The Power of Accounting

Lewis, Lawrence

doi:10.4324/9780203129098

Cited by 3 publications

(2 citation statements)

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“…If financial statement similarity captures financial reporting comparability, firms with lower FSS are expected to receive more SEC scrutiny and therefore be more likely to receive comment letters, especially on financial reporting issues. Moreover, the SEC increased cross-firm comparisons after launching RoboCop in 2013 (Lewis, 2012), so the predictability of FSS for the likelihood of SEC comment letters should increase after RoboCop.…”

Section: Sec Comment Lettersmentioning

confidence: 99%

“…We expect a firm with lower financial statement similarity to its industry peers to be more likely to attract SEC attention and therefore receive a comment letter. In 2013, the SEC launched the Accounting Quality Model (nicknamed "RoboCop" by the media), which aims to "discern whether a registrant's financial statements stick out from the pack" in its industry (Jones, 2013;Lewis, 2012;Novack, 2013). Although the exact model used by RoboCop is secret, the SEC has anecdotally increased crossfirm comparisons in screening firms for further scrutiny.…”

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confidence: 99%

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Financial statement similarity

Brown¹,

Tucker

2023

Contemporary Accting Res

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We propose financial statement similarity as a measure of financial reporting comparability. The firm‐pair version of our measure reflects the degree to which two firms report similar relations within their financial statement items; this version can help managers and market participants identify peer firms. The firm‐year version of our measure reflects the degree to which a firm reports financial statement relations that are similar to other members of its industry; this version can help market participants, regulators, and auditors screen firms for further attention. Our measure uses the presence and amounts of almost all financial items reported by a firm. We validate our measure in four sets of analyses to establish concurrent validity and in three sets of analyses to establish predictive validity. In all these tests, we contrast our measure with the comparability measure in De Franco et al. (2011) and a multivariate measure that considers the presence, but not amounts, of financial statement items. Our measure outperforms the alternatives and can be a useful tool for users.This article is protected by copyright. All rights reserved.

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Section: Sec Comment Lettersmentioning

confidence: 99%

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confidence: 99%

Financial statement similarity

Brown¹,

Tucker

2023

Contemporary Accting Res

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Discounts as a Barrier to Change in Our Food Systems

Jack

2023

Sociological Research Online

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Despite the wealth of discussion and ideas on how food systems might change, and all the plans and schemes created to provide solutions to unsustainable food systems, very few researchers have examined the accounting practices that define socio-economic relationships around food. In this article, I show that the imperative for each entity in food supply networks to obtain a discount on costs involved in food supply to survive on very thin margins, inhibits large-scale change. The approach here is introductory, providing an explanation of the accounting issues involved for a non-accounting audience, and an illustrative case study is used to show the embeddedness of always ‘getting a discount’. The case study is drawn from interview data with those involved in intermediary companies and in alternative food distribution in Canada and the USA. The difficulties faced by organisations distributing food on a more local level and the lack of lasting and widespread change despite their endeavours, is shown to linked to the inevitability that they too need to ‘get discounts’ to survive. This interdisciplinary study is important to provide context for sociological thinkers and activists seeking to understand the barriers to change in food behaviours and food strategies.

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A Discussion Paper on Accounts Payable Ratio

Ilter¹

2020

AOP

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Generally speaking, financial accounting textbooks are in harmony on the explanation of accounts payable and accrued liabilities/expenses. However, the same thing cannot be said for accounts payable turnover and days in accounts payable ratios. Different financial accounting textbooks and academic papers have different explanations for the accounts payable turnover ratio. The extant literature on the ratio is mainly comprised of two groups of authors. The first group relates the ratio to purchases and the second group relates the ratio to cost of goods sold (COGS). Purchases, in a purely theoretical sense, relate to periodic inventory method, whereas the perpetual inventory method relates purchases with inventory (being debit) and accounts payable (being credit). The second major group who explain the ratio by using the COGS figure ignore what is included in COGS. It should not include depreciation, amortisation, payroll and interest expenses to be meaningful for the purposes of the calculation of the ratio. In practice, manufacturing companies do not attempt to calculate these ratios due to the difficulty of obtaining the figures. These ratios can only be truly calculated from within the company if need be. Their accounting departments will be able to calculate the ratio correctly since they can reach the data. Any financial analyst not being able to reach a detailed breakdown of the expenses of the companies whose shares are being traded in stock exchanges will not able to calculate these ratios.

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The Power of Accounting

Cited by 3 publications

References 0 publications

Financial statement similarity

Financial statement similarity

Discounts as a Barrier to Change in Our Food Systems

A Discussion Paper on Accounts Payable Ratio

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