18. Informed shareholders and stakeholders—disclosure and the limited company

2021 ◽  
pp. 393-430
Author(s):  
Brenda Hannigan
Keyword(s):  
Business Strategy ◽  
Financial Statements ◽  
Regulatory Framework ◽  
Duty Of Care ◽  
Audit Report ◽  
Public Companies ◽  
Financial Position ◽  
Limited Company ◽  
Narrative Account ◽  
Company Accounts

Most disclosure comes in the form of company accounts and reports focusing on the financial position and the activities of the company. Increasingly, mandated disclosures for public companies extend widely beyond the financial statements to a narrative account of the company’s activities, business strategy, and risks. Considerable emphasis is now placed, for public companies, on addressing environmental, social, and governance (ESG) concerns. The chapter discusses the statutory provisions governing company accounts and considers the obligations of the directors with respect to preparing, circulating, and filing accounts. The chapter also addresses the regulatory framework for audit, the need in larger companies for an auditors’ report, and considers the extent of the auditor’s duty of care as well as the potential auditor liabilities arising from a negligent audit report.

scholarly journals Развитие на практиките при изготвяне на консолидирани финансови отчети (The Development of Practices for the Preparation of Consolidated Financial Statements)

2020 ◽  
pp. 123-133
Keyword(s):  
Financial Statements ◽  
Regulatory Framework ◽  
Financial Statement ◽  
Practical Application ◽  
Consolidated Financial Statements ◽  
Information Requirements ◽  
Financial Position ◽  
Other Comprehensive Income ◽  
Economic Position ◽  
Source Of Information

The main source of information on the financial and economic position of a group of companies is the consolidated financial statement. Thus, the consolidated financial statements aim to fulfill the information requirements of both external and internal parties of the group. The article examines the consolidated financial statements in two aspects. The first one is the emergence of the need for consolidated financial statements and their step-by-step regulation and standardization. The second aspect is the practical application of the current regulatory framework in the preparation of the consolidated financial statements at the end of the reporting period. The article summarizes and illustrates the main consolidation procedures in the preparation of consolidated financial statements (consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income and consolidated statement of changes in equity) at the end of the reporting period.

Additional Evidence on Audit Report Lag

2001 ◽  
Vol 20 (1) ◽  
pp. 137-146 ◽  
Author(s):  
W. Robert Knechel ◽  
Jeff L. Payne
Keyword(s):  
Earnings Quality ◽  
Financial Statements ◽  
Financial Statement ◽  
Fiscal Year ◽  
Sources Of Information ◽  
Audit Report ◽  
The Public ◽  
Time Period ◽  
Audit Team ◽  
Available Information

The process for providing accounting information to the public has not changed much in the last century even though the extent of disclosure has increased signifi-cantly. Sundem et al. (1996) suggest that the primary benefit of audited financial statements may not be decision usefulness but the discipline imposed by timely confirmation of previously available information. In general, the value of information from the audited financial statement will decline as the audit report lag (the time period between a company's fiscal year end and the date of the audit report) increases since competitively oriented users may obtain substitute sources of information. Furthermore, the literature on earnings quality and earnings management suggests that unexpected reporting delays may be associated with lower quality information. The purpose of this paper is to extend our understanding about the determinants of audit report lag using a proprietary database containing 226 audit engagements from an international public accounting firm. We examine three previously uninvestigated audit firm factors that potentially influence audit report lag and are controllable by the auditor: (1) incremental audit effort (e.g., hours), (2) the resource allocation of audit team effort measured by rank (partner, manager, or staff), and (3) the provision of nonaudit services (MAS and tax). The results indicate that incremental audit effort, the presence of contentious tax issues, and the use of less experienced audit staff are positively correlated with audit report lag. Further, audit report lag is decreased by the potential synergistic relationship between MAS and audit services.

Earnings management in non-public companies: the case of for-profit hospice organizations

2017 ◽  
Vol 29 (1) ◽  
pp. 1-19
Author(s):  
Kelly Noe ◽  
Dana A. Forgione ◽  
Pamela C. Smith ◽  
Hanni Liu
Keyword(s):  
Earnings Management ◽  
Financial Statements ◽  
Accounting Earnings ◽  
Public Companies ◽  
For Profit ◽  
Management Literature ◽  
Political Cost ◽  
Accounting Earnings Management ◽  
Public Scrutiny ◽  
Cost Factors

We examine earnings management in non-publicly listed companies, with a focus on for-profit (FP) hospice organizations, and extend the accounting earnings management literature to the hospice industry. FP hospice organizations file Medicare cost reports that include complete financial statements not otherwise publicly available. Managers of FP hospice organizations have incentives to manage earnings to increase performancebased bonuses, meet or beat bond covenant requirements, or avoid public scrutiny. We find total accruals are significantly positively associated with profitability, debt, and size factors. However, discretionary accruals are significantly negatively associated with debt and size, but not profitability. Thus, monitoring and political cost factors appear to effectively mitigate earnings management in this industry sector.

scholarly journals Analysis Of Presentation Of Sharia Financial Statements According To Psak 101 At Pt. Mandiri Sharia Bank

2021 ◽  
Vol 2 (4) ◽  
pp. 1175-1183
Author(s):  
Fera Riske Anggita ◽  
Tommy Kuncara
Keyword(s):  
Accounting Standards ◽  
Secondary Data ◽  
Financial Statements ◽  
Relevant Information ◽  
Financial Accounting ◽  
Financial Statement ◽  
Islamic State ◽  
Literature Study ◽  
Financial Position ◽  
Other Information

The presentation of Islamic Financial Statements has been regulated in PSAK 101 and every bank needs to refer to it. As we know, PT Bank Syariah Mandiri is the number 1 largest Islamic bank in Indonesia and other information obtained by researchers, PT Bank Syariah Mandiri will merge with 2 other Islamic state-owned banks, namely PT Bank BNI Syariah and PT Bank BRI Syariah. Therefore, researchers are interested in examining whether the financial statements of PT Bank Syariah Mandiri are appropriate in applying the application of Financial Accounting Standards 101. The types of data used are qualitative and quantitative data, the data used are general company information and company financial statement information in 2019. Sources the data used is secondary data. The data collection method is literature study. In the financial statements of PT Bank Syariah Mandiri, the bank has reported all components of the financial statements in PSAK 101. In the Statement of Financial Position PT Bank Syariah Mandiri does not include the Istishna Assets in Settlement and Salam Receivable accounts in the Statement of Financial Position, but in PSAK 101 Paragraph 61 explains Statement of Financial Accounting Standards 101 does not regulate the composition or format of presentation of statement of financial position items. PT Bank Syariah Mandiri continues to present relevant information on the Statement of Financial Position. However, in PSAK 101 Paragraph 61 explaining the Statement of Financial Accounting Standards 101 does not regulate the composition or format of the presentation of the statement of financial position. PT Bank Syariah Mandiri continues to present relevant information on the Statement of Financial Position. However, in PSAK 101 Paragraph 61 explaining the Statement of Financial Accounting Standards 101 does not regulate the composition or format of the presentation of the statement of financial position. PT Bank Syariah Mandiri continues to present relevant information on the Statement of Financial Position.

scholarly journals Penyusunan Laporan Keuangan dan Perancangan Aplikasi Keuangan Untuk Usaha Kecil Menengah Studi Kasus pada D’Haus Cake

2020 ◽  
Vol 15 (2) ◽  
pp. 90-96
Author(s):  
Fitra Oliyan ◽  
Elfitri Santi ◽  
Eka Rosalina
Keyword(s):  
Implementation Process ◽  
Financial Statements ◽  
Transaction Processing ◽  
Development Stage ◽  
User Needs ◽  
Application Development ◽  
Financial Position ◽  
Microsoft Access ◽  
System Requirements

This study aims to design accounting applications for the preparation of financial statements at D'Haus Cake's business. The approach used in this research is a case study. The design process begins with studying the transactions and reports that D'Haus Cake’s business needs in the form of purchase and sale transaction forms, and general journals. The required reports are in the form of all transaction journal records, ledgers, trial balances, profit and loss reports, and statements of financial position. After studying the system requirements, then proceed to the application development stage using Microsoft Access 2013 software. The next stage is to test the application to obtain adequate confidence in transaction processing by comparing the results of processing with manual calculations carried out. The implementation process is carried out by converting the initial data on the conversion date and making input transactions up to the company's operating date. After implementing and converting, the final stage is to carry out training for users and carry out a process of improvement and adjustment to the application based on the feedback received from users. The process of designing and implementing the application has been considered successful after the user states that the application has met all user needs and operates well.

scholarly journals THE COMPANY ACCOUNTING EVALUATION – PRELIMINARY PHASE OF THE PROPER ANALYSIS OF FINANCIAL STATEMENTS

2008 ◽  
pp. 70
Author(s):  
Doina Pacurari ◽  
Mircea Muntean
Keyword(s):  
Cash Flow ◽  
Accounting Information ◽  
Financial Statements ◽  
Negative Effects ◽  
Accrual Accounting ◽  
Financial Position ◽  
Economic Reality ◽  
Result Management ◽  
Preliminary Phase ◽  
Proper Analysis

The problem that the accounting information do not always reflect the economic reality may affect the analysis and forecast based on financial statements. This is due both to the accrual accounting limitations and to the fact that this type of accounting allows the result management. In spite of some disadvantages, the accrual accounting is considered superior to cash accounting in measuring the performances and determining financial position as well as in the predicting of future cash flow. In order to limit the negative effects on the results of analysis and forecast based on financial statements, the analists should evaluate the enterprise accounting and if necessary adjust the financial statements so they reflect the economic reality.

scholarly journals ANALISIS PENGAKUAN PENDAPATAN BUNGA ATAS PEMBERIAN KREDIT MODAL KERJA PADA PT. BANK PERKREDITAN RAKYAT PRISMADANA

2015 ◽  
Vol 10 (4) ◽  
Author(s):  
Timothy Ray Korah ◽  
David Paul Elia Saerang ◽  
Heince Wokas
Keyword(s):  
Descriptive Analysis ◽  
Accounting Standards ◽  
Bank Lending ◽  
Financial Statements ◽  
Analysis Method ◽  
The Real ◽  
Financial Position ◽  
Interest Income ◽  
The Right ◽  
Cash Basis

The largest bank revenue is interest income from credit. In general, bank lending business and one of the most interest product.Therefore the recognition and measurement of the right to credit interest income must be relevant, accurate, and accounted for, so the financial statements truly on the real financial position. The research aims to determine how the accounting treatment of the recognition of interest income on PT.BPR PRISMA DANA is already in appropriate with the applicable accounting standards, The method used in this research is descriptive analysis method. The results of research conducted in PT.BPR PRISMA DANA, showed recognition of loan interest income using the accrual basis or more leads to the realization of the concept.Except for interest income on loans classified as problematic (nonperforming) is recognized when it is received (cash basis). Interest income using the effective interest annuity system is calculated based on the remaining principal.

scholarly journals The impact of Key Audit Matters (KAMs) on financial information quality: Evidence from Lebanon

2021 ◽  
Vol 19 (2) ◽  
pp. 135
Author(s):  
Joelle Matta ◽  
Khalil Feghali
Keyword(s):  
Value Creation ◽  
Information Quality ◽  
Investment Decision ◽  
Financial Statements ◽  
Financial Information ◽  
Audit Report ◽  
External Auditors ◽  
Expectations Gap ◽  
Expectation Gap ◽  
The Impact

<p>The purpose of this study is to discover the impact of Key Audit Matters (KAMs) on financial information quality and their value for Lebanese auditors. The value creation of KAMs is determined by its financial information quality, its ability to help during investment decision and its effect on the audit expectation gap. The research is conducted through a survey that was filled by external auditors who audit Lebanese banks exclusively, and are involved in the new audit report. The main results show that reporting by using Key Audit Matters adds value to the audit report from the perspective of Lebanese external auditors, and can reduce information asymmetry, increase trust in accounting and reduce the expectation gap. Moreover, the results marked that KAM improves the auditee's understanding in the audited entity, builds confidence in the audited financial statements, and helps to reduce the audit expectations gap.</p>

scholarly journals Ethics and auditing: Setting the bar too low

2015 ◽  
Vol 12 (4) ◽  
pp. 549-561
Author(s):  
Keith Hooper ◽  
Jenny Wang
Keyword(s):  
Professional Ethics ◽  
Conceptual Analysis ◽  
Social Values ◽  
Financial Statements ◽  
Social Darwinism ◽  
Duty Of Care ◽  
Accounting Firms ◽  
The Public ◽  
Audit Firms ◽  
Empirical Perspective

Purpose - from a philosophical and empirical perspective this paper seeks to show how the big audit firms have managed to set the bar low so that they offer only opinions on whether financial statements meet accounting standards. It is argued that while the concepts of virtue ethics have now largely disappeared, ethical legitimacy has moved beyond consequential ethics to a form of social Darwinism. It is a Social Darwinism that is legalistic and technical as evidenced by the audit firms’ widespread use of the Bannerman clause attached to their opinions. Design - to illustrate the shift of ethical positions, the paper is informed illustrations of a failure to discharge a duty of care to the public. Findings – the shift in underlying social values contributes to what the Economist Journal describes as a steady decline in professional ethics. This arguable conclusion is supported by various illustrations and cites the shift in combinations of cognitive, moral and pragmatic legitimacy as drivers employed by accounting firms. Research Limitations – the paper uses secondary and documentary data and is informed by conceptual analysis which necessarily in the realm of ethics may be contentious. Originality – the paper seeks to link the changing social values with changes in legitimisation and to show shifts in accounting practices like the recent practice of issuing disclaimers.

scholarly journals INFORMATION COVERAGE IN FINANCIAL STATEMENTS: PRACTICAL EXPERIENCE IN THE APPLICATION OF IAS AND IFRS

2021 ◽  
Vol 5 (40) ◽  
pp. 276-287
Author(s):  
O. Yarmoliuk ◽  
О. Hubaryk ◽  
Т. Savanchuk ◽  
О. Dmytrenko ◽  
N. Khomiak
Keyword(s):  
Information Disclosure ◽  
Financial Statements ◽  
Practical Experience ◽  
Jel Classification ◽  
International Standards ◽  
Position Information ◽  
Financial Position ◽  
Methodological Aspects ◽  
A Current

Abstract. The information demands of a globalized society are forcing businesses to produce financial statements that meet the requirements of all stakeholders. The purpose of the article was to assess what information entities disclose in the financial statements prepared in accordance with IAS and IFRS, and what conflicts arise. Theoretical and methodological aspects of the results of scientists prove the importance of information disclosure in the financial statements prepared in accordance with IFRS. At the same time, the issue of disclosure of information in the financial statements remains open, taking into account the needs of current activities of enterprises. In view of this, there is a need to: study the provision of users of financial statements with information, the disclosure of which provides for international standards; testing hypotheses about the need to study the differences between the types of financial statements provided for in IFRS and IAS and reviewing the long-term liability in the event of early repayment. Based on the analysis, it is established that the information required for disclosure in the financial statements determines the type of financial statements. The conducted research testifies to the presence of gaps in IFRS in the order of compilation and information content of the combined reporting. It is proposed that the combined financial statements be prepared by entities that for one reason or another do not meet the requirements of IFRS 10. It is established that an important condition for reliable reflection in the Statement of financial position information on long-term credit is the need to analyze during the year. It is proposed to consider part of the long-term loan in the form of payments, which must be repaid within twelve months from the date of reporting, as a current liability. This approach requires reclassifying existing credit from long-term to current liabilities, which will lead to further changes in cash flow estimates, adjusting the carrying amount of liabilities. The results of the study can be used by practitioners in various sectors of the economy in the formation of financial statements in accordance with IFRS. Keywords: financial statements, IFRS reporting, financial results, enterprise, standards, accounting, IFRS, IAS. JEL Classification M40, M 41, M 48 Formulas: 0; fig.: 1; tabl.: 1; bibl.: 19.

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