FINANCIAL ACCOUNTING AND REPORTING IN SMALL FIRMS

1996 ◽  
Vol 04 (02) ◽  
pp. 163-182
Author(s):  
A.J.M. Humayun Murshed
Keyword(s):  
Decision Making ◽  
Financial Reporting ◽  
Small Firms ◽  
Financial Statements ◽  
Financial Accounting ◽  
Organizational Decision Making ◽  
Business World ◽  
Degree Of Satisfaction ◽  
Modern Business ◽  
And Control

Small firms’ role in the modern business world is well recognized. Despite such recognition, there exists a dearth of research in small firms, particularly in understanding the implications of accounting and finance. This paper reports the results of an empirical study carried out on the financial accounting and reporting of small firms in Bangladesh. Financial reporting does not seem to be important in these firms except for complying with tax formalities. No systematic way of presenting financial figures among the firms was observed. Most firms’ financial statements do not provide any database for organizational decision making. The managers have a high degree of satisfaction, particularly with the format used in presenting financial statements. On the contrary, they hardly use those financial statements in organizational decision making and control. They prefer to use a simple form of financial statement and show almost no concern for users’ need and attaining financial control.

Researches of Detection of Fraudulent Financial Statements Based on Data Mining

2017 ◽  
Vol 14 (1) ◽  
pp. 32-36
Author(s):  
Dan Han
Keyword(s):  
Data Mining ◽  
Academic Research ◽  
Financial Statements ◽  
Bayesian Belief Networks ◽  
Financial Accounting ◽  
Accounting Fraud ◽  
Financial Statement Fraud ◽  
Business World ◽  
Modern Business ◽  
Fraudulent Financial Statements

Financial statement fraud has been one of the biggest challenges in the modern business world. Financial accounting fraud detection (FAFD) has become an emerging topic of great importance for academic, research and industries. In this paper, the effectiveness of Data Mining (DM) classification techniques in detecting firms that issue fraudulent financial statements (FFS) and deals with the identification of factors associated to FFS are explored. Our study investigates the usefulness of Data Mining techniques including Decision Trees, Neural Networks and Bayesian Belief Networks in the identification of fraudulent financial statements. At last, we compare the three models in terms of their performances.

MANAGEMENT IN DECISIONS MAKING, TAKING CONTROL IN BUSINESS

2018 ◽  
Vol 28 (5) ◽  
pp. 1575-1579
Author(s):  
Redon Koleci
Keyword(s):  
Decision Making ◽  
Accurate Information ◽  
Good Decision ◽  
Business World ◽  
Development Cycle ◽  
Wide Range ◽  
Modern Business ◽  
The Right ◽  
Available Information ◽  
And Control

The purpose of this paper is to help managers with a wealth of understanding so that they value the available information and then make a good decision-making solution in the venture they will run or hire in the business world, most individuals have successfully developed their entrepreneurial talent and have been able to use it to realize their investment and career goals.In the business world as well as in many other areas of the economy decision-making and control is used to elucidate valuable information on economic activity.The business hospitality business has always attached importance to making decisions and at all times doing constant job verifications if they are doing the right thing.The owners of a bussines are interested in monitoring the business status but also take care of many other things, especially for investment, because an investor wants to invest their business money that will return or increase their wealth so here we are faced with making decisions.To monitor whether their investments are good they will always look for and rely on accurate information to do so effectively as it is the control that helps us monitor and provide information.It is known that today there are many companies operating in our country and most of them enjoy a very high success, but besides, there are those who do not even have a year of operation in our market. Many times come the questions that we put to ourselves from all this failure, and we will find the answer precisely in this paper by defining in detail the terms: control and planning by comparing them with competition.The primary task of managers in the modern business world is to accept the risk and make decisions in very dynamic environments combining a wide range of economic, social, technical factors that serve as innovations for new modern businesses.Control is a key element in the business development cycle in all sectors, for better planning and for successful future, since with the help of control it is also possible to make a secure decision based on the results previously undertaken and all businesses directly or indirectly face the competition by creating them an instability in business life.Control is a process that generates information about the truthfulness of what we want to research about organizations.

scholarly journals ANALISIS PENYAJIAN LAPORAN KEUANGAN BERDASARKAN PENERAPAN STANDAR AKUNTANSI KEUANGAN ENTITAS TANPA AKUNTABILITAS PUBLIK PADA PT. FORTUNA INTI ALAM

2017 ◽  
Vol 12 (01) ◽  
Author(s):  
Marddyanto Dwi Saputra ◽  
Jullie J. Sondakh ◽  
Treesje Runtu
Keyword(s):  
Decision Making ◽  
Cash Flow ◽  
Descriptive Analysis ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
Financial Statement ◽  
Public Accountability ◽  
Financial Situation ◽  
Chartered Accountants

The financial statements in principle are the result of the accounting process used to communicate the financial situation to internal and external parties that are aimed at decision making. The importance of the financial statements, then the financial statement should be prepared carefully and without errors. Financial Accounting Standards generally are not in accordance with entities whose accountability is not as significant. Therefore, the Institute of Indonesia Chartered Accountants (IAI) has issued Financial Accounting Standards Entity Without Public Accountability (SAK ETAP) intended for entities that do not have significant public accountability and publish financial statements for general purposes for external users. This study aims to analyze the implementation of ETAP in the presentation of PT. Fortuna Inti Alam’s financial statement. The method used in this study is comparative descriptive analysis. Results of this research is based on the financial statements of 2016 show that PT. Fortuna Inti Alam has implemented ETAP but it is not fully complete yet. The Company has not presented Statement of Owner’s Equity, Cash Flow Statement, and Notes to Financial Statements. This research suggests that companies can prepare components of other financial statements in accordance with applicable standards.Keywords : Financial Statements, SAK ETAP.

scholarly journals Cost with time can yield reliable and relevant financial accounting information

2004 ◽  
Vol 2 (1) ◽  
pp. 60-72 ◽  
Author(s):  
Eno L. Inanga ◽  
Bruce Schneider
Keyword(s):  
Decision Making ◽  
Accounting Information ◽  
Financial Statements ◽  
Financial Accounting ◽  
Corporate Accountability ◽  
Accounting Data ◽  
Historical Cost ◽  
Lead Users ◽  
Accounting Reports ◽  
Nominal Amount

It is generally accepted that one of the key financial accounting problems of the day is how to make financial accounting reports, as tools for corporate accountability and stewardship reporting, both reliable and relevant. Practitioners, rule makers, and academics are struggling with this dilemma that is inherent in historical cost financial statements. This paper suggests that historical cost, transactions- based accounting data is nominally reliable, which is an attribute of relevance, but it can be made timelessly relevant, if data about the precise date and time the nominal amount of the transaction was measured are made available to users. Furthermore, the presumption those company-related accountants and the auditors need to prepare a set of financial statements that they need to make relevant to an unknown set of users, should be abandoned. The valuation algorithm, the processes for making historical cost data relevant to situation-specific decision-making, are the prerogative and, most importantly, the responsibility of the users based on their perceptions of the dynamic, quantum world and their unique needs. The paper develops the logical reasons for the positions taken. It also argues that US-GAAP and the resulting financial statements may lead users of accounting information to allege that the financial statements are fraudulent. It is well-recognized by accountants and users that time, the details of which are currently under-reported, is a material fact related to the significance and usefulness of accounting information. Thus, the omission of facts about when the measurements were made, known to be important to understanding the reported information, may be the basis for the allegation of fraud.

Second Round Electronics: A Case for Critical Thinking

2013 ◽  
Vol 28 (4) ◽  
pp. 983-989 ◽  
Author(s):  
Nathalie Johnstone ◽  
Brandy Mackintosh ◽  
Fred Phillips
Keyword(s):  
Critical Thinking ◽  
Financial Reporting ◽  
Emerging Technologies ◽  
Financial Statements ◽  
Thinking Skills ◽  
Critical Thinking Skills ◽  
Financial Accounting ◽  
Class Discussion ◽  
For Profit ◽  
Writing Assignment

ABSTRACT This instructional case requires students to provide advice to a client who is currently the sole owner of a for-profit company that reconditions and sells used electronics. The client is considering purchasing a similar company with the vision of expanding into the sales and service of emerging technologies. The target company's unaudited financial statements contain questionable accounting choices and judgments that appear to enable the company to meet external financial reporting constraints. In their role as financial advisers, students are expected to use critical thinking skills to identify and evaluate questionable choices in the target company's financial statements. This case is suitable for use in introductory and intermediate financial accounting as well as introductory auditing and assurance courses, and can be used as a context for in-class discussion, as a basis for exam questions, and/or as a writing assignment. Assessment rubrics and Teaching Notes accompany the case for use by instructors.

A Cross-Country Empirical Investigation of Corruption and its Relationship to Economic, Cultural, and Monitoring Institutions: An Examination of the Role of Accounting and Financial Statements Quality

2002 ◽  
Vol 17 (4) ◽  
pp. 325-350 ◽  
Author(s):  
Marinilka Barros Kimbro
Keyword(s):  
Financial Reporting ◽  
Empirical Investigation ◽  
Financial Statements ◽  
Financial Accounting ◽  
Accounting Systems ◽  
Financial Reporting Standards ◽  
Information Monitoring ◽  
Per Capita ◽  
Cross Country

This paper empirically tests a model that links economic, cultural, and information/monitoring variables to corruption in 61 countries. The results offer significant evidence to suggest that higher GNP per capita, moderate economic growth, effective legal and financial accounting systems, collectivist values and low power distance are associated with countries that have low corruption. Countries that have better laws, more effective judiciary, good financial reporting standards, and a higher concentration of accountants are found to be less corrupt.

Advancing Financial Reporting in the Age of Technology: An Interview with Robert H. Herz

2021 ◽  
Vol 18 (2) ◽  
pp. 117-124
Author(s):  
Robert H Herz ◽  
Duo Pei
Keyword(s):  
Decision Making ◽  
Big Data ◽  
Financial Reporting ◽  
Main Idea ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Business Reporting ◽  
Reporting Process ◽  
Part Time

ABSTRACT This paper is based on an interview on January 9, 2020, with Robert H. (Bob) Herz, the former two-term chairman of the Financial Accounting Standards Board, on how the environment for business reporting has evolved and how it may continue to evolve. Bob Herz has also held decision-making positions as a part-time member of the IASB and on the board of the SASB. In this interview, we discuss a pragmatic reporting model suited to the era of Big Data and technology. We also explain the different interests of the reporting process, including the standard-setters, preparers, auditors, and users. The main idea of this paper focuses on how to incorporate Big Data and technology into reporting models working within the current framework and needs of the stakeholders. We then outline several use cases that illustrate a refined reporting model using Big Data and technology.

Teaching Intermediate Financial Accounting Using a Business Activity Model

2000 ◽  
Vol 15 (4) ◽  
pp. 583-603 ◽  
Author(s):  
Anthony H. Catanach ◽  
David B. Croll ◽  
Robert L. Grinaker
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Accounting Education ◽  
Financial Accounting ◽  
Professional Service ◽  
Business Activity ◽  
Curriculum Revision ◽  
Activity Model ◽  
Technical Competency ◽  
Accounting Courses

This paper describes a creative approach to the instruction of intermediate financial accounting that relies primarily on a business activity model (BAM). Initially funded by an Accounting Education Change Commission (AECC) grant, this curriculum revision is designed to (1) motivate students for their chosen profession, (2) promote their technical competency, and (3) develop in them an expanded set of educational objectives including critical-thinking, communication, and research skills. The BAM emphasizes financial disclosure and technical research as well as those topics commonly found in “traditional” intermediate accounting courses. Working in professional service teams, students mimic the accounting and financial-reporting processes found in the “real world” by conducting analytical reviews, soliciting information from clients, preparing adjusting and correcting entries, and drafting financial statements and notes for a fictitious client company.

The Limitations of Financial Reporting on Innovation and Its Value-Relevance for the Investor's Decision-Making Process

2019 ◽  
pp. 390-418
Author(s):  
Francisco Leote ◽  
Ana Damião
Keyword(s):  
Decision Making ◽  
Financial Reporting ◽  
Value Relevance ◽  
Financial Statements ◽  
Individual Characteristics ◽  
Decision Making Process ◽  
Accounting Systems ◽  
Financial Factors ◽  
The Individual ◽  
Industry Sectors

This chapter aims to present some limitations of financial reporting on innovation with an impact on the investor's decision-making process. In order to do so, the authors show how accounting recognizes and measures innovation factors: the intangibles. Based on the literature, the authors discuss how the value relevance of financial reporting on innovation is conditioned by non-financial factors. The impacts of the adoption of IFRSs, the effect of the industry sectors and the effect of the individual characteristics of the different countries on the value relevance of the intangible assets are analyzed. The literature suggests a decrease in the value relevance of financial statements due to the manner in which intangibles are recognized and measured in accounting. However, financial reporting on innovation is value relevant to the investor's decision-making and is conditioned by non-financial factors. Value relevance differs among different industry sectors, between different countries and is conditioned by the accounting systems used in the preparation of the financial information.

Why do Restatements Decrease in a Clawback Environment? An Investigation into Financial Reporting Executives' Decision-Making during the Restatement Process

2015 ◽  
Vol 90 (6) ◽  
pp. 2515-2536 ◽  
Author(s):  
Jonathan S. Pyzoha
Keyword(s):  
Decision Making ◽  
Executive Compensation ◽  
Financial Reporting ◽  
Financial Statements ◽  
Data Availability ◽  
Archival Studies ◽  
Key Factors ◽  
Ex Post ◽  
Auditor Quality

ABSTRACT Prior archival studies find that firms that voluntarily adopted clawback policies have experienced a reduction in restatements. I experimentally examine this outcome by investigating the influence of two key factors (i.e., executive compensation structure and auditor quality) on financial reporting executives' (hereafter, “executives”) decision-making regarding a proposed restatement that will lead to a clawback of their incentives. I find that executives (i.e., CFOs, controllers, and treasurers) facing a lower quality auditor are less likely to agree with amending prior financial statements when a higher proportion of their pay is incentive-based. However, this tendency is reduced when executives face a higher quality auditor, indicating that higher quality auditors can act as effective monitors. My results identify an ex post unintended consequence of clawback regulation that could at least partially offset the benefits of the ex ante deterrent effects of clawbacks, and that could contribute to findings of less frequent restatements when clawback policies are in place. I discuss potential implications regarding the role of executives during restatement decisions and auditors' risk assessments in a clawback environment. Data Availability: Data are available from the author upon request.

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