Effects of exposure to the International Education Standards on perceived importance of the global harmonization of accounting education among Japanese accounting academics

This exploratory study empirically examines the degree to which the Japanese accounting academics is exposed to the IESs and explores their perception of the importance of global harmonization in accounting education in terms of ensuring quality global control of the accounting profession. Responses from 76 questionnaires found that accounting staff, particularly in the post graduate Accounting Schools, have a basic understanding of the IESs and view this global harmonization as favorable whereas staff who teach at undergraduate level or at ordinal postgraduate level in tertiary schools have a much lower understanding and perception. This is of concern to the accounting profession as it is in these undergraduate schools and ordinal postgraduate schools from where the majority of successful CPA examinees graduate each year. The findings also indicated that the IESs can be effectively used as a benchmarking tool within the Japanese accounting academics.     

Chinese bookkeeping systems: a study of accounting adaptation and change

The evolution of bookkeeping methods is one of the main features in the advance of Chinese accounting over several thousand years. This paper outlines the invention and application of Chinese-style bookkeeping methods from a historical perspective. With an emphasis on the rise and fall of the 'increase-decrease' bookkeeping method in the mid-1960s to 1980s, the paper not only illustrates the main characteristics of this bookkeeping system, but also analyses its relative strengths and deficiencies in contrast to the Italian-style debit-credit bookkeeping system. It is contended that the increase-decrease system is a continuing innovation of the Chinese-style bookkeeping and an attempt to adapt the western bookkeeping system in terms of the Chinese social and cultural traditions. Studies of this bookkeeping system may generate certain insightful input for the potential improvement of modern bookkeeping in other countries in light of the changing technological and economic conditions.     

The use of the postal questionnaire in accounting history research

This methodological article discusses the first project in accounting history to use the postal questionnaire as a research tool. The historical context was the changing nature of the company audit in Britain, and this article outlines the process by which the questionnaire was devised, the stages through which the project developed, the data that were collected, and how these were analysed and interpreted. A significant innovation was to sample, in equal proportions, accountants who qualified in each decade from the 1920s and 1930s down to the 1980s, and direct the questioning toward their early training and careers, thereby generating historical trends in the responses. Some of the results of the survey are given here by way of illustrating the weaknesses and strengths/costs and benefits of the technique in comparison with oral history and traditional documentary sources.     

The impact of professional standards on accounting judgments: The role of availability and comparative information

Given scant research on the influence of the AICPA’s Code of Conduct, this study examines the effects of professional standards for advocacy and integrity on a financial reporting decision. Based on the availability and priming literature, we test whether the current wording of two AICPA professional standards influence financial reporting decisions. Prior accounting research has documented cases where professionals were inclined toward a conservative or skeptical bias (Francis & Krishnan, 1999; Jenkins & Lowe, 1999) while other studies have documented an inclination toward a client-confirming bias (Hackenbrack & Nelson, 1996; Roberts, 2010). Our study examines whether using AICPA ethical standards as primes results in a neutral, unbiased financial reporting decision in a context in which there is substantial, yet inconclusive, evidence. Roberts (2010) documents the tendency for professionals to view integrity and advocacy as segregated objectives: one for promoting unbiased reporting, associated frequently with accounting-related decisions, and the other condoning client advocacy, typically associated with tax-related judgments. Hence, we test for availability effects based on separately-stated standards. However, the literature on comparative analysis explains that a combined concept containing counterbalancing features allows the participant to form causal relationships between the distinguishing components. This type of mental process brings the causal knowledge into working memory. Hence, a joint presentation of countervailing standards should result in a more balanced judgment, reflecting neither a conservative nor pro-client tendency.The psychology literature suggests that heuristics, such as availability priming and comparative analysis, are more likely to affect novice decision makers (e.g., jurors, clients, new hires, students) than experts whose work experiences could drive the results. This study examines the responses of upper-level accounting majors, and the results show that the participants are inclined toward conservative decision making. Participants exposed to a separately-stated standard for integrity respond conservatively, just as they do in a control group without explicit access to the professional standard. Similarly, even when exposed to AICPA Rule 102-6 allowing client advocacy, they report conservatively. In contrast, when the prime is a joint presentation of the standards, participants respond with an unbiased decision, which differs significantly from the consistently conservative response by the control group as well as by the participants primed with an isolated standard. We conclude that two AICPA standards (as currently worded) are best understood when they are aggregated. Whether this finding holds for professionals is an empirical question for future research. The implication is that accountants’ decision making could be enhanced by a revised professional standard reminding them to jointly consider the goals of unbiased decision making and justifiable client advocacy.     

Desired attributes of public accounting firms in the job selection process: an empirical examination of accounting graduates' perceptions

The purpose of this study is to identify attributes of public accounting firms that accounting graduates find most desirable in their job selection decisions, and the impacts of individual differences on these perceptions. Factor analysis performed on the responses of 167 final-year accounting students in Hong Kong to a 30-item questionnaire identified seven factors. The results indicate that accounting graduates considered help in finishing their professional accounting examinations and good staff relationships as the most important criteria in their choice of employers. In addition, female accounting graduates were more concerned about the possibility of being required to travel or be transferred, but were less concerned about the reputation and profile (such as the client base and the size) of the firms than their male counterparts. Accounting graduates with a higher grade point average (GPA) were less concerned about the working environment, but more concerned about a firms' reputation and profile than those with a lower GPA. The implications of these results are discussed.     

Financial statement effects of adopting international accounting standards: the case of Germany

Using a sample of German firms, we investigate the financial statement effects of adopting International Accounting Standards (IAS) during 1998 through 2002. We find that total assets and book value of equity, as well as variability of book value and income, are significantly higher under IAS than under German GAAP (HGB). In addition, book value and income are no more value relevant under IAS than under HGB, and HGB (IAS) income is highly persistent (transitory). Finally, we find weak evidence that IAS income exhibits greater conditional conservatism than HGB income. Our results are consistent with the fair-value (income smoothing) orientation of IAS (HGB).

Goal‐efficacy framework: an examination of domestic and international accounting students' academic performance

This study considers the psychological influences on academic performance using a goal‐efficacy framework. Data were gathered using a survey questionnaire (N = 375). The paper is motivated by a repeated high failure rate for a second‐year core accounting unit and anecdotal evidence that international students perform poorly in comparison with domestic students. The results demonstrate the role of self‐regulated learning strategy as a mediating variable for goal orientation and academic performance. While the analyses suggest no significant differences between domestic and international students with respect to the main psychological variables and academic performance, further analyses reveal that four specific factors of the main psychological variables are significantly different between domestic and international students.     

The influences of Confucianism, Feng Shui and Buddhism in Chinese accounting history

This paper attempts to examine the influences of Confucianism, Feng Shui and Buddhism on the evolution of Chinese accounting before recent accounting reforms commencing in the 1980s. Chinese cultural variables (e.g. Confucianism, Taoism, Buddhism, etc.) have been widely utilized in studying Chinese accounting systems, the accounting profession and the evolution of Chinese accounting techniques. However, the literature has not taken into account the traditional Chinese Feng Shui belief, which was broadly considered as the most important part of Chinese traditional culture. There is much evidence to show that Chinese accounting development was not only influenced by Confucianism, Taoism and Buddhism, but also by the prevalence of Feng Shui belief in ancient China over thousands of years. This paper first discusses the concepts of culture and describes Confucianism, Feng Shui and Buddhism in China, and then examines the influences of Confucianism, Feng Shui and Buddhism on the evolution of Chinese accounting. The influences discussed are those on bookkeeping methods, accounting information, accounting profession/accountants, regulating and standardizing accounting practice, government accounting and private-sector accounting respectively. This paper also identifies some areas for future research in Chinese accounting history and culture.     

Culture and accounting in Indonesia: An empirical examination

This study examines the relationships among the cultural characteristics of Indonesian society, reporting practices of Indonesian firms, and accounting standards promulgated by the Association of Indonesian Accountants. It is argued that an empirical relation exists between the change in cultural values, as conceived by Hofstede's theory of the five dimensions of cultural values (power distance, uncertainty avoidance, individualism, masculinity, and time horizon and the change in accounting values as captures by Gray's four dimensions (professionalism, conservatism, secrecy, and uniformity). Using LISREL to evaluate data between 1981 and 1992, three of Hofstede's five cultural values (power distance, uncertainty avoidance, and individualism) have significant relationships with one or more accounting value. This limited confirmation of the culture-accounting relationships suggest that particular historical and economic configurations must be considered in longitudinal analysis. The conflicting influences of extensive government involvement in the economy and nascent market competition are a possible explanation of the Indonesian results.     

Development of accounting regulation in Jordan

This study examines the development of accounting regulation in Jordan with emphasis on the dominant environmental factors that influence it. In order to have a better understanding of Jordan's present accounting practices, and its future development tendencies, we examine the path of accounting in Jordan since the early days of the nineteenth century, and analyze how Jordan's accounting environment — political, economic, legal and cultural — influenced the development of accounting in Jordan. We also examine Jordan's recent move towards full adoption of International Financial Reporting Standards (IFRS) and find that Jordan's colonial past has exerted a strong influence. In addition, we conclude that political and economic factors, through privatization and the resulting accounting reforms, contributed more to the development of accounting practices than other environmental factors. Privatization led to reforming Jordan's disclosure regulation and laying down of the corporate-governance policy framework. Our conclusions could be of interest to other countries, particularly developing countries, who want to improve the quality of their accounting disclosures and practices.     

Commentary on: A synergistic approach to an accounting educator's primary responsibilities

Many students find the application of sampling theory to audit testing difficult, even if they have a good grounding in business statistics. This paper describes an action-learning technique used to teach audit sampling theory to third-year business degree students at The Open Polytechnic of New Zealand. Feedback from students indicated that they found action-learning better than traditional lectures and printed material in enhancing their understanding of sampling theory and practice and in maintaining their interest and enjoyment.     

A Weberian model applied to the study of accounting stagnation in late Qing China

The industrialization and commercial expansion that China experienced following foreign intrusion, in 1840, necessitated the modernization of its accounting, but its accounting technology continued to stagnate for more than half a century. Weber's socio-historical model provides a framework for posing the question why indigenous accounting systems persisted even though superior western bookkeeping techniques were available. Weber's framework for the study of the relations of accounting to organizations and society may be divided into two analytic layers: structural conditions of accounting and the historical dynamic arising from the tensions between formal and substantive rationalities. All structural conditions specified in his first analytic layer as necessary for capital accounting were basically satisfied in Qing China. The second layer of Weber's framework is ideational. Rationality is the key concept in Weber's work. Replacing traditional accounting amounted to a direct challenge to substantive rationality of ti ('substance', 'essence') by the formal rationality of yung ('instruments', 'utility').     

The role of accounting in supporting adaptation to climate change

The study is one of the first concerned with the topic of accounting and climate change adaptation. It proposes that the accounting role can support organisational climate change adaptation by performing the following functions: (i) a risk assessment function (assessing vulnerability and adaptive capacity), (ii) a valuation function (valuing adaptation costs and benefits) and (iii) a disclosure function (disclosure of risk associated with climate change impacts). This study synthesises and expands on existing research and practice in environmental accounting and sets the scene for future research and practice in the emerging area of accounting for climate risk.     

Tax education in the UK: a survey of tax courses in undergraduate accounting degrees

This paper presents the results of a postal survey designed to examine the teaching of taxation in UK universities. The project looks at taxation in undergraduate accounting degree programmes and adopts an objective centred focus. The principal aim of the survey was to examine the relationships between some characteristics of individual tax courses, including the course objectives and coverage, staffing, teaching and assessment methods, in an attempt to draw some conclusions on the nature of tax education in UK accounting degrees. The results of the survey and consequent analysis may provide taxation and accounting educators, professional bodies and researchers into accounting education with an insight into approaches to, and methods used in, taxation teaching. It may also present a framework for comparative international research in tax education.     

A collective,undifferentiated accounting profession: an Australian study

A study of 386 potential and current members of the accounting profession in Australia and South‐East Asia provides evidence of the importance of three attributes – brand/reputation, international recognition of qualifications and career opportunities – in the decision to join a professional accounting body. While these attributes are important, logit regression models indicate that they are not discriminatory in the choice of professional body and suggest a perception of a collective, undifferentiated accounting profession. The marketing of brand/reputation and membership benefits may be a more efficient and effective strategy in attracting members and differentiating the profession if undertaken by a combined or coordinated professional body.     

The role of a crisis in reshaping the role of accounting

Prior to 2001, international accounting standards (IAS) were insufficiently attractive to gain the support of US regulators. The potential role of IAS in the US gained prominence during a period of extreme financial reporting instability in 2001–2002. Emerging opinion increasingly upheld principles-based rather than rules-based accounting standards in the face of the financial reporting crisis. But to promote any active shift in the US position, an institutionally legitimate infrastructure for the international accounting standards setter had to be created. As this was taking shape, the globalisation of business activities grew with inter-organizational linkages and cross-national financial inter-dependencies and flows becoming increasingly complex. Given the extensively uncertain, uneven and constantly evolving nature of global business changes, the aptness of applying judgment in assessing financial performance and position rather than relying on the application of pre-defined rules continued to achieve wider acceptance. The argument is made in the paper that international financial reporting standards are today seen to fulfil a global risk mitigating role founded on a logic that had to first gain political and institutional legitimacy and that also had to be viewed as being responsive to perceived market imperatives.     

Tightening credit standards: the role of accounting quality

Over the latest 20 years, the average credit rating of U.S. corporations has trended down. Blume et al. (1998, Journal of Finance, 53, 1389–1413.) attribute this trend to a tightening of credit standards by agencies. We reexamine the observed decreases in credit ratings in several ways. First, we show that this downward trend does not apply to speculative-grade issuers. Second, our analysis of investment-grade issuers suggests that the apparent tightening of standards can be attributed primarily to changes in accounting quality over time. After incorporating changing accounting quality, we find no evidence that rating agencies have tightened their credit standards.

Offering a globally-linked international accounting course in real time: a sharing of experiences and lessons learned

This article reports the experiences from offering an online international accounting course that involved students from Japan, Spain, Switzerland, and the USA participating in real time via both audio and video links. In addition to interacting among themselves, students also interacted with accounting practitioners and standard setters from these countries. The latter attended class either in person or “virtually” via audio and video links. The paper also discusses the major benefits from the course, as identified by student feedback and direct faculty observations. A number of challenges in offering a course of this type also are identified. These insights can assist accounting educators interested in implementing a similar international accounting course at their institutions. They also have implications for applying distance-learning approaches in courses with a domestic focus.     

The deliberation around accounting techniques: accounting for depreciation and foreign exchange in an Indian jute company, 1870-1900

This paper examines the way two accounting techniques, namely depreciation and foreign exchange, were deliberated on, between 1870 and 1900, in an Indian jute company whose shareholders resided in the UK. The arena for these deliberations was the conflictual relationship between controlling and non-controlling shareholders as to how best to account for depreciation and foreign exchange especially when the particular accountings affected distributional issues such as the dividend decision. The purpose of this paper is to analyse and explain the processes by which a company's accounting practices emerge and develop as a contest between different interests. Accounting framed the parameters of the deliberations and provided the language of power and dissent. The paper uses a rich archive that includes narrative and accounting material.