Search results for "Accrual"
showing 8 items of 28 documents
Busyness of audit committee directors and quality of financial information in India
2016
The audit committees, as a part of the internal corporate governance mechanisms, play an important role to enhance the financial reporting quality. The busyness of audit committee members of a firm in boards and committees of other firms can affect its independent functioning, ceteris paribus. The current study examines, first, the association between multiple directorships of audit committee members and quality of financial reporting in India, second, whether endogenously determined busyness limits of busyness of the audit committee members provide better insights than those exogenously mandated by regulators. The study finds that endogenously determined busyness limits of sub-samples and …
External investigations and disciplinary sanctions against auditors: the impact on audit quality
2015
In this paper, we provide empirical evidence for the impact of disciplinary sanctions imposed on Spanish auditing firms and their engagement partners. The disciplinary sanctions resulted from external investigations, which revealed misapplications of auditing standards. In particular, we evaluate (a) the efficacy of the external supervisory board in identifying low-quality auditors and (b) the effectiveness of the disciplinary system in improving the quality of subsequent statutory audits performed by the sanctioned auditors. We employ two earnings management indicators as proxies for audit quality: loss avoidance through extraordinary items and abnormal accruals. And we compare these measu…
From Rhetoric to Practice: The Case of Spanish Local Government Reforms
2013
This paper aims to explore what performance management tools are implemented in practice in Spanish local governments and whether they have led to an improvement in public management and accountability. We also analyse the usefulness of performance reporting, comparing it with that of accrual financial reporting. The results show that most of the entities that have introduced performance indicators do not use them for decision-making or accountability. After two decades of reforms in financial and management systems, financial directors still consider that budgetary reporting is the most useful, basically because the control of expenditure is still based on the budget.
From Cash to Accrual Accounting: The seminal case of the Sicilian Regional Public Bodies
2019
The Italian public sector has been traditionally characterised by a cash-based and compliance-oriented governmental accounting, principally aimed at supporting the budgetary control by the legislative body. Over the last few decades, however, a new movement has been spreading around the world, casting doubt on the potentialities and advantages of the traditional accounting system in favour of an accrual basis one. This paper traces the progressive introduction of a complete accrual accounting by the Sicilian Regional public bodies – within the context of international and national public management changes – pursuing the ultimate goal to improve efficiency, accountability and transparency. …
Earnings management of target firms and deal premiums: The role of industry relatedness
2022
This paper contributes to the merger and acquisitions (M&A) literature by providing evidence for the role of industry relatedness in the association between target firms' earnings management (EM) before the deal and the premium offered by the acquirer. We argue that familiarity with the industry's policies and practices is a crucial factor that helps acquirers to see through targets' EM. Our evidence supports this prediction in relation to accounting manipulation as we observe that the income increasing accrual manipulation of the target results in significantly higher premiums offered by acquirers in interindustry deals, which is not the case when targets and acquirers belong to the same i…
The predictive ability and value relevance of accounting measures
2011
Accepted version of an article published in the journal: International Journal of Economics and Accounting. Also available from the publisher at: http://dx.doi.org/10.1504/IJEA.2011.041894 Empirical accounting research sometimes assumes that the value relevance of accounting variables can be indirectly assessed by studying the ability of the variables to forecast future cash flow and earnings. This study investigates the relationships between short-term cash flow and earnings prediction tests and value relevance analyses. I find that earnings prediction tests might be good substitutes for value relevance analyses, whereas cash flow prediction tests merely provide indications with respect to…
Differences in estimates of change of bone accrual and body composition in children because of scan mode selection with the prodigy densitometer.
2004
Abstract Girls of age 10–13 yr with Tanner stage I–III maturation status ( n = 155) were measured using the Prodigy (GE Lunar) densitometer. Bone area (BA), bone mineral content (BMC), and bone mineral density (BMD) were assessed for the whole body, lumbar spine, and proximal femur using the Thin (T) and Standard (S) scan modes at years 1 and 3 of the study. The differences obtained between the T and S mode at year 1 were 1–2% for the lumbar spine and proximal femur and 5–11% for the whole body. For those girls whose default mode changed from T at year 1 to S mode at year 3, the estimated gain in BA, BMC, and BMD was 3.4%, 7.6%, and 3.1% respectively, lower than that obtained when scanning …
Consequences of Justifications of Assessments in French Expanded Audit Reports
2018
Since 2003, French auditors must disclose justifications of assessments (JOAs) in expanded audit reports. Like critical audit matters recently introduced in the US and key audit matters introduced by international standard setters, the purpose of JOAs is to enhance the informative value of audit reports. Based on French audit reports issued from 2002 to 2011, we analyze the impact of first-time implementation of JOAs, and the impact of new JOAs in subsequent years, on investors (measured by abnormal returns and abnormal trading volume) and on the audit (measured by audit report lag, abnormal accruals, and audit fees). For both first-time implementation of JOAs and new JOAs in subsequent yea…