Users Of Financial Reports Research Articles

Earnings Management and Its Implications on Management of Quoted Manufacturing Firms in Nigeria

This study is motivated by concerns investors and other financial reports users have shown after observing many business failures shortly after declaring impressive financial performance. The relationship that may subsist between diverse performance measurements and earnings management in selected manufacturing companies in Nigeria is explored. Twenty-seven (27) firms listed on the Nigerian Stock Exchange (NSE) were purposively drawn for the study using published financial statements for the period 2008-2015. Further, a questionnaire was designed and administered to customers and staff of the companies included in the study. Pooled regression and panel data analysis were carried out and the results show that financial variables of leverage and growth, as well as the non-financial variable perceived quality, significantly influence Discretionary Accruals. Consequently, users of financial reports are encouraged to use both financial and non-financial measures to evaluate companies. The research also emphasized the need for the financial and regulatory authorities to intensify efforts in ensuring that firms manage their earnings properly.

THE EFFECT OF APPLYING THE CAPITAL ADEQUACY STANDARD According to basel iii requirements on the earning quality in Iraqi private banks

This research aims to assess the earning quality after applying capital adequacy according to Basel III decisions in Iraqi private banks, and for the purpose of achieving the objectives of the research, the researcher measured the capital adequacy criterion according to Basel III decisions in the earning quality in Iraqi private banks in terms of earning management (using a model Jones 1991 modified) and in terms of the practice of accounting conservatism) using the market-to-book value model by (Jain & Rezaea 2004). The researcher reached a set of conclusions, the most important of which is that the capital adequacy standard according to Basel III decisions does not affect the earning quality in terms of the practice of profit management in private Iraqi banks. The Iraqi private, the researcher also presented a set of recommendations, the most important of which is that the Iraqi private banks should take into consideration when practicing a conservative accounting policy when forming allocations and reserves, profits and their quality because this is reflected in the decisions of investors and users of financial statements and reports.

Analyzing the relationship between accounting conservatism and profit management and its impact on promoting sustainable development: An applied study for a sample of Iraqi commercial banks listed in the Iraq Stock Exchange

This study aims to test the extent to which Iraqi banks practice accounting conservatism, and measure their profit management practices, in addition to testing the relationship between accounting conservatism and profit management, by applying to a sample of 15 banks that constitute about 80% of the total Iraqi private banks listed in the Iraq Stock Exchange. For the years 2014 and 2015. The model (miller) was relied on to measure profit management practices, and the book value to market value model was used to measure the accounting conservatism. A set of statistical methods were used to analyze the data and reach the results, such as the Pearson correlation coefficient test, the coefficient of variance analysis, the arithmetic mean, and the standard deviation, using the SPSS statistical program. The results showed that all banks in the study sample had used accounting conservatism in varying proportions, as well as that they had practiced profit management, except for the Bank (Baghdad). And that there is an inverse relationship between the use of accounting conservatism and the practice of profit management, as accounting conservatism contributes to limiting profit management, which contributes to increasing investor confidence and encouraging them to invest and thus promoting sustainable development. The study recommends the necessity of educating users of financial reports in general, and lenders and investors in particular, of the dangers and effects of the practice of profit management in their economic decisions, and its role in the spread of manipulation and opportunistic practices, through the establishment of media programs, courses and educational seminars. And the necessity for the external auditors to adopt one of the indicators for measuring the accounting conservatism in the statements they audit, and the necessity to include in their audit reports a paragraph that includes measuring the level of accounting conservatism in the financial statements of the banks they have audited.

The Mediating Effects of Key Audit Matters on the Relationship Between Audit Quality and Earnings Management: Evidence from Jordan

The relationship between audit quality and earnings management has not been tested with consideration of key audit matters as a mediating variable. This study examined whether audit quality (AQ) decreases earnings management (EM) in shareholding corporations through improving key audit matters (KAMs) in Jordan’s emerging environment. A regression analysis was carried out on a sample that included financial reports and auditor reports of 105 industrial and service shareholdings companies listed on the Amman Stock Exchange (ASE) from 2017 to 2019. The study found a negative relationship between audit quality and earnings management. The results showed that audit quality increases key audit matters, which, in turn, decreases earnings management. Also, the study confirmed the mediating effect of KAMs between audit quality and earnings management. The study confirms the importance of key audit matters to provide more relevant and useful information for the users of financial reports and provides important indications to the regulatory authorities and standards bodies that key audit matters should be given more attention regarding the way that they are presented and disclosed.

The Expected Effect of Using eXtensible Business Reporting Language (XBRL) on the Extent of Using Ordinary Financial Statements by External Users in Jordan

In 2000, a freely available modern global framework to exchange and communicate business information among business systems has emerged and called the eXtensible Business Reporting Language (XBRL). The XBRL was designed to reduce differences in financial data presentation methods. The current study aimed mainly to find the feasibility of using the XBRL in Jordanian entities and the extent to which the ordinary financial statements can be replaced by the XBRL framework. A quantitative approach was used to collect and analyze data. Accordingly, 187 analyzable questionnaires were distributed and retrieved. The results showed that the majority of respondents are convinced that using the XBRL framework will provide them with relevant, reliable, comparable, timely, and required information. In addition, the coefficient measures showed that there is a significant negative relationship between using the XBRL framework and the use of ordinary financial reports at the significance level of 0.01. Conversely, the results indicated that there is a significant positive relationship between using the XBRL framework and the usefulness of financial information in the planning and decision-making purposes. The results imply that Jordanian companies should turn to use the XBRL framework to present and communicate their financial reports, which will be reflected on increasing the confidence and interest of various users of financial reports in the company's results and management. Further, using the XBRL framework will enhance the planning and decision-making tools of users, which will be reflected on the interest of companies, especially those with good performance. Received: 6 May 2021 / Accepted: 16 August 2021 / Published: 5 September 2021

The Potential for Biases in Resolving Loan Problems

This paper describes how behavioral biases influence the resolution of financial covenant violations. Prior literature documents that violation waivers are common; however, there is a lack of discussion on the determinants that lead loan officers to waive covenant violations. We rely on the escalation of commitment bias (or the sunk cost phenomenon) to discuss how loan officers may become attached to a selected course of action and fail to incorporate new information, increasing the likelihood of covenant waivers. We explain the implications of this bias on bank financial reports by detailing how accounting links loan quality to bank financial statements. We further draw on the psychology literature to offer potential solutions to mitigate overcommitment in the context of loan officers. Future research can examine the extent to which loan officers knowingly or unknowingly steer away from rational decision-making. This study has practical implications as users of bank financial reports, including investors, auditors, examiners, and bank managers, learn about processes and challenges on how accounting mechanics link bank loan portfolios to financial statements.

Studying the Moderating Role of Audit Committee Independence in the Relationship between CEO Narcissism and Real Earnings Management

A manager’s personality and psychological attributes may influence his or her performance, thereby affecting the quality of financial reporting by companies. On the one hand, today there is an increasing requirement for protecting the interests of investors as providers of investment and the most important group of accounting information and financial report users. The development of audit committees is among the mechanisms expected to be effective in protecting the interests of different groups of accounting information and financial report users. In order to act effectively, an audit committee must be independent. Therefore, the present study aims to examine the role played by the independence of audit committee members as a quality of an audit committee to identify how it may moderate the relationship between managers' narcissism and real earnings management in the firms listed in the Tehran Stock Exchange (TSE) using a statistical sample consisting of 642 observations (year-firm) over the period 2013-2018. The findings obtained through hypothesis testing using statistical analysis of panel data suggest that independence of audit committee members does not moderate the relationship between CEO's narcissism and real earnings management through abnormal cash flow, real earnings management through abnormal production, and real earnings management through abnormal discretionary expenses. Thus, the independence of audit committee members as a moderator cannot moderate the relationship between CEO's narcissism and real earnings management

ANALISIS MEKANISME AUDIT PEMBIAYAAN PADA BANK SYARIAH

<div><p>The development of Sharia Bank depends on the role of its customers which regularly rises in terms of its number whether it shows less significance. Sharia Bank runs its business under the principle of sharia making it should be relevant and stick to the sharia itself. The operation is closely monitored by The Board of Sharia Monitoring (DPS) tasked to monitor and suggest to the management in ensuring that the bank operates under strict sharia rule so as to convince the customers that they are also stick to it. By the end of each year, DPS releases its internal report along with external auditor report. These reports are useful for financial report users who are stick to the religious values as a guarantee and convincing them that all financial transaction of the bank has operated under the sharia law. The examination is conducted by an external auditor who are qualified in managing accounting. This may rise a question whether it is relevant that “conventional” auditor examined and generating examination report for an Islamic organization (including for Sharia Bank) despite its professionalism and competence.</p><div> </div></div>

Implications of recent reforms to auditor reporting requirements in Australia

PurposeThis paper aims to address a topical and controversial issue, namely, the degree of conformity with the new auditor reporting requirements in Australia and the extent of variations in the reporting of key audit matters (KAMs) by Australian firms.Design/methodology/approachThis paper compares the 64 elements identified in the applicable standards with the auditor’s report from the sampled companies to determine the degree to which the top 200 firms listed on the Australian Stock Exchange are complying with the requirements of the new audit report. This paper investigates KAM disclosures within and across industries.FindingsThe results indicate that there is a high degree of conformity with the new reporting framework, yet significant variations in the contents of the report, particularly in KAM disclosures. This paper observes that the number of KAMs and their extent of disclosure generally varies within industries. The types of KAMs presented vary both within and across industries. This paper further provides evidence that auditors have a tendency of not disclosing negative KAMs and tend to avoid negative wordings when describing KAMs. This paper also finds that there are significant differences in the placement of various types of KAMs in the audit report.Practical implicationsThese findings have important policy implications for the standard-setters, regulators, auditors and users of financial reports on the adequacy of the new auditor reporting framework.Originality/valueThis study is one of the first to examine the degree of conformity with the new audit reporting model in Australia.

Earnings Persistence In Affecting Stock’s Prices Of Malaysia And Indonesia Manufacturing Companies

The users of financial reports usually use the information of current earnings to predict future earning so that quality earnings are earnings that can reflect the continuity of earning in the future..
 This study takes company samples of manufacturing companies, both of which listed in Indonesia’s stock exchange as well as Malaysia’s in the yeas 2014 – 2017 by using regression and intervening analysis. The results of this study are operating cash flow cannot affect the earnings’ persistence in Indonesia but it affect in Malaysia, book tax differences and debt level can affect an earning persistence in Indonesia & Malaysia, earnings persistence could affect stock prices in Indonesia & Malaysia and Operating cash flow cannot affect stock prices with Earning Persistence as intervening variable for manufacturing companies in Indonesia & Malaysia.
 Research Limitations/implications: Adj R square value is very low and cannot be compared between Indonesia and Malaysia.
 Practical Implication: the result would be beneficial for researchers who eager to analyse the similar variable against different countries.

The ability to reduce the expectation gap between financial reporting users and auditors: an analytical study of audit offices in Iraq

As a result of the exposure of the audit profession to many criticisms directed by the financial community and users of financial reports, by failing to provide the desired services, resulting in a gap of expectation between the financial community and users of financial reports and auditors, the profession had to take into account the requirements of the financial community and users of financial reports to reduce the expectation gap between the financial community and users of financial reports and auditors. From this point, the study is based on examining the gap between the financial community and users of financial reports and auditors, as well as on ways to reduce this gap by an analytical study of the opinions of both auditors working in audit offices operating in Iraq and a number of users of financial reports employed in joint stock companies. In order to achieve these objectives, a survey was conducted in 2020, under which 140 questionnaires were distributed. One of the most important findings of the research is that a major reason for the gap of expectations in the audit profession from the point of view of users of financial reports is the underperformance of the auditor’s responsibilities, and the lack of auditing standards is a major reason for the gap of expectations in the audit profession from the point of view of auditors.

Improving Audit Reports: A Consensus between Auditors and Users

Audit reports represent the only information stakeholders have about conducted audits and they are a key instrument used in economic and financial decisions. Improving audit reports should be a priority of regulators and auditors. The authors solicited perceptions from 212 experienced auditors and financial report users about the value of audit reports and ways to improve their format and content. An analysis of the responses suggests that adding information on audits (such as auditor’s responsibility about fraud) and on annual accounts and client’s information systems, without significant changes in the format, would improve the decision usefulness of audit reports. The growing sophistication of markets and reporting standards requires new information in audit reports, such as auditors’ conclusions about management’s estimates in annual accounts. The study is useful to regulators, auditors’ corporations, academics, and users and contributes to the current audit literature by providing evidence on consensus between auditors and users with regard to the format and content of audit reports.

Measuring the Level of Voluntary Disclosure of Information in the Published Annual Financial Reports of Iraqi Banks

The accounting profession has witnessed a qualitative transformation in the last three decades in light of scientific and technical developments, So that it has become an integrated and comprehensive information system that serves all activities and businesses in various sectors, This is where the accounting disclosure has become an essential and effective means in the media and reporting of the outputs of the accounting system and their delivery to all users in the administration, investors and stakeholders, In a way that enhances their ability to make appropriate decisions, to the qualitative transformation that has occurred in the accounting profession, In exchange for the mandatory disclosure concerned with providing the minimum amount of accounting information as determined by the legal frameworks and professional standards, The voluntary disclosure has emerged as a trend that some banks take to disclose the largest amount of information that goes beyond the limits of what they are obligated to do in order to serve the users of financial statements, This, in turn, drew the researchers' attention to conduct many studies and researches concerned with measuring the level of voluntary disclosure in banks. And its role in serving and achieving its strategic objectives, And its role in serving and achieving its strategic objectives, and the problem of the current research is to measure the level of voluntary disclosure of information in the published annual financial reports of Iraqi banks listed on the Iraq Stock Exchange, This is done by developing a tool to measure the level of voluntary disclosure of information in the published annual financial reports In addition, the results of the study showed that the voluntary disclosure of public information about banks comes in first place with a rate of (84.6%). This is followed by management discussions and analysis of business data (83.8%), And then internal control and audits (81.9%). The study recommended the necessity of continuing to raise the level of voluntary disclosure in Iraqi banks, The necessity of increasing attention to the optional disclosure by the Iraqi Securities Commission and the scientific, professional and academic organizations and societies, This is to ensure that users of financial reports have access to additional financial and non-financial information, which helps them to make rational investment decisions.

PENGARUH ROTASI KANTOR AKUNTAN PUBLIK (KAP), TENURE AUDIT DAN UKURAN KAP TERHADAP KUALITAS AUDIT

Accounting is a form of accountability and conveying financial information of a company or organization to parties concerned. However, the accounting report could potentially be affected by private interests, while the users of financial reports are very concerned to receive reliable financial reports. Therefore there is a need for an independent third party to mediate the two parties (agent and principal) with different interests. The independent party is an auditor who is responsible to provide assessment and opinion statement on the fairness of the financial report presented. DeAngelo (1981) defines audit quality as "the probability of an auditor is able to find and report irregularity in client's accounting system”.This study aimed to empirically examine the effect of rotation of the public accounting firms, audit tenure, and the size of the public accounting firms on audit quality. The population of the data is the entire manufacturing companies listed on the Indonesia Stock Exchange in the period 2011 to 2016.This study used purposive sampling method to select sample from the population. Based on this method, sample of 51 manufacturing firms were obtained from the period 2011-2016. The multiple linear regression was used to analysis data. Proxy measurements for audit quality is using discretionary accrual Kazsnik model (1999).The results of multiple regression analysis show that the size of public accounting firm positivly affecting on audit quality while the rotation of the public accounting firms and audit tenure has no effect on audit quality.

Основные проблемы и перспективы развития бухгалтерского учета в условиях инновационной экономики

The development of accounting in the conditions of the innovation economy is associated with the constant complication of the theory and practice of accounting, the emergence of new accounting facilities, new types of accounting and types of reporting. In the entire history of the existence of accounting, he did not develop as fast as our time. At the same time, it should be recognized that the theory of accounting barely disperse asks for changes in the economic, financial and investment activities of commercial organizations. The purpose of the article is to identify and review the current problems of accounting and analytical support for the management of innovative activities of economic entities, as well as to characterize the promising areas of development of accounting methodology in the conditions of an innovative economy. Based on the analysis of the problems of the formation of an innovative economy in Russia, the provisions of the Development Strategy of the Information Society of the Russian Federation for 2017–2030, the requirements of interested users of financial reports to disclosing information about innovation in the reporting of sustainable development revealed a number of emerging problems in accounting requiring their methodological solution and Develop the necessary practical recommendations for their elimination. To challenges and, accordingly, the prospects for the development of accounting in the innovation economy should include not only issues related to the recognition and evaluation of R & D results, but also the emergence of new types of accounting facilities (innovation, intellectual property facilities (OR), innovative products, innovative risks , human capital, intellectual capital, social capital, reputational capital, etc.), the emergence of new types of accounting (innovative accounting, accounting of innovation, integrated accounting, projected accounting, etc.), the emergence of new types of reporting (strategic derivative balance sheet, intellectual Derivative Balance Report, etc.). It is impossible not to mention the new technologies and tools used in the context of an innovative economy, such as benchmarking costs, Kook-Killing, Kaizen-Kosting, Allocation costs with the introduction of modern software, etc. The results of the study can be used as a theoretical base for further research in this area.

ANALISIS EMPIRIS FAKTOR YANG MEMPENGARUHI KUALITAS AUDIT DENGAN ETIKA PROFESI SEBAGAI VARIABEL MODERASI

The purpose of this research is to examine the influence of work experience and audit fees and professional ethics as moderating variables on audit quality. This research is important to do again because of the inconsistency of the results of previous research and the increasing demands of users of financial reports for quality audit reports. Sampling was conducted using simple random sampling method with a sample size of 50 auditors from 17 public accounting firms in South Jakarta. The collection method uses a questionnaire method that is distributed to respondents. The data analysis technique of this research is using multiple regression analysis and moderation regression analysis. The results showed that work experience had an effect on audit quality while audit fees had no effect on audit quality. Professional ethics do not moderate work experience on audit quality, but professional ethics do moderate and weaken audit fees on audit quality. Work experience and audit fees simultaneously affect audit quality.

MENGIDENTIFIKASI PERAN TEORI DAN KARAKTERISTIK PERUSAHAAN YANG DAPAT MEMPENGARUHI PENGUNGKAPAN CSR

Corporate Social Responsibility (CSR) is a part of corporate business social activities as an effort to bring good impact on environmental issues. Information regarding social activities, both economic also non-economic, has attracted the attention of users of financial reports. The disclosure of corporate social responsibility to the public is still voluntary. The theoretical development of CSR is stakeholder theory and legitimacy theory. Both of these theories come from a political economy perspective which explains the motivation for social disclosure. Stakeholder theory try to clarify the credentials of stakeholders. Meanwhile, the legitimacy theory explains that voluntary disclosure is component of the legitimacy process. The disclosure of corporate social responsibility can also be influenced by company characteristics, such as firm size, profitability, company profile, the number of the board of commissioners, leverage, ownership structure, business age, company size, growth and industrial type. This paper aims to explain the motivation for CSR disclosure from a theoretical perspective and identify company characteristics that can influence CSR disclosure.

Description of the Implementation of PSAK 45 and ISAK 35 in Mosque Financial Reporting Accounting

Mosques are non-profit organizations in the religious sector. Mosque institutions must and have the right to make responsible financial reports and report to users of mosque institutional financial reports. This study provides an overview of the application of PSAK 45 and ISAK 35 in mosque financial reporting. The results of the application of IAS 45 and Interpretation of SFAS 35 second reporting standards have almost no difference, especially in the financial statements only in ISAK 35 m emperhatikan persyartaan minimum content of financial statements in IAS 1 then d apat menyesuaiakan description of some pis, d apat menyesuaiak a n a description of the report finance: report title, considering the relevant facts so as not to reduce the quality of the information presented and the addition of LRA financial reports is possible as long as it is explained in the accounting policy there are regulatory references, in this case assumptions and what is managed by the mosque is much more complex in its sources and uses. Based on the descriptions regarding the reporting standards of PSAK 45 and ISAK 35, the two reporting standards can be used in the preparation of mosque financial reports, although many mosques still use simple reports.

Internet reporting, social media strategy and firm characteristics – an Australian study

PurposeThis paper aims to investigate internet reporting and social media strategies by Australian firms. This study looks at the extent of internet reporting and considers firm characteristics associated with disclosing information on the internet. This research is timely as in the past decade, this paper has witnessed the rapid growth of technologies such as the internet and social media and their subsequent impact on business and the economy.Design/methodology/approachThis paper constructs a disclosure index featuring a wide range of both financial and non-financial disclosures including social media strategy. This study then investigates the firm characteristics associated with the level of internet disclosure.FindingsThis paper finds that a firm’s internet reporting is associated with firm size, financial performance and analysts’ coverage but not associated with the percentage of independent board members. A firm’s social media strategy is associated with firm size and its environmental, social and corporate governance (ESG) ranking.Practical implicationsThe findings can help firms improve their internet reporting disclosures by providing a comprehensive list of disclosures that could benefit users of financial reports. It also helps standard setters and regulators understand some of the firm factors related to internet reporting and provide guidance for standard setters to consider in developing best practice internet reporting standards.Originality/valueThe research features the top 100 Australian companies’ internet disclosures in 2018 and also includes social media strategy. The results highlight that there is room for improvement with firms’ internet disclosure. By constructing a comprehensive index, this study provides guidance for standard setters to consider in developing best practice internet reporting standards.

Documenting the Results of Audit of the Information Disclosed in the Notes to the Financial Reporting Compiled by International Standards

Financial reporting releases the information requiring disclosure in accordance with national or international accounting and reporting standards. This information is usually released in the notes to the financial reporting, intended for a broader range of users. The notes are the most informative document, by which a user of the reporting can assess the company’s solvency, financial viability or business activity, can be informed about the terms of transactions with related parties, can make assumptions and receive data on management accounting, which are laid as the basis for the management strategy building. The released information is subject to obligatory disclosure, as its content is to be analyzed by national and international regulators and auditors in a way similar to the principal forms of financial reporting. An auditor assesses the received audit evidence in view of its sufficiency and reliability. Results of audit procedures can be summarized and documented. Because the International Standards on Auditing do not provide examples of documenting, the working document “The auditor’s testing of disclosure of the information attached to the financial reporting compiled by IFRS” has been formed, to support the process of documenting audit procedures with respect to the information given in the notes to the financial reporting. Using this working document, an auditor is able to obtain detailed information about a company and indicators of its financial reports, about its items and transactions that, not being subject to recognition in the reporting, are important for the management, about the accounting foundations and the opinions of management on which a company relied in compiling the reports. Depending on the operation specifics of a company, the working document can be supplemented by the following sections: IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”, IFRS 8 “Operational Segments”, IAS 19 “Employee Benefits”, IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”, IAS 40 “Investment Property” etc. The test, which is a unified working document, can be used by any audit firm. The auditor’s opinion on the information disclosure in the notes to the financial reporting is vitally important bearing in mind that not all the users of financial reports have deep knowledge of the International Accounting and Reporting Standards, but all of them need unbiased and complete data about the company status and performance.