significant effect on the quality of financial reports at Al Azhar Syifa Budi Solo, Surakarta City. And the use of information technology has no effect on the quality of financial reports at Al Azhar Syifa Budi Solo, Surakarta City.

Influence of Audit Tenure, Audit Lag, Opinion Shopping, Liquidity, Leverage, and Profitability on Audit Going Concern Opinion (A Study on Manufacturing Companies Listing in Indonesian Stock Exchange 2015-2019)

Users of financial report need information as a basic for them to making decisions. Going concern audit opinion is a form of audit opinion that is given when there is great doubt about the entity's ability to maintain its survival within a reasonable period of time. This study aims to examine the influence of audit tenure, audit lag, opinion shopping, liquidity, leverage, and profitability of giving a going concern audit opinion. The sample on this study were manufacturing companies listed on the Indonesia Stock Exchange in 2015-2019. The reseach using purposive sampling method and processed using logistic regression analysis. The selected sample was 36 companies through predetermined criteria. The results of this study indicate that profitability and opinion shopping has a negative effect, leverage have a positive effect, while audit tenure, audit lag, and liquidity have no effect on going concern audit opinion.

Investigation of the Influence of Internal Control System Factors on the Financial Stability of Companies (Review)

Annotation. The quality of the internal control system can have a significant impact on decision-making by users of financial information and on the negative economic consequences of the organization's economic activities (bankruptcy, fictitious audit reports, etc.). The author suggests that these consequences are typical for Russian organizations due to their poor study of the factors that affect the system of internal control of organizations. The study reviewed 30 foreign (China, USA and Europe) publications indexed in Scopus and Web of Science on the problem of the influence of external and internal factors on the internal control system of organizations. Based on the results of the analysis of the literature, external and internal factors have been identified that affect the internal control system, which are characteristic of Russian organizations. In addition, the prospects for studying these factors for the internal control system of Russian organizations are outlined.

Business Combination Under Common Control (BCUCC) - What Kind of Disclosure is Enough? The Polish Experience

Purpose: The assessment of the scope and quality of disclosures about BCUCC, which are excluded from the scope of IFRS, published by Polish public companies in their annual financial reports prepared following IFRS. Design/Methodology/Approach: The research uses qualitative and quantitative methods. The research methodology was based mainly on critical analysis of the literature on the subject, quantitative methods, content analysis of financial statements, and synthesis of results. Findings: Most Polish public companies that did not account for BCUCC using IFRS provided at least minimal scope of disclosures necessary for users of financial information to decide the effects that BCUCC had on the information presented in the financial statement. Companies that applied the Accounting Act to substitute for the lacking IFRS solution related to BCUCC provided a higher level of disclosure than other companies. Practical Implications: The use of national accounting regulations may provide a better quality of disclosures about BCUCC. Originality/Value: This paper provides insight into how the problem is dealt with in practice and may be used to form a commentary on the current IASB project focusing on BCUCC.

The Contributions of the Financial Accounting System in Achieving the Fitness Characteristic of the Financial Statements From the Point of View of Financial Information Users - a Field Study in the Wilaya of Ouargla

This research aims to study the extent to which the financial accounting system contributes to achieving the property of suitability in the financial statements from the point of view of users of financial information. To achieve this endeavour, we conducted a field study through a questionnaire form directed to a sample of 70 targets, 67 of which were retrieved. This sample included some The employees of the tax authority in the state of Ouargla, and using the spss program, the answers obtained were analysed.
 The study concluded that the information in the financial statements is characterized by a high degree of suitability and that the quality of the financial information lies in meeting the needs of its users, and that the property of relevance affects the decision-making process

IFRS as an Important Part in Commercial Companies

IFRS are important for all the companies. The first priority of the Financial Accounting Standards Board (FASB) is to improve financial reporting for the benefit of investors and other users of financial information in U.S. capital markets. We do that by striving to set the highest-quality standards, which collectively are known as Generally Accepted Accounting Principles (GAAP). By highest quality, we mean standards that provide users of financial statements with information that is clear, useful, and relevant to their needs, while considering whether the expected benefits of that information justify the costss of providing and using it.The FASB believes that seeking more comparable global accounting standards—improving the quality of accounting standards used around the world while reducing differences among those standards—is consistent with its core mission. Investors, companies, auditors, and other participants in the U.S. financial reporting system benefit from the increased comparability that can result from the closer alignment of standards used internationally. More comparable standards have the potential to reduce costs for both users and preparers of financial statements and make worldwide capital markets more efficient. The Securities and Exchange Commission (SEC) expects the FASB to consider, in developing standards, the extent to which international comparability is necessary or appropriate in the public interest and for the protection of investors. DOI: 10.7176/RJFA/12-8-02 Publication date: April 30 th 2021

Peran Fraud Triangle dalam Mendeteksi Financial Statement Fraud di Perusahaan Perbankan ASEAN

This research aims to determine the effect of fraud triangle theory toward Financial statement fraud. Financial statement fraud is proxied by earnings management. Population in this study is non-Islamic commercial banking companies listed on SGX, MYX, SET, PSE and IDX. The sampling technique used purposive sampling. The total sample in the study was 66 non-Islamic commercial banking companies. The data analysis method used is multiple linear regression. The research results proved that Financial targets and change of auditors had a positive effect on Financial statement fraud while external pressure had a negative effect on Financial statement fraud. Financial stability and ineffective monitoring had no effect on Financial statement fraud. This research can be used as a reference by investors, the public, government and users of other financial statement information in order to detect Financial statement fraud through the fraud triangle theory.
 Keywords: Financial statement fraud; Earnings Management; Fraud Triangle.

Street versus GAAP: Which Effective Tax Rate Is More Informative?*

ABSTRACTThis study investigates how sophisticated market participants use tax‐based information by examining whether analysts' street effective tax rates (ETRs) are informative. When assessing firm performance, analysts exclude items they believe do not reflect current performance, resulting in “street” metrics such as street ETR. However, evidence on the properties of the components of street earnings is limited. Examining the informativeness of street ETRs is important because taxes are a significant component of earnings, and the extent to which analysts understand taxes and incorporate them into their analyses is not clear. Using a hand‐collected sample of analyst reports, we find that while approximately 35% of street ETRs have at least one tax‐specific exclusion, over 90% reflect the tax effects of pre‐tax exclusions. Further, both tax‐specific exclusions and the tax effects of pre‐tax exclusions significantly contribute to differences between GAAP and street ETRs. Consistent with analysts' understanding of the implications of tax and nontax exclusions, our results suggest that street tax metrics exhibit greater predictive ability about future tax outcomes and provide more information to investors than GAAP tax metrics. We also find that ETR exclusions are of higher quality when the magnitude of the potentially excluded item is greater and when managers disclose pro forma earnings. Collectively, our findings suggest that analysts understand taxes, but selectively exert effort to incorporate tax‐based information into their assessment of firm performance. Our study should be informative to regulators and users of financial information because it provides evidence regarding the usefulness of street earnings metrics.

CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING: INTEGRATED POLICY

Abstract. The project of the International Accounting Standards Board that updates and develops international accounting standards (IASB) has been lasting more than twenty years. In Ukraine, International accounting standards were adopted as the national standards for business and public sectors. The article analyzes the Conceptual Framework for Financial Reporting for the business sector entities, compares it with the Conceptual Framework for financial reporting for the public sector entities, and the current requirements of the Ukrainian legislation in the field of accounting and financial reporting. The necessity of creating a single Conceptual Framework for financial reporting, based the needs of information users, is substantiated. The relevant International Standards for the business sector entities became fundamental for the development of International Public Sector Accounting Standards. The similar needs of financial reports users support this approach. At the same time, part of the IPSAS, and the Conceptual Framework take into account the functional peculiarities of the entities in this sector of the economy. Financial reporting concepts for entities in any sector of the economy determine the aim of financial reporting as that to acquire information concerning the entity. Investors, creditors, other lenders are prior users of financial information in the business sector while society as a whole uses information in the public sector. The Conceptual Framework for the public sector takes into account the peculiarity of this sector of the economy, the main purpose of which is to provide services to society, rather than generating profits and ensuring the return on capital of investors. The common features of financial reporting standards and their Conceptual Framework, taking into account current trends and global challenges, indicate the possibility and feasibility of creating a unified (integrated) Conceptual Framework for Financial Reporting. Keywords: the Conceptual framework for financial reporting, International Financial Reporting Standards for the entrepreneurial sector, International Public Sector Accounting Standards, National Accounting Statements (Standards). JEL Classification M41 Formulas: 0; fig.: 1; tabl.: 2; bibl.: 20.

Faktor-Faktor yang Mempengaruhi Fenomena Audit Delay di Bursa Efek Indonesia

Audited financial reports are considered a reliable source of information for users of financial information in order to make decisions, therefore they must pay attention to the factors that affect audit delay. This study aims to determine the effect of auditor switching, financial distress, KAP reputation, and the Covid-19 pandemic on audit delay. The study was carried out at the Indonesian Stock Exchange's mining firms for the period 2017-2019. The number of samples in this study were 105 companies using nonprobability sampling techniques. Multiple linear regression analysis is selected as the technique in analyzing the data. Based on the analysis, it is known that auditor switching has no effect on audit delay, financial distress has a positive effect on audit delay, and the reputation of KAP has a negative effect on audit delay. There is a significant difference in the audit delay before the Covid-19 pandemic and during the Covid-19 pandemic.
 Keywords: Audit Delay; Auditor Switching; Financial Distress; Reputation of KAP; Pandemic Covid-19.

Impactos da adoção das international financial reporting standards (IFRS) nos indicadores econômico-financeiros de instituições financeiras brasileiras

O objetivo desta pesquisa é avaliar os impactos da adoção das IFRS (IAS 7, IAS 19, IAS 32 e IAS 39) nos indicadores econômico-financeiros de instituições financeiras brasileiras, por meio dos indicadores de solvência, estrutura patrimonial e de captação, e de rentabilidade. O método utilizado foi comparar os resultados referentes ao ano de 2009 e que tiveram suas demonstrações financeiras publicadas de acordo com as normas BR GAAP e IFRS. Foram comparadas as médias de cada um dos indicadores econômico-financeiros, calculados em ambos os padrões contábeis e para identificar se as diferenças encontradas eram significativas foi aplicado o teste Mann Whitney. Como teste de robustez foram comparadas as proporções de variações positivas e negativas dos indicadores analisados e para identificar se as diferenças eram significativas foi aplicado o teste chi-quadrado. Os resultados encontrados sugerem que o ajuste ao valor recuperável de empréstimos e adiantamentos e o ajuste ao valor justo de ativos financeiros influenciaram para que a carteira de crédito e o patrimônio líquido das instituições financeiras analisadas apresentassem de maneira geral valores maiores quando demonstradas em IFRS, o que elevou os indicadores Independência Financeira; Empréstimos/Depósitos e reduziu os indicadores Alavancagem; Participação dos Empréstimos; Retorno sobre o Patrimônio Líquido. Não foi possível constatar nenhuma diferença significativa, provavelmente devido a pequena amostra trabalhada. Esta pesquisa pretende ter contribuído para aprimorar o entendimento dos impactos do processo de convergência da contabilidade das instituições financeiras brasileiras, que por muitas vezes são excluídas das pesquisas por suas particularidades, para o padrão internacional; bem como, para auxiliar os gestores de negócios e os usuários da informação financeira, especialmente aqueles oriundos do mercado de capitais, as autoridades reguladoras e a academia.

Comparing the Value Relevance of Selected Accounting Information in Consolidated and Separate Financial Statements: The Case of Nigerian Listed Financial Service Firms

In a company with a group structure, financial information is presented in two folds via consolidated and separate financial statements. The reporting of the similarly classified elements of financial statements arranged side by side in two columns carrying two different figures may be puzzling. Consequently, investors and other financial information users having two different figures available to them need to be guided as to which set(s) of information they need to make predictions and decisions. This study provides evidence about the comparative value relevance of accounting information for consolidated and separate financial statement of listed financial service firms in Nigeria. The study population is the entire listed financial services firms throughout the period of 2014-2018. Accounting information was represented by earnings per share, book value per share, dividend per share, and cash flow per share. These proxies were regressed against the market price per share. Data for accounting information were sourced from the annual reports of sampled firms and market prices from the Nigerian stock exchange factbook. A census sampling was used after a three-point filter was applied to the original population. The results show generally that both consolidated and separate accounting information is value relevant. However, consolidated accounting information is found to be more value relevant than separate accounting information. The study thus recommends the strengthening of firms’ operations, re-evaluation of the dividend policy, and enhanced implementation of IFRS standards to enhance value relevant accounting information that will be useful to the shareholders in making informed decision and taking adequate actions.

Metodologija analize izveštaja o tokovima gotovine

Cash flows are one of the main indicators of liquidity and solvency of the company. In practice, the Statement of cash flows is very often done as "following document" to Balance sheet and Income statement. This is wrong. The statement of cash flows can give the information to its users about the ability of the company to make cash. The balance sheet and Income statement, due to their accrual basis, are not saying anything about the cash flows of the accounting period, and that is why the Statement of cash flows is very important. A good analysis of this statement can be the basis and support to the process of decision making both for internal and external users of financial information. In this paper we are presenting the methodology of the Statement of cash flows report analysis. The subject of this paper is the analysis of the Cash Flow Statement. The aim of this paper is to point out the importance of reporting on cash flows and its information capabilities to users of accounting information.

Analysis Of The Influence Of Corporate Size, Leverage , Price Earning Ratio (PER) And Return On Equity (ROE) On Company Value

This study aimed to n use values the company can be determined by many factors, among which the size of the company, leverage, the price earnings ratio (PER) and Return On Equity (ROE) Firm size is considered able to influence the value of the company . the large size of the company shows that the company is developing so that investors will respond positively and the value of the company will increase. The relative market share shows the company's competitiveness is higher than its main competitors. Investors will respond positively so that the value of the company will increase.
 Companies that have total assets with large amounts or commonly referred to as large companies will get more attention from investors, creditors and other users of financial information compared to small companies. If the company has a large total assets, the management will be more flexible in using existing assets in the company. This ease in controlling assets will increase the value of the company. In the face of economic turmoil, usually a more sturdy company stands are large, although it does not rule out bankruptcy, so investors tend to like large-sized companies rather than small-sized companies.

Analysis Of The Influence Of Corporate Size, Leverage , Price Earning Ratio (PER) And Return On Equity (ROE) On Company Value

This study aimed to n use values the company can be determined by many factors, among which the size of the company, leverage, the price earnings ratio (PER) and Return On Equity (ROE) Firm size is considered able to influence the value of the company . the large size of the company shows that the company is developing so that investors will respond positively and the value of the company will increase. The relative market share shows the company's competitiveness is higher than its main competitors. Investors will respond positively so that the value of the company will increase.
 Companies that have total assets with large amounts or commonly referred to as large companies will get more attention from investors, creditors and other users of financial information compared to small companies. If the company has a large total assets, the management will be more flexible in using existing assets in the company. This ease in controlling assets will increase the value of the company. In the face of economic turmoil, usually a more sturdy company stands are large, although it does not rule out bankruptcy, so investors tend to like large-sized companies rather than small-sized companies.

International methods of accounting and giving financial reporting to banking institutions

The article analyzes the trends of annual increase in the number of countries that encourage the use of IFRS in their territories in different companies and in different spheres of activity. Developed system of IFRS implementation, their transparency and openness will further lead to a significant improvement in relations with investors and increase their confidence in banks. The comparison of the status of the IFRS use for organizations around the world has been conducted. The immediate connection between the effective activity of banking institutions in foreign countries and the introduction of IFRS has been demonstrated. The factors of proximity of countries to the political forces formed in IASB have been highlighted, and the indicators of probable national strategies of IFRS implementation in different countries of the world have been given. While Ukraine is one of the countries that has quite weak political influence on the management decisions of the IASC. It was found out that in Ukraine the process of harmonization of accounting with IFRS in the banking sector began in 1998, however they began to be considered as a subject of regulation only recently. Nowadays, IFRS is already the basis of UAS and other regulations, which indicates the effectiveness of the process of combining national characteristics of doing business in Ukraine with international ones. It has been established that an important factor in adjusting the Ukrainian banking accounting system is to provide real financial information about the true price of assets of the bank, their profitability, transparency of accounting activities, creating effective methodological and legal documents governing the accounting of financial instruments under international rules. The plans of bank accounts before and after the reform have been considered, their advantages and disadvantages have been outlined. In this research the general problems in banking institutions in the process of implementing international standards, as well as possible ways to solve them have been also analyzed. The process of monitoring the quality of financial reporting in banks is also important. The analysis of foreign systems of this process has shown that the most favorable for Ukrainian banks is the control structure used in Germany. Among the main risks of full implementation of IFRS in banking institutions of Ukraine, we have identified: 1) internal ‒ an increase in the number of users of financial information; content of corporate reporting (integrated, non-financial, management); corporate auditing policy; 2) external ‒ financial risks; the danger of rapid integration into international financial markets; interest rate risks. Key words: accounting, IFRS, banks, organization of accounting, chart of accounts, regulation of accounting standard, financial

FORENSIC ACCOUNTING: AN OVERVIEW IN INDIAN CONTEXT

The rudiments objective of GAAP states that the financial statements must depict ‘true and fair’ view of the financial state of affairs. The ambivalence of ‘true and fair’ view created a dodge towards the rise of financial frauds, thereby wearying the trust of the users of financial information on the reported statements. Forensic accounting as new area of accounting in India has come to limelight recently due to quick increase in white collar crimes, financial crimes, cyber-crimes and growing complexities of the corporate environment. Forensic accounting is the triple practice that integrates accounting, auditing and investigative skills to conduct an examination into a company’s financial statements. The object of this study is to know the detailed conceptual clarity regarding the term Forensic Accounting. The study covered the necessary information regarding knowing the term Forensic Accounting, its definition, characteristics, objectives scope, role of a forensic accounting investigator and modus operandi (Techniques). It also covered differentiating points among the accounting, audit & forensic accounting. More over the well-known case of fraud has also been taken in the study. The data was collected to understand the objectives of forensic accounting and challenges faced by forensic investigators while examining various cases. The research largely makes use of secondary sources of data and the previous literature on forensic accounting, along with the experts’ views on the same. There is an urgent need to regularize the forensic accounting movement by the government and recognized accounting bodies in India.

The impact of fair value estimates on audit fees: evidence from the financial sector in Jordan

PurposeThis study investigates the association between the estimates of fair value and external auditor's fees.Design/methodology/approachBased on a sample of 32 Jordanian financial companies listed on the Amman Stock Exchange (ASE) over the period 2005–2018. We employ random effect models to test our hypothesis.FindingsWe found a positive relationship between audit fees and the proportion of fair value assets, which implies that external auditors are more likely to spend more effort for complex estimates, thereby increasing audit fees. We examined the relationship between audit fees and three levels of fair value inputs and found a positive relationship between the level of effort spent on assessment of higher uncertainty fair value inputs and audit fees. The findings are consistent with the expectation that more audit effort is required in a highly regulated environment due to the possibility of a higher cost of litigation.Practical implicationsThe findings of this study could be beneficial for a number of users of financial information, such as investors, regulators, auditors. This group of users might consider the results of this study when they are using a company's financial information, and consequently, better able to make the right decisions.Originality/valueAlthough prior studies have researched fair value, no study to date among developing countries has investigated its relationship with audit fees. This study, therefore, provides new empirical evidence that the complexity and risk of fair value estimates significantly influences auditors' motivation to expend additional effort, resulting in higher audit cost.

The Usefulness of Accrual Accounting in Forming Analysts’ Forecasts of Accruals and Cash Flows from Operations

Recent work shows that the role of accrual accounting in mitigating the timing differences between cash flows and operating performance has been disappearing over time (Bushman, Lerman, and Zhang 2016). We argue that even though there is noise in the accrual accounting process, sophisticated users of financial information – financial analysts, are able to extract useful information from the reported accrual accounting process, and use them in their forecasting process, are able to smooth the timing differences in forecasted cash flows, and also predict future reported cash flows. We find that the analysts’ forecasts of accruals and cash flows are negatively correlated with each other, and this negative correlation has not changed over time. We also find that the ability of analysts’ accruals forecasts to predict future cash flows has not declined over time.