scholarly journals Corporate Revenue Miscalculations & The Impact On Stakeholders

2014 ◽  
Vol 12 (2) ◽  
pp. 77
Author(s):  
Karen T. Cascini ◽  
Alan DelFavero ◽  
Ryan Bezner
Keyword(s):  
Multinational Corporations ◽  
Financial Reporting ◽  
Multinational Firms ◽  
Accounting Standards ◽  
Shareholder Wealth ◽  
Net Income ◽  
Accounting Systems ◽  
Generally Accepted Accounting Principles ◽  
Earnings Restatements ◽  
The Impact

Corporate earnings restatements are regarded as one of the most significant issues in accounting today. While there are various factors that can influence profitability, revenue is the key contributor to a business net income. During the 2000s, a multitude of domestic and multinational corporations faced significant issues with their revenue recognition practices. Although the investing public might regard any revenue restatement as laden with possible fraud, this is not always the case. Multinational firms face dual accounting systems, such as U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Currently, similarities and differences between the accounting systems exist. However, key differences between GAAP and IFRS may cease to exist in upcoming years due to the Financial Accounting Standards Boards (FASBs) and the International Accounting Standards Boards (IASBs) joint effort to converge the two systems. Throughout this paper, examples of revenue miscalculations will be presented as well any penalties levied by the U.S. Securities & Exchange Commission against implicated corporations. Accordingly, the impact that revenue blunders have on shareholder wealth will be examined. Finally, the authors will present recommendations for mitigating revenue errors in the future.

scholarly journals Continued Impact of International Financial Reporting Standards on U.S. Generally Accepted Accounting Principles

2020 ◽  
pp. 1-12
Author(s):  
Sylwia Gornik-Tomaszewski ◽  
Victoria Shoaf
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Fair Value ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles ◽  
Value Measurement ◽  
The Impact

The milestone outcomes of over a decade of close cooperation between the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) on the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) have been highly publicized in the professional media. Great attention has been paid to such joint FASB and IASB projects as accounting for business combinations, fair value measurement, and revenue recognition. The impact of U.S. GAAP on IFRS has also been discussed and highlighted in many professional and academic resources. It should come as no surprise since FASB is considered a world leader in creating high-quality standards through an exemplary standard-setting process. In this paper, we look at the least noticed outcome of the convergence process: the impact of IFRS on U.S. GAAP. We reviewed all of the Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification®, from the first issued in June 2009 to 2016, and listed instances where U.S. GAAP was significantly modified to reflect international solutions. These examples of U.S. GAAP modifications indicate that the impact of IFRS on U.S. GAAP continued well after the bilateral cooperation between FASB and IASB effectively ended in 2014. Furthermore, look at the most recent FASB pronouncement let us conclude that the FASB continues to be engaged in seeking comparable global accounting solutions.

scholarly journals CONSIDERATIONS ON THE TREATMENT OF QUALITATIVE CHARACTERISTICS OF ACCOUNTING INFORMATION AT THE INTERNATIONAL LEVEL AND IN VARIOUS NATIONAL ACCOUNTING SYSTEMS

2014 ◽  
Author(s):  
Ionela Cristina Breahna Pravat
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Accounting Standards ◽  
Quality Criteria ◽  
Financial Accounting ◽  
Financial Reports ◽  
Accounting Systems ◽  
Generally Accepted Accounting Principles ◽  
Accounting Reports ◽  
Qualitative Characteristics

The qualitative characteristics of accounting information presented by financial-accounting reports represent a concept which was subsequently introduced in the national legal accounting framework and, as a rule, the national conceptual frameworks represent the documents by means of which these quality criteria are established. At a worldwide level, there are more international or national organisms that have an important role in the elaboration of accounting standards in general and more specifically in the formulation of qualitative characteristics of financial reporting. We find two important ones among them, and these are: International Accounting Standards Board, which creates and promotes International Financial Reporting Standards (IFRS), and Financial Accounting Standards Board, which elaborates Generally Accepted Accounting Principles (US GAAP). However, at the level of each country a standardizing authority decides the rules for producing the financial reports and the qualitative characteristics that must be respected by the information contained in these documents. In this context, this paper aims to present a few general considerations concerning the treatment of the qualitative characteristics of the financial-accounting information in different accounting systems, such as the American one, or the British, French, German, Romanian ones, with insistence on the international approach to qualitative characteristics.

scholarly journals The Convergence of U.S. GAAP with IFRS: A Comparative Analysis of Principles-based and Rules-based Accounting Standards

2016 ◽  
Vol 3 (5) ◽  
pp. 63
Author(s):  
Oris Guillaume ◽  
Denel Pierre
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Accounting Standard ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Future State ◽  
The Impact ◽  
International Accounting Standard ◽  
Single Set

The Financial Accounting Standard Board (FASB) and the International Accounting Standard Board (IASB) have been working jointly toward the convergence of the U.S. generally accepted accounting principles (GAAP) and the international financial reporting standards (IFRS). However, several arguments still exist as to whether or not U.S. companies should adopt or converge with IFRS. This qualitative study identified the differences noted between rules-based and principles-based accounting, and discussed the impact of these accounting standards on financial reporting. Additionally, several resources were analyzed to understand the path to convergence and the future state of IFRS. The examination of information regarding the transition towards one single set of accounting standards led to the development of two alternate conclusions. Although research allows for the belief that convergence with IFRS is imminent, the fact remains that FASB and IASB will need to work diligently in order to resolve the differences between the two sets of accounting standards.

Did Codification Result in Improved Readability?

2017 ◽  
Vol 7 (1) ◽  
pp. 190
Author(s):  
Doug Barney ◽  
Daniel Tschopp ◽  
Steve Wells
Keyword(s):  
Financial Reporting ◽  
Essential Element ◽  
Accounting Standards ◽  
Securities And Exchange Commission ◽  
Financial Accounting ◽  
Reporting Standards ◽  
Financial Reports ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
The Impact

Financial reporting complexity costs money. The process of developing and promulgating financial reporting standards is costly. The Financial Accounting Standards Board (FASB), Securities and Exchange Commission (SEC), and the International Accounting Standards staff spend time, expertise, and funds writing detailed financial reporting standards. Reporting companies spend money studying and applying these financial reporting standards. Investors, financial analysts, and creditors, while knowledgeable in financial accounting, spend time and resources interpreting and analyzing the resulting financial reports. While there are a number of factors that contribute to the complexity in financial reporting, the level of reading complexity, or readability, is an essential element of a clear, easy-to-understand accounting standard. Recently the FASB adopted a process to bring about a Codification for U.S. Generally Accepted Accounting Principles (GAAP). What impact, if any, did the FASB’s Codification have on the level of reading complexity or readability in U.S. GAAP? The results of several readability tests reported in this article indicate the impact of Codification on the level of reading complexity or readability is not a positive one.

Cash Flow Statement in Russian and International Practice

Auditor ◽  
2020 ◽  
Vol 6 (9) ◽  
pp. 35-41
Author(s):  
I. Dmitrieva ◽  
Yu. Kharakoz
Keyword(s):  
Cash Flow ◽  
Financial Reporting ◽  
Accounting Standards ◽  
The United States ◽  
Cash Flows ◽  
Accounting Systems ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
The World ◽  
Cash Flow Statement

Th e article discusses the world practice of applying accounting standards for the formation of a cash flow statement. In particular, the requirements for providing information on cash flows in national accounting systems were studied: generally accepted accounting principles of the United States, international financial reporting standards and Russian standards.

scholarly journals The impact of IFRS-based accounting standards on earnings management: evidence from Malaysia

2016 ◽  
Vol 5 (1) ◽  
pp. 1
Author(s):  
Yosra Makni Fourati ◽  
Rania Chakroun Ghorbel
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Emerging Market ◽  
Accounting Standards ◽  
Absolute Value ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Earning Quality ◽  
The Impact ◽  
Different Levels

This study aims to examine the consequences of International Financial Reporting Standards (IFRS) convergence in an emerging market. More specifically, we investigate whether the adoption of the new set of accounting standards in Malaysia is associated with lower earnings management. Using a sample of 3,340 firm-year observations across three reporting periods with different levels of IFRS adoption, we provide evidence that IFRS convergence improves earning quality. In particular, we find a significant decrease in the absolute value of discretionary acccruals in the partial IFRS-convergence period (2007-2011), whereas this effect is restrictive after the complete IFRS- implementation.

scholarly journals The importance of information upon applying IFRS in financial entities that trade at the Colombian stock market

2019 ◽  
Vol 21 (34) ◽  
pp. 137-152
Author(s):  
Miguel Angel Laverde Sarmiento ◽  
Jorge Fernando Garcia Carrillo ◽  
Juan Carlos Lezama Palomino ◽  
Alejandra Patiño Jacinto
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Stock Exchange ◽  
Regulatory Framework ◽  
General Level ◽  
Market Exchange ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Before And After ◽  
The Impact

The aim of this research is to determine whether the implementation of the International Financial Reporting Standards (IFRS) in the companies of the financial sector listed on the Colombian Stock Exchange has greater relevance compared to the previous accounting regulatory framework known as Generally Accepted Accounting Principles (GAAP) in Colombia, for the years 2009 to 2016. Taking into account the concept of valorative relevance that indicates that the accounting information is relevant if it affects the stock price reflected in the capital market exchange. To determine this relationship, an adaptation of the model proposed by Ohlson (1995) is used, because it is the most frequently used to measure relevance. The modifications made to the model were to include accounting variables of financial instruments of assets and liabilities to better measure the impact of the IFRS. On a general level, the conclusion is reached that the valorative relevance of financial companies listed on the stock exchange between 2009 and 2016, does not change due to the application of the IFRS. The results are because the regulation that financial companies that are listed on the stock exchange of Colombia are subject to has contributed to the relevance being maintained before and after the application of the new regulatory framework. however, when carrying out the study of the information taking into account only the variables and taking into account the regulations under the IFRS, they present a greater degree of significance.

scholarly journals A literature review on the impact of IAS/IFRS and regulations on quality of financial reporting

2016 ◽  
Vol 6 (4) ◽  
pp. 102-114 ◽  
Author(s):  
Newman Wadesango ◽  
Edmore Tasa ◽  
Khazamula Milondzo ◽  
Ongayi Vongai Wadesango
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Financial Statements ◽  
Conclusive Evidence ◽  
Financial Reporting Quality ◽  
International Accounting Standards ◽  
Ifrs Adoption ◽  
The Impact

The International Accounting Standards Board (IASB) in its objectives and preamble, presume that IFRS adoption and perceived compliance to regulatory framework is associated with increased financial reporting quality. Based on these assumptions, this desktop study reviewed several documents to determine whether the IFRS adoption has led to increased financial reporting quality in Zimbabwe. The researchers reviewed literature on how the IAS/IFRS and regulations affect the financial reporting quality of listed companies. The factors around IFRS adoption were identified (mandatory, voluntary and convergence) and discussed in relation to the financial reporting quality. Evidence from previous studies conducted in line with this same issue shows that there is no conclusive evidence on how IFRS and regulations affect the financial reporting quality. Issues to be addressed in further studies include the importance of financial statements prepared under IFRS framework and the importance of compliance with accounting and auditing requirements.

scholarly journals Impact of Changes in Accounting Standards on Earnings Management

2020 ◽  
Vol 2 (2) ◽  
pp. 166-175
Author(s):  
Kawa W. Muhamad ◽  
Subhi M. Saleh ◽  
Kees van Paridon
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Quality Standards ◽  
Financial Reporting Quality ◽  
High Quality ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles

This study considers the question whether the changes in Accounting Standards has led to companies making less use of earnings management. The paper is an attempt to investigate whether the application of high quality standards like International Financial Reporting Standards (IFRS) is related to high financial reporting quality. This study addresses this issue empirically. Furthermore, this research examines whether German companies that have applied IFRS have less earnings management compared to German companies that report according to the German Generally Accepted Accounting Principles (GGAAP). The sample, consisting of two equally large listed companies in Germany (Südzucker Group and Henkel Group) from 2003-2014. The study suggests that IFRS-adopters show different earnings management performance compared to companies reporting under German GAAP. This finding contributes to the discussion on whether high quality standards are appropriate and operational in countries with weak investor protection rights. The result shows that adopters of IFRS in Germany can be related with less use of earnings management as a result of changes in accounting standards. This result is contradictory with previous research that was done by Van Tendeloo and Vanstraelen, (2005), and consistent with the previous research conducted by Ball et al. (2003).

scholarly journals The Impact of Financial Statement Comparability on Earnings Management: Evidence from Frontier Markets

2020 ◽  
Vol 8 (4) ◽  
pp. 73
Author(s):  
Wil Martens ◽  
Prem W. S. Yapa ◽  
Maryam Safari
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Common Law ◽  
Accounting Standards ◽  
Real Earnings Management ◽  
Financial Statement ◽  
Financial Reporting Standards ◽  
Developed Markets ◽  
Accounting Comparability ◽  
The Impact

This paper examined whether financial statement comparability constrains opportunistic earnings management in frontier market countries. Using a large sample of 19 frontier market countries, and an accounting comparability method that maps comparability across several accounting standards, the results show that enhanced financial comparability constrains accruals earnings management (AEM). Contrary to developed markets and novel to this study, a significant relationship between financial comparability and real earnings management (REM) was not found. For greater robustness, AEM and REM were also tested on both International Financial Reporting Standards (IFRS) adopting and non-adopting countries. The results suggest IFRS adoption constrains AEM, yet exhibited no impact on constraining REM. Additionally, the use of BigN auditors failed to conclusively show an ability to moderate EM. When combined, the results suggest that frontier markets engage in less REM than expected. It is also noted that the legal roots (civil vs. common law) play a significant role in constraining earnings management. Common law countries exhibited lower AEM when comparability increased; this significance was not found in countries that were rooted in civil law. Contributions from this study show that findings from developed markets cannot be generalised to frontier markets.

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