Implementing aspects of management accounting in a low volume manufacturing engineering concern

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Introducing International Accounting Standards to an emerging capital market:Relative familiarity and language effect in Egypt

The purpose of this study is to assess the effect of relative familiarity and language accessibility on the International Accounting Standards (IASs) disclosures when IASs are first introduced in an emerging capital market. The study focuses on the annual reports of listed non-financial companies in Egypt when IASs were first introduced. The method used applies a disclosure index measurement to a sample of listed company annual reports and evaluates relative compliance with IASs in relation to corporate characteristics. The results show that for relatively less familiar requirements of IASs, the extent of compliance is related to the type of audit firm used and to the presence of a specific statement of compliance with IASs. A lower degree of compliance with less familiar IASs disclosure is observed consistently across a range of company characteristics. Consideration of agency theory and capital need theory would lead to prior expectation of a distinction in disclosure practices between different categories of companies. The results were, therefore, counterintuitive to expectations where the regulations were unfamiliar or not available in the native language, indicating that new variables have to be considered and additional theoretical explanations have to be found in future disclosure studies on emerging capital markets. © 2003 Elsevier Science Inc. All rights reserved.

Measuring accounting disclosure in a period of complex changes:the case of Egypt

Significant changes in accounting disclosure are observed in periods of economic change such as those relating to emerging capital markets and programs of privatization. Measurement of the level of accounting disclosure should ideally be designed to capture the complexity of change in order to give insight and explanation to match the causes and consequences of change. This paper shows the added interpretive value in subdividing the disclosure checklist to reflect the requirements of national accounting regulations, the location of disclosure items in the annual report, and limitations on the availability of regulations in official translation to the local language. Defining targeted disclosure categories leads to significance testing of specific aspects of changes in accounting disclosure in the Egyptian capital market in the 1990s. Strong correlation of disclosure with the presence of majority government ownership of the company and the relative activity of share trading supports the applicability of political costs and capital need theories, respectively. The relation between International Accounting Standards (IASs) disclosure and the type of audit firm points to additional theoretical explanations, including relative familiarity with the legislation and compliance features identifiable with the emerging capital market. The approach described in this paper has the potential for enhancing understanding of the complexity of accounting change in other emerging capital markets and developing economies.

Special issue of accounting forum:social and environmental accounting and reporting in emerging and less developed countries

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Accounting for derivatives:an evaluation of reporting practice by UK banks

In 1998 the Accounting Standards Board (ASB) published FRS 13, ‘Derivatives and other Financial Instruments: Disclosures’. This laid down the requirements for disclosures of an entity’s policies, objectives and strategies in using financial instruments, their impact on its risk, performance and financial condition, and details of how risks are managed. FRS 13 became effective in March 1999, and this paper uses the 1999 annual reports of UK banks to evaluate the usefulness of disclosures from a user’s perspective. Usefulness is measured in terms of the criteria of materiality, relevance, reliability, comparability and understandability as defined in the ASB’s Statement of Principles (ASB, 1999). Our findings suggest that the narrative disclosures are generic in nature, the numerical data incomplete and not always comparable, and that it is difficult for the user to combine both narrative and numerical information in order to assess the banks’ risk profile. Our overall conclusion is therefore that current UK financial reporting practices are of limited help to users wishing to assess the scale of an institution’s financial risk exposure.

Related party transactions, corporate governance and accounting quality in Greece

Related Party Transactions (RPTs) have been considered recently in research as a phenomenon which is associated with several financial scandals, shareholder’s wealth expropriation and is used for earnings management (EM) purposes by the reporting entity. This study aimed to: (i) assess the extent of EM and RPTs i Greece; (ii) investigate the association between RPTs and EM; (iii) investigate the association between corporate governance and EM; (iv) investigate the association between corporate governance and RPTs; and (v) investigate the impact of RPTs on Accounting Quality. Greece was selected for this study as it provides a special context due to poor investor protection, high levels of EM and unhealthy financial reporting environment where wealth extraction and EM are more likely. This study examines the relationship between earnings management and RPTs for the firms listed on the Athens Stock Exchange (ASE). Moreover, it examines the association between earnings management and corporate governance activities. The results show a negative and significant relationship between EM and RPTs. This finding does not support the conclusion that RPTs are necessarily conducted to mask fraud or the extraction of firm resources. The results show that firms audited by one of the Big 4 audit firms are associated with less EM. Additionally, the study investigates the relationship between RPTs and accounting quality. The findings show that that there is no significant difference in accounting quality between RPTs firms and non-RPTs firms. This study contributes to the EM, accounting quality and corporate governance literatures. This research suggests recommendations for researchers, data providers and policy makers on ways to reduce the problems associated with RPTs.

Practitioners are from Mars; academics are from Venus? An investigation of the research-practice gap in management accounting

Purpose: The aim of this paper is to identify and gain insights into the significance of barriers contributing to the purported "gap" between academic management accounting research and practice. Design/methodology/approach: Drawing on diffusion of innovations theory, this study collects and analyses data from a questionnaire survey and follow-up interviews with 19 representatives of the four principal professional accounting bodies in Australia. Findings: Professional accounting bodies perceive the gap between academic research and practice in management accounting to be of limited concern to practitioners. The two most significant barriers to research utilisation by practitioners are identified as: difficulties in understanding academic research papers; and limited access to research findings. In acting as a conduit between the worlds of academia and practice, professional bodies have an important role to play by demonstrating the mutual value to both academics and practitioners resulting from a closer engagement between MA research and practice. Research limitations/implications: As one of the few empirically-based, theoretically informed investigations exploring the research-practice gap in management accounting, this study provides insights rather than "answers". Its findings therefore serve as a foundational basis for further empirical and theoretical enquiry. Originality/value: This study contributes to the conversation about the "research-practice gap" in management accounting by adopting a distinct theoretical vantage point to organize, analyse and interpret empirical evidence obtained from Australian professional accounting bodies about management accounting practice. © Emerald Group Publishing Limited.

A framework of best practice of continuing professional development for the accounting profession

The International Accounting Education Standards Board (IAESB) places a strong emphasis on individual professionals taking responsibility for their Continuing Professional Development (CPD). On the other hand, the roles performed by professional accountants have evolved out of practical necessity to 'best' suit the diverse needs of business in a global economy. This diversity has meant that professional accountants are seen in highly specialised roles requiring diverse skill sets. In order to enhance the contribution of the accountant as a knowledge professional for business, it follows that CPD that leverages off an individual's experience should be designed to meet the needs of professionals across the different specialised roles within the profession. In doing so the project identifies how CPD should differ across roles and levels of organisational responsibility for accounting professionals. The study also makes a number of policy recommendations to IAESB and IFAC. © 2013 © 2013 Taylor & Francis.

Theorizing accounting and other [calculative] practices in private equity:Experimenting with Schatzki’s ‘site’ ontology

This thesis contributes to social studies of finance and accounting (Vollmer, Mennicken, & Preda, 2009) and the practice theory literatures (Feldman & Orlikowski, 2011) by experimenting (Baxter & Chua, 2008) with concepts developed by Theodore Schatzki and demonstrating their relevance and usefulness in theorizing and explaining accounting and other organizational phenomena. Influenced by Schatzki, I have undertaken a sociological investigation of the practices, arrangements, and nexuses forming (part of) the social ‘site’ of private equity (PE). I have examined and explained the organization of practices within the PE industry. More specifically, I have sought to throw light on the practice organizations animating various PE practices. I have problematized a particular aspect of Schatzki’s practice organization framework: ‘general understanding’, which has so far been poorly understood and taken for granted in the accounting literature. I have tried to further explore the concept to clarify important definitional issues surrounding its empirical application. In investigating the forms of accounting and control practices in PE firms and how they link with other practices forming part of the ‘site’, I have sought to explain how the ‘situated functionality’ of accounting is ‘prefigured’ by its ‘dispersed’ nature. In doing so, this thesis addresses the recent calls for research on accounting and control practices within financial services firms. This thesis contributes to the social studies of finance and accounting literature also by opening the blackbox of investment [e]valuation practices prevalent in the PE industry. I theorize the due diligence of PE funds as a complex of linked calculative practices and bring to fore the important aspects of ‘practical intelligibility’ of the investment professionals undertaking investment evaluation. I also identify and differentiate the ‘causal’ and ‘prefigurational’ relations between investment evaluation practices and the material entities ‘constituting’ those practices. Moreover, I demonstrate the role of practice memory in those practices. Finally, the thesis also contributes to the practice theory literature by identifying and attempting to clarify and/or improve the poorly defined and/or underdeveloped concepts of Schatzki’s ‘site’ ontology framework.

Market risk reporting by the world's top banks:evidence on the diversity of reporting practice and the implications for international accounting harmonisation

The increasing adoption of international accounting standards and global convergence of accounting regulations is frequently heralded as serving to reduce diversity in financial reporting practice. In a process said to be driven in large part by the interests of international business and global financial markets, one might expect the greatest degree of convergence to be found amongst the world’s largest multinational financial corporations. This paper challenges such claims and presumptions. Its content analysis of longitudinal data for the period 2000-2006 reveals substantial, on going diversity in the market risk disclosure practices, both numerical and narrative, of the world’s top-25 banks. The significance of such findings is reinforced by the sheer scale of the banking sector’s risk exposures that have been subsequently revealed in the current global financial crisis. The variations in disclosure practices documented in the paper apply both across and within national boundaries, leading to a firm conclusion that, at least in terms of market risk reporting, progress towards international harmonisation remains rather more apparent than real.