Management accounting innovations for rationalizing the cost of services: The reassessment of cash and accrual accounting

ABSTRACT

Management accounting can be a useful tool in austerity government because it produces information about the costs of public services and can be used for informed decision-making. Spanish local governments are required to submit data on the cost of their services to central government, which publishes this information online. The calculation of costs is based on budgetary cash accounting instead of accrual accounting; therefore cash accounting is being used for decision-making and accrual accounting has no role in this process. This paper critically analyses the innovation from three perspectives: the use assigned to the cost information in the legal framework; the opinion of academics and experts; and the perception of professionals about the usefulness of the information produced with the new system.     

Improving earnings quality: The effect of reporting incentives and accounting standards

We investigate the different effects on earnings quality of accounting standards and reporting incentives for Germany over the period 1994 to 2005. To this end, we control for reporting incentives at the firm level, instead of the country level, by using the timing of voluntary IFRS adoption as a proxy for reporting incentives. We then include reporting incentives in an analysis of earnings management and information asymmetry. Contrary to common expectation, we find that IFRS reporting potentially decreases earnings quality on average; but also that reporting incentives appear to have lower effects on earnings quality in IFRS statements than in GGAAP statements. Thus, IFRS may lead to more homogenous earnings quality across firms.     

The effect of accounting firm mergers on the market for audit services: New Zealand evidence

This article examines the outcomes of accounting firm mergers using data about the frequency of audit switches, the numbers of partners in the respective firms, and perceptions revealed in interviews with partners. Evidence from client switches does not show any evidence that the mergers were followed by cost reductions, or of collusion to force prices up. The effects of the mergers appear to have been elsewhere—the merging firms reduced partner numbers substantially, increasing partner leverage so that individual remaining partners were better off. Data from interviews confirm these findings, and show that the culture of individual firms had a significant effect on determining which group of partners controlled the merged firm.     

The effect of differential accounting conservatism on the “over-valuation” of high-tech firms relative to low-tech firms

This paper examines systematic differences in the level of accounting conservatism between high-tech and low-tech firms. Relying on the recent development in theoretical models and empirical measures of conservatism, we investigate conservative accounting practices and earnings management behavior in high-tech and low-tech firms. The results based on comparisons of cumulative nonoperating accruals, regression coefficients from the income timeliness models in Basu (1997), the distribution of earnings, and discretionary accruals between the two groups are consistent with a higher level of accounting conservatism in high-tech firms vis-à-vis low-tech firms. Additional analyses show that the effect of conservatism cannot be used as a defense for the over-valuation of high-tech firms.     

The influence of accounting enforcement on earnings quality of banks: Implications of bank regulation and the global financial crisis

We study the effects of country-level accounting enforcement on earnings quality of banks and whether bank regulation substitutes or complements the effect of accounting enforcement on bank earnings quality. We also examine whether the influence of accounting enforcement on bank earnings quality changed after the global financial crisis. Using a sample of listed banks from 40 countries between 2001 and 2014, and abnormal loan loss provisions (ALLP) as our main proxy for earnings quality, we document a consistent and strong association between accounting enforcement and bank earnings quality. More specifically, an increase in accounting enforcement decreases the level of ALLP and decreases the propensity to manage earnings to avoid losses. Furthermore, we provide empirical evidence that bank regulation complements the effect of accounting enforcement on bank earnings quality. Finally, unlike in the pre-crisis period, we find a positive association between accounting enforcement and income-decreasing ALLP in the post-crisis period, which indicates that stronger accounting enforcement is associated with more conservative earnings and higher loan loss reserves. Overall, our results indicate that accounting enforcement reduces opportunistic earnings management.     

A study of earnings-management motives in the Anglo-American and Euro-Continental accounting models: The Canadian and French cases

The purpose of this paper is to investigate factors that potentially influence earnings-management policy with reference to the Anglo-American and Euro-Continental accounting models. Canada and France, respectively, belong to those different socio-economic environments. Earnings-management practices detected in those countries are expected to be affected by specific socio-economic features of the Anglo-American and the Euro-Continental environments. We explain earnings-management practices by incentives suggested in the literature to reveal which motives are prominent within each environment.We tested our earnings-management motives (EMM) model using appropriate panel-estimation techniques over 1674 Canadian and 1470 French firm-year observations. Our results provide evidence that incentives for earnings management for French firms are specifically linked to contractual debt costs and effective tax rate. However, Canadian firms show specific incentives matched with a dynamic capital market. Issuing equity is a strong motive for earnings management in Canadian firms.     

盈余质量对会计信息报酬契约有用性的影响及股权特征的交互作用分析

本文以盈余可靠性维度作为盈余质量的替代,检验管理者报酬契约中的会计监督作用是否存在、其受到公司股权特征制约或促进的程度以及对企业未来业绩的影响。研究发现:(1)从整体情况看,上市公司盈余的低可靠性对管理者报酬—会计业绩的敏感性产生显著负向影响,说明盈余质量影响了管理者报酬契约中的会计业绩度量。(2)政府机构直接控制的上市公司控股股东缺乏监督经理人的剩余索取权激励,在管理者报酬契约制定中对盈余质量的评价监督重视不足。(3)第一大股东对董事会的控制增强了盈余可靠性影响管理者报酬—会计业绩敏感性的程度,在一定程度上说明大股东与上市公司之间在监督激励管理者方面的“治理协同效应”。(4)第一大股东与第二大股东之比对盈余可靠性影响报酬—会计业绩的敏感性程度产生削弱的影响。(5)盈余的低质量使管理者现金报酬的激励效果受到制约,在管理者报酬契约中针对会计信息的可靠性进行会计监督,增强了对管理者进行激励的效果。     

An agency perspective on the accounting costs used in various roles in the regulation of a state-owned natural monopoly: The British Gas Corporation 1972-86

This study describes and analyses the accounting costs reported in the financial statements of the British Gas Corporation (BGC) during its fourteen years (1972-86) as a state-owned natural monopoly. Evidence is provided of the various roles in which these accounting costs were used in the regulation of the corporation. The agency perspective developed by Whittington (1985) is used to provide an analytical framework for discussion of the effects of BGC's accounting costs on the allocation of burdens and rewards between gas consumers and taxpayers through being used in these various roles. Further analytical insights are drawn from developments subsequent to privatisation in 1986.     

The impact of Australian higher education policy changes on the production of PhDs in the field of accounting and finance

This article examines the growth in accounting and finance PhD graduates across all Australian universities from 1965 to 2006. It investigates the impact of the major changes that were initiated in 1988 in higher education in Australia with the introduction of the Unified National Scheme (UNS) and, in 2002, with the Research Training Scheme (RTS). A data set of PhD thesis records provides data of actual PhD completions, as distinct from enrolments. Analyses show that both the number of accounting and finance PhD completions and the dispersion of these PhD completions across Australian universities increased from 1988 with the introduction of the UNS. There is also evidence that the proportion of accounting and finance–related PhD completions relative to total Australian PhD completions increased from 1988. While there is strong statistical support for the effect of the UNS on PhD completions, this is not the case for the more recent changes associated with the Research Training Scheme (RTS).