Country-level corruption and accounting choice: Research &amp; development capitalization under IFRS

Mazzi, Francesco; Slack, Richard; Tsalavoutas, Ioannis; Tsoligkas, Fanis

doi:10.1016/j.bar.2019.02.003

Cited by 47 publications

(44 citation statements)

References 102 publications

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“…Thus, high-quality accounting practices can enable incumbent politicians to better demonstrate political accountability, so as to be able to fend off the attacks of competing politicians [1,9,65]. From credible and transparent financial information, the potential for corruption can be monitored early, so that it can focus on investments to increase economic growth [2,8,24].…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…High-quality accounting practices can increase the credibility of financial information through the presentation of financial reports on a regular and timely basis so as to increase transparency and accountability in the public sector, and have an impact on reducing corruption [32][33][34]. At present several studies focus on the relationship between accounting practices and corruption [1,2,24,35], with overall results showing that reducing corruption can be done by the state countries with high quality accounting practices compared to countries with low quality accounting practices.…”

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confidence: 99%

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Corruption, Accounting Practice and Economic Growth: Evidence of ASEAN Countries

Akbar¹,

Rozak²,

Prawiranegara³

et al. 2020

Proceedings of the 3rd Asia Pacific Management Research Conference (APMRC 2019)

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This study analyzes the impact of corruption on economic growth by including the role of accounting practices. Corruption has a negative influence on economic growth in countries with poor quality accounting practices than in countries with high-quality accounting practices. The new contribution of this study concerns the relationship between the literature between corruption and separate accounting practices regarding economic growth. To our knowledge, this is a study of the first ASEAN countries documenting the impact of corruption on economic growth that depends on the quality of accounting practices in a country. We use cross-section data for 2018 for 11 ASEAN countries. Data on economic growth is taken from the World Bank, while corruption is represented by the Transparency International (TI) Corruption Perception Index (CPI). Meanwhile accounting practices are represented by the strength of auditing standards and financial reporting from the World Economic Forum (WEF), as well as the adoption of the International Public Sector Accounting Standards (IPSAS) in a country from the International Federation of Accountants (IFAC). We apply the Moderated Regression Analysis (MRA) approach for estimating results. The results of studies show that corruption inhibits economic growth. In addition, the strength of auditing standards and financial reporting weakens the relationship between corruption and economic growth. Other results show that the adoption of IPSAS does not weaken the relationship of corruption with economic growth in ASEAN countries. The findings of this study prove that high-quality accounting practices in a country can weaken corruption which can hamper economic growth. Conversely, corruption will easily grow in countries with weak quality accounting practices whose impact will hamper economic growth.

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Section: Hypothesis Developmentmentioning

confidence: 99%

mentioning

confidence: 99%

Corruption, Accounting Practice and Economic Growth: Evidence of ASEAN Countries

Akbar¹,

Rozak²,

Prawiranegara³

et al. 2020

Proceedings of the 3rd Asia Pacific Management Research Conference (APMRC 2019)

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“…Corruption in Indonesia is in danger position. Corruption practices in Indonesia are increasing from year to year, both of the state's financial losses and increasingly systematic quality, more sophisticated and relevant in all aspects of society (Mazzi et al, 2019). The increase in corruption is uncontrolled.…”

Section: Introductionmentioning

confidence: 99%

Mens Rea and State Loses on Corruption Cases: An Analysis of Corruption Court Judgment of Semarang

Kharismadohan

2019

JLLR

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Quality Judges' decisions are decisions that are based on legal considerations according to the facts revealed at the trial, according to the laws and beliefs of the judge without being influenced by various external and internal interventions. The results of this study indicate that the judge in giving the decision still considers the overall elements included in Law No. 31 of 1999 jo. Law No. 20 of 2001 concerning Eradication of Corruption and Amendments to Law Number 31 of 1999 concerning Eradication of Corruption Crime, including elements of the evil spiritual attitude (mens rea). In the case of even being caught, mens rea is still important to prove at the trial stage. Basically, this mens rea becomes an important element to determine the accountability of the perpetrator. However, in cases of corruption, it is often difficult to find mens rea, even though in the examination it indicates that there is a State loss that arises in an event of corruption. The conclusions of this study are the consideration of the judge in giving a decision, always considering the elements of the crime, then things that alleviate, things that are burdensome than the attitude of the defendant including mens rea or malicious intent.

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“…In addition, the level of investor protection is more important than governance mechanisms in enhancing the relation between R&D and performance. At the same context,Mazzi et al (2019) used the time lag of five years for future earnings and they found a positive relationship between R&D and firm performance.…”

mentioning

confidence: 99%

“…In addition,Ahmed and Falk (2006) found that companies that capitalize R&D expenditures have higher market share price compared to companies that expense R&D expenditure. Moreover,Mazzi et al (2019) found that in countries with high corruption level, managers choose to capitalize R&D expenditures compared to expensed it, and this treatment is reflected on future performance.At the same context,Ali et al (2012) analyzed the effect of the accounting treatment for R&D expenditures as period expenses. They found that this treatment affects investors and stock analysts' evaluation for future returns, which leads to lower estimation and lower stock price.…”

mentioning

confidence: 99%

أثر کثافة البحث والتطویر على الأداء المالی وقیمة الشرکة: دراسة تطبیقیة على شرکات الأدویة المدرجة فی البورصة المصریة (باللغة الانجلیزیة)

الدواياتي¹

2020

مجلة الاسکندریة للبحوث المحاسبیة

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This paper examines the relation between Research and Development (R&D) intensity and both of the financial performance and firm value for pharmaceutical companies listed on Egyptian Stock Exchange. Because of the future benefits related to R&D, the researcher examines the relationship between R&D intensity and both of the current and future performance. R&D intensity is measured as the ratio of R&D expenditures to total revenues. The financial performance as a first dependent variable is measured using three accounting-based operating performance measures; Return on asset (ROA), Return on Equity (ROE), and return on sales (ROS). ROA is computed as the ratio of Earnings Before Interest and Tax (EBIT) to total assets; ROE is the ratio of Net income after tax to stockholder equity, and ROS is the ratio of Net income after tax to net sales. With regard to the second dependent variable, firm value, Tobin's Q is used, which is measured by (market value of equity+ book value of liabilities) divided by book value of total assets. Using data of listed pharmaceutical companies on Egyptian stock market for the period between 2000 to 2019, empirical results showed a significant negative relationship between R&D intensity and current performance measured by ROE and ROS, in addition to Tobin's Q. However, the results showed an insignificant negative relation with ROA. On the contrary, Findings indicated a significant positive relationship between R&D intensity and future firm performance measured by ROA only and Tobin's Q, and an insignificant positive relation with ROE and ROS.

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Country-level corruption and accounting choice: Research & development capitalization under IFRS

Cited by 47 publications

References 102 publications

Corruption, Accounting Practice and Economic Growth: Evidence of ASEAN Countries

Corruption, Accounting Practice and Economic Growth: Evidence of ASEAN Countries

Mens Rea and State Loses on Corruption Cases: An Analysis of Corruption Court Judgment of Semarang

أثر کثافة البحث والتطویر على الأداء المالی وقیمة الشرکة: دراسة تطبیقیة على شرکات الأدویة المدرجة فی البورصة المصریة (باللغة الانجلیزیة)

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