scholarly journals Influence the Quality of Accounting Information Systems and the Effectiveness of Internal Control on Public Financial Reporting Quality; an Empirical Sturdy

2021 ◽  
Vol 04 (02) ◽  
Author(s):  
Mayadunnege Senaka Anuruddha ◽  
Keyword(s):  
Public Sector ◽  
Sri Lanka ◽  
Financial Reporting ◽  
Internal Control ◽  
Accounting Information ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
The Public ◽  
The Government

There is a growing concern over the public financial management practices including financial reporting of governments. People's concern over more productive public resource utilization has flourished. Not only that, transparency, accountability, and openness of public money utilizations have become more common. Financial reporting is a key leading instrument that is able to prove both ideas. The requirement stimulates governments to concern about the quality of financial reporting in the public sector. The government of Sri Lanka has already taken several steps to strengthen their public financial reporting while there are still being criticisms by critical interest parties. The situation creates a drought over the effectiveness and the direction of the initiatives. Based on the public financial reporting environment in Sri Lanka, the research investigates the determining factors of Public Financial Reporting Quality (PFRQ). Scholars acknowledge the influence of the Accounting Information System (AIS) and Internal Control (IC) to determine the PFRQ in different organizational environments. A questionnaire survey seeking opinions on these two areas was distributed to a sample of Accountants working in the central government ministries and departments in Sri Lanka. The results reveal the strong contribution of AIS and IC to enhance the PFRQ. The results further acknowledge the findings of previous scholars over the positive influence of AIS and IC to determine the FRQ. These findings contribute to the literature by analyzing the determinants of financial reporting quality in the public sector. Finally, it is recommending to the government of Sri Lanka to take steps to strengthen their public financial reporting in a correct and more influential direction.

scholarly journals Influence of the Quality of Accrual Financial Report Information with the Roles of Accounting Information System as an Intervening Factor

2017 ◽  
Vol 8 (2) ◽  
pp. 84
Author(s):  
Dyah Purwanti ◽  
Ghulbudin Isham Natser
Keyword(s):  
Information System ◽  
Human Resources ◽  
Financial Reporting ◽  
Internal Control ◽  
Accounting Information ◽  
Primary Data ◽  
Accounting Information System ◽  
The Government ◽  
The Impact

<p>This study aims to find empirical evidence about the role of accounting information system (AIS) as intervening factors that affect the quality of financial reporting information of the government. This study uses a questionnaire that primary data collected from respondents, namely employees of the accounting department of the government units, especially a partner institution in the State Treasury Office (KPPN) 2 Jakarta. Data processing is performed by the method of partial least squares (PLS). The results of this study are the accounting information system has significantly the impact on the quality of government financial reporting information. While the capacity factor of human resources, control data input and application of Government Accounting Standards (SAP) have a significant direct effect on the AIS, is larger when compared to a direct influence on the quality of financial reporting information. Other factors, organizational commitment and internal control system has a significant influence either directly or indirectly on the quality of financial reporting information. The findings of the study are expected to provide input to the government the importance of improving the accounting information system, such as strengthening the capacity of human resources and accounting applications in realizing quality financial information.</p>

Family ownership and financial reporting quality: Iranian evidence

2018 ◽  
Vol 8 (3) ◽  
pp. 339-356 ◽  
Author(s):  
Mahmoud Mousavi Shiri ◽  
Mahdi Salehi ◽  
Fatemeh Abbasi ◽  
Shayan Farhangdoust
Keyword(s):  
Financial Reporting ◽  
Family Firms ◽  
Stock Exchange ◽  
Accounting Information ◽  
Reporting Quality ◽  
Audit Fees ◽  
Financial Reporting Quality ◽  
Family Ownership ◽  
Content Type

PurposeIn the process of reporting accounting information, the auditor’s objective is to detect possible misstatements and errors in accounting information. Audit evidence aids auditors in providing reasonable assurance about the quality of financial reporting. Studying the quality of family firms’ financial reporting is of higher importance relative to non-family firms due to lower risk of accounting manipulation. Therefore, the purpose of this paper is to examine the relationship between family ownership structure and financial reporting quality from an auditing perspective.Design/methodology/approachTo analyze the research hypotheses, the authors use a sample data consisted of 221 companies listed on the Tehran Stock Exchange (including 52 family and 169 non-family firms) over a five-year span from 2011 to 2015.FindingsUsing multivariate regression analysis of panel data, our results indicate that audit risk in family firms is lower than their counterparts. Likewise, the findings are indicative of lower audit fees paid by family firms as compared to non-family ones. The authors also find that auditors put more effort in family firms and thus audit effort is more significant for these kinds of firms.Originality/valueThe study focuses on family ownership and financial reporting quality in a developing country like Iran and the results of the study may be beneficial to other developing nations, as Iran stock market possesses some unique features which are not normally prevailing in other equity markets, even in the Middle East.

Effects of leadership and accounting capacity on accountability through the quality of financial reporting by public organisations in Vietnam

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yen Thi Tran ◽  
Nguyen Phong Nguyen ◽  
Trang Cam Hoang
Keyword(s):  
Public Sector ◽  
Financial Reporting ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Equation Modeling ◽  
Content Type ◽  
Research Results ◽  
Public Organisations ◽  
The Impact

Purpose By drawing on the institutional theory and contingency theory, this study aims to examine the effects of leadership and accounting capacity on the quality of financial reporting and accountability of public organisations in Vietnam. Furthermore, this paper is to determine the impact of financial reporting quality on accountability. Design/methodology/approach The research model and hypotheses have been tested by partial least squares structural equation modeling, with 177 survey samples obtained from accountants and managers working in the public sector in Vietnam. Findings The research results indicate that leadership and accounting capacity have a positive effect on financial reporting quality; leadership and accounting capacity positively influence accountability; and the quality of financial reporting has a positive impact on accountability. Research limitations/implications The research results provide empirical evidence of the direct impact of leadership and accounting capacity on financial reporting quality and accountability of public organisations in a developing country. Moreover, the current work also provides important evidence for the impact of financial reporting quality on accountability. Practical implications Public sector organisations must realise that leadership and accounting capacity play a vital role in the accounting reform process. Public institutions likewise need to pay attention to develop accounting capacity and promote leadership. Moreover, the results respond to the continuing call for increased citizen trust in public organisations. Originality/value To the best of the authors’ knowledge, this study is the first to examine the chain from leadership, accounting capacity, financial reporting quality and accountability in the context of public sector organisations in an Asian transition market.

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.&nbsp;

scholarly journals Financial Reporting Quality and Online Disclosure Practices in Spanish Governmental Agencies

2021 ◽  
Vol 13 (5) ◽  
pp. 2437
Author(s):  
Javier Garcia-Lacalle ◽  
Lourdes Torres
Keyword(s):  
Public Sector ◽  
Financial Performance ◽  
Financial Reporting ◽  
Central Government ◽  
Good Governance ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Equation Modeling ◽  
Governing Body

Good governance in the public sector implies high accountability levels. Accountability is a multidimensional concept that includes the quantity and reliability of disclosures as well as rendering accounts to the citizenry. Nowadays, good governance, accountability, and financial performance are key for the long-term sustainability of autonomous public sector organizations. The objective of this paper is to study how key governance features relate to the quantity and quality of the information disclosed. In particular, how the governing body, financial performance and organizational features relate to online transparency and financial reporting quality, as well as how these two accountability dimensions are related. To fulfill this objective, we have used the Structural Equation Modeling, Partial Least Squares (PLS-SEM) approach. The focus of our analyses is on Spanish central government agencies. The size of, and a greater presence of independent members in, the governing body are explanatory factors behind the quality of the financial reports. Our findings also show that the quality of the financial information is also affected by the pressure that Eurostat requirements -deficit limits- puts on public sector entities, which leads to the use of smoothing practices. Online disclosure practices are not explained by the features of the governing body, but by the size of the agencies and their financial results. The better the financial reporting quality, the higher the online disclosure levels.

scholarly journals The Influence of Internal Controls on Public Financial Reporting Quality (PFRQ) in Sri Lanka; an Empirical Study

2021 ◽  
Vol 06 (07) ◽  
Author(s):  
Anuruddha, M.S. ◽  
Keyword(s):  
Sri Lanka ◽  
Financial Reporting ◽  
Central Government ◽  
Good Governance ◽  
Reporting Quality ◽  
Internal Controls ◽  
Financial Reporting Quality ◽  
Control Environment ◽  
The Public ◽  
The Impact

Public financial reporting is accountable to maintain public trust by protecting the accountability, openness, and transparency of public money which leads to the good governance of the country. There were many criticisms over financial reporting quality by various stakeholders of entities across the countries. There is a growing concern over the quality of PFR which determines the level of performing expectations of financial reporting. Assurance of PFR in Sri Lanka has deteriorated and been questioned by legislative authorities and interested parties because of the quality concerns. Considering the scholarly studies in various countries, the study was carried out in Sri Lanka to investigate the influence of Internal Controls (ICs) over the Public Financial Reporting Quality (PFRQ) with an objective to measure and conclude the determinants. To conclude the impact, the study investigates the influence of five basic dimensions of ICs introduced in previous literature, namely: Control Environment, Risk Assessment, Control Activities, Information & Communication, and Monitoring. Considering the facts of the context of Sri Lanka, the research has investigated the influence of IC on public financial reporting quality in the central government ministries and departments environment in Sri Lanka. The primary data was collected by a questionnaire survey conducted with accountants who are being employed in the central government ministries and departments in Sri Lanka. Data have collected by a structured questionnaire and verified by Cronbach’s alpha test for reliability. A multiple linear regression model was developed and tested to determine the statistical influence of variables of IC over the dependent PFRQ. The findings investigate and conclude the positively significant influence of IC on the PFRQ in the central government ministries and departments in Sri Lanka. Further, it was admitted the significant direct influence of IC attributes of Control Environment, Information and Communication and Monitoring to determine the PFRQ. Based on the facts, the study recommends the public sector in Sri Lanka to ensure the effectiveness of ICs in government institutions to improve and maintain the trust level of PFRQ.

scholarly journals INFLUENCE OF MANAGERIAL ABILITY ON FINANCIAL REPORTING QUALITY: EVIDENCE FROM NIGERIAN LISTED NON-FINANCIAL FIRMS

2020 ◽  
Vol 2 ◽  
pp. 25-40
Author(s):  
Aderemi Olalere Adebayo
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Secondary Data ◽  
Reporting Quality ◽  
Income Smoothing ◽  
Financial Reporting Quality ◽  
Managerial Ability ◽  
Financial Report ◽  
Financial Firms

Users of accounting information crave of quality financial reporting, by emphasising on the quality of the auditors neglecting the attribute of the managers. This study investigates the influence of managerial abilities on financial reporting in Nigerian listed non-financial sectors. The time series research design was employed by selecting 40 non-financial institutions as sample size between 2010 and 2017. Secondary data obtained from the financial report were analysed using correlation and logistic regression. It was found that managerial ability has an inverse relationship on financial reporting quality, which is consistent with the agency theory. The finding implied that managers employ their ability to income smoothing for the benefit of the organisation rather than the interest of the shareholders.

Internal control and financial reporting quality of small firms

2020 ◽  
Vol 19 (2) ◽  
pp. 221-246
Author(s):  
Jagan Krishnan ◽  
Jayanthi Krishnan ◽  
Sophie Liang
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Small Firms ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Policy Debate ◽  
Content Type ◽  
Material Weaknesses ◽  
The Impact

Purpose The Dodd–Frank Act of 2010 exempts small, non-accelerated filers from compliance with Sarbanes–Oxley Act (SOX) Section 404b internal control audits. However, these firms are required to comply with other internal control regulations, namely, SOX Sections 302 and 404a, starting in 2002 and 2007, respectively. A small number of these firms also voluntarily adopted (and sometimes dropped) Section 404b during 2004-2010. The purpose of this study is to investigate the impact of a series of internal control regulations introduced by SOX on the financial reporting quality of small firms. Design/methodology/approach The research design for this study is empirical. Using unsigned and signed discretionary accruals as measures of financial reporting quality, the authors compare the financial reporting quality for adopters and non-adopters across four regulation regimes over the period 2000-2010: PRESOX, SOX 302, SOX 404a and SOX 404b. Findings The results indicate that most of the adopters and non-adopters benefited from SOX 302 and 404a compared with the PRESOX period. However, only the non-adopters gained incrementally when moving from SOX 302 to SOX 404a. Also, Section 404b benefited firms with material weaknesses, as well as firms without material weaknesses that had the lowest reporting quality, in the PRESOX period. Research limitations/implications This study helps inform the important policy debate on whether to increase the threshold that is used for the SOX 404b exemption. It shows incremental benefits for firms that adopted Section 404b audits, even when they were complying with Section 302 and Section 404a. Consequently, extending the exemption to more companies would result in a loss of the reporting quality benefit of 404b. Originality/value This study contributes to the literature by focusing exclusively on non-accelerated filers and by examining differences across four regulation regimes over a long window compared to prior studies. It provides evidence that the financial reporting benefit of SOX 404b is not transitional, but rather extends for a few years even after some firms discontinued the 404b audits.

Effects of implementation of International Public Sector Accounting Standards on Nigeria’s financial reporting quality

2020 ◽  
Vol 33 (2/3) ◽  
pp. 323-338 ◽  
Author(s):  
Saheed Adekunle Muraina ◽  
Kabiru Isa Dandago
Keyword(s):  
Public Sector ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Partial Least Square ◽  
Least Square ◽  
Financial Reporting Quality ◽  
Content Type ◽  
Public Sector Accounting

Purpose The purpose of this paper is to examine the effects of the implementation of the International Public Sector Accounting Standards (IPSAS) on Nigeria’s financial reporting quality. Design/methodology/approach The study employed a survey research design to determine the effects of the implementation of the IPSAS on Nigeria’s financial reporting quality. Partial Least Square 3(SmartPLS 3) technique of analysis was applied to achieve the research objective. Findings The study found that accountability positively and significantly affects the quality of financial reporting in Nigeria. Specifically, IPSAS has improved the level of accountability, which in turn improved Nigeria’s financial reporting quality. Research limitations The study only explored two explanatory variables whereas other variables such as transparency, corruption minimization, comparability and faithful representation were not considered in this study. It is, therefore, recommended that further studies could expand the scope to cover some other variables not included in this paper. Practical implications IPSAS-Accrual has engendered the Nigerian Government to launch the Asset Tracking and Management Project (ATMProject) in order to easily track its assets for the purpose of accountability. Thus, accountability was discovered in this study to be the most essential factor to enhance the quality of financial reporting using accrual-based IPSAS in Nigeria. Social implications Accountability will impact positively on the lives of Nigerians in relation to the application of public funds to impact on the lives of the masses. Originality/value The statistical significance of accountability found in this study, using partial least square technique of data analysis, will further enhance financial integrity in the country.

Determinants of Financial Reporting Quality in the Public Sector: Evidence from Indonesia

2019 ◽  
Vol 54 (03) ◽  
pp. 1950009 ◽  
Author(s):  
Fuad Rakhman ◽  
Singgih Wijayana
Keyword(s):  
Public Sector ◽  
Financial Reporting ◽  
Financial Incentives ◽  
Local Governments ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Financial Reports ◽  
Audit Opinion ◽  
The Public ◽  
Quality Literature

Most studies addressing the issue of financial reporting quality (FRQ) focus on corporations. This study investigates the determinants of FRQ in the public sector. We use the type of audit opinion as a proxy for reporting quality, with an unqualified opinion representing the best reporting quality while a disclaimer of opinion represents the worst quality. Using manually collected data from 3018 financial reports of local governments in Indonesia from 2008 to 2014, we find that a high proportion of capital expenditures in the total budget is associated with low FRQ. Further, we find that larger and wealthier local governments are associated with higher FRQ. Finally, we find that local governments under more experienced mayors have higher reporting quality. Our results are robust to different measures of FRQ. This study contributes to the reporting quality literature by providing empirical evidence on the determinants of FRQ in the public sector, which has been relatively underexplored. We conclude that certain characteristics of local governments and of mayors are associated with the types of audit opinion and that financial incentives accelerate the improvement of reporting quality.

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