scholarly journals The Zeitgeist of "Financial Reporting Quality" Predictors: An Empirical Study among Local Governments (Districts) in Indonesia

2022 ◽  
Vol 10 (1) ◽  
pp. 137-147
Author(s):  
Swarmilah Hariani ◽  
A. Fakhrorazi
Keyword(s):  
Empirical Study ◽  
Financial Reporting ◽  
Local Governments ◽  
Reporting Quality ◽  
Financial Reporting Quality

scholarly journals THE INITIAL IMPLEMENTATION OF ACCRUAL BASED ACCOUNTING, THE EFFECT ON PERFORMANCE AND FINANCIAL REPORTING QUALITY AT LOCAL GOVERNMENTS IN INDONESIA

2019 ◽  
Vol 11 (1) ◽  
pp. 13
Author(s):  
Rindu Rika Gamayuni
Keyword(s):  
Financial Performance ◽  
Financial Reporting ◽  
Local Governments ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Fiscal Year ◽  
Accounting Standard ◽  
Government Accounting ◽  
Before And After

Abstract: In Indonesia local government, accrual based Government Accounting Standard (GAS) was started to be mandatorily applied in 2015, so this research aims to investigate to what extent the role of accrual GAS implementation toward quality of financial reporting and financial performance especially at local governments. Population of this study is Local Governments of districts/cities in Indonesia for Fiscal Year 2014 and Fiscal Year 2015, as many as 542 local governments (before and after the implementation of accrual base).  Sampling method uses probability sampling which is cluster sampling. In this case, the population is divided based on 34 province clusters, so the number of sample obtained is 242 local governments of districts/cities in Indonesia.  The hypothesis testing uses paired t test. The object of research is the financial reporting quality and financial performance. The results of this study provide empirical evidence that there is an increase in the quality of financial reporting after the application of accrual-based accounting at local governments in Indonesia, but have not proven the existence of the increased financial performance. There is no differences in financial performance before and after accrual based accounting implementation at local governments in Indonesia. This hyphothesis  was not supported due to the application of accrual basis accounting is still in the early stages of implementation (1 year) that still have constraints in limited human resources competencies, necessary adaptations or adjustments in the process of change. Local governments in Indonesia must apply accrual based accounting because it is proven that it increases financial report quality.  However, the system implementation in the beginning period found many obstacles so it needs continuous adjustment and learning in order to reach desirable goal. There is still a debate on how important is the implementation or adoption of accrual IPSAS in many countries, including Indonesia.  In Indonesia, the implementation of accrual based Government Accounting Standard (SAP/GAS) is new mandatory since 2015. The result of this research will give contribution to the theory, that there is significant influence of implementation accrual based GAS to financial reporting quality, but no significant increase in financial performance (efficiency and effectiveness) at local government.  Therefore, this result study will be used to determine related policies about the implementation of accrual based GAS. Keywords: Accrual Based Accounting, Financial Reporting Quality, Financial Performance, Government

Linguistic Tone of Municipal Management Discussion and Analysis Disclosures and Future Financial Reporting Delays

2016 ◽  
Vol 13 (2) ◽  
pp. 93-107 ◽  
Author(s):  
Kevin T. Rich ◽  
Brent L. Roberts ◽  
Jean X. Zhang
Keyword(s):  
Financial Reporting ◽  
Local Governments ◽  
Reporting Quality ◽  
Relevant Information ◽  
Financial Reporting Quality ◽  
Fiscal Year ◽  
Municipal Management ◽  
Reporting Delays ◽  
Linguistic Tone ◽  
Textual Content

ABSTRACT We investigate relations between the textual content of municipal Management Discussion and Analysis (MD&A) disclosures and future financial reporting. Specifically, we examine the linguistic tone of municipal MD&A disclosures and future financial reporting delays as a proxy for financial reporting quality. Using a sample of 362 municipal MD&A disclosures in fiscal year-end 2011, our empirical analysis suggests that the fraction of positive to total words in municipal MD&A disclosures is associated with timelier financial reporting in the following year after controlling for current report timing and other municipality and governance factors. We interpret our results to suggest that positive language in municipal MD&A disclosures is a signal of confidence in financial reporting quality, indicating that MD&A text contains relevant information in forecasting the quality of future financial reporting for local governments. JEL Classifications: G34; H55; H72.

Financial Reporting Quality and Proprietary Cost: Empirical Study of Selected Indian Manufacturing Companies

2017 ◽  
Vol 7 (1) ◽  
pp. 249
Author(s):  
Leela Joshi
Keyword(s):  
Empirical Study ◽  
Financial Reporting ◽  
Manufacturing Industry ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Manufacturing Companies ◽  
Long Time ◽  
The Subject ◽  
Proprietary Cost ◽  
Corporate Financial Reporting

Corporate financial reporting has been recognized as very important issue in accounting area since a long time. Increased awareness among investors and stringent disclosure regulations has converted the subject of corporate financial reporting into an area of growing corporate and academic interest. The empirical study conducted in this paper provides an insight for understanding the nature of relationship between financial reporting quality and proprietary cost particularly in Indian manufacturing industry.

Determinants of Financial Reporting Quality in the Public Sector: Evidence from Indonesia

2019 ◽  
Vol 54 (03) ◽  
pp. 1950009 ◽  
Author(s):  
Fuad Rakhman ◽  
Singgih Wijayana
Keyword(s):  
Public Sector ◽  
Financial Reporting ◽  
Financial Incentives ◽  
Local Governments ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Financial Reports ◽  
Audit Opinion ◽  
The Public ◽  
Quality Literature

Most studies addressing the issue of financial reporting quality (FRQ) focus on corporations. This study investigates the determinants of FRQ in the public sector. We use the type of audit opinion as a proxy for reporting quality, with an unqualified opinion representing the best reporting quality while a disclaimer of opinion represents the worst quality. Using manually collected data from 3018 financial reports of local governments in Indonesia from 2008 to 2014, we find that a high proportion of capital expenditures in the total budget is associated with low FRQ. Further, we find that larger and wealthier local governments are associated with higher FRQ. Finally, we find that local governments under more experienced mayors have higher reporting quality. Our results are robust to different measures of FRQ. This study contributes to the reporting quality literature by providing empirical evidence on the determinants of FRQ in the public sector, which has been relatively underexplored. We conclude that certain characteristics of local governments and of mayors are associated with the types of audit opinion and that financial incentives accelerate the improvement of reporting quality.

scholarly journals Professionalism, Staff Competency and Financial Reporting Quality in The Public Sector

2020 ◽  
Author(s):  
Maaruf Mustapha
Keyword(s):  
Public Sector ◽  
Financial Reporting ◽  
Local Governments ◽  
Critical Phenomenon ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Equation Modeling ◽  
Research Approach ◽  
The Public

The financial reporting quality (FRQ) refers to better information dissemination across different users. It is a critical phenomenon for gauging organizations’ performance and survival. In many countries, the public sector has witnessed considerable changes in the past decade. The prominent one is the international public sector accounting standards (IPSAS) for the public sector entities. Drawing on contingency and institutional theories, this study tests the effects of professionalism on the relationship between staff competency and FRQ under the new accounting standards. By using a survey research approach and self-administered questionnaire, data was gathered from 118 directors of finance that represents the local governments of four states in the north-west geopolitical zone of Nigeria. The Partial Least Squares Structural Equation Modeling (PLS-SEM) estimate revealed a significant positive relationship between staff competence and FRQ. Conversely, no significant effect was found in the interaction of professionalism on the model. The implications from the study are discussed in the context of Nigeria.  

The Impact of Going Concern on Financial Reporting Quality: Evidence from Vietnam

2018 ◽  
Vol 34 (3) ◽  
Author(s):  
Phung Anh Thu ◽  
Nguyen Vinh Khuong
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Financial Distress ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Viet Nam ◽  
Listed Firms ◽  
Going Concern ◽  
Debt Covenant

The investigation was conducted to contribute empirical evidence of the association between going concern and financial reporting quality of listed firms on the Vietnam stock market. Based on data from 279 companies listed on the HNX and HOSE exchanges in Vietnam for the period 2009-2015, the quantitative research. Results found that the relationship between the going concern and financial reporting quality of listed firms. Research results are significant for investors, regulators to the transparency of financial reporting information. Keywords Going concern, financial reporting quality, listed firms References Agrawal, K., & Chatterjee, C. (2015). Earnings management and financial distress: Evidence from India. Global Business Review, 16(5_suppl), 140S-154S.Bergstresser, D., & Philippon, T. (2006). CEO incentives and earnings management. Journal of Financial Economics, 80(3), 511–529.Burgstahler, D., & Dichev, I. (1997). Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics, 24(1), 99–126.Charitou, A., Lambertides, N., & Trigeorgis, L. (2007a). Earnings behaviour of financially distressed firms: The role of institutional ownership. Abacus, 43(3), 271–296.Chen, Y., Chen, C., & Huang, S. (2010). An appraisal of financially distressed companies’ earnings management: Evidence from listed companies in China. Pacific Accounting Review, 22(1), 22–41Dechow, P., & Dichev, I. (2002). The Quality of Accruals and Earnings: The Role of Accrual Estimation Errors. The Accounting Review, 77, 35-59.DeFond, M., & Jiambalvo, J. (1994). Debt covenant violation and manipulation of accruals. Journal of Accounting and Economics, 17(1), 145–176.DeFond, M.L., & Park, C.W. (1997). Smoothing income in anticipation of future earnings. Journal of Accounting and Economics, 23(2), 115–139.Dichev, I., & Skinner, D. (2004). Large sample evidence on the debt covenant hypothesis. Journal of Accounting Research, 40(4), 1091–1123.Đinh Thị Thu T., Nguyễn Vĩnh K. (2016). Tác động của hành vi điều chỉnh thu nhập đến khả năng hoạt động liên tục trong kế toán: Nghiên cứu thực nghiệm cho các doanh nghiệp niêm yết tại Việt Nam, Tạp chí phát triển khoa học và công nghệ, Quí 3, tr.96-108.Đỗ Thị Vân Trang (2015). Các mô hình đánh giá chất lượng báo cáo tài chính, Tạp chí chứng khoán Việt Nam, 200, tr 18-21.Habib, A., Uddin Bhuiyan, B., & Islam, A. (2013). Financial distress, earnings management and market pricing of accruals during the global financial crisis. Managerial Finance, 39(2), 155-180.Jaggi, B., & Lee, P. (2002). Earnings management response to debt covenant violations and debt restructuring. Journal of Accounting, Auditing & Finance, 17(4), 295–324.Kasznik, R., (1999). On the association between voluntary disclosure and earnings management. Journal of accounting research, 37(1), pp.57-81.Lu, J. (1999). An empirical study of earnings management by loss-making listed Chinese companies. KuaijiYanjiu (Accounting Research), (9), 25–35.McNichols, M.F. and Stubben, S.R., (2008). Does earnings management affect firms’ investment decisions?. The accounting review, 83(6), pp.1571-1603.Selahudin, N.F., Zakaria, N.B., & Sanusi, Z.M. (2014). Remodelling the earnings management with the appear- ance of leverage, financial distress and free cash flow: Malaysia and Thailand evidences. Journal of Applied Sciences, 14(21), 2644–2661.Skinner, D.J., & Sloan, R. (2002). Earnings surprises, growth expectations, and stock returns or don’t let an earnings torpedo sink your portfolio. Review of Accounting Studies, 7(2/3), 289–312.Sweeney, A.P., (1994). Debt-covenant violations and managers' accounting responses. Journal of Accounting & Economics, 17(3): 281-308.Trần Thị Thùy Linh, Mai Hoàng Hạnh (2015). Chất lượng báo cáo tài chính và kỳ hạn nợ ảnh hưởng đến hiệu quả hoạt động của doanh nghiệp Việt Nam, Tạp chí phát triển kinh tế, 10, tr.27-50.Trương Thị Thùy Dương (2017). Nâng cao chất lượng báo cáo tài chính công ty đại chúng, Tạp chí tài chính, 1(3), tr.55-56.Uwuigbe, Ranti, Bernard, (2015). Assessment of the effects of firm’s characteristics on earnings management of listed firms in Nigeria, Asian Economic and Financial Review,5(2):218-228.

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