Pengaruh Struktur Modal, Likuiditas, Profitabilitas dan Umur Perusahaan terhadap Kualitas Laba:

This study aims to prove the effect of capital structure, liquidity, profitability and firm age on earnings quality. The type of research used is quantitative research and secondary data. The sample of this research is mining companies listed on the Indonesia Stock Exchange (IDX) in 2017-2020 using purposive sampling. This study shows that capital structure has no significant effect on earnings quality, liquidity has no significant effect on earnings quality, profitability has no significant effect on earnings quality and firm age has no significant effect on earnings quality. The implications of this research are related to earnings quality. Investors and other users of financial statement information, need to consider the liquidity factor because this factor has a significant impact on the quality of earnings in the company. This shows that users of financial statements, especially investors, need to consider the liquidity factor when making investment decisions in affiliated companies. Keywords: Capital Structure, Liquidity, Profitability, Company Age, Earnings Quality

Is conditional conservatism a source of deviations of financial statements from Benford's Law?

PurposeIn this paper, the authors examine the association between conditional conservatism and deviations of the first digits of financial statement items from what are expected by Benford's Law.Design/methodology/approachThis research uses data of companies listed on the London Stock Exchange. The authors measure deviations of first digits from Benford's Law following Amiram et al. (2015) and firm-year conditional conservatism following previous studies (Basu, 1997; Khan and Watts, 2009; García Lara et al., 2016). The authors use multiple regressions to provide evidence for their hypothesis.FindingsThe results show that conditional conservatism is positively associated with deviations from Benford's Law. The findings are robust across different measures of deviations and conditional conservatism. Also, the authors find that the relationship between deviations from Benford's Law and conditional conservatism is more pronounced for firms with debt issuance, and for leveraged firms facing financial distress. Next, the authors’ analyses confirm previous evidence by showing that the first digits of financial statement items of UK listed companies conform to Benford's Law at the firm-specific level and the market level, and deviations of income statements are larger than those of balance sheets and cash flow statements.Research limitations/implicationsThe research makes significant contributions to the literature. First, this is the first study that provides empirical evidence suggesting that conditional conservatism may be a source of deviations from Benford’s Law. Second, the authors provide evidence confirming previous US findings (e.g. Amiram et al., 2015) showing that the distributions of first digits of financial statement items of UK listed companies also conform to Benford's Law.Practical implicationsThe authors’ findings have implications for auditors. Auditors should be aware of “false positive” for material misstatements when using Benford's Law as a risk assessment procedure. While both conditional conservatism and earnings management are related to deviations from Benford's Law, conservatism-related biases could indicate less audit risks.Originality/valueThe authors provide new and original evidence suggesting that conditional conservatism is related to deviations from Benford's Law.

The use of data analytics in external auditing: a content analysis approach

PurposeThis study examines the perceptions of interested stakeholders on the factors affecting the use of data analytics (DA) in financial statement audits. Response letters submitted by stakeholders of the auditing services to the International Auditing and Assurance Standards Board's (IAASB) Data Analytics Working Group (DAWG) served as sources for analysis.Design/methodology/approachThe modified information technology audit model was used as a framework to perform a direct content analysis of all the 50 response letters submitted to the DAWG.FindingsThe analysis showed that a range of attributes, such as the usefulness of DA in auditing, authoritative guidance (auditing standards), data reliability and quality, auditors' skills, clients' factors and costs, were the factors perceived by stakeholders to be affecting the use of DA in external auditing.Research limitations/implicationsThis study is subjected to the limitations inherent to all content analysis studies. Nonetheless, the findings offer additional insights about potential factors affecting the adoption of DA in audit practices.Originality/valueThe data noted in the published statements highlighted the perceptions of a range of stakeholders with regards to the factors affecting the use of DA in auditing.

Fundamental analysis and the use of financial statement information to separate winners and losers in frontier markets: evidence from Vietnam

PurposeThe pupose of the paper is to study the usefulness of Piotroski (2000)'s F-score in separating winners and losers in Vietnam.Design/methodology/approachThe authors adopt a portfolio analysis and regression analysis on a sample of 501 of listed firms between 2009 and 2019 in Vietnam.FindingsThe authors find that a hedge strategy that buys high-F-score firms and sells low-F-score firms yield market-adjusted return of over 30 percent annually, which is statistically and economically significant. The hedge strategy based on F-score is not only profitable for value (high book-to-market [BM]) firms but also earn abnormal returns in a sample of growth (low BM) firms, suggesting that the usefulness of F-score strategy is not just a phenomenon in value firms as documented in previous literature.Research limitations/implicationsWhilst the authors' paper documents economically significant returns obtained from the F-score strategy, the authors do not examine what drives the abnormal returns.Practical implicationsThe results provide supporting evidence for the use of financial statement analysis as a screening tool to improve the performance of value investment in Vietnam stock market and for the training of financial reporting and fundamental analysis in universities.Originality/valueThe authors' research is the first study examining the F-score strategy in Vietnam that provides insights about the usefulness of fundamental analysis in separating winners and losers in a frontier market and contributes to the literature on fundamental analysis and market efficiency in emerging and frontier markets.

LICENÇAS DE EMISSÃO DE GASES DE EFEITO ESTUFA: TRANSPARÊNCIA DA INFORMAÇÃO FINANCEIRA

ABSTRACT This research analyzes the influence that the performance of GHG emissions has on the level of transparency in financial reporting. Content analysis of the financial statement notes allowed the level of transparency to be measured. The results suggest that the level of transparency in financial reporting is negatively related to the performance of GHG emissions when financial reports are prepared on the basis of the International Financial Reporting Standards. It was also concluded that more ‘good news’ is disclosed by companies when their GHG emissions’ performance reduces. This study complements previous literature about transparency in financial reporting, and the necessity to relate it to eco-efficiency measures to empower the decision-making process of stakeholders. The study also provides a reference for European accounting regulators on the behavior of companies with regard to this issue.

Tenure audit effect on timeliness of financial statement publication with industry specialist auditors as moderating

This study aims to empirically examine the effect of tenure audits on the timely publication of financial statements moderated by industry specialist auditors. This study uses a sample of 726 Firm Years, which were obtained through a purposive sampling method from companies listed on the Indonesia Stock Exchange in 2018-2020. This study uses the method of Sub-Group Logistic Regression and Sub-Group Moderation in testing the hypothesis. The results of this study indicate that audit tenure has a negative effect on the timeliness of financial statement publications. This means that the longer the audit period of an auditor, the publication of financial statements will be relatively less timely. The results of this study also show that industry specialist auditors are able to moderate the relationship between audit tenure and the timeliness of financial statement publications. This means that the influence of audit tenure on the timely publication of financial statements in the industry specialist auditor group is greater than in the non-industry specialist auditor group. Therefore, the more specialist the auditor, the stronger the influence between audit tenure on timeliness.

GREENHOUSE GAS EMISSION ALLOWANCES: FINANCIAL REPORTING TRANSPARENCY

ABSTRACT This research analyzes the influence that the performance of GHG emissions has on the level of transparency in financial reporting. Content analysis of the financial statement notes allowed the level of transparency to be measured. The results suggest that the level of transparency in financial reporting is negatively related to the performance of GHG emissions when financial reports are prepared on the basis of the International Financial Reporting Standards. It was also concluded that more ‘good news’ is disclosed by companies when their GHG emissions’ performance reduces. This study complements previous literature about transparency in financial reporting, and the necessity to relate it to eco-efficiency measures to empower the decision-making process of stakeholders. The study also provides a reference for European accounting regulators on the behavior of companies with regard to this issue.