The Determinants of Timing in the Adoption of New Accounting Standards: A Study of SFAS No. 87, Employers' Accounting for Pensions

1994 ◽  
Vol 9 (2) ◽  
pp. 325-337 ◽  
Author(s):  
Samuel S. Tung ◽  
Jerry J. Weygandt
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Income Effect ◽  
The Political ◽  
Debt Contracting ◽  
Early Adopters ◽  
Coverage Ratio ◽  
Political Costs ◽  
Political Cost

This study examines whether debt contracting and political costs influence companies' decisions regarding the timing of the initial adoption of Statement of Financial Accounting Standards No. 87, Employers' Accounting for Pensions. The results are consistent with the debt contracting hypotheses: early adopters tended to have higher leverage and a higher income effect from the adoption and a lower interest coverage ratio and a larger increase in this ratio from the adoption. Our findings, however, do not support the political cost hypothesis.

Bank External Financing and Early Adoption of SFAS 133

2018 ◽  
Vol 21 (03) ◽  
pp. 1850015
Author(s):  
Sophia I-Ling Wang
Keyword(s):  
Balance Sheet ◽  
Accounting Standards ◽  
Financial Accounting ◽  
External Financing ◽  
Bank Holding Companies ◽  
Holding Companies ◽  
Early Adopters ◽  
Early Adoption ◽  
Derivative Instruments ◽  
Sfas 133

This study examines whether and how US bank holding companies that early adopted Statement of Financial Accounting Standards (SFAS) 133, “Accounting for Derivative Instruments and Hedging Activities,” experience changes in their external financing activities relative to banks that did not early adopt the standard. Consistent with predictions, the study shows that early adopters hold higher and experience greater changes in their leverage compared with nonearly adopters. In addition, early adopters experience greater shifts in weights of liabilities other than insured deposits in banks’ funding mix. This finding is consistent with banking literature which states that banks have shifted towards nondeposit debts to finance their balance sheet growth.

Political costs and earnings management: evidence from Tunisia

2016 ◽  
Vol 6 (4) ◽  
pp. 388-407 ◽  
Author(s):  
Mouna Ben Rejeb Attia ◽  
Naima Lassoued ◽  
Anis Attia
Keyword(s):  
Earnings Management ◽  
Emerging Economies ◽  
Management Practices ◽  
Political Influence ◽  
The Political ◽  
Political Connection ◽  
State Control ◽  
Content Type ◽  
Political Costs ◽  
Political Cost

Purpose The purpose of this paper is to test the political costs hypothesis in emerging economies characterized by interventionist governments and weak protection of property rights. The paper uses executives’ political connection and state control to measure firms’ political costs. Design/methodology/approach Based on a sample of Tunisian firms, univariate and multivariate analyses are used to test whether firms’ political costs have any impact on earnings management. Findings The empirical analysis indicates that the executives’ political connection is not directly related to earnings management. However, the interaction between executives’ political connection and the state control affects the firm’s sensitivity to political pressure and its earnings management practices. More specifically, this study provides evidence that non-connected firms and state-controlled firms attempt to use accounting policies to decrease their earnings especially during periods of the former government when they had to face high political costs. This finding is robust to comparing means of political cost indicators between different groups. Indeed, private firms with political connection enjoy a significantly lower insurance right, tax and donations and grants compared to other firms. Research limitations/implications This study provides empirical evidence for the specific application of accounting theory in emerging economies. Practical implications Political influence may be an important criterion that will be used by auditors and investors to appreciate and detect specific manipulations of accounting earnings. Similarly, regulators should be aware of the political factors effect on discretionary behavior of managers to provide appropriate rules and standards. Originality/value The study is a pioneer in proving that a firm’s size is not always a suitable measure of its political cost. It extends the accounting literature on the role of political economy in the application of the political costs hypothesis. This hypothesis is confirmed in emerging economies by providing new and significantly measure of firms’ political costs

scholarly journals The Political Costs of Reforms

2019 ◽  
Vol 19 (08) ◽  
Author(s):  
Gabriele Ciminelli ◽  
Davide Furceri ◽  
Jun Ge ◽  
Jonathan Ostry ◽  
Chris Papageorgiou
Keyword(s):  
Developing Economies ◽  
Economic Benefits ◽  
The Political ◽  
Structural Reforms ◽  
Political Costs ◽  
Reform Strategies ◽  
Political Cost ◽  
Short Run ◽  
Fiscal Space ◽  
Policy Agendas

Many countries are experiencing persistent, weak medium-term growth and limited fiscal space. Against this background, economic policy agendas—in both advanced and developing economies—are focusing increasingly on structural reforms. While there is broad agreement on the economic benefits of structural reforms, the political-economy of reform is less settled. This is because reforms may generate gains only in the longer term while distributional effects may be sizable in the short run, and because governments may lack political capital to confront vocal interest groups. In these circumstances, politicians may hold back on reforms, fearing they will be penalized at the ballot box. The aim of this Staff Discussion Note is to examine whether the fear of a political cost associated with structural reforms is justified by the available evidence, and whether there are lessons from the data about how reform strategies might be designed to mitigate potential political costs. It provides a major addition to recent IMF analysis examining the output and employment effect of reforms

FAKTOR-FAKTOR YANG MENDASARI REFORMASI AKUNTANSI DI INDONESIA

2007 ◽  
Author(s):  
Dwi Fitri Puspa
Keyword(s):  
Political Economy ◽  
Financial Reporting ◽  
Policy Making ◽  
Central Element ◽  
Accounting Standards ◽  
Regulatory Reform ◽  
Financial Accounting ◽  
The Political ◽  
Government Accounting ◽  
Accounting Policy

Accounting regulations in Indonesia have been strengthened over the past three decades as part of a series broader program of market-driven regulatory reform. Some revisions efforts have been made by the Indonesian Institute of Accountants and government in enhancing the quality of accounting information presented in the financial reporting since the reopening of the Indonesian capital market in 1977. The central element of these efforts was the introduction of accounting standards which were based largely on the International Accounting Standards (hereby deemed as the Financial Accounting Standards (FASs)) in late 1994 to replace the old Indonesian accounting principles (hereby deemed as the IAPs). In 2005, the Indonesian Institute of Accountants and government introduced Government Accounting Standard. It can be concluded that there are three factors influencing accounting reform in Indonesia. First, the political economy of accounting policy-making in Indonesia : 1965-mid 1980s. Second factor is the political economy of accounting policy-making in Indonesia since the mid-1980s. Thirdly, the third factors is 1997 financial crisis and further reform.

The Effect of Political Sensitivity and Bargaining Power on Taxes: Evidence from Federal Contractors

2012 ◽  
Vol 88 (3) ◽  
pp. 977-1005 ◽  
Author(s):  
Lillian F. Mills ◽  
Sarah E. Nutter ◽  
Casey M. Schwab
Keyword(s):  
Bargaining Power ◽  
Interactive Effects ◽  
The Political ◽  
Firm Level ◽  
Political Costs ◽  
Political Cost ◽  
Federal Contracts ◽  
Federal Taxes ◽  
Defense Contracts ◽  
New Evidence

ABSTRACT We investigate whether politically sensitive contractors pay higher taxes and whether their bargaining power reduces these tax costs. Using federal contractor data, we develop a new composite measure of political sensitivity that captures both the political visibility arising from federal contracts and the importance of federal contracts to the firm. We proxy for bargaining power using the firm-level proportion of contract revenues not subject to competition, the firm-level proportion of contract revenues arising from defense contracts, and industry-level concentration ratios. We find that politically sensitive firms pay higher federal taxes, all else equal. However, firms with greater bargaining power incur fewer tax-related political costs. Our study provides new evidence on the political cost hypothesis in a tax setting and the first evidence of the interactive effects of a firm's political sensitivity and bargaining power on tax-related political costs. JEL Classifications: M41; H26

scholarly journals The Quantitative Evaluation of the Political Cost of Environmental Issues: A Case Study of a Typical Public Protest in China

2021 ◽  
Author(s):  
Xintao Li ◽  
Tongshun Cheng ◽  
Zaisheng Zhang ◽  
Li Liu
Keyword(s):  
Local Governments ◽  
Function Analysis ◽  
Environmental Issues ◽  
Fuzzy Comprehensive Evaluation ◽  
Steel Plant ◽  
The Political ◽  
Generation Process ◽  
Cost Index ◽  
Political Costs ◽  
Political Cost

Abstract It is of great reference significance for broadening the research perspective of environmental issues, improving the efficiency of government environmental governance and the credibility of the government, to scientifically measure and analyze the political cost of environmental issues. This article takes the typical case “protest event of power generation project of R steel plant in T city, China” as the research background. First, the generation process and action mechanism of the political cost of environmental issues in the actual situation are investigated. Then, through in-depth interview, multi-case grounded theory and fuzzy subordinate function analysis, the scientific construction of the political cost index system of environmental issues are completed. Finally, based on G1 method/entropy method combined with weighting and fuzzy comprehensive evaluation method, the political cost of the protest events of R iron and steel plant in T city is measured. The results show that (1) it is important that good single dimensions and reliable indicators are embodied in the overall political cost scale. Among them, the behavioral political cost of the masses is the largest proportion of all indicators; (2) after the entire environmental mass incident is over, the political costs are difficult to repair, and some lagging ideas and behaviors shown by local governments lead to a continuous expansion of the political cost associated with environmental issues; and (3) local governments should not conceal information asymmetry. Instead, local governments should give greater freedom to other actors to deal with environmental problems. This will mitigate the effect of political costs. Corresponding policy recommendations are proposed.

Pengakuan Pendapatan dan Biaya dalam Kaitannya dengan Penentuan Laba Perusahaan Ekspedisi (Studi Kasus pada PT. EMKL Jelutung Subur)

2019 ◽  
Vol 6 (1) ◽  
pp. 1
Author(s):  
Yuli Anwar
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Recognition Method ◽  
Important Thing ◽  
Storage Service ◽  
Long Time ◽  
Accrual Basis

Revenue and cost recognitions is the most important thing to be done by an entity,  time and the recognition method must be based on the rules from Financial Accounting Standards. Revenue and cost recognition which is done by PT. EMKL Jelutung Subur located on Pangkalpinang, Bangka Belitung province is done by using the accrual basis, and it can be seen with its influences to company profits every year.  This research is useful to get a data and information for preparing this thesis and improving my knowledge and also for comparing between theories accepted against facts applied in the field.  The result of this research shows that PT. EMKL Jelutung Subur has implemented one of the revenue and cost recognition method (accrual basis) continually, so that profit accuracy is accountable to be used for developing this kind of expedition business in order to become a better company. The accuracy is evaluated because all revenues received and cost spent  have clear evidence and found in the period of time.  The evaluation shows there is one thing that miss from revenue and cost recognition done by PT. EMKL Jelutung Subur, that is charge to the customers who use the storage service temporary, because some customers keep their goods for a long time in the warehouse, and it will increase the costs of loading, warehouse maintenance, damaged goods and decreasing a quantity of goods. If the storage service is charged to the customers, PT. EMKL Jelutung Subur will earn additional revenue to cover all the expenses above

The Adoption of Financial Accounting Standards for Small Medium Enterprises by Muslim Entrepreneurs

2020 ◽  
Vol 27 (2) ◽  
pp. 54
Author(s):  
Muslichah Muslichah ◽  
Sunarto Sunarto ◽  
Anang Amir Kusnanto ◽  
Sri Indrawati ◽  
Hariyanto Hariyanto
Keyword(s):  
Financial Reporting ◽  
Quantitative Data ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Unexpected Finding ◽  
Financial Reports ◽  
Small Medium Enterprises ◽  
Medium Enterprises ◽  
Chartered Accountants ◽  
Structured Questionnaire

This study aims to discuss the adoption of financial reporting and accounting standards for small-medium enterprises (SMEs) by Muslim entrepreneurs. A structured questionnaire was used to collect quantitative data from the SME owners. 214 Muslim owners of SME businesses participated in the survey. The results show that only a few Muslim entrepreneurs prepared financial reports regularly. The main reason for preparing the statement is for calculating tax, borrowing money, and decision making. An unexpected finding from this study is that most of the Muslim owners are unaware of Standard for SMEs. Users of SME financial reports include tax authority, banks, and owners, or shareholders. This study enriches the financial reporting studies by examining the accounting standards for SMEs in a Muslim dominated country. The findings of this study also have implications for the Institute of Indonesia chartered accountants (IICA) as standard setter. IICA must routinely disseminate these standards to SMEs and also assist them in preparing financial reports

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