Confirmation bias in accounting judgments: the case for International Financial Reporting Standards for small and medium-sized enterprises

We conduct an experiment that investigates confirmation bias in the reporting judgments of accountants when applying International Financial Reporting Standards (IFRS) for small and medium-sized enterprises (SMEs). The results indicate that accountants’ judgments are biased towards the recognition and measurement principles of full IFRS when applying IFRS for SMEs. The results also suggest that confirmation bias in judgments can be mitigated by increasing accountants’ awareness of justification requirements and by using appropriate decision aids. These results are likely to be of interest to the 70-plus countries that have adopted the SME standard and countries that continue to contemplate its adoption.     

Adopting International Financial Reporting Standards for Small and Medium‐sized Enterprises

Diverse complications and controversial issues in the adoption of International Financial Reporting Standards (IFRS) for Small and Medium‐sized Enterprises (SMEs) have been reported by many jurisdictions, prompting them not to adopt this set of standards. Conversely many jurisdictions have adopted or are in the process of adopting IFRS for SMEs. This study considers the impetus for successfully achieving accounting convergence with IFRS for SMEs in those jurisdictions. The possible transition issues that may arise when countries adopt IFRS for SMEs are also highlighted. Furthermore, to provide pioneering evidence on the problems accountants encounter when applying IFRS for SMEs, we conduct a survey on accounting practitioners in Fiji – an early adopter of this set of standards. Both the insights provided on the process of embracing IFRS for SMEs in Fiji and the opinions elicited from accountants highlight new dimensions to the inherent problems in IFRS for SMEs. Scant attention has been given to this issue so far; hence the empirical evidence provided by our study informs not only the global convergence of SME accounting but also the quality of the current suite of IFRS for SMEs.     

Greenhouse gas emission reduction potentials in air transport: a structural equation modelling-based multi-group analysis

In this study, we used a structural equation modelling (SEM) approach to identify the key factors that influence greenhouse gas (GHG) emission reduction potentials in air transport (ERPAT). We explored the correlations among constructs from the perspectives of aviation GHG emission reduction. Organisation type is one of the contextual factors that may change the nature of these correlations. Person- and self-administered questionnaires were used to collect data from 249 aviation experts. The results obtained using SEM showed that aircraft technology and design, aviation operations and infrastructure, socio-economic and policy measures, and alternative fuels and fuel properties are the key factors for reducing GHG emission. Conclusively, organisation type can help in controlling the relationship among the constructs. Thus, organisation type acts as a moderator in the research model. The outputs can be used to measure the level of knowledge and understanding regarding ERPAT and can provide policy-makers, government organisations, and airlines with valuable information for designing appropriate air transport policies for emission reduction.     

The effects of ethnic culture and organizational culture on judgments of accountants

This study extends prior cross-cultural research by examining the effects of ethnic culture and organizational culture (Big 4 and non-Big 4 accounting firm affiliations) on the judgments of accountants in Fiji. The study also examines how interaction between ethnic culture and organizational culture influences the judgments of accountants. It examines the extent and the cause of differences between the judgments of Ethnic Fijian and Indo-Fijian accountants when interpreting and applying selected International Financial Reporting Standards (IFRSs). Consistent with their ethnic cultural values, the results show that Indo-Fijian accountants are generally more conservative in their judgments than their Ethnic Fijian counterparts. This study provides empirical evidence to support the view that both ethnic culture and organizational culture have a significant effect on the manner in which accountants within a country interpret uncertainty expressions contained in the IFRSs. The results also show that organizational culture has a greater effect on the judgments of accountants than ethnic culture. The results of this study provide important insights into the factors affecting the judgments of accountants within a country and raise interesting theoretical issues.     

Stocks,flows, and market equilibrium in neoclassical monetary growth models

The treatment of short-run monetary equilibrium in neoclassical monetary growth theory has been criticized as one of asset market equilibrium that leaves the status of real flows unclear. The paper shows this dichotomy to be the result of a stock-flow confusion. A resolution is attempted on the basis of which it is shown that the output market is in fact continuously equilibrated, and that neoclassical models can be employed for short-run analysis.     

The Changing Face of the Auditor's Report: Implications for Suppliers and Users of Financial Statements

The International Auditing and Assurance Standards Board (IAASB) recently finalised several significant and controversial reforms of the audit reporting model. The reforms are in response to long‐standing criticisms about the form and content of the existing audit report. This study critically examines the current audit report reforms and their implications. In particular, we investigate the perceptions of prominent stakeholders in respect of these reforms and then evaluate the implications of the reforms on the informational value of the audit report, audit quality and audit costs. The findings suggest that the changes to the audit report are of significant informational value to users, while the implications for audit quality are unclear. Indeed, the changes would increase audit costs and potentially the legal liability of auditors. This appraisal is timely given the efforts made by the IAASB in commissioning these reforms to enhance the relevance and informational value of the audit report.     

An empirical study of e-government diffusion in Fiji: a holistic and integrative approach

Pacific Island countries (PICs) are facing certain unique challenges in e-government diffusion due to their geographic, cultural, social, and economic environments. However, very few rigorous empirical studies have been published about e-government diffusion issues in the region. To address the knowledge gap, we conducted a case study of Fiji. Drawing on Fountain’s technology enactment framework as a theoretical lens, we identified and investigated in a holistic and integrative way the major issues and challenges which influenced e-government diffusion and outcomes in Fiji. The study has significant implications both for research and practices not only in Fiji but also in the PICs.     

Exploring the nexus between urbanisation,inflation and tourism output: empirical evidences from the Fiji Islands

The main aim of this study is to investigate the relationship between urbanisation, inflation and tourism output of Fiji. This study used the Autoregressive Distributed Lag bounds test to examine the relationship between urbanisation, inflation and tourism output by using annual time series data for the period 1985–2015. This study has found that urbanisation, inflation and tourism output share a long-run relationship when urbanisation and inflation are used as the dependent variables. The results of this study confirm that in the long run, tourism output has a significant and positive impact on urbanisation. This implies that a 1% increase in tourism output will increase urbanisation by 0.000165%. In the short run, urbanisation and inflation do not affect the tourism output of Fiji. The findings from this study have implications for the policy-makers and practitioners. Policy-makers should play an essential role in expanding tourism activities in the rural areas. In Fiji, there is development disparity between the urban and rural areas. The government has to invest more financial resources in the development of tourism activities in the rural areas.