THE ESSENCE OF ACCOUNTING PARADOXES

Accounting information serves as a primary source for the formation of financial statements, based on which further decisions are made. However, existing forms of financial reporting cannot fully meet the information needs of users. One of the reasons is the paradox of accounting information. Accounting paradoxes are a little-studied issue that requires proper coverage, first of all, the generation of theoretical and methodological framework, to better understand and optimize existing contradictions and controversial issues. The article describes the variety of methodological approaches to the scientific substantiation of the paradoxes of accounting information with their solutions and shortcomings. The paper highlights the economic essence of accounting paradoxes, their importance in the process of making effective management decisions, identifies the causes of formation, impact, and consequences of distortion of the information array in making rational management decisions. The role of the influence of accounting data paradoxes on the further activity of the enterprise is argued. The causal relationship between the possibility of distortion of accounting information at different stages of its formation depending on the object of accounting and its further transformation into management data is analyzed. As a result of the analysis of the outlined topic several solutions of problem questions are offered, namely: optimization of the accounting information, minimization of influence of paradoxes of the accounting information taking into account features of the account, expansion of the theoretical base.

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Selecting Railway Investments in 1890s America

Accounting Historians Journal ◽

10.2308/aahj-10525 ◽

2017 ◽

Vol 44 (1) ◽

pp. 77-93

Author(s):

Joel E. Thompson

Keyword(s):

Financial Reporting ◽

Accounting Information ◽

Accounting Standards ◽

Financial Accounting ◽

Investment Strategies ◽

Financial Accounting Standards Board ◽

Accounting Data ◽

Rational Decisions

ABSTRACT The purpose of financial reporting is to provide information to investors and creditors to help them make rational decisions (Financial Accounting Standards Board [FASB] 2010). Tracing the development of investors' methods should help with understanding the role of financial accounting. This study examines investment practices involving railways in 1890s America. As such, it furthers our knowledge about the development of investment methods and their necessary information. Moreover, it shows that as investment methods grew in sophistication, there was an enhanced demand for greater comparability in accounting data to make meaningful analyses. Competing investment strategies, largely devoid of accounting information, are also discussed.

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An Object-Oriented Model for Ex Ante Accounting Information

Journal of Information Systems ◽

10.2308/jis.2003.17.1.43 ◽

2003 ◽

Vol 17 (1) ◽

pp. 43-61 ◽

Cited By ~ 2

Author(s):

Peter Verdaasdonk

Keyword(s):

Operations Management ◽

Accounting Information ◽

Object Oriented ◽

Data Models ◽

Management Decisions ◽

Accounting Data ◽

Alternative Future ◽

Ex Ante ◽

Behavioral Aspects

Present accounting data models such as the Resource-Event-Agent (REA) model merely focus on the modeling of static accounting phenomena. In this paper, it is argued that these models are not able to provide relevant ex ante accounting data for operations management decisions. These decisions require dynamic descriptions of the consequences of alternative future courses of actions and the resulting events. Therefore, a new object-oriented model is presented that enables the use of ex ante accounting data for this purpose. In comparison to the REA model, the object-oriented model presented in this paper includes new static aspects as “recipes,” “potential contracts,” and “reservations,” together with behavioral aspects expressed as theoretical scripts for the retrieval of relevant accounting data.

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Making sense of the users of public sector accounting information and their needs

Journal of Public Budgeting Accounting & Financial Management ◽

10.1108/jpbafm-10-2018-0124 ◽

2019 ◽

Vol 31 (4) ◽

pp. 478-495 ◽

Cited By ~ 8

Author(s):

Jan van Helden ◽

Christoph Reichard

Keyword(s):

Financial Reporting ◽

Information Needs ◽

Accounting Information ◽

Influential Factors ◽

Future Research ◽

Specific Information ◽

Content Type ◽

Making Sense ◽

Actual Use ◽

User Groups

Purpose The purpose of this paper is to dismantle the complex issue of “use of accounting information (AI)” by pointing to different groups of information users, diverging interests and needs of these user groups and various influential factors on the usability and the actual use of AI. Design/methodology/approach This paper includes a literature review and conceptual reflections. Findings The review of recently published articles on the issue of “use of accounting information” presents an actual picture of the academic debate on purposes of use, user types, needs of various user groups and factors influencing the usability and the actual use of AI. The subsequent conceptual reflections deal with so far less regarded user groups, with options to strengthen the user perspective in budgeting and financial reporting, with approaches for engaging users in the content of accounting documents, with interrelations between user needs, usability and use intensity, including various antecedents of the different variables of the information-use issue. Research limitations/implications This paper presents promising routes for future research. Practical implications The paper emphasizes the importance of paying more attention to the specific information needs and the motivations of various stakeholder groups generally interested in using financial information. Originality/value The paper presents results of reviewing recent literature on the issue of “use of accounting information” and provides some insight into specific aspects of this issue.

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The Nature of Accounting Information Reliability: Inferences from Archival and Experimental Research

Accounting Horizons ◽

10.2308/acch.2006.20.4.399 ◽

2006 ◽

Vol 20 (4) ◽

pp. 399-425 ◽

Cited By ~ 71

Author(s):

Laureen A. Maines ◽

James M. Wahlen

Keyword(s):

Financial Reporting ◽

Experimental Research ◽

Research Evidence ◽

Accounting Information ◽

Financial Statement ◽

Empirical Literature ◽

Financial Reporting Standards ◽

Information Reliability ◽

Conducting Research

Reliability is an essential characteristic for accounting information to be useful for decision making. Reliability represents the extent to which the information is unbiased, free from error, and representationally faithful (FASB 1980). Despite the central role of reliability, it is a complex and elusive construct of accounting information. Reliability is difficult to specify precisely in accounting standards and practice, and it is difficult to examine directly with research. The primary goal of this paper is to better understand the nature of accounting information reliability by synthesizing archival and experimental research evidence within the context of a framework for accounting information usefulness. Greater understanding of the empirical literature on accounting information reliability should assist standard setters and regulators in establishing financial reporting standards, preparers and auditors in implementing standards, and financial statement users in evaluating accounting information reliability. Finally, greater understanding of reliability should assist academics in conducting research to produce new insights on reliability and in conveying the important role of reliability to students.

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KEY ACCOUNTING PROBLEMS RELATED TO THE STRATEGIES OF INTERNATIONAL TRANSFER PRICING IN MODERN GLOBALLY OPERATING COMPANIES

Knowledge International Journal ◽

10.35120/kij3001115p ◽

2019 ◽

Vol 30 (1) ◽

pp. 115-119

Author(s):

Diana Petrova

Keyword(s):

Information Needs ◽

Transfer Pricing ◽

Rapid Development ◽

Objective Assessment ◽

Accounting Information ◽

Business Environment ◽

Management Decisions ◽

Global Business ◽

Transfer Prices ◽

Sound Management

This paper treats the role and significance of international transfer pricing in the activities of modern globally operating companies in the contemporary conditions of constantly increasing globalization of the world economic area. The main goals and tasks pursued by the mechanism of international transfer pricing in the hyper competitive, highly risky and dynamically changing global business environment are explained. The key accounting problems related to the processes of planning, analysis and control of specific strategies of international transfer pricing in the globally oriented companies are discussed. The rapid development of globalization processes in contemporary conditions determines the growth of the significance and application of international transfer pricing in the activities of modern globally operating companies. Increasing the degree of their economic integration and the amount of their intra-corporate exchange, as well as the increasing complexity of their international transactions, make international transfer pricing one of the most important and topical problem that is faced by these companies.The main goal pursued by the mechanism of international transfer pricing is to optimize activities and maximize overall profits for the company as a whole on a global basis. The accounting problems that may arise in connection with international transfer pricing in modern globally operating companies are in two main aspects:  problems in terms of information provision of the internal management processes that occur in the different subsidiaries and within the company as a whole;  problems in providing the necessary accounting information for the purpose of compiling the financial statements and satisfying the information needs of the interested external users. The accounting information system of globally operating companies should be able to meet the information needs of their distinctive uniform system of making decisions aimed at coordinating goals on a global basis, successfully implementing the global strategy and optimizing resources and results globally. The accounting must provide adequate information needed to make sound management decisions concerning the policy of international transfer pricing that is implemented, to control the implementation of these decisions and subsequently to assess and analyze the results. A key problem for globally operating companies is implementing such a policy of international transfer pricing that ensures optimal results for the company as a whole and at the same time successful practical implementation of the requirement for consistency of the goals of all units operating within the overall organizational structure. Considerable difficulties arise in the objective assessment of costs and benefits of the application of transfer prices in the implementation of numerous and diverse international operations between the different constituent structural units of the company and the making of sound management decisions based on this.

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The use of budgetary and financial information by politicians in parliament: a case study

Journal of Public Budgeting Accounting & Financial Management ◽

10.1108/jpbafm-11-2018-0135 ◽

2019 ◽

Vol 31 (4) ◽

pp. 539-557 ◽

Cited By ~ 4

Author(s):

Susana Jorge ◽

Maria Antónia Jorge de Jesus ◽

Sónia P. Nogueira

Keyword(s):

Public Sector ◽

Information Needs ◽

Accounting Information ◽

Financial Information ◽

Content Type ◽

Members Of Parliament ◽

Information Intermediaries ◽

Public Sector Accounting

Purpose The purpose of this paper is to research the use of accounting information by politicians. Based on the Portuguese Parliament setting, it seeks to understand how useful politicians consider this information to be, what type of budgetary and financial information they use, and for what purposes. Finally, the research also seeks to find out whether politicians resort to expert intermediaries or advisors help them in the use of this information. Design/methodology/approach Following a qualitative and interpretative methodology, the study draws upon interviews with Members of Parliament in Portugal (and their technical advisors (TAs)) from all political parties, in particular the members of the Budget, Finance and Administrative Modernization Committee (COFMA) of the Parliament. Findings Research shows that, due to the general lack of knowledge and the complexity of the accounting information, politicians in the Parliament do not use it frequently, only occasionally. To be better or worse informed for the debates and other activities depends on each Member of Parliament’s personal willingness to prepare oneself, notwithstanding some aggregated and previously analyzed information made available by official technical support units. Parliamentarians may also resort to TAs, who prepare the information at their request. Both intermediaries and TAs are deemed important to support parliamentarians’ understanding of more technical budgetary and financial issues. Practical implications This paper shows that politicians acknowledge there is room for improving the role of information intermediaries and advisors, who would support them to better understand and use accounting information. Parliamentary groups incharge of hiring advisors, as well as accounting professionals, in Portugal and in other countries, must be aware of the very useful role accountants play in this process. Social implications While allowing to understand whether and how politicians use accounting information, this research contributes to the process of public sector accounting reforms in Portugal, and at an international level, inasmuch as public sector accounting and reporting standards should better address these users’ information needs. Assuming that these reforms would foster more accurate, transparent and useful information for accountability and decision making, it is essential that politicians acknowledge and become real users of accounting information, in order to accomplish those objectives. Originality/value This study contributes to the general knowledge of how politicians use accounting information. Academic studies so far have not gathered enough evidence about the type of accounting information that is actually important for politicians. This paper highlights that use of such information by politicians depends on individual skills and their willingness to receive the appropriate advice.

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Financial Reporting to the Industries Assistance Commission: A Study in the Rôle of Accounting Information in Regulatory Decision Making

Australian Journal of Management ◽

10.1177/031289629001500201 ◽

1990 ◽

Vol 15 (2) ◽

pp. 217-241 ◽

Cited By ~ 1

Author(s):

Neal Arthur

Keyword(s):

Decision Making ◽

Financial Reporting ◽

Accounting Information ◽

Regulatory Decision

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Integrated Reporting as a Tool for Communicating with Stakeholders – Advantages and Disadvantages

E3S Web of Conferences ◽

10.1051/e3sconf/20183506004 ◽

2018 ◽

Vol 35 ◽

pp. 06004

Author(s):

Iwona Matuszyk ◽

Bartosz Rymkiewicz

Keyword(s):

Comparative Analysis ◽

Financial Reporting ◽

Information Needs ◽

Primary Source ◽

Financial Data ◽

Literature Analysis ◽

Integrated Reporting ◽

Main Interest ◽

Advantages And Disadvantages ◽

Wide Range

Financial and non-financial reporting from the beginning of its existence is the primary source of communication between the company and a wide range of stakeholders. Over the decades it has adapted to the needs of rapidly changing business and social environment. Currently, the final link in the evolution of organizational reporting, such as integrated reporting, assumes integration and mutual connectivity to both financial and non-financial data. The main interest in the concept of integrated reporting comes from the value it contributes to the organization. Undoubtedly, the concept of integrated reporting is a milestone in the evolution of organizational reporting. It is however important to consider whether it adequately addresses the information needs of a wide range of stakeholders, and whether it is a universal tool for communication between the company and its stakeholders. The aim of the paper is to discuss the advantages and disadvantages of the concept of integrated reporting as a tool for communication with stakeholders and to further directions of its development. The article uses the research methods such as literature analysis, the content analysis of the corporate publications and comparative analysis.

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PENDAMPINGAN PENYUSUNAN SISTEM AKUNTANSI PADA UKM PENGOLAHAN SUSU

Jurnal Pengabdian dan Peningkatan Mutu Masyarakat (Janayu) ◽

10.22219/janayu.v1i1.11159 ◽

2020 ◽

Vol 1 (1) ◽

Author(s):

Eny Suprapti ◽

Aniek Rumijati

Keyword(s):

Information Needs ◽

Accounting Information ◽

Educational Background ◽

Accounting Information System ◽

Accounting Information Systems ◽

The Public ◽

Product Marketing ◽

Accounting Software ◽

The Right

IbM aims to assist partners in order to have a reliable accounting information systems that can provide vital information accurately and timely. Therefore, owners and interested parties can analyze and make the right decisions. This system is expected to help owners evaluate the performance and business developments. Partner companies (CV Brawijaya Dairy Industry and CV Karya Brawijaya) want to have a good accounting information system. Accounting information produced is very useful in business planning, product marketing development, performance evaluation and expand access to funding. Therefore, they require the role of internal (company) and external (banks and the Tax Office).These expectations can not be realized because of the partner company faced several obstacles. Constraints are the company does not have the human resources that have the educational background of accounting, facilities and infrastructure (hardware and software) was minimal, limited capital so it will merektur specialized employees handle bookkeeping is still difficult financially. Expansion of product marketing needs to be done so that the product more known to the public. The partner company (CV Karya Brawijaya) has difficulty in determining how much tax should be paid. Tax Office (KPP) is always sent warning letters because partners are often late in paying taxes. It’s happen because the company still does not have a simple bookkeeping and financial statements.Team devotion perform some activity. First; sharing with the leadership of the company to analysis the transaction. Second; preparing accounting software in accordance with the information needs of UKM (based SAK ETAP). Third; providing the necessary facilities and infrastructure (notebook). Fourth; preparing UKM accounting handbook. Fifth; conducting inhouse training for employees who handle bookkeeping and accounting. Sixth; implementation of accounting software and mentoring. Seventh; marketing assistance and tax calculation and how to fill out SPT.

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Editorial 63 (2) Especial Contabilidad

Contaduría y Administración ◽

10.22201/fca.24488410e.2018.2044 ◽

2018 ◽

Vol 63 (2) ◽

pp. 26

Author(s):

Ilidio Tomás Lopes ◽

Paula Odete Fernandes

Keyword(s):

Decision Making ◽

Financial Reporting ◽

Primary Source ◽

Theory And Practice ◽

Financial Information ◽

Special Issue ◽

Future Directions ◽

Qualitative Characteristics ◽

Scientific Fields

Accounting is in its essence, the language of businesses and the summary of economic events for the purpose of providing financial information for decision making. It is materialized on the firms’ financial statements, periodically disseminated to a wide diversity of stakeholders, and used as a primary source of financial perceptions and beliefs. As a reflection of businesses’ dynamics, financial information should be useful by observing the fundamental qualitative characteristics -relevance and faithful representation- and the enhancing qualitative characteristics -comparability, verifiability, timeliness, and understandability-. This special issue, on the scope of Accounting and other related scientific fields, such as Auditing and Taxation, was driven by the importance of the financial reporting on the entire decision-making process, and by the role of some Corporate Governance agents, as granters and controllers of information reliability and transparency. The current issue, strongly focused on those scientific fields, can certainly serve as a contribution for theory and practice, underlining some of the old and current paradoxes, and driving readers into future directions and challenges.The organization of a special issue is always an interesting challenge. It is based on the desire to capture and integrate in the special issue the best and the latest developments occurred in a particular scientific field. Indeed, it is our conviction that we have clearly achieved that goal by providing readers with a set of original and useful papers.

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