On The Credibility Of GAAP: Do Preparers, Auditors, And Users See Eye To Eye?

2011 ◽  
Vol 10 (4) ◽  
pp. 77 ◽  
Author(s):  
Douglas K. Schneider ◽  
Gordon S. May ◽  
David R. Shaffer
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Psychological Research ◽  
Financial Accounting ◽  
Future Research ◽  
Social Psychological ◽  
Accounting Standard ◽  
Financial Reports ◽  
Setting Process ◽  
Social Psychological Research

<span>The purpose of this study was to apply social-psychological research methods to address an issue in the development of general accepted accounting principles (GAAP). Of concern to the Financial Accounting Standard Board (FASB) in the development of GAAP is the attitudes of its constituent groups with respect to the credibility of GAAP. Our main objective was to assess any differences in the credibility perception of GAAP, as indicated by the three main groups of FASB constituents: corporate preparers of financial statements (preparers), CPAs who audit financial reports to ensure their adherence to GAAP (auditors), and accountants who us financial reports to make lending and investment decisions (users). The results indicated that auditors perception of the credibility of GAAP along eight credibility dimensions was significantly different than that of preparers and users of financial reporting. These results are important to the standard setting process because they indicate a lack of consensus among the three main FASB constituent groups, and may indicate an elevation of auditor views over those of users and preparers. Some implications of these results and suggestions for future research are discussed.</span>

scholarly journals On Narrowing The Credibility GAAP: Has The Financial Accounting Standards Board (FASB) Enhanced The Credibility Of Generally Accepted Accounting Principles (GAAP)?

2011 ◽  
Vol 9 (2) ◽  
pp. 76 ◽  
Author(s):  
Douglas K. Schneider ◽  
Gordon S. May ◽  
David R. Shaffer
Keyword(s):  
Accounting Standards ◽  
Psychological Research ◽  
Financial Accounting ◽  
Future Research ◽  
Financial Accounting Standards Board ◽  
Financial Reports ◽  
Generally Accepted Accounting Principles ◽  
Perceived Credibility ◽  
Accounting Principles ◽  
Social Psychological Research

The purpose of this study was to apply social-psychological research methods to address an issue of widespread concern in the accounting profession. One of the primary motives underlying the creation of the Financial Accounting Standards Board (FASB) was to increase the credibility of Generally Accepted Accounting Principles (GAAP). Our main objective was to assess any differences in the perceived credibility of FASB GAAP and pre-FASB GAAP, as indicated by three groups of FASB constituents familiar with these procedures: corporate preparers of financial statements (preparers), CPAs who audit financial reports to ensure their adherence to GAAP (auditors), and accountants who use financial reports to make lending and investment decisions (users). The results indicated that (a) the credibility of accounting principles can be assessed, (b) not all dimensions that have been touted as contributors to the credibility of accounting practices predict accountants perceptions of credibility, and (c) examples of FASB GAAP were perceived as less credible than corresponding examples of pre-FASB GAAP by each of the above three groups of FASB constituents. Some implications of these results and suggestions for future research are discussed.

scholarly journals The Role of Financial Accounting Standards for Small And Medium Micro Economic Sectors

2019 ◽  
Vol 8 (3) ◽  
pp. 17-23
Author(s):  
Ahmad Mukoffi ◽  
Yayuk Sulistiyowati
Keyword(s):  
Financial Reporting ◽  
Free Market ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
Economic Sectors ◽  
Financial Reports ◽  
Strategy Model ◽  
Food And Beverage ◽  
The Government

In the preparation of financial statements based on financial accounting standards is an improvement in quality of financial statements, which will leverage the credibility of the financial statements in question. The research’s object to be studied are MSMEs in Food and Beverage Sector. The formulation of the problem in this study is, a. How is the preparation of MSME financial statements in the Food and Beverage sector based on EMKM SAK in Tlogomas Sub-District, Malang City, b. What are the constraints faced by MSMEs in the Food and Beverage Sector in implementing EMKM SAK in Tlogomas Sub-District Malang, c. What strategy model is effective from the government so that MSMEs can apply the SAK EMKM optimally. This research method used a combination of research methods (Mixed Methods). With adequate accounting, MSME entrepreneurs can fulfill the requirements in applying for credit, such as making financial reports. The researcher offers a model for the application of electronic-based financial reporting, this is to attract investors to contribute their capital, considering that currently entering the free market. This program also makes easier for the Bank to read the financial statements of micro entities.

scholarly journals Financial Accounting Standards for Micro, Small & Medium Entities (SAK EMKM) Implementation and Factors That Affect It

2018 ◽  
Vol 15 (2) ◽  
pp. 50
Author(s):  
Nur Diana Adhikara
Keyword(s):  
Financial Reporting ◽  
Small And Medium Enterprises ◽  
Fundamental Problem ◽  
Accounting Standards ◽  
Financial Statements ◽  
Educational Background ◽  
Financial Accounting ◽  
Accounting Standard ◽  
Level Of Understanding ◽  
Medium Enterprises

The low understanding of accounting and financial accounting standards is a fundamental problem for Micro, Small & Medium Enterprises (MSMEs) in Indonesia. This makes it difficult to prepare and manage financial statements. The presence of the Financial Accounting Standards for Non-Publicly-Accountable Entities (SAK-ETAP) on January 1, 2011, is expected to accommodate small and medium enterprises in making easy, transparent and accountable financial statements. But In fact, many MSMEs that have not been able to apply SAK ETAP properly because it is considered to be too complex and not by the financial reporting needs of MSMEs. On January 1, 2018, SAK EMKM was enacted as a standard that could help about 57.9 million MSME entrepreneurs in Indonesia in properly preparing their financial statements without having to get caught up in the complexity of it. SAK EMKM is a much simpler financial accounting standard than SAK ETAP. This study aims to provide empirical evidence on the perception of MSME business actors regarding the importance of financial bookkeeping and reporting for their business and the factors that affect the level of understanding of MSME’s related to SAK EMKM. The sample of research was MSMEs business actors in Malang Raya with purposive sampling method with the total of 225 respondents. The results showed that company size, educational background, and level of education affect the MSME business entrepreneurs' perception of the importance of financial bookkeeping and reporting. While the level of understanding of MSME business entrepreneurs of SAK EMKM is affected by the level of information on SAK EMKM, educational background and education level of the MSME business actors.

scholarly journals Formation of Financial Statements at Islamic Financial Institutions

2018 ◽  
pp. 128-132
Keyword(s):  
Financial Institutions ◽  
Financial Reporting ◽  
Financial Institution ◽  
Financial Statements ◽  
Financial Accounting ◽  
Accounting Standard ◽  
Charitable Foundations ◽  
Islamic Financial Institutions ◽  
Further Development ◽  
Traditional Economy

Conceptually, the key approaches to the formation of financial reporting for an Islamic financial institution (IFI) have much in common with approaches developed for economic entities in the traditional economy. At the same time, the AAOIFI Concept and the Financial Accounting Standard No. (1) provide for Islamic financial institution-specific provisions and reporting forms that reflect the requirements of the Sharia. Disclosure of methods in published accounts is intended to help its users distinguish between changes in the financial position of an Islamic financial institution, the results of its operations, cash flow, limited investment managed by it, the sources and use of Zakat (poor-due) and Kard funds and charitable foundations. Further development of the regulation of the issues on the formation of financial statements seems to us in the making common approaches to its formation closer for companies operating in the traditional economy and Islamic financial institutions.

scholarly journals Adaptasi Laporan Keuangan Pada Entitas Nonlaba Berdasarkan Isak 35 (Studi Kasus pada Universitas Ibrahimy Sukorejo Situbondo)

2021 ◽  
Vol 21 (02) ◽  
Author(s):  
Imro'atun Shoimah ◽  
Siti Maria Wardayati ◽  
Yosefa Sayekti
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
Financial Reports ◽  
Non Profit ◽  
Net Assets ◽  
Double Entry ◽  
The University

This research aims to analyze and adapt the financial reporting of non-profit entities based on Interpretation of Financial Accounting Standards 35 (ISAK 35): concerning the Presentation of Financial Statements for Non-Profit Oriented Entities. Namely the interpretation of the Statement of Financial Accounting Standards 1 (PSAK 1): concerning the Presentation of Financial Statements. For other accounting provisions for non-profit entities, it refers to the Financial Accounting Standards for Entities without Public Accountability (SAK ETAP) and Sharia Accounting Standards (SAS). Qualitative research was conducted with a case study at the University of Ibrahimy Sukorejo Situbondo. The results of this study, it is necessary to change the accrual basis recording method with the double entry system, preparation of adjusting journals to then compilation of financial position reports, comprehensive income reports, changes in net assets reports, cash flow reports and notes on financial reports based on ISAK 35. Adaptation of university financial reports Ibrahimy based on ISAK 35 is carried out by adjusting the required account posts by Ibrahimy University with the accounts stated in the Interpretation of Financial Accounting Standards 35 (ISAK 35)

scholarly journals Collective Psychological Ownership and Intergroup Relations

2017 ◽  
Vol 12 (6) ◽  
pp. 1021-1039 ◽  
Author(s):  
Maykel Verkuyten ◽  
Borja Martinovic
Keyword(s):  
Collective Identity ◽  
Intergroup Relations ◽  
Psychological Research ◽  
Psychological Ownership ◽  
Future Research ◽  
Social Psychological ◽  
The Social ◽  
Local Contexts ◽  
Social Psychological Research ◽  
Group Responsibility

Whereas much social psychological research has studied the in-group and out-group implications of social categorization and collective identity (“we”), little research has examined the nature and relevance of collective psychological ownership (“ours”) for intergroup relations. We make a case for considering collective psychological ownership as an important source of intergroup tensions. We do so by integrating theory and research from various social sciences, and we draw out implications for future social psychological research on intergroup relations. We discuss collective psychological ownership in relation to the psychology of possessions, marking behavior, intergroup threats, outgroup exclusion, and in-group responsibility. We suggest that the social psychological processes discussed apply to a range of ownership objects (territory, buildings, cultural artifacts) and various intergroup settings, including international, national, and local contexts, and in organizations and communities. We conclude by providing directions for future research in different intergroup contexts.

scholarly journals Accounting Ethics in Financial Reporting in The Context of The Metaphor of ‘Lawang Sewu’ (thousands of doors, thousands of information, thousands of interests)

2021 ◽  
Vol 11 (2) ◽  
pp. 187
Author(s):  
Debi Setyawati ◽  
Erina Sudaryati
Keyword(s):  
Conceptual Framework ◽  
Old Age ◽  
Financial Reporting ◽  
Analytical Method ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
Accounting Ethics ◽  
Financial Reports

This study aims to improve the readability and understanding of financial statements through a conceptual framework of financial reporting and its derivatives. This study employed an analytical method as a conceptual framework, where financial accounting standards, financial reporting, and the results are described by the term "Lawang Sewu" as a reflection. The results show that the term 'Lawang Sewu' has similarities with accounting ethics in financial reporting, where "lawang" (Javanese) means door refers to "door of information" and "sewu" (Javanese) means a thousand or many refers to having many information and interest in accounting reporting performance. Accounting ethics in financial reporting also describes the strength of the 'Lawang Sewu' building which is not damaged despite its old age. Financial statements reflect the company's past, present and future values. Based on the conceptual framework of accounting, financial statements must meet two qualitative criteria: primary qualitative (relevant and in accordance with actual conditions) and secondary qualitative (comparable, testable, timely and understandable). Thus, financial reports are expected to be transparent so that users can use them appropriately.

scholarly journals PENYAJIAN LAPORAN KEUANGAN ENTITAS BERORIENTASI NONLABA BERDASARKAN ISAK 35 PADA MASJID BAITUL HAADI

2020 ◽  
Vol 15 (2) ◽  
pp. 113-132
Author(s):  
Sukma Diviana ◽  
Rangga Putra Ananto ◽  
Wiwik Andriani ◽  
Roni Putra ◽  
Armel Yentifa ◽  
...  
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
Microsoft Excel ◽  
Financial Reports ◽  
Non Profit ◽  
For Profit ◽  
Financial Position ◽  
Not For Profit

Mosque is an entity that aims not for profit (non-profit entity), so that financial accountability becomes an important aspect for mosques. Good accountability can be realized by presenting the mosque's financial reports in accordance with generally accepted accounting standards. The standard governing the financial reporting of non-profit entities is the Interpretation of Financial Accounting Standards No. 35 (ISAK 35). By implementing ISAK 35 in the presentation of mosque financial reports, interested parties will be able to assess the financial performance of the mosque. The object of this research is Mosque Baitul Haadi. Data were collected through a series of interviews and observations. Until now, Mosque Baitul Haadi only presented financial reports as far as cash in and cash out. This study aims to compile the financial statements of Mosque Baitul Haadi based on ISAK 35 using Microsoft Excel application tools. The financial statements that will be produced are the statements of financial position, comprehensive income statements, cash flow statements and notes to financial reports.

Financial Engineering and the Arms Race Between Accounting Standard Setters and Preparers

2014 ◽  
Vol 29 (2) ◽  
pp. 265-295 ◽  
Author(s):  
Ronald A. Dye ◽  
Jonathan C. Glover ◽  
Shyam Sunder
Keyword(s):  
Financial Reporting ◽  
Financial Engineering ◽  
General Theorem ◽  
Accounting Standards ◽  
Financial Statements ◽  
Goal Congruence ◽  
Accounting Standard ◽  
Financial Reports ◽  
The Face ◽  
Representational Faithfulness

SYNOPSIS This essay analyzes some problems that accounting standard setters confront in erecting barriers to managers bent on boosting their firms' financial reports through financial engineering (FE) activities. It also poses some unsolved research questions regarding interactions between preparers and standard setters. It starts by discussing the history of lease accounting to illustrate the institutional disadvantage of standard setters relative to preparers in their speeds of response. Then, the essay presents a general theorem that shows that, independent of how accounting standards are written, it is impossible to eliminate all FE efforts of preparers. It also discusses the desirability of choosing accounting standards on the basis of the FE efforts the standards induce preparers to engage in. Then, the essay turns to accounting boards' concepts statements; it points out that no concept statement recognizes the general lack of goal congruence between preparers and standard setters in their desires to produce informative financial statements. We also point out the relative lack of concern in recent concept statements for the representational faithfulness of the financial reporting of transactions. The essay asserts that these oversights may be responsible, in part, for standard setters promulgating recent standards that result in difficult-to-audit financial reports. The essay also discusses factors other than accounting standards that contribute to FE, including the high-powered incentives of managers, the limited disclosures and/or information sources outside the face of firms' financial statements about a firm's FE efforts, firms' principal sources of financing, the increasing complexity of transactions, the difficulties in auditing certain transactions, and the roles of the courts and culture. The essay ends by proposing some other recommendations on how standards can be written to reduce FE. JEL Classifications: M31.

scholarly journals Do IFRS Promote Transparency? Evidence from the Bankruptcy Prediction of Privately Held Swedish and Norwegian Companies

2021 ◽  
Vol 14 (3) ◽  
pp. 123
Author(s):  
Akarsh Kainth ◽  
Ranik Raaen Wahlstrøm
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Listed Companies ◽  
Bankruptcy Prediction ◽  
Future Research ◽  
Financial Reports ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Creative Accounting ◽  
Privately Held

The purpose of our paper is to investigate whether any differences between International Financial Reporting Standards (IFRS) and local Generally Accepted Accounting Principles (GAAP) impact the transparency of financial reporting of non-listed companies through bankruptcy prediction. This contributes to extant research that has focused on the effects of IFRS adoption in the context of listed companies. For our investigation, we used logistic regression, well-established accounting-based predictors, and a sample of financial statements from privately held Swedish companies using IFRS, and Norwegian companies using Norwegian GAAP. The results indicate that financial statements made under IFRS may be better suited for bankruptcy prediction than those made under Norwegian GAAP. Our findings suggest that the use of IFRS could aid in increasing the informativeness of financial reports by promoting transparency and prevent managers of firms facing insolvency from engaging in creative accounting practices. Our results should, however, be applied with caution, as they may be due to the differences in characteristics across firms that are not captured by our research design. We leave this issue open to future research.

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