IMMUNITY AND PROTECTION AGAINST RETALIATION GRANTED TO „WHISTLEBLOWERS” – PERSONS WHO REPORT VIOLATIONS OF EUROPEAN UNION LAW AND POLICY

The author analyzes the Directive 2019/1937 promoting the idea of cooperation between employees and public authorities regarding information on abuses of European Union law and policy. It outlines the purpose (to improve enforcement and EU policies), methods and techniques for this cooperation (internal and external reporting and follow-up). It discusses the immunity and legal protection (prohibition against retaliation) granted to persons who report a breach of EU law and policy. The author believes that due to historical events, the employed persons, potential whistleblowers, may be critical of the above idea. According to the author, the success of the existing directive depends on its effects, which will be known only in five years.

Three Anchoring Managerial Mechanisms to Embed Sustainability in Service Organizations

The aim of this discussion paper is to address three major concerns in establishing sustainability in service organizations regarding the intersections among external reporting, internal governance, and business management and innovation. External reporting addresses issues related to sustainability information specificities and determinants, the pros and cons of mandating CSR disclosures, and the need for assurance. The internal management of sustainability refers to the opportunities and challenges for services to introduce sustainable business models and sustainability innovation. Finally, internal governance prioritizes the control process and systems employed by managers to make informed decisions and implement sustainability strategies. By means of an extensive and sophisticated literature review, the article contributes to untangling the opportunities and challenges that services face when adopting external and internal practices to commit to sustainability. Specifically, the paper addresses how company-level mechanisms of transparency, accountability, and innovation are linked to system-level mechanisms of implementation that lead to the adoption of sustainability in service organizations.

Implementing and Monitoring Circular Business Models: An Analysis of Italian SMEs

The transition from a linear to a circular economy (CE) is at the center of the debate among institutions, enterprises, practitioners, and scholars. Small- and medium-sized enterprises (SMEs), with their high presence in the business environment, play a pivotal role in the successful implementation of CE principles. Therefore, this paper aims to understand the state of the CE among Italian SMEs, considering both their different sizes and sectors. This study investigates CE knowledge and application, strategic relevance, benefits from and barriers to the transition towards circular business models, and the use of CE-related performance indicators in management control and external reporting. Through an online survey carried out in cooperation with the Italian Confederation of Craft Trades and Small- and Medium-Sized Enterprises (CNA), we collected primary data from 623 respondents. Findings revealed the existence of cultural, technological, market and financial barriers, which have hampered the adoption of circular practices among Italian SMEs. Poor understanding of CE potential, combined with difficulty in raising public and private funds to finance the transition from linear to circular, are the greatest problems. To overcome such issues, we recommend serious intervention by public institutions, trade and consumer associations, and the higher education system to develop a climate more favorable to the CE.

Hospital profiling using Bayesian decision theory

Background For evaluating the quality of care provided by hospitals, special interest lies in the identification of performance outliers. We study a setting where the decision to classify hospitals as performance outliers or non-outliers is based on the observed result of a single binary quality indicator. Methods We propose to embed the classification of providers into a Bayesian decision theoretical framework which enables the derivation of optimal decision rules with respect to the expected decision consequences. We argue that these consequences depend upon for which pathway to quality improvement the profiling of hospitals takes place. We propose paradigmatic utility functions for the two pathways external reporting and change in care delivery and compare the resulting optimal decision rules with regard to their threshold values, sensitivity and specificity. We further apply them to the area of hip replacement surgeries, for which we re-evaluate hospital performances for five quality indicators in Germany during 2017. Results Based on the utilities we assigned to the classification decisions, the decision rule for change in care delivery classifies more high-volume providers as outliers compared to the decision rule for external reporting, with consequences for both sensitivity and specificity. The re-evaluation of the five quality indicators illustrates that classification decisions are highly dependent upon the underlying utilities. Conclusion Analyzing the classification of hospitals as a decision theoretic problem and considering pathway-specific consequences of decisions can help to derive an appropriate decision rule. Contrasting decision rules with regard to their underlying assumptions about the utilities of classification consequences can be helpful to make implicit assumptions transparent and justifiable.

Comments on Discussion Paper: Fraud and Going Concern in an Audit of Financial Statements: Exploring the Differences Between Public Perceptions About the Role of the Auditor and the Auditor’s Responsibilities in a Financial Statement Audit

We commend the International Auditing and Assurance Standards Board (the Board) on its efforts to determine “whether the auditing standards related to fraud and going concern need to be updated to reflect the rapidly evolving external reporting landscape.” We especially commend the Board on the timeliness of the call for input into these issues in that there is sufficient time to conduct research to further inform questions raised in the Discussion Paper and the questions that will inevitably arise as deliberations continue and progress is made on the project. We note below insights from the extant research literature as they relate to the questions posed in the Discussion Paper, but there remain many unanswered questions. We believe that many members of the Auditing Section of the American Accounting Association stand ready to work with the Board and other stakeholders to inform deliberations in this area.

Establishing an Annual Account for Performers of Independent Activity

The preparation of the Annual account is mandatory for all economic entities in the Republic of North Macedonia. Depending on the type of categorized economic entity, special forms are prepared prescribed by law, in order to summarize them in the Annual account. Performers of independent activity are economic entities that include an individual person – entrepreneur, sole proprietorship an individual person who is engaged in performing agricultural, craft activity, as well as a person who performs a service or free occupation. Accordingly, at the end of the year, it is necessary to prepare an Annual account which contains the Income and Expenses Balance, the Annual Tax Balance for determining the income tax from performing an independent activity and the Income Structure by activities. The main purpose of the paper is to reflect the legislation of a certain part of companies registered in accordance with the law in The Republic of North Macedonia for external reporting and tax purposes. Hence, as a conclusion, the practical preparation of the three forms, implemented in the Annual Account of a sole proprietorship can be seen.

The influence of non-governmental organizations (NGOs) on the development of voluntary sustainability accounting reporting rules

PurposeThe purpose of this paper is to show the impact that non-governmental organizations (NGOs) have on the evolution of Global Reporting Initiative (GRI). GRI is a sustainability report disclosed by business organizations to meet the demands and interests of various stakeholders. These stakeholders’ needs have influenced GRI and its guidelines.Design/methodology/approachThe methodology for this paper is library-based archival research. It is qualitatively and analytically descriptive of prior academic research and published literature on the subject.FindingsSustainability accounting rulemaking has evolved overtime resulting in proliferation of reporting rules. These rules have improved the extent and scope of environmental and economic performances that businesses disclose in GRI.Originality/valueGRI has provided the foundation for integrated reporting (IR). Both GRI and IR have ecological and functional dimensions. Sustainability is functionally inherent in the accounting principle of materiality, when disclosed in external reporting. The ongoing concern of business assumes an organization is systemic and operates as a living entity only when it can provide sustainable performance that benefits stakeholders and society.

Accounting for modern slavery risk in the time of COVID-19: challenges and opportunities

PurposeThe purpose of this paper is to examine how the coronavirus disease 2019 (COVID-19) pandemic affects corporate modern slavery accounting, auditing and accountability, and how a business can take advantage of this situation to ensure a more robust and effective modern slavery response in the long-term.Design/methodology/approachDrawing on recent literature and available statistics about modern slavery in the context of COVID-19 comment is provided on the challenges and opportunities for researchers and business.FindingsGiven the additional invisibility of modern slavery in a COVID-19 environment as victims move into unemployment and back into vulnerable positions where they are exploited the challenge is how accounting, auditing and accountability can help business break this cycle. Capabilities for business to track and trace victims of modern slavery will be reduced because of the pandemic. Opportunities exist for gathering data and building internal awareness about the problem of modern slavery in supply chains and to reassess operational risk and investment in modern slavery reduction. With the pause in external reporting opportunity exists to obtain views of external stakeholders.Research limitations/implicationsBecause of the relatively short period of the COVID-19 pandemic to date, numeric data on impacts are largely unavailable.Originality/valueThis is the first paper to consider the challenges and opportunities of COVID-19 on accounting for modern slavery in business. Directions for future research are also considered.