Financial Reporting Problems: The Analysis of Quality of Disclosure and the Measurement System of the Traditional Accounting (original) (raw)
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The study aims at introducing the influence of disclosure in financial statements on the economical Jordanian firms in the presence of international accounting standards. It also aims at introducing the role of the variables of the study. To achieve these goals, the questionnaire has been carefully studied and developed. The reliability and the consistency coefficient have been checked, too. After collecting questionnaires, they have been coded, entered into a computer to be statistically processed by using SPSS. Here are the results of the study in accordance with its questions and hypothesis. Disclosure and openness affect the fairness of the financial statements. Commitment to international accounting standards creates a balance between the interests of the administration and the interests of share holders and commercial partners. Commitment to disclosure in accordance to international accounting standards attracts new investors. The information resulted through disclosur...
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Financial reporting purposes stem from information needs and demands of outside the organization users. The main goal is economic effects of events and financial operations on the status and performance of the business unit for help to foreign entities and financial decision making in connection with the business unit. This research deals to investigate the relationship between the quality of financial reporting and investment efficiency. Expected higher quality of financial reporting improve investment performance by reducing information asymmetries between business unit and external suppliers. Quality of financial reporting can improve investment efficiency from two ways : First, through reducing information asymmetries between company and investors, thus reduce financial costs. Second, through reducing information asymmetries between investors and managers, thus reduce monitoring costs and improving project selection.
VALUE MEASUREMENT AND DISCLOSURES IN FAIR VALUE ACCOUNTING
2013
objectively determine quality of financial reporting which have continued for many decades. Quality characteristics are the bedrock on which accounting theories are formulated, since it is important to prepare and present financial statement with a view to meeting its objectives. Although, this study is literature approach, having explored rationale for fair value accounting, IFRS 13 sets out a framework for measuring fair value; and requires disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, the IFRS 13 establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques. The process of valuing an instrument to its fair value depends on how easy it is to determine a price for that instrument. Since fair value is the price at which a willing buyer and seller agree to trade, finding the right price is important to valuation.
The Modern Corporation Statement on Accounting
SSRN Electronic Journal
A number of regulatory initiatives on the national, international and EU levels both foster and fortify the principle of Maximizing Shareholder Value (MSV) in corporate governance. This tendency can be clearly seen in such areas as financial accounting standards and various soft and hard law initiatives pertaining to corporate governance that have flourished in recent decades. These have created a new type of accountability for managers of listed corporations as will be exemplified below. One of the most important regulatory changes over this period was when the EU opted for International Financial Reporting Standards (IFRS) as a basis for financial reporting for the accounts of all listed, EU-based corporations in 2005. These accounting standards, amounting to quasi legislation, are issued by a private sector body-the International Accounting Standards Board (IASB). Other important regulatory changes include the various national 'corporate governance codes' that have mushroomed since the early 1990s. Although such codes pertain to member states, the EU remains the main body prescribing most new hard-law corporate governance regulation within the union, for example, by means of the 13 company law directives issued so far. A number of characteristics of these developments can be explicitly linked to the ascendance of MSV in corporate governance: 1. A new landscape of norm setters. A clear tendency in accounting and corporate governance regulation that started in the 1970s but accelerated from the 1990s is the transfer of control over regulatory initiatives and content from elected assemblies to bodies consisting of experts that stand outside the democratic process. As noted a clear example is financial accounting regulation. While the EU retained the right to ratify standards issued by the IASB, they are in practice initiated and developed by a private institution that can develop its agenda outside of democratic control (Chiapello and Medjad, 2009). Exacerbating this move from democratic jurisdiction, the individuals participating in the norm-setting, tend to be closely associated with "preparers" and "investors". This includes, for example, former executives of global companies, former partners of the multinational accounting firms and former investment professionals. 2. Changing idea of the purpose of financial accounting. Financial accounting as this was understood theoretically and taught in many business schools for the greater part of the 20th century was characterized by the notion that the 'accounting entity', was a separate entity, distinct from both shareholders and other stakeholders (Mattessich, 2008). The purpose of accounting in this view was to hold management accountable to stakeholders; and a strong emphasis was laid on measuring company performance and not overvaluing assets to the detriment of creditors (Whittington, 2008). The IASB has gradually moved away from this position to more narrowly focus on financial reporting as a corporate tool for providing absentee investors and creditors with information to support their decisions to invest or not in the corporations' securities. This purpose is explicitly expressed in IASB's present conceptual framework (last updated 2010) that governs the development of accounting standards. Hence, the express purpose of financial reporting according to the most important standard setter for EU-based listed corporations is to support absentee investors (Zeff, 2012), presumably with a strong interest in MSV (Lazonick and O'Sullivan, 2000), signaling the primacy of this group. 3. Shifting methods of financial accounting. Based on the new premise that the main purpose of financial reporting is to provide information to the capital markets, accounting standards are developed and legitimized based on their ability to convey the value of corporations (Power, 2010). This has led to the introduction of so-called fair-value accounting (FVA), implying that assets are valued at their market value, as mandatory or as an option for important classes of assets such as financial instruments (see the standard IAS 39 and the forthcoming standard IFRS 9), intangible assets (IAS 38), property plant and equipment (IAS 16), investment property (IAS 40) and biological assets (IAS 41). This represents a radical shift in how European listed corporations account for their assets and liabilities. 1/3 The Modern Corporation. Statement on Accounting This statement has been coordinated together with other disciplinary statement by Dr. Jeroen Veldman, Modern Corporation Project, which is hosted by Cass Business School, City University, London to support the Purpose of the Corporation Project: purposeofcorporation.org. It may be endorsed at: themoderncorporation.org 4. A new set of soft-law standards. The 1990s and early 2000s saw an explosion of so-called corporate governance codes in European countries, typically backed by the various states and stock exchanges. These define standards of what is considered good governance and operate on the principle of 'comply or explain'; meaning that if the standards are not followed, management and the board must provide an account of why that is the case. While codes vary in detail among countries, the European corporate governance code projects were all more or less inspired by the British Cadbury Report (1992) and subsequent UK-based developments which culminated in the current UK Corporate Governance Code (2012). They thus share noticeable similarities in issues covered. The main focus of these codes is to, by various measures, require the board to act in the best interests of shareholders and this has seen an increase in the relative power of institutional investors (Thomsen, 2006) and in the influence of capital markets as a whole. 5. A new accountability. The way corporations are accounted for is tremendously important for shaping the way investors and other stakeholders see and assess them (Hines, 1988; Miller and O'Leary, 1987). A new understanding of the purpose of financial accounting with adjoining accounting methods thus creates powerful incentives for corporate managers to adjust their actions accordingly (Watts and Zimmerman, 1986), to perform well according to those dimensions that are accounted for and therefore observed (Kaplan and Norton, 1992). Similarly, corporate governance codes direct the gaze of investors and media on specific dimensions by which corporate managements must deliver or suffer consequences (Westphal and Zajac, 1998). Financial accounting standards and soft-law initiatives like corporate governance codes thus powerfully define the domains of accountability of corporate management in ways that support MSV. Such developments over recent decades can result in insidious changes whereby a highly contestable, accounting-based measure of business success can become an end in itself at the expense of more pluralist and socially accountable stewardship of companies.
Value Relevance of Financial Reporting: In Pre IFRS, Post IFRS and Transition Regime
JISR management and social sciences & economics
The objective of this study is to test the influence of value relevance ofaccounting information (EPS, BV, CF, ROE) on the market share value of non-financial sector of Pakistan Stock Exchange (PSX) listed firms in the Pre & Post IFRS implementation period and transition regime. The study analyses the effectiveness of the quality measures of accounting information for the future prediction of market stock price and for investors to make better decisions for future investment. The targeted population of this study is the non-financial sector of PSX. The targeted sample is based on 41 non-financial public listed companies of PSX. The sample is based on those reported companies whose data is consecutively available for 18 years from 2001 to 2018. This study period has been chosen because this period covers the Pre and Post IFRS application period of Pakistan’s firms. The panel data and Ohlson (1995) price model are applied in the study. The findings conclude that the R-Square value of ...