The Imperfect Match of Public Accountability of State-Owned Enterprises and Private-Sector-Type Financial Reporting: The Case of Italy

Capalbo, Franscesco; Palumbo, Ricardo

doi:10.14453/aabfj.v7i4.4

Cited by 7 publications

(6 citation statements)

References 21 publications

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“…Probity audits in university x can prevent fraud in the procurement of goods and services through the auditee selection process which has been prioritized from the beginning with a high risk. This is in line with the results of research conducted by Capalbo & Palumbo (2012), Doig (2014), Keerasuntonpong, Manowan, & Shutibhinyo (2019), Silva (2016), and Westhausen (2017) conclude that the probability audit is effective in terms of preventing and detecting fraud because it is carried out in real-time when the process of procuring goods and services is carried out. This is an effort so that the procurement process can run according to the contract and does not cause potential findings or fraud.…”

Section: Resultssupporting

confidence: 84%

Fraud Prevention in the Perspective of Probity Audit (The Case Study of University X)

2021

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Goods and services procurement in the university sector is a big chance towards fraud case occurrence. Corruption in the university environment resulted in state loss in the amount of two billion rupiahs. Therefore, The internal auditor of University X implements a probity audit as one effort to materialize the procurement system with low fraud possibility. The purpose of this study is to contribute to the understanding of fraud prevention using probity audits on goods and services procurement in the university sector. This research was carried out using a qualitative approach, with a case study method. The data collection was conducted by document analysis and interviews. The data obtained is then reduced, identified, and analyzed. The results conclude that the probity audit in University X is a real-time audit which one conducted in the construction and maintenance stages. Based on the internal auditor evaluation result, a probity audit rated sufficiently to prevent fraud in the goods and services procurement process in the University X.

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Section: Resultssupporting

confidence: 84%

Fraud Prevention in the Perspective of Probity Audit (The Case Study of University X)

2021

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“…For many years, thanks to the prevailing focus on their private legal form, these entities had the opportunity to comply just with company law requirements, gaining the benefits of softer normative and budgetary regulations that have allowed them to manage public funds with greater flexibility and discretion than is typically permitted of public entities. This has allowed their managers a significant degree of freedom in duties like hiring, supplier selection, remuneration policies, and CEO appointments (Capalbo and Palumbo, 2013), making these companies a perfect tool to gain political consensus. More recently, the Italian parliament, given the widely shared disfavour for SOEs (Corte dei Conti, 2013, p. 101), has tightened the conditions under which public authorities can set up corporations and has extended to existing entities most of the regulations that typically rule the management of public entities (law 244/2007 and law 19/2009).…”

Section: Institutional Backgroundmentioning

confidence: 99%

Accrual-based earnings management in state owned companies

Capalbo

Frino

Mollica

et al. 2014

Acc Auditing Accountability J

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Purpose -Opposition to transnational calls for the adoption of accrual-based accounting in the public sector may stem from arguments that it is associated with poor earnings quality. The purpose of this paper is to determine whether state owned enterprises (SOEs) operating under accrual-based accounting manage their earnings, whether it is more prevalent vis-a`-vis privately owned enterprises (POEs) and the conditions under which it is more likely to occur. Design/methodology/approach -This paper measures earnings management for a large sample of unlisted Italian SOEs and POEs using a framework developed by Stubben (2010). The authors use regression analysis to estimate the variables which predict abnormal accruals including firm size, leverage and profitability. Findings -The authors find no evidence that the level of state ownership (SO) is positively correlated with accrual-based earnings management. The authors also provide evidence that earnings management by SOEs decreases with firm size and increases with profitability. Research limitations/implications -While the study is the first to examine earnings management in a public sector accrual accounting environment for a sample of European firms, namely Italian firms, the authors call for more research into this issue examining public entities in other European Union (EU) member states or public entities other than SOEs. Practical implications -The EU recently introduced a new transnational accounting directive in which it prescribes the preparation of financial statements based on accrual accounting for all European public sector entities, arguing that it reduces the window dressing that is allowed by cash accounting. Since Italian SOEs already prepare their accounts on an accruals-basis, by analysing their accounting behaviour the authors are able to determine the variables which predict when earning management is more likely to occur in a public sector accrual accounting environment, and therefore the authors provide guidance which may be useful in shaping the transition process from cash accounting to accrual accounting by identifying the types of entities whose accounts should be subject to greater regulatory scrutiny. A better understanding of the relation between SO and earnings management will provide insight into public sector corporate governance and aid in the acceptance of transnational regulation that would otherwise significantly alter current accounting practices and possibly be opposed at a national level.

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“…71 of 2008 in conjunction with other specific sector regulations. Capalbo and Palumbo (2013) also support that any entity operating as a limited company in the market should ensure adherence to all the accounting requirements as established through appropriate legislations on the general economic situation and for the third parties' best interests.…”

Section: Literature Review 21 Practices Of Financial Reportingmentioning

confidence: 93%

Assessment of the Application of Ifrs 9 Requirements by South African State-Owned Entities

Mapulane,

Adelowotan,

Barnes

2023

EJEF

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The global financial crisis in 2008 nearly resulted in a possible total collapse in the financial markets, which resulted in the development of new International Financial Reporting Standard (IFRS) 9: Financial Instrument. This study’s objective is to assess the quality information presented in the accounting policies in relation to IFRS 9: Financial Instruments, by the selected South African State-Owned Entities (SA SOEs) listed in Schedule 2 of the Public Finance Management Act (PFMA). The researchers have been interested in the factors of implementation and compliance of IFRS, though most of these studies are dominated by Asian and European countries with few for Africa. Using qualitative content analysis, the authors assessed the quality information in the accounting policies in relation to IFRS 9 against SOEs’ financial reporting. This study found that most of the SOEs applied the requirements of the IFRS 9 standard in terms of classification and measurement of financial assets and liabilities, though there is still room for improvement on the quality of the information provided by SOEs in their financial reports. The improvement on the quality of financial reporting is critical, as it could in turn help to build trust and confidence of investors to attract further investment.

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The Imperfect Match of Public Accountability of State-Owned Enterprises and Private-Sector-Type Financial Reporting: The Case of Italy

Cited by 7 publications

References 21 publications

Fraud Prevention in the Perspective of Probity Audit (The Case Study of University X)

Fraud Prevention in the Perspective of Probity Audit (The Case Study of University X)

Accrual-based earnings management in state owned companies

Assessment of the Application of Ifrs 9 Requirements by South African State-Owned Entities

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