The Effect of Inventory Turnover, Cash Turnover, and Receivable Turnover on Profitability at Telecommunication Companies during the Covid-19 Pandemic

This study aimed at analyzing three different turnovers of current asset elements: the inventory turnover, the cash turnover, and the receivable turnover on profitability. Data is taken in the form of financial statements from the public companies of the telecommunication sector during four quarters of 2020. The panel data is processed from 9 companies or 36 observations using the Eview9 application and produced the fixed effect model as the best regression. The results indicate that the cash turnover has a significantly positive effect on profitability, whereas the inventory turnover and the receivable turnover have not significantly any effect on profitability. Therefore, the study concluded that the cash turnover was the one of current assets turnover that effected on the profitability of the public company telecommunication sector in Indonesia. It implied to the public companies of telecommunication sectors to choose the appropriate turnover model to achieve the maximum profitability during the Covid-19 pandemic.

A Meta Analysis of Materiality Studies

The Supreme Court and the Public Company Accounting Oversite Board (PCAOB) has said that an amount is material if there is a substantial likelihood it will influence a reasonable investor’s judgment. The American Institute of Certified Public Accountants (AICPA) has said that an amount is material if there is a substantial likelihood it will influence a reasonable user’s judgment. The Financial Accounting Standards Board (FASB) has refused to define materiality. The Securities and Exchange Commission (SEC) has said that qualitative factors can make even small amounts material. Reasonable implies a consensus of opinion. This article is a meta-analysis of 31,155 materiality decisions made by 335 cohorts in 48 studies with the objective of defining what is reasonable. A cohort is a group of like individuals faced with a common materiality decision. Materiality in this study is measured as a percentage of net income. The mean threshold of materiality is 7.84% and the median is 6.81%. Both thresholds are substantially higher than the often-discussed threshold of 5.0%. A quarter of the participants in these studies set the threshold of materiality at 11.90% and the threshold for a statistically significant difference from the consensus is 17.51%. Ultimately, materiality will be decided through civil and criminal litigation. Finders of fact, usually jurors, will be asked to determine what a reasonable investor would conclude. Few jurors have the training and experience of investors, so without context, they can only guess what a reasonable investor would conclude. This study provides that context.

Mapping the Knowledge

In this chapter, the author examines the possibility of applying the servant leadership concept's critical components in the innovation management process. The author, based on his own experience as a top manager of a prominent Russian public company, reveals the importance of a proactive approach to managing innovative projects. The chapter's objective is to develop the rules for the proactive management of innovative project portfolios and, based upon these rules, to lead the team of key personnel. The author concludes that while following the five rules of proactive management of innovative projects, the manager becomes a team's servant-leader. The manager is not suppressing the team's initiative, not depriving them of the right to independently understand current events, and arming them with self-immersion tools in the project's details. The author is confident that the presented approach may be of interest to other practicing innovative managers.

Hexagon Fraud: Detection of Fraudulent Financial Reporting in State-Owned Enterprises Indonesia

This study aims to detect fraudulent financial reporting using hexagon fraud analysis, including seven factors: financial stability, external pressures, ineffective monitoring, auditor changes, change in director, arrogance, and collusion. The subject of this research is a public company consolidated audit report of state-owned enterprises. The existence of conflicting results, the phenomenon of fraudulent financial reporting, and limited research using the hexagon of fraud theory prompted this research to examine the factors that influence fraudulent financial reporting. The sample was selected using a sampling technique, with the criteria of state-owned enterprises listed on the Indonesia Stock Exchange in 2016–2020. The method used is quantitative, and the analytical method used is logistic regression analysis. The sampling technique used was purposeful sampling, so the number of samples was 125. The results of this study indicate that financial stability and external pressures have a positive effect on fraudulent financial reporting. However, ineffective monitoring, auditor changes, change in director, arrogance, and collusion do not affect fraudulent financial reporting.

Opportunistic Avoidance of Litigation Loss Accruals and the Mitigating Effects of Auditors

We find that firms with preliminary earnings that are expected to just meet analyst forecasts are more likely to only disclose (i.e., not accrue) litigation loss contingencies, claiming that the litigation event falls below the qualitative thresholds necessitating accrual. We also find that this opportunistic treatment of a subjective estimate is reduced when firms’ auditors have expertise in the defendant’s industry or have experience auditing litigation contingencies. Furthermore, we find that opportunistic disclosure usage increases when firms are more economically important to auditors’ client portfolios. Our results are robust to a series of additional tests. We provide evidence to support the Public Company Accounting Oversight Board’s (PCAOB) call for increased auditor professional skepticism toward management bias and opportunism when evaluating subjective estimates.

Valuation Issues, Auditor Fraud, and PCAOB Confirmation: Findings From an Analysis of Lawsuits Against Large Public Accounting Firms

In this article, we bridge the gap between academia and practice by analyzing and presenting the results of allegations in more than 200 lawsuits against the largest public accounting firms. Our findings are critical as the lawsuits damage the firms’ reputations, the credibility of the profession in general, and may result in large monetary losses and loss of clients. We find three key results not found in previous legal research. First, we find that Generally Accepted Accounting Principles (GAAP) issues, especially those focused on valuation, dominate Generally Accepted Auditing Standards (GAAS) issues in the allegations. Second, fraud allegations against the auditors themselves are a significant problem, although often ignored in the fraud literature. Third, the Public Company Accounting Oversight Board (PCAOB) reports on the accounting firms provide an unintended source of information for third parties in future legal allegations against those same firms.

The Role of Employees Empowerment Strategy in Crisis Management: Applied Study in Public Company of Electrical Industrial

The current research aims to test the relationship linkage and the effect between the employees empowerment strategy and crisis management, the problem of the research is the role of employees empowerment strategy in crisis management in the state company of electrical industry. A questionnaire was used in data collection depending on the distribution of (58) questionnaire to the research sample. Data were analyzed using (SPSS) program. Using a number of statistical tools to test the research hypothesis. The research came out with a set of conclusions, one of the most important thinks was that there is a linkage and impact relation between employees empowerment strategy, it's variables (Information sharing, Freedom and autonomy, Replace hierarchical structure with self-employment teams) and crisis management as a whole. The research came out with many suitable recommendations.

Using Storytelling to Apply Lessons from PCAOB Enforcements

The real-life failures of others provide vivid opportunities to learn. Audit failures and rule infractions stemming from Public Company Accounting Oversight Board (PCAOB) inspections represent the few instances where detailed information about financial statement audits is made publicly available. The PCAOB enforcement reports contain a wealth of information and offer greater transparency in regard to the audits of SEC registrants. This project uses these reports to teach real-life lessons in the context of the complex regulatory environment in which registered audit firms operate. Students examine the information from these enforcements and then craft and present the stories of the related audit failures. This approach has a proven impact on learning, and students who completed the project reported enhanced knowledge of the regulatory process and audit standards. The student presentations can also be used in a professional environment for CPAs to earn CPE. We provide advice to faculty who wish to pursue a similar option.

Assessing Finance Interaction of Chemical Industry Corporations with State

The article assessed interaction of state and chemical industry corporations by criteria of budget making, tax burden and managerial impact. The appraisal was made on the basis of methodological tools worked out by the author. Within the period from 2012 to 2020 earnings of corporations of chemical industry producing mineral fertilizers grew and exceeded tax revenues of regions of their location, which caused an increase in companies’ taxation potential. However, analysis of tax payments to the budget system by profit tax, property tax, income tax and VAT did not confirm the growth in this potential. A rise in dividends, payments for losses were typical for enterprises, as well as increasing amount of dividends surpassing net profit. The goal of the article is to identify the level of finance interaction efficiency between state and enterprises of chemical industry. The following enterprises of chemical industry producing mineral fertilizers acted as the object of the research: the public company ‘Apatit’ (Vologda region), the public company ‘Akron’ (Novgorod region) and the public company ‘Dorogobuzh’ (Smolensk region). This choice was stipulated by location of these enterprises in regions with weakly-diversified economic structure and serious dependence on the budget-forming enterprise. The information base of the research was formed by works by Russian and overseas authors dealing with chemical industry development, finance accounting of the companies, data of the Federal Taxation Service and the Treasury of Russia.

Barriers to The Execution of Seizure of Execution against Court Decisions That Have Permanent Legal Force (Example is The Case of Confiscation of Execution of Assets of Perumda Salatiga)

This research aim to determine the regional finance management arrangements for the assets of regional public company originating from separated regional assets and the constraints in the execution of assets of Perumda BPR Bank Salatiga. This research uses normative research. The research was conducted by library research using secondary data, while the tool used was document study. The data that has been collected is analyzed qualitatively. The results of this study indicate that the Regional Financial Management of Regional Public Company (Perumda) assets is the authority and responsibility of the Regional Government represented by the Regional Head who is the owner of capital as well as the owner of Perumda and Barriers in the execution of the seizure of the assets of Perumda BPR Bank Salatiga because there is Article 50 of Law No. 1 of 2014 concerning the State Treasury which prohibits the execution of assets belonging to the region.