Users Of Financial Statements Research Articles

The quality of tax accounting for financial reporting purposes: International evidence from the United Kingdom

The quality of tax accounting can be defined as the relationship between the annual tax expense reported in firms’ financial statements and future tax cashflows. As corporate income taxes have a material proportion of earnings, assessing the tax accounting quality can help financial statement users in evaluating future commitment to internal funds. While there is an emerging US-based literature on tax accounting quality, to the authors’ knowledge this is the first study to examine tax accounting quality outside of the US and the first under a regime governed by International Financial Reporting Standards. The results indicate that tax accounting quality is significantly lower for firms that engage in higher levels of tax management or have stronger earnings management pressure. While corporate governance mechanisms do not moderate the relationship between tax management and tax accounting quality, there is some evidence of a moderating effect in the relationship between earnings management pressure and tax accounting quality. In addition, we observe variations in tax accounting quality associated with a change in tax-related financial reporting standards.

Audit(or) type and audit quality in emerging markets: evidence from explicit vs. implicit restatements

Purpose This paper aims to examine the link between audit(or) type and restatements in Egypt, a complex and multifaceted auditing market. The usual big 4 versus non-big 4 comparison is insufficient as Egypt has a unique mix of private audit firms, one governmental agency (Accountability State Authority) and mandatory/nonmandatory audit services, including single, joint and dual audits. Design/methodology/approach The study uses a sample of listed companies in Egypt and analyzes the impact of auditor type and audit type on explicit, implicit and total restatements. The study uses logistic regression model to examine the underlying relationship. Findings Results show no relationship between auditor type and audit quality, positive association between non-big foreign CPA firms and total/implicit restatements and mixed results for the impact of dual audits on audit quality. The study found no link between auditor type and audit quality in Egypt. Egyptian audit firms linked to non-big 4 foreign Certified Public Accounting firms were positively linked to total and implicit restatements. Joint audits did not improve audit quality and were directly related to total and explicit restatements. Dual audits showed mixed results, positively associated with implicit restatements but inversely associated with explicit restatements. Originality/value The study provides valuable insights into the complexities of the auditing market in emerging markets and offers valuable insights for stakeholders in the financial statement users, audit firms and governmental agencies.

Audit partner gender and the COVID-19 pandemic: the impact on audit fees and key audit matters

Purpose The purpose of this study is to analyze the influence of the COVID-19 pandemic on audit fees and the reporting of key audit matters (KAMs). Additionally, this study also looks into potential differences in the behavior of male and female audit partners during this period, adding to the existing research on gender's effect on different elements of the audit process. Design/methodology/approach This study used a sample of all FTSE 350 firms from before the COVID-19 pandemic and during the pandemic. It analyzed the data using Ordinary Least Squares regression analysis to test its hypotheses. Findings This paper provides early evidence on the impact of the COVID-19 pandemic on audit fees and KAM disclosures in the UK. The results of this study show an increase in audit fees during the pandemic and greater detail in the reporting of KAMs, with no significant difference between male and female audit partners. These findings will be of interest to audit firms and regulators as they assess the performance of auditors during the pandemic and evaluate the expanded audit report's effectiveness in providing sufficient information to financial statement users. Originality/value This study provides first-of-its-kind empirical evidence on how auditors in the UK reacted to the COVID-19 pandemic. The findings of this study will be of interest to audit firms, regulators, such as the Financial Reporting Council, and other stakeholders as they evaluate the performance of auditors during the crisis period. The results will help regulators assess the effectiveness of the expanded audit report in providing sufficient information during a time of heightened risk and scrutiny.

Implementasi Big Data Analytics dan Opini Audit terhadap Kualitas Audit dengan Audit Delay Sebagai Variabel Mediasi

This research is based on the relationship between Big Data Analytics and its impact on the quality of audit evidence and the level of assurance felt by end users of financial statements. Big Data Analytics potentially play an important role in innovative auditing practices. Big Data Analytics can increase the efficiency and effectiveness of financial statement audits, but additional competencies and technological capabilities are required to implement Big Data Analytics. With Big Data, auditors can minimize the risks posed by sampling, and therefore, provide a reasonable level of assurance. This study aims to examine Big Data Analytics variables and audit opinion whether these two variables are antecedent variables of audit delay and affect audit quality. This study uses secondary data in the form of the company's annual financial report. The population in this study are all companies listed on the Indonesia Stock Exchange (IDX). The population in this study were 100 companies in the telecommunications, transportation and banking sub-sectors that met the criteria and had been determined to be related to problems during the 2016 to 2020. The data analysis technique in this study was to use the Structural Equation Model to examine the mediating effect. The implementation of big data analytics has no effect on the audit delay variable. Based on the research results, there is sufficient evidence that audit opinion has a significant positive effect on audit delay. However, there is not enough evidence that BDA has a significant positive effect on audit delay

Valuation of financial reporting quality: is it an issue in the firm’s valuation?

Purpose The purpose of this study is to test the determinant of financial report quality and its consequences to the company values.Design/methodology/approach This research is using a quantitative approach and testing a theory by formulating some hypotheses. The sample of this study is 85 go public companies listed in the Indonesia Stock Exchange, for a 5-year observation period from 2016 to 2020. Hence, it has a total of 425 observations. Data were analyzed using path analysis.Findings The results found that innate factors from financial reporting quality (FRQ) consists of dynamic factors (operation cycle and sales volatility) as well as static factors (firm’s size, FS). These factors help to achieve FRQ and are able to provide a positive response to the market. On the other hand, static factors (firm’s age, FA) and institution risk factors (leverage) are not able to produce FRQ. Thus, it cannot be considered as an economic decision maker for an investor.Practical implications Research implications include theoretical and practical implications. Theoretical implications prove that the valuation of clean surplus theory, which shows the market value of the company, is reflected in the components of the financial statements. This study also uses more than one quality of financial reporting. The practical implication of the research is that the research results are expected to provide information for the company’s management, to fulfill quality financial reporting and so that the market or investors will respond positively to these conditions. In addition, quality financial reporting information provides benefits for investors and capital market analysts (consisting of investors, brokers and market securities analysts) in determining investment decisions. The Financial Services Authority is also able to improve the implementation of corporate governance practices in Indonesia, through reform of the framework supervision of the financial services sector.Originality/value This research examines the determinants of FRQ and its consequences on firm’s value (FV). Innate factors proxies from FRQ include dynamic factors (operation cycle and sales volatility), static factors (FS and FA) and institution risk factors (leverage). A follow-up study on the value of the company because it shows the magnitude of the market response (financial statement users) on the quality of financial reporting, which is reflected in FV, the originality of this research is that the object of research is carried out in developing countries, specifically in Indonesia, because most of the previous research was carried out in developed countries.

The perception of audit quality among financial statements users, preparers and auditors, in Tunisia

The perception of audit quality among financial statements users, preparers and auditors, in Tunisia

Determinants Of Corporate Profit Management In Jakarta Islamic Index Mediated By Company Performance

Corporate earnings management is an essential issue in business entities. The fact reveals that users of financial statements are more focused on what is stated in the financial statements rather than how the profit process is obtained. This study analyzes and shows the factors influencing company earnings management in the Jakarta Islamic Index (JII) for the 2016-2020 period. Company performance is used as an intervening variable. This research uses a quantitative approach with secondary data in the form of panel data. The research population is all companies in the Jakarta Islamic Index (JII) for the 2016-2020 period, namely 30 companies. The sampling technique is purposive sampling, and 13 company samples were obtained. Data analysis technique using multiple linear regression and path analysis. The results showed that the independence of the audit committee, audit committee meetings, and company size positively and significantly affect earnings management. The audit committee size does not affect earnings management. Audit committee independence, audit committee size, and audit committee meeting do not affect company performance. Firm performance cannot mediate the effect of audit committee independence, size, and meetings on earnings management. This research can complement existing theory and be a reference for companies in improving performance and earnings management.

Audit Quality Reduction Behavior: A Literature Review

Audit quality has become an important issue for accounting professionals. The phenomenon of audit quality criticism from stakeholders such as users of financial statements and the government who shows dissatisfaction with financial statements will pressure auditors to improve audit quality. Auditors do not always apply audit procedures in the audit program. Audit quality behavior is defined as the auditor's actions during the audit process by reducing the effectiveness of existing audit evidence. This study aims to discuss the behavior of audit quality reduction a review of the existing literature related to that issues and then identify empirical evidence from previous research. Data collection techniques through search in national and international journals and selected based on related keywords, audit quality reduction. Based on the results of previous research, it is known that time pressure, work-family conflict, high work stress levels, audit fees, and experience can affect the behavior of decreasing audit quality. In contrast, work-family conflict and experience have no significant effect. The implications of the results of this study are expected to provide an in-depth understanding of the factors that affect the reduction of audit quality so that it can be used as evaluation material to improve audit quality.

On the mechanism for improving accounting and reporting of subordinate educational institutions of the Ministry of Culture of the Russian Federation

Subject. This article analyzes the processes and phenomena associated with the justification of the need to develop and use a mechanism for improving accounting and reporting of subordinate educational institutions of the Ministry of Culture of the Russian Federation. Objectives. The article aims to show the need to develop a mechanism for improving accounting and reporting, using the case of subordinate educational institutions of the Ministry of Culture of Russia, and substantiate the advantages of its use to improve the quality of information support for users. Methods. For the study, we used the methods of analysis, synthesis, comparison, modeling, case study, etc. Statutory documents in the field of regulation of accounting and reporting in budgetary organizations, factual materials, as well as the opinions of experts and practitioners were used as a methodological basis. Results. The article defines the essence of the concept of Mechanism for Improving Accounting and Reporting and the algorithm for its development. It justifies the need to use this mechanism to more fully meet the information requests of users of accounting information and reduce the time and money spent on its compilation. Conclusions and Relevance. The current system of accounting and reporting of budgetary educational institutions does not provide adequate quality of information support to users of financial statements, causes a decrease in the effectiveness of management decisions, and unjustified time and money costs. The presented mechanism can be used to develop appropriate domains in the Electronic Budget system and adapted to the features related to the goals and organizational specifics of State-funded institutions, and thus, can contribute to improving the quality of information support for users and reducing time and money costs for these purposes.

Pengaruh Profitability Terhadap Penerapan Konservatisme Akuntansi Pada Perusahaan Yang Terdaftar Di Jakarta Islamic Index

To find out the company's financial condition in one period, it is reviewed through the financial statements issued by the company. The information for interested parties such as creditors, investors, government and users of financial statements is the responsibility of company management. Components in the presentation of its financial statements that already exist in PSAK No. 1 with issuance from the Indonesian Accounting Association, these components include the company's statement of financial position, the income statement, the report on changes in the company's equity, the report on its cash flows and the notes to the financial statements. 1 As for one of the methods in compiling a financial report issued by companies, namely the preparation of financial reports using the principle of accounting conservatism. Accounting conservatism includes actions taken to present the company's financial statements using the precautionary principle in which the company slows down recognizing profits and assets and accelerates recognizing losses and debts. The consequence of using this principle can result in lower profit and income values while costs tend to be relatively high. 2 The benefits of using conservatism can minimize risks to managers who have excessive optimism. However, excessive use of the principle of conservatism can cause differences in profits and losses by not reflecting the actual state of the company3 Judging from the above phenomenon, profitability can be a consideration in the application of accounting conservatism in companies listed on the Jakarta Islamic Index The purpose of this research is to find out how profitability affects the application of accounting conservatism in companies listed on the Jakarta Islamic Index. The number of samples in the research in this study amounted to 42 samples using a quantitative approach. The technique used in taking the sample uses non-probability sampling techniques, namely techniques in taking samples from the population where members of the population do not have the same opportunity to be used as samples. In this non-probability sampling technique, the researcher uses a purposive sampling technique, namely the sampling technique is based on certain criteria or requirements set by the researcher. The data obtained is processed using Eviews and the research data is panel data. The results of this study indicate that the value of tcount = 2.741973 > table = 1.68957 with probability = 0.0096 <α = 0.05. Based on this comparison it can be stated that Profitability has a significant positive influence on the application of accounting conservatism so that if the Profitability variable increases, the accounting conservatism variable will also increase

Economic Growth Of Manufacturing Companies: Long-Term Debt, Pre-Tax Foreign Income, And Earning Management

The objective of this research is to find evidence of Long-Term Debt, Pre-Tax Foreign Income, and Earnings Management on Economic Growth. The data used are manufacturing companies listed on the Indonesia Stock Exchange from 2015-2018. This study's sample was selected using purposive sampling criteria and 12 manufacturing companies. This study uses a panel regression model with the Eviews version 10. This study found that the variable of Long-Term Debt (LTD) has a positive effect, Pre-Tax Foreign Income (PRTX), and Earnings Management (EM) have no effect on Economic Growth (EP). Research contribution gives academics, financial statement users, and regulatory bodies additional literature that Long-Term Debt (LTD) is a component that has a positive impact on Economic Growth (EP).Keywords: Long Term Debt, Pre-Tax Foreign Income, Earnings Management, Economic Growth

Nexus between corporate governance and earnings management in family and non-family firms

This study explores the relationship between internal corporate governance mechanism and accruals and real earnings management (EM), following Pakistan’s 2012 amended Code of Corporate Governance. It also examines the moderating role of family firms on the relationship among corporate governance mechanisms and accruals and real earnings management. For this purpose, we used a sample of 172 firms listed on the Pakistan Stock Exchange (PSX) for 2012–2019. The dependent variables were estimated by utilizing the generalized method of moments (GMM), fixed random effects and moderation analysis were estimated through Stata. Hausman specification test was used to choose among random and fixed effects. Results report that board size showed a significant positive impact on abnormal discretionary expenses and overall real earnings management. Board independence led to a substantial and negative impact with accruals EM. Managers of familyowned firms are also opportunistically altering the reported earnings. Results illustrate to the users of financial statements that the reliability of financial information depends on the effectiveness of corporate governance. Also, highlight the efficiency of monitory mechanisms and suggest that board independence is one of the practical approaches for an emerging market to restrain the EM practices. Findings are helpful for regulators, policymakers, and investors to regulate and make policies to improve the financial reporting quality in Pakistan. As per the authors’ knowledge, this study adds the novelty by focusing on two critical internal monitoring mechanisms (board independence and board size) in mitigating earnings management, following the 2012 amended Code of Corporate Governance in Pakistan. It will add uniqueness by studying the moderating role of family ownership, as the literature is scarce. The findings of this study highlighted the impact of the internal monitoring mechanisms on earning management practices in Pakistan.

Understanding Auditor-Auditee Relationship: Some Cultural Considerations

Purpose: The purpose of this study is to analyse other types of relationship developed between auditor and auditee. The study tries to explore kinds of auditor and auditee working relationship appeared in an audit process. Theoretical framework: Research have shown that the AAR is more than just about good knowledge that should be acquired by auditors regarding their clients’ industry or how long auditors have served a client. It is also about auditors’ performance in audit tasks and in interaction with clients, or how to develop a better understanding of clients. However, that kind of relationship has not been explore enough as study on AAR most focus on professional relationship Design/methodology/approach: This study applied a qualitative approach. The interview method, in semi-structured form, was conducted to collect data. The semi-structured interview posed the same questions to all interviewees. This research involved 12 interviewees which consist of three different audit market participants in Indonesia: auditors, auditee, and users of financial statements. These participants (auditee and users of financial statements) were identified and selected from the IDX website, while participants for the auditor group were identified from BAPEPAM-LK database. Results were analysed by using NVivo software. Findings: Key findings derived from the qualitative study confirmed that some cultural values appear in participants’answers. The most common cultural values found in the interview text were: harmony; relationship prevails over task; and warm relationships are important. Indonesians interpreted the auditor-auditee relationship as a peers’ relationship: a relationship that consists of a professional/personal relationship and trust. Research, Practical & Social implications: This research nhances knowledge of the influence of cultural values on the relationship. In this type of society, individuals perceive social situations, including business relationships, in terms of close personal bonds. The personal relationship should be established first before any business can be done. service providers who are able to show warmth to customers can build trust with them. Moreover, a high-social-interaction context provides an environment in which social interaction and relationship-building activities are a primary goal. Originality/value: This research provides a more refined understanding of auditor-auditee relationship. Given ongoing globalisation and the fact that audits are performed by auditors from a multitude of nations, it is important that AAR research captures perspectives from different cultural backgrounds.

Does Financial Statement Line-Item Comparability Affect Analysts’ Forecasts?

This study investigates comparability of firms’ financial statement presentation, that is, the display of line items on financial statements. The line items that are displayed on financial statements are the result of disclosure choices such as placement, formatting, and aggregation. Given the emergence of machine-readable data (for example, XBRL-tags used in this paper in creating our test variable), a question arises about the relevance of items’ presentation on the face of the human-readable financial statements. This paper examines the relation between line-item comparability (based on the face of financial statements) and financial statement users’ judgments as proxied by attributes of analysts’ forecasts. We posit that greater line-item comparability likely lowers analysts’ processing costs and enhances analysts’ ability to evaluate firms’ economic performance. Our results indicate that greater line-item comparability is associated with more analyst coverage, increased forecast accuracy, reduced forecast dispersion, and greater timeliness of forecasts. Overall, these results suggest that comparability of line items on the face of financial statement enhances informativeness.

Does the income of the chief executive officer affect the quality of corporate financial statements? An evidence from industrial firms in Vietnam

Research aims: This study examines the relationship between the CEOs’ income and the quality of financial statements of industrial firms listed on the Ho Chi Minh Stock Exchange (HSX) during the three years from 2018 to 2020.Design/Methodology/Approach: This study investigated the influence of CEOs’ characteristics, particularly their income, on the quality of financial statements of listed firms in the Vietnamese industry by using features of information quality proposed by the International Accounting Standards Board (IASB). Ordinary Least Squares (OLS), Random Effects model (REM), Fixed Effects model (FEM), and Feasible Generalized Least Squares (FGLS) regressions were applied for empirical examinations.Research findings: The results of this study demonstrated that a CEO’s income positively affected the quality of corporate financial statements. Additionally, the analysis results confirmed the positive correlation between the firm’s size and the quality of disclosed reports, consistent with prior studies. However, this study uncovered that Big4 auditors did not influence the quality of financial statements.Theoretical contribution/Originality: This study contributes to the literature by providing a comprehensive perspective on the assessment of corporate financial statements quality and examining its association with the CEO’s income in the context of an emerging economy.Practitioner/Policy implication: The study is useful for investors and other financial statement users to assess the quality of corporate financial statements through the CEO’s profile; it also contributes as a scientific basis for firms to adjust the compensations offered to their CEOs.Research limitation: This study was limited by looking at the mono-directional impact of the CEO’s income on the financial statement quality. The following studies need a larger sample of industries and countries to strengthen the research findings. Also, further studies can broaden their perspectives to investigate the multidimensionality of this relation.

Parental reports of vaccine information statement usage in Utah.

Since the implementation in 1986, there is little research focused on vaccine information statements (VISs) use for vaccine education and parental perception. To explore parental reports of dissemination and use of VISs. Data for this pilot, cross-sectional, descriptive study were collected through an online survey in both English and Spanish. Responses from 130 parents in one school district were analyzed. Most participants (67.7%) reported getting vaccine information from a pediatric health care provider. A majority (71.5%) said that VISs were included in the vaccination process. Approximately one third of participants (37.7%) reported reading some or all the VIS before their child was vaccinated, and more than half (59.3%) read some or all the VIS after their child was vaccinated. While promising that many parents reported receiving a VIS, more than one quarter of parents reported they did not. Inadequate time to read and understand VIS information before an immunization may lead to limited parental understanding. Although some participants reported struggling to understand VISs, more than half said that VISs were helpful and would read another in the future. Without appropriate use of vaccine education material, providers miss the opportunity to educate parents on the risks and benefits of vaccinating their children. Providers must be aware of literacy levels and vaccine attitudes and create appropriate opportunities for parents to read and learn about vaccines. VISs are valuable educational tools for patients and parents. Improvements are needed to improve both VIS clarity and dissemination.

PENGARUH SOSIALISASI, TINGKAT PENDIDIKAN, PERSEPSI PELAKU USAHA, PEMAHAMAN AKUNTANSI DAN MOTIVASI KERJA TERHADAP PENERAPAN PENYUSUNAN LAPORAN KEUANGAN EMKM

This EMKM business can be done by anyone, but there are still many EMKM actors who neglect to make financial reports in accordance with the applicable SAK. Therefore, information regarding accounting is needed which can be obtained from electronic media or reading books on accounting specifically for EMKM so that EMKM actors can easily compile relevant financial reports, can be compared and understood by anyone. Accounting plays an important role in the progress of EMKM and every business is expected to have financial reports to analyze financial performance so as to provide information about the company's financial position, financial performance and cash flow that is useful for making decisions for users of financial statements. In this study, the population of EMKM was 15,126 and the sample used the slovin formula was 100 EMKM. The data analysis method used in this study is a quantitative data analysis method. The test results show that the socialization and work motivation has no effect on the application of SAK EMKM. The level of education has an effect on the application of SAK EMKM, the perception of business actors has an effect on the application of SAK EMKM, accounting understanding has an effect on the application of SAK EMKM.

Earnings Quality: An Analysis of Indonesia Manufacturing Companies with Dividend Policy as a Moderating Variable

This study aimed to examine the factors that influenced earnings quality in manufacturing sector companies listed on the Indonesia Stock Exchange for the 2018-2020 period. Earnings quality is the ability of company-generated profit information to influence the decisions of financial statement users. Earnings information is used as a basis for consideration in making decisions so companies are required to provide quality earnings information. Earnings quality in this study was measured by the Earnings Response Coefficient (ERC). ERC is a measure of the magnitude of the abnormal return of a stock in response to unexpected earnings reported by the company. In this study, the factors that were predicted to affect ERC were profitability, leverage, firm size, and liquidity with dividend policy as a factor that could moderate the relationship with ERC. Based on the results, it can be concluded that profitability, firm size, and liquidity had a significant positive effect on earnings quality (ERC), with dividend policy as a moderating variable. Meanwhile, leverage (DER) had no effect on earnings quality with dividend policy as a moderating variable. Keywords: dividend, earnings response coefficient, leverage, profitability, size

WAYS TO IMPROVE THE ACCOUNTING OF SETTLEMENT TRANSACTIONS

The purpose of the article is to consider the method of accounting for settlements with debtors and creditors and to determine directions for its improvement. Methodology. The theoretical and methodological basis of the study is a systematic approach to the study of practical accounting tools for settlement transactions. In the process of research and systematization of the obtained results, general scientific and special methods were used: abstract-theoretical, historical, dialectical, induction and deduction, analysis and synthesis, formalization and comparison. Results. It has been proven that the quality of accounting organization is important today, as it contributes to the organization of information, transparency and reliability of data on transactions with debtors and creditors, and also provides minimum guarantees of reality, completeness and legality of the given information on calculations for users of financial statements. Timeliness of payments is important for both the debtor and the creditor, and its provision depends to a large extent on the correct organization of accounting and day-to-day control. The availability of information on the amount of bad and overdue debts in the financial statements of economic entities would allow both internal and external users to make effective management decisions, which is extremely important in the context of European integration of the domestic economy. Practical implications. It is proposed to make an improvement that will unite all information about receivables and payables, make it integral and allow users, in particular the head of the enterprise, to receive complete information about the state of indebtedness to debtors and creditors for received goods and services, provided works. The analytical accounting statement of the extended balance to account 63 "Settlements with suppliers and contractors" will help in practical activities to prevent errors in the presentation of information in financial statements, and management personnel to make operational management decisions. It is possible to solve the problems of the company's accounts payable accounting by improving the procedure of applying individual elements of the accounting method on the basis of identifying systemic connections between them. The information from the above analytical accounts to account 66 "Settlements for Employee Benefits" will allow management to track salary trends not only by employee groups but also by type of benefit. For the rational organization of accounting of accounts payable at enterprises, it is suggested to use a special analytical table, which will highlight the debt in the section of each supplier according to contracts, the terms of debt repayment according to the schedule and actually. This document must reflect all transactions the company has made with a particular supplier during the year (receipt of goods and services for a particular delivery; receipt of a subscription for a particular delivery; payment of arrears for a previously received delivery). Value/originality. The above-mentioned possibilities will contribute to the improvement of the organization and accounting of the accounts, to the reduction of receivables and payables, and to the strengthening of the financial position of the company.

Determinants of goodwill: Empirical study from emerging economies

Goodwill is increasingly receiving the interest of investors, auditors and other users of financial statements, therefore the need for comprehensive information on this topic has grown over time. The aim of this article is to analyze the determinants of goodwill in companies from emerging economy countries. The research is structured in two stages. The first stage of the research consists of a bibliometric analysis of the literature that is focused on the goodwill topic. The second part of the research consists in building an econometric model in order to assess the determinants of goodwill based on data reported by firms in emerging economy countries in 2021, namely the data reported by 21,977 companies from 100 emerging economy countries, structured into 94 industries. The obtained results are represented by the development of an econometric model that shows the implications of net profit, Economic Value Added (EVA), Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and of research and development (R&D) expenses on goodwill fluctuations and vice versa. The results of our research highlight the fact that goodwill fluctuation is generated by the fluctuation of net profit, EVA, EBITDA and less by the R&D expenses. This study adds value to the literature by treating the subject differently, analyzing and evaluating the relationship between net profit, EVA, EBITDA, R&D expenses and goodwill.