Unethical Financial Reporting: An Empirical Analysis of Causes and Consequences

2014 ◽  
Vol 1 (1) ◽  
Author(s):  
Ajay Kumar Singh ◽  
Sakshi Vasudeva
Keyword(s):  
Corporate Governance ◽  
Factor Analysis ◽  
Discriminant Analysis ◽  
Stock Market ◽  
Financial Reporting ◽  
Court Cases ◽  
Whistle Blowing ◽  
Self Interest ◽  
Stock Market Valuation ◽  
Chartered Accountants

The study attempts to identify the major causes and consequences of unethical financial reporting. We also try to find out if these causes and consequences discriminated between two groups of respondents. The study is based on primary survey with respondents including Chartered Accountants and commerce/ management teachers in Delhi. Using factor analysis and discriminant analysis, we find that ‘delay in final judgement of fraud related court cases’ is the most important cause of unethical financial reporting followed by ‘inadequate punishment for defaulters’. Other important identified causes were protection of self-interest of the auditor and the company, lack of effective corporate governance in the company, and whistle-blowing issues. The identified consequences include law suits against the company as the most important one, followed by increase in the volatility in stock market. The most important factor identified is the decline in the stock market valuation followed by loss of credibility of the company. The results also varied among two groups of respondents for identifying factors of causes and consequences.

Stock market valuation of R&D expenditures—The role of corporate governance

2015 ◽  
Vol 31 ◽  
pp. 78-93 ◽  
Author(s):  
Konan Chan ◽  
Hung-Kun Chen ◽  
Li-Hong Hong ◽  
Yanzhi Wang
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Market Valuation ◽  
Stock Market Valuation

scholarly journals Editorial: Fundamental pillars of corporate governance research

2020 ◽  
Vol 18 (1, Special Issue) ◽  
pp. 222-224
Author(s):  
Paolo Tenuta ◽  
Alexander Kostyuk
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Stock Market ◽  
Earnings Management ◽  
Board Of Directors ◽  
Financial Reporting ◽  
Corporate Ownership ◽  
Special Issue ◽  
The Board Of Directors ◽  
And Control

Corporate governance is a system designed to improve corporate performance through supervision of management performance to ensure accountability to stakeholders based on a regulatory framework. Board of directors as a field of research becomes a major point for intersection of many other issues of corporate governance, such as financial reporting, firm performance, earnings management, stock market, and reaching even well-established fields of research such as accounting and finance. Most of the papers published in this issue (volume 18, issue 1, special issue) of the Corporate Ownership and Control journal are linked to the board of directors’ issues directly or indirectly.

scholarly journals Factors causing Enron’s collapse: An investigation into corporate governance and company culture

2011 ◽  
Vol 8 (3) ◽  
pp. 585-593 ◽  
Author(s):  
Huu Cuong Nguyen
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Corporate Culture ◽  
Internal Audit ◽  
Governance Structures ◽  
Fraudulent Financial Reporting ◽  
Internal Auditor ◽  
Whistle Blowing ◽  
Top Executives ◽  
Company Culture

This paper investigates and evaluates the weaknesses of Enron’s corporate governance structures, weaknesses that lead to the collapse of the company. Overall, poor corporate governance and a dishonest culture that nurtured serious conflicts of interests and unethical behaviour in Enron are identified as significant findings in this paper. Employing the case study method, the paper synthesizes, analyses, and interprets all aspects of corporate governance that lead to Enron’s collapse based on three main reports: The Powers Report (Powers, Troubh and Winokur 2002), the Testimony of Chief Investigation (Roach 2002), and The Subcommittee’s Report (United States Senate’s Permanent Subcommittee on Investigations 2002). Firstly, Enron’s Board of Directors failed to fulfil its fiduciary duties towards the corporation’s shareholders. Secondly, the top executives of Enron were greedy and acted in their own self-interest. Thirdly, many of Enron’s employees witnessed the wrongdoings of Enron’s top executives, and quite a few whistleblowers came forward. Lastly, Enron outsourced external auditing for its internal audit function instead of establishing a functionally internal audit mechanism and its external auditor acquiesced in the application of questionable accounting and fraudulent financial reporting. Although Enron’s collapse has been widely discussed in the literature, no paper has been found that synthesizes the various aspects of corporate governance that resulted in the Corporation’s collapse. This paper contributes to the literature on the numerous weaknesses of Enron’s corporate governance structures, including the following: the role of the Corporation’ board, especially its top executives; the Corporation’s corporate culture and whistle-blowing system; and the Corporation’s internal auditor and external auditors.

Enriching AIS Courses With SOX Compliance Activities

2010 ◽  
Vol 5 (1) ◽  
pp. 1-24 ◽  
Author(s):  
Joann Segovia ◽  
Carol M. Jessup ◽  
Marsha Weber ◽  
Sheri Erickson
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Internal Controls ◽  
Accounting Profession ◽  
Investor Confidence ◽  
Reporting Requirements ◽  
Sarbanes Oxley ◽  
Audit Firms ◽  
Significant Change

A very significant change to the accounting profession occurred in 2002 when the Sarbanes-Oxley Act of 2002 (SOX) was enacted. This legislation had a significant impact on corporations and their audit firms. The objective was to improve corporate governance and its quality of financial reporting to improve investor confidence. This paper provides instructors with a background on SOX and suggests readings and activities that reflect the requirements of SOX as it relates to the AIS environment and the analysis of internal controls. These activities can strengthen students' understandings of how corporations respond to the various reporting requirements of this Act.

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

Media Coverage of Corporate Governance Scandals and Stock Market Returns

2011 ◽  
Author(s):  
Raymond Siu Yeung Chan ◽  
See Tin Tang ◽  
Roy F. Ying ◽  
Sun Wing Tam
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Media Coverage ◽  
Market Returns ◽  
Stock Market Returns
Sign in / Sign up

Export Citation Format

Share Document