scholarly journals Financial reporting quality in enterprises in Vietnam

2019 ◽  
Vol 3 (2) ◽  
pp. 143-152
Author(s):  
Pham Quoc Thuan
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Quantitative Research ◽  
Reporting Quality ◽  
Indirect Measurement ◽  
Financial Reporting Quality ◽  
Chief Financial Officers ◽  
Measurement Scale ◽  
Technology Managers ◽  
Qualitative Characteristics

Financial reporting quality is one the most interesting topic, drawing many researchers and scientists' attentions in the field of a ccounting. Previous studies have shown that the measurement of financial reporting quality is developed in two main d irections: direct measurement (by operationalizing the qualitative characteristics) and indirect measurement (examines the level of earnings management; the specific elements in the annual report in depth,… as a proxy for financial reporting quality). This research aims to build, complete the measurement scale and assess the quality of financial reporting based on qualitative characteristics defined by FASB & IASB 2010. Qualitative research is used to build and complete the measurement scale of financial reporting through case studies using in-depth interviews and focus groups with respondents being specialists and experts in accounting field ( including. university lecturers, chief accountants, heads of internal control, Information technology managers and chief financial officers in enterprises in Vietnam). Quantitative research is used for measuring the financial reporting quality through survey on enterprises in Vietnam. The findings show that financial reporting quality is considered acceptable with average point being 3.7102/5. Among 3 qualitative characteristics of financial reporting quality, the enhancing characteristics are highly evaluated (4.2065/5) while the fundamental characteristics (relevance and faithful presentation) are considered as moderate (3.7032/5 and 3.5590/5).  

scholarly journals Impact of auditors and internal control effectiveness on the financial reporting quality in small and medium-sized enterprises in Vietnam

2020 ◽  
Vol 4 (2) ◽  
pp. First
Author(s):  
Pham Quoc Thuan
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Weighted Average ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Measurement Scale ◽  
Survey Method ◽  
Control Effectiveness ◽  
Big 4 ◽  
The Impact

This study aims to determine the impact of auditors (Big 4 and non-big 4) and internal control effectiveness on the financial reporting quality in Small and medium-sized enterprises in Vietnam. The case study reasearch with participants who are in the following positions: Head of finance and accounting department; General manager/director; Internal control manager; Auditors is used to build and complete the measurement scale of financial reporting quality based on viewpoints of FASB and IASB 2018. Weighted average is applied for the elements of information quality in measuring financial reporting quality. By using the survey method with a sample of 183 respondents from small and medium - sized enterprises in Vietnam, the authors have developed a regression model showing the impact of these factors named: Auditors (Big 4 and Non-big 4) and Internal Control Effectiveness to the financial reporting quality. In which, the differences in the influence of Big 4 and Non-Big 4 on the quality of financial statements information is the highlighted contributions of this study. In terms of financial reporting quality, the survey results show that financial reporting quality in small and medium - sized enterprises in Vietnam is considered acceptable with average point being 3.49/5. Among 3 qualitative characteristics of financial reporting quality, the enhancing characteristics are highly evaluated (3.94/5) while the fundamental characteristics (relevance and faithful presentation) are considered as moderate (3.43/5 and 3.31/5).

Financial reporting quality and share price movement-evidence from listed companies in Bangladesh

2020 ◽  
Vol 18 (3) ◽  
pp. 425-458
Author(s):  
Md. Mamunur Rashid
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Share Price ◽  
Financial Reporting Quality ◽  
Annual Reports ◽  
Developing Economy ◽  
Price Movement ◽  
Content Type ◽  
Qualitative Characteristics

Purpose The purpose of this study is to examine the effect of financial reporting quality (FRQ) on share price movement (SPM) of listed companies in an emerging and developing economy – Bangladesh. Design/methodology/approach The study analyzed 296 annual reports for the year 2015 and 2016 in examining the effect of FRQ on SPM. Ordinary least squares (OLS) regression model is used to examine the hypothesized relationship among the variables. A modified version of Lang et al. (2003) has been adopted in measuring the SPM. FRQ is measured using the qualitative characteristics approach as defined by the International Financial Reporting Standard Framework and used by Beest et al. (2009) and Braam and Beest (2013). Findings The study finds a positive association (though not significant statistically) between the FRQ and SPM in the country’s leading stock exchange (Dhaka stock exchange). Furthermore, the effect of enhancing quality on SPM is found to be stronger as compared to fundamental quality. Majority of the FRQ constructs demonstrate an improvement in the quality score in the year 2016 as compared to 2015 except for relevance. Research limitations/implications The key limitation of the study is that it focuses only on two years (2015 and 2016) annual reports data in measuring FRQ and its effect on SPM. Originality/value The study uses qualitative characteristics approach in measuring the FRQ and to examine its effect on SPM using the context of an emerging and developing economy – the case of Bangladesh.

scholarly journals Influence of the Sarbanes-Oxley Act on Financial Reporting Quality: An Overview of EU Firms Cross-Listed in the USA

2021 ◽  
Author(s):  
Ujkan Bajra ◽  
Rrustem Asllanaj
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Sarbanes Oxley ◽  
Novel Approach ◽  
The Us ◽  
The Usa

Abstract This paper investigate whether compliance with the Sarbanes–Oxley Act of 2002 (SOX) Sect. 302 (financial reporting) and 404 (internal controls) enhances financial reporting quality (FRQ). This study focuses on EU publicly traded companies that are cross-listed in the US markets. Using a novel approach with respect to operationalization of the SOX, the empirical research integrated into this paper advances the understanding of financial reporting quality for both practitioners and policymakers. The study argues that financial reporting quality increased after SOX entered into force but, notably, we find that FRQ improves with compliance with SOX302 but not with SOX404. Examination of the latter relationship at the subsection level also reveals that compliance with certain SOX requirements is not satisfactory. We find that three out of six subsections of SOX302 are directly associated with financial reporting, while subsections (1), (5) and (6) of SOX302 are not related with FRQ, indicating that the management team, albeit not entirely, provides a reliable financial reporting systems. We also find that compliance with some SOX404’s subsections has been relatively low (i.e. subsections (1) and (3) of SOX404)), suggesting that corporations have not established and are not maintaining suitable internal control systems over financial reporting.

scholarly journals Assessment of Government Internal Control Systems on Financial Reporting Quality in Ghana: A Case Study of Ghana Revenue Authority

2018 ◽  
Vol 10 (11) ◽  
pp. 40
Author(s):  
Wonder Agbenyo ◽  
Yuansheng Jiang ◽  
Prince Komla Cobblah
Keyword(s):  
Control Systems ◽  
Financial Reporting ◽  
Internal Control ◽  
Negative Impact ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Quality Reporting ◽  
The Impact

Internal control systems cannot be underestimated as it serves as the lifeblood of most institutions in terms of its imperative roles that it plays in both tangible and intangible assets of an organization. Internal control actions on quality financial report state positive goals more especially when all parties involved adhere to their duties; thus, making the quality of financial reporting comparable, understandable, relevant, and reliable. In this regard, this study investigated the impact of government internal control systems on financial reporting quality in Ghana using Ghana Revenue Authority as the case study. Specifically, the study examined the nature and quality of financial reporting and the impact of government internal control systems on financial reporting quality. Both quota and simple random sampling techniques were used to select fifty (50) persons as the sample size of the study. Questionnaires were used to obtain data. The correlation matrix was used to examine the relationship between government internal control systems and financial reporting quality. The study finds out that contrary to apriori expectation sign monitoring as an element of internal control system has a negative impact on the financial quality reporting but was however statistically significant. The study also revealed that with a unit increase in the collection performance, the financial reporting quality of GRA will improve. The study recommended that the government should ensure that the internal control systems are well monitored and regulated. 

scholarly journals Does Control Self-Assessment Influence Financial Reporting Quality?

2020 ◽  
Vol 5 (4) ◽  
pp. 70-76
Author(s):  
Hiroshi Uemura
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Negative Relationship ◽  
Reporting Quality ◽  
Audit Fees ◽  
Internal Controls ◽  
Financial Reporting Quality ◽  
Control Environment ◽  
Self Assessment ◽  
Positive Effects

The aim of this study is to examine the effect of control self-assessment (CSA) on financial reporting quality by using CSA as a proxy of monitoring quality. CSA has an important feature that allows the employees themselves to become involved in the assessment of internal controls’ effectiveness. Moreover, CSA has two important monitoring functions. First, it can add value to internal auditing. Second, because all employees of operational units participate in the assessment of internal controls in CSA, that control environment is expected to be mature. The investigation of this study used data from 3,517 Japanese firms listed on the First Section, Second Section, Mothers, and JASDAQ of the Tokyo Stock Exchange. The result of 2SLS regression shows that CSA adoption has a negative relationship with the number of financial restatements and audit fees, and therefore, I conclude that CSA has positive consequences for financial reporting quality. This result indicates that the internal monitoring mechanism that continuously monitors internal control over financial reporting (ICFR) effectiveness and in which all employees participate has some positive effects on financial reporting quality. There are two reasons for this result. First, employees have easier access to negative information concerning ICFR effectiveness than outsiders and can share that information with the internal personnel in charge of monitoring (e.g., internal auditors). Moreover, CSA is expected raise an entity’s awareness of ICFR, that is, the control environment of ICFR components is made into an environment that prevents and detects impropriety in the accounting process. Keywords: Control

Social Capital and Internal Control Material Weaknesses

2021 ◽  
Author(s):  
Jayanthi Krishnan ◽  
Sang Mook Lee ◽  
Myungsoo Son ◽  
Hakjoon Song
Keyword(s):  
Social Capital ◽  
Financial Reporting ◽  
Internal Control ◽  
Reporting Quality ◽  
Internal Controls ◽  
Financial Reporting Quality ◽  
External Monitoring ◽  
Regional Center ◽  
Material Weaknesses ◽  
Specific Material

Using a measure of social capital provided by the Northeast Regional Center for Rural Development, we document that, after controlling for auditor effort, firms headquartered in US counties with higher social capital are less likely to have ineffective internal control over financial reporting than those located in regions with lower social capital. This negative association between local social capital and ineffective internal controls holds when other forms of external monitoring are weak. We also find that the association is driven by ineffective internal control arising from entity-level, but not from account-specific, material weaknesses. Overall, we contribute to the literature that links firms' social environment with financial reporting quality.

The Effect of Financial Reporting Quality on Financing and Investment

2016 ◽  
Vol 4 (3) ◽  
pp. 113-120
Author(s):  
Windy Angela ◽  
Rilya Aryancana
Keyword(s):  
Financial Reporting ◽  
Quantitative Research ◽  
Reporting Quality ◽  
The United States ◽  
Financial Reporting Quality ◽  
Library Research ◽  
Domestic Capital ◽  
Financing Frictions ◽  
Negative Effect ◽  
Financing And Investment

Objective - This study examines the effect of financial reporting quality on financing and investment of 15 large Indonesian companies that may still be under-investing in relation to its regional peers. Methodology/Technique - This research uses the quantitative research technique which involves field search, library research and statistical methods. Findings - The results suggest that (1) financial reporting quality has negative effect on financing (2) financial reporting quality has positive effect on investment among companies with higher likelihood of over-investing and negative effect on investment among those with higher likelihood of under-investing. Novelty - This research is complementary to previous researchers because they use financial reporting data of companies located in the United States whose domestic capital markets remain the largest and deepest globally. This might affect the degree of information asymmetry and financing frictions that companies face and hence, lead to an upward bias of the effect. Meanwhile, this research is conducted in Indonesia whose non-financial companies obtain nearly 50% of their financing from abroad via loans, bonds, and other credit. Type of Paper - Conceptual Type of Paper - Financial reporting quality; Financing; investment; Likelihood of over-investing; Likelihood of under-investing.

scholarly journals The Qualitative Characteristics of Accounting Information, Earnings Quality, and Islamic Banking Performance: Evidence from the Gulf Banking Sector

2020 ◽  
Vol 8 (2) ◽  
pp. 30
Author(s):  
Ibrahim Elsiddig Ahmed
Keyword(s):  
Financial Reporting ◽  
Positive Relationship ◽  
Banking Sector ◽  
Earnings Quality ◽  
Negative Relationship ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Annual Reports ◽  
Significant Positive Relationship ◽  
Qualitative Characteristics

The study aims to operationalize financial reporting quality in terms of the qualitative characteristics (QCs) as stated by the Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI) standards, as well as to investigate their association with earnings quality (EQ) and banking performance. The study uses secondary data extracted from DataStream to operationalize and measure the financial reporting quality in the annual reports of 25 out of the 27 Islamic banks in the Gulf Council Countries (GCC) for a 5-year period (2014–2018), meaning 125 annual reports were used. The study applies a manual content analysis to the annual reports to score all the items of QCs and operationalizes 25 measurement items that represent the six QCs. All items use 5-point Likert-type scales to compute the sub-score and the overall index through the Neural Network System. The findings of the model paths show a significant positive relationship between EQ and most of the QCs. The first hypothesis is partially accepted as there is a positive relationship between EQ and relevancy, reliability, prudence and general quality; however, there is no significant relationship between EQ and understandability and there is a significant negative relationship between EQ and comparability. Moreover, the study finds a significant positive relationship between EQ and ROA on one hand and EQ and ROE on the other hand (p-value = 0.00), meaning the second hypothesis is supported.

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