The Effect of Economic Conditions on Accounting Conservatism under IFRS in Europe

Cerqueira, António; Pereira, Cláudia

doi:10.2478/revecp-2020-0007

Cited by 17 publications

(20 citation statements)

References 42 publications

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“…For instance, Cahan (1992) postulate that managers of companies being prosecuted for violation of antitrust will have incentive to reduce the possibility of an unfavorable ruling and the costs associated with it using accounting procedures that produce abnormally low levels of income. Pereira and Cerqueira (2020) conjecture that to avoid reporting bad results to stakeholders, managers tend to get involved in accounting fraud because of International Financial Reporting Standards flexibility.…”

Section: Theoretical and Conceptual Backgroundmentioning

confidence: 99%

“…The Z-Score measure company liquidity and thus, can proximity the state of bankruptcy of a company which can be directly associated with the earnings (Pustylnick, 2015). Therefore, managers of poor performing companies may be engaged in FSM to show a better financial performance (Pereira and Cerqueira, 2020). Based on the deteriorating financial performance of the sampled listed companies (especially extractive mining companies), managers may commit FSM to show better financial performance.…”

Section: Financial Statements Manipulationmentioning

confidence: 99%

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Fraudulent financial reporting and related party transactions

Kabwe

2023

IJRBS

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The study assessed the possibility of accounting fraud among Zambian listed companies with a focus on the mining sector and the relationship between related party transactions (RPTs) and financial statement manipulation (FSM). The financial statements (2012 to 2020) of listed companies were analysed to detect accounting fraud using the M-score and the Z-score. Descriptive statistics were used to explain the extent of FSM. The Chi-Square test of independence was employed to test the relationship between FSM and RPTs. Both the Z-Score and M-Score indicate that the mining companies were possibly involved in FSM. There is a relationship between the FSM and RPTs. The Total Accruals to Total Assets, Days in Sales in Receivables Index and Sales Growth Index show that revenue and profits were the most manipulated. The RPTs disclosures were the lowest for mining companies. Relevant authorities should not neglect FSM as a form of fraud despite the routine external audit of financial statements. There is the potential loss of tax revenue through accounting fraud.

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Section: Theoretical and Conceptual Backgroundmentioning

confidence: 99%

Section: Financial Statements Manipulationmentioning

confidence: 99%

Fraudulent financial reporting and related party transactions

Kabwe

2023

IJRBS

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“…Accounting conservatism is one of the fundamental basic principles of accounting that has emerged alongside the development of accounting itself and remains of interest to researchers in many studies due to its significant influence on determining business results and the financial status of companies. Cerqueira and Pereira (2020) argue that several previous studies have dealt with many aspects of accounting conservatism in terms of various factors affecting it, such as the size of the company, the company's activities, the financial markets in which a company is registered, the accounting standards used, and many other factors that affect the level of accounting conservatism. Due to the different accounting treatment of companies affiliated with the financial sector, namely banks and insurance companies, these studies have been used when measuring accounting conservatism and the factors affecting the data of non-financial companies.…”

Section: Literature Reviewmentioning

confidence: 99%

The effects of COVID-19 on conditional accounting conservatism in developing countries: evidence from Jordan

Al-Qudah

Qudah

Hamour

et al. 2022

Cogent Business & Management

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The purpose of this study was to look at the impacts of COVID-19 on the Jordanian banking industry and how it affects the use of the conditional accounting conservatism concept. This study's sample consists of 16 banking institutions listed on the Amman Stock Exchange (ASE) and 64 observations from December 2018 to July 2021. A multiple linear regression model was used to evaluate the hypotheses, and the results show that COVID-19 had a substantial beneficial influence on conditional conservatism in the Jordanian banking industry over this period. Furthermore, when uncertainty grows, the function of conservatism becomes more significant, as more trustworthy accounting information allows investors to properly judge a company's past and future performance. The research suggests that the relevant authorities offer instructions for accountants that may be used in practice to attain the appropriate degree of accounting conservatism, under international standards and local laws and regulations. The current study is the first to be conducted in a developing nation, such as Jordan, and the findings may be useful to other developing nations.

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“…One of the main reasons is related to the "failures of economic enterprises have raised a number of credibility questions about Accounting as a System of authentication and the reliability of its report in reaching optimal management and investment decisions" (Akpanuko & Umoren, 2018, p. 292). Several studies relate accounting standards and/or practices to economic crises because it is expected that the context of economic crises affects the AEM-related behavior (Silva et al, 2014, Cerqueira & Pereira, 2020. Another reason is related to the financial scandals that occurred in the United States of America and Europe in the early twenty-first century (Parada & Sanhueza, 2009).…”

Section: Introductionmentioning

confidence: 99%

Accounting-based earnings management: motivations, players, implementation, and detection from the perspective of certified accountants

Monteiro¹,

Rua²,

Pereira³

et al. 2022

10.5267/j.ac

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In the scope of Behavioral Decision Theory, Accounting-based Earnings Management (AEM) may compromise the success of decision making of a firm’s stakeholders. Given that AEM constitutes a barrier to the decision-making process, we aim to identify the main motivations of the players of AEM. Besides, in this study we also intend to analyze the implementing and detecting of AEM practices in financial statements and to evaluate whether individual characteristics influence the ability to implement and detect creative accounting practices. To achieve the proposed objectives, a quantitative methodology approach was used. A survey was applied to Portuguese’s certified accountants. In the data analyses, we applied the univariate and multiple analysis. Based on 159 observations, we find that most certified accountants indicate the main motivations are related to the reduction of the cost of capital and tax burden, the strength of the “code law system”, and that the managers are the main players. Our evidence also shows that the AEM practices are easily implemented and detected in the financial statements. In addition, we find that age, professional experience, and academic qualifications of the certified accountant tend to have an impact on the ability to implement AEM in the financial statements, contrary to gender and training area. Furthermore, gender and academic financial statements. This research is important for the development of the literature, entities that operate in accounting standardization and for the users of accounting and financial information. This study contributes to a better understanding of AEM practice, and it originally combines individual characteristics of accounting professionals with AEM practice.

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The Effect of Economic Conditions on Accounting Conservatism under IFRS in Europe

Cited by 17 publications

References 42 publications

Fraudulent financial reporting and related party transactions

Fraudulent financial reporting and related party transactions

The effects of COVID-19 on conditional accounting conservatism in developing countries: evidence from Jordan

Accounting-based earnings management: motivations, players, implementation, and detection from the perspective of certified accountants

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