scholarly journals Valuing PSAK 64 in Reducing Conservatism in The Extractive Industry

2021 ◽  
Vol 11 (2) ◽  
pp. 157
Author(s):  
Nella Yantiana ◽  
Ricky Ricky ◽  
Elok Heniwati
Keyword(s):  
Financial Reporting ◽  
Mineral Resources ◽  
Influential Factors ◽  
Financial Statement ◽  
Related Factors ◽  
Extractive Industry ◽  
Before And After ◽  
Using Data ◽  
The Impact

In 2011, the Indonesian Institute of Accountants (IAI) issued PSAK 64, which adopted IFRS 6 concerning exploration for and evaluation of mineral resources. It is assumed that this adoption will improve the quality of financial reporting. This current study examines the impact of PSAK 64 implementation and other related factors on financial statement conservatism. The data were collected by using data from extractive industries listed on the IDX over the period 2009-2010 and 2013-2014 to represent before and after IFRS-based PSAK mandatory implementation respectively. This study develops two regression models to analyze first, factors influence on conservatism before implementing PSAK 64 and second, the influential factors after implementing PSAK 64 by interacting among conservatism factors. The study found that exploration aggressiveness has influenced conservatism and there are no influential factors on conservatism when they interact. Generally speaking, there is a no different level of conservatism before and after implementing PSAK 64. This finding adds a body of literature on the accounting of extractive industry in Indonesia and is prospective for countries having yet adopted IFRS.

Regulating non-financial reporting: evidence from European firms’ environmental, social and governance disclosures and earnings risk

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Arif ◽  
Christohper Gan ◽  
Muhammad Nadeem
Keyword(s):  
Financial Reporting ◽  
Positive Impact ◽  
Content Type ◽  
Eu Directive ◽  
Before And After ◽  
The Difference ◽  
Earnings Risk ◽  
The Impact ◽  
The Eu

Purpose Motivated by the enactment of non-financial reporting regulations by the European Parliament, this paper aims to investigate the impact of European Union (EU) directive 2014/95/EU on the quantity of environmental, social and governance (ESG) disclosures by the S&P Europe 350 index firms. This study also investigates whether the implementation of the non-financial information (NFI) reporting regulations influences the association between ESG disclosures and firms’ earnings risk. Design/methodology/approach To measure the impact of mandatory regulations on the quantity of ESG disclosures, this study estimates the average treatment effects using a propensity weighted sample. Then this study uses the difference-in-differences method to estimate the differences in the association between ESG disclosures and earning risk before and after implementation of the EU directive. Findings The results show a significant positive impact of the EU directive on the quantity of ESG disclosures for the sample European public-interest entities, which indicates that the mandatory NFI reporting requirements could boost the availability of increasingly demanded ESG related information. The enhanced association between the ESG disclosures and firms’ earnings risk during the post-directive period reveals that mandating NFI reporting also increases the quality of ESG disclosures. Originality/value Using the legitimacy and decision-usefulness theories, this study provides novel evidence concerning the impact of the EU directive on the quantity and quality of ESG disclosures.

Financial statement comparability in the extractive industry

2020 ◽  
Vol 33 (3) ◽  
pp. 523-541
Author(s):  
Christelle Smith ◽  
Elmar R. Venter
Keyword(s):  
Financial Reporting ◽  
Mineral Resources ◽  
Financial Statements ◽  
Financial Statement ◽  
Accounting Standard ◽  
Extractive Industry ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Cross Country

Purpose This paper aims to investigate financial statement comparability in the extractive industry. This paper focuses on the extractive industry because International Financial Reporting Standards (IFRS) contain limited guidance on the accounting treatment for exploration and evaluation (E&E) costs and IFRS 6 – Exploration for and Evaluation of Mineral Resources allowed firms to continue with existing divergent accounting treatment of E&E costs. Design/methodology/approach The authors use data from Australia, a country that adopted IFRS in 2005 with a large extractive industry. They also compare changes in cross-country comparability around the IFRS adoption date between Australian firms and adopters relative to Australian firms and non-adopters to better isolate changes in comparability that are attributable to the adoption of IFRS from other sources that are not related to the adoption of IFRS. The authors measure comparability consistent with De Franco et al. (2011) where financial statements are comparable when two firms produce similar accounting amounts for similar economic events. Findings For non-extractive industry firms, the authors find the comparability of financial statements of Australian firms increased with other adopters and that this increase was relatively greater than the increase with non-adopter firms. This evidence is consistent with comparability benefits associated with the adoption of IFRS. However, for extractive industry firms, the authors do not find a significantly greater increase in the comparability of financial statements of Australian firms with adopters relative to the increase with non-adopters, suggesting that the increase is likely not associated with the adoption of IFRS. In additional analysis, they find that following IFRS adoption non-extractive Australian firms have greater within-country comparability relative to extractive Australian firms, while there was no difference in the pre-adoption period. Originality/value The evidence suggests that the divergent practices for E&E costs under IFRS 6 and the lack of an accounting standard that deals with matters relating to the extractive industry hinder the comparability of financial statements in this industry.

Auditor Industry Specialization, Auditor Changes, and Accounting Restatements

2008 ◽  
Vol 22 (4) ◽  
pp. 389-413 ◽  
Author(s):  
Robin N. Romanus ◽  
John J. Maher ◽  
Damon M. Fleming
Keyword(s):  
Financial Reporting ◽  
Error Detection ◽  
Financial Statement ◽  
Corporate Boards ◽  
Accounting Restatements ◽  
Industry Specialization ◽  
Auditor Industry Specialization ◽  
Audit Firms ◽  
The Impact

SYNOPSIS: The increasing occurrence of accounting restatements has drawn considerable attention from regulators, audit firms, and corporate boards concerning audit and financial statement quality. Research suggests that auditor industry specialization is associated with improved error detection and greater financial statement quality. We examine the impact of auditor industry specialization on a sample of restatement and nonrestatement firms and find that auditor industry specialization is negatively associated with the likelihood of accounting restatement. In addition, focusing on the subset of restatement firms, we find that auditor industry specialization reduces the likelihood of issuing restatements affecting core operating accounts, suggesting that industry specialization adds value in auditing a particularly critical area of the firms’ continuing operations. Finally, we find changing from a nonspecialist to a specialist auditor increases the likelihood of restatement, and changing from a specialist to a nonspecialist reduces the likelihood of restatement. Our findings are consistent with industry specialization enhancing auditors’ role in improving the quality of the financial reporting process, particularly related to the core operations of their clients.

Strategic Role of Zakat in Multidimensional Quality of Life in Sijunjung, Indonesia

2018 ◽  
Vol 15 (1) ◽  
pp. 55-72
Author(s):  
Herlin Hamimi ◽  
Abdul Ghafar Ismail ◽  
Muhammad Hasbi Zaenal
Keyword(s):  
Quality Of Life ◽  
Positive Impact ◽  
Wealth Distribution ◽  
Absolute Poverty ◽  
Before And After ◽  
The Status ◽  
Being There ◽  
The Impact

Zakat is one of the five pillars of Islam which has a function of faith, social and economic functions. Muslims who can pay zakat are required to give at least 2.5 per cent of their wealth. The problem of poverty prevalent in disadvantaged regions because of the difficulty of access to information and communication led to a gap that is so high in wealth and resources. The instrument of zakat provides a paradigm in the achievement of equitable wealth distribution and healthy circulation. Zakat potentially offers a better life and improves the quality of human being. There is a human quality improvement not only in economic terms but also in spiritual terms such as improving religiousity. This study aims to examine the role of zakat to alleviate humanitarian issues in disadvantaged regions such as Sijunjung, one of zakat beneficiaries and impoverished areas in Indonesia. The researcher attempted a Cibest method to capture the impact of zakat beneficiaries before and after becoming a member of Zakat Community Development (ZCD) Program in material and spiritual value. The overall analysis shows that zakat has a positive impact on disadvantaged regions development and enhance the quality of life of the community. There is an improvement in the average of mustahik household incomes after becoming a member of ZCD Program. Cibest model demonstrates that material, spiritual, and absolute poverty index decreased by 10, 5, and 6 per cent. Meanwhile, the welfare index is increased by 21 per cent. These findings have significant implications for developing the quality of life in disadvantaged regions in Sijunjung. Therefore, zakat is one of the instruments to change the status of disadvantaged areas to be equivalent to other areas.

Effects of use of an eHealth platform e-Vita for COPD patients on disease specific quality of life domains

2020 ◽  
Keyword(s):  
Quality Of Life ◽  
Functional State ◽  
Mental State ◽  
Self Management ◽  
Copd Patients ◽  
Before And After ◽  
Ehealth Intervention ◽  
The Impact ◽  
Disease Specific

Background: Integrated disease management with self-management for Chronic Obstructive Pulmonary Disease (COPD) is effective to improve clinical outcomes. eHealth can improve patients’ involvement to be able to accept and maintain a healthier lifestyle. Eventhough there is mixed evidence of the impact of eHealth on quality of life (QoL) in different settings. Aim: The primary aim of the e-Vita-COPD-study was to investigate the effect of use of eHealth patient platforms on disease specific QoL of COPD patients. Methods: We evaluated the impact of an eHealth platform on disease specific QoL measured with the clinical COPD questionnaire (CCQ), including subscales of symptoms, functional state and mental state. Interrupted time series (ITS) design was used to collect CCQ data at multiple time points. Multilevel linear regression modelling was used to compare trends in CCQ before and after the eHealth intervention. Results: Of 742 invited COPD patients, 244 signed informed consent. For the analyses, we only included patients who actually used the eHealth platform (n = 123). The decrease of CCQ-symptoms was 0,20% before the intervention and 0,27% after the intervention; this difference was statistically significant (P=0.027). The decrease of CCQ-mental was 0,97% before the intervention and after the intervention there was an increase of 0,017%; this difference was statistically significant (P=0,01). No significant difference was found in the slopes of CCQ (P=0,12) and CCQ-function (P=0,11) before and after the intervention. Conclusion: The e-Vita eHealth platform had a potential beneficial impact on the CCQ-symptoms of COPD patients, but not on functional state. The CCQ-mental state remained stable after the intervention, but this was a deterioration compared to the improving situation before the start of the eHealth platform. In conclusion, this study shows that after the introduction of the COPD platform, patients experienced fewer symptoms, but their mental state deteriorated slightly at the same time. Therefore, health care providers should be aware that, although symptoms improve, there might be a slight increase in anxiety and depression after introducing an eHealth intervention to support self-management.

Founding Family Ownership and the Selection of Industry Specialist Auditors

2014 ◽  
Vol 28 (2) ◽  
pp. 261-276 ◽  
Author(s):  
Fei Kang
Keyword(s):  
Financial Reporting ◽  
Family Firms ◽  
Structure And Agency ◽  
Founding Family ◽  
Using Data ◽  
Dual Class Shares ◽  
Dual Class ◽  
Selection Of ◽  
Industry Specialist

SYNOPSIS This study examines how family firms' unique ownership structure and agency problems affect their selection of industry-specialist auditors. Using data from Standard & Poor's (S&P) 1500 firms, the results show that family firms are more likely to appoint industry-specialist auditors than non-family firms, which suggests that family firms have strong incentives to signal the quality of financial reporting. Additional analysis indicates that due to the potential entrenchment problems, family firms with family member CEOs or with dual-class shares have even a higher tendency to hire industry-specialist auditors to signal their disclosure quality.

scholarly journals Statutory audit in Slovakia – significant phenomenon of global European changes

2020 ◽  
Vol 74 ◽  
pp. 06006
Author(s):  
Denisa Domaracká ◽  
Veronika Kňažková
Keyword(s):  
Financial Reporting ◽  
Global Economy ◽  
Financial Statements ◽  
Legislative Regulation ◽  
Significant Phenomenon ◽  
The Subject ◽  
The Impact ◽  
Regulation Changes ◽  
Audit Performance

The changing global economy environment also affected the area of statutory audit. Nowadays, statutory audit faces the significant changes not only because of the processes of digitization and automation in accounting and auditing, but because of increased and tightened legislative regulation, too. The most important aspects of financial reporting and auditing are subject to EU Regulations and EU Directives. For this reason, the issue of legislative regulation changes in field of statutory audit in Slovakia has become the subject of our article. Currently, the proposal of amending and supplementing Act. No 431/2002 Coll. on Accounting, as amended underwent an interdepartmental comment procedure. The proposal includes the changes on requirements for statutory audit. This article examines the current proposal to change (mainly increase) the conditions for performing the mandatory statutory audit of financial statements in Slovak audit environment. Our goal is to clarify the reasons and implications behind the changes of Slovak legislation as well as the impact of these changes on audit performance in Slovakia. We believe conducting statutory audits in accordance with the applicable legislation accepted and implemented at international European level can contribute to transparency and improve the quality of audit performance. In order to achieve the goal, it was necessary to choose a purposeful work methodology and research methods.

scholarly journals Heterogeneity in earnings quality between different classes of companies after IFRS adoption: evidence from Brazil

2017 ◽  
Vol 28 (73) ◽  
pp. 113-131
Author(s):  
Roberto Black ◽  
Sílvio Hiroshi Nakao
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Earnings Quality ◽  
Economic Incentives ◽  
Net Income ◽  
Accounting Earnings ◽  
Ifrs Adoption ◽  
Before And After

ABSTRACT This paper aims to investigate the existence of heterogeneity in earnings quality between different classes of companies after the adoption of the International Financial Reporting Standards (IFRS). IFRS adoption is generally associated with an increase in the quality of financial statements. However, companies within the same country are likely to have different economic incentives regarding the disclosure of information. Thus, treating companies equally, without considering the related economic incentives, could contaminate earnings quality investigations. The case of Brazil is analyzed, which is a country classified as code-law, in which tax laws determined accounting practice and in which IFRS adoption is mandatory. First, Brazilian companies listed on the São Paulo Stock, Commodities, and Futures Exchange (BM&FBOVESPA) were separated into two classes: companies issuing American Depositary Receipts (ADRs) before IFRS adoption and companies that did not issue ADRs until the adoption of IFRS. Then, this second class of companies was grouped, using cluster analysis, into two different subclasses according to economic incentives. Based on the groups identified, the quality of accounting earnings is tested for each class of the companies before and after IFRS adoption. This paper uses timely recognition of economic events, value relevance of net income, and earnings management as proxies for the quality of accounting earnings. The results indicate that a particular class of companies began showing conditional conservatism, value relevance of net income, and lower earnings management after IFRS adoption. On the other hand, these results were not found for the two other classes of companies.

Effect Technology Information On Quality Financial Statement With Internal Control As Moderating Variable

2021 ◽  
Vol 2 (1) ◽  
pp. 9-13
Author(s):  
Aris Eddy Sarwono ◽  
Asih Handayani
Keyword(s):  
Information Technology ◽  
Control System ◽  
Financial Reporting ◽  
Internal Control ◽  
Local Governments ◽  
Sampling Technique ◽  
Financial Statement ◽  
Financial Reports ◽  
Internal Control System

The problem with the low quality of financial reports in local governments is the reason this research was conducted. This research was conducted with the aim of analyzing the use of information technology on the quality of financial reports by considering the internal control system (SPI) factor. The location of this research is in the Karisidenan Surakarta area which includes 6 districts and 1 city. The population of this research is all state civil servants (ASN) in local governments who work in accounting. The sampling technique was using purposive sampling method. The results showed that the use of information technology had a positive effect on the quality of financial reporting in local governments, while the internal control system moderated the effect of the use of information technology on the quality of financial reporting in local governments.

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