Search results

Over the last decade, the accounting convergence process with the development and adoption of IFRS as national standards has become the focus of governments, professionals, and researchers. In 2005, the EU (including Germany) and Australia adopted IFRS. A survey by Deloitte Touche Tohmatsu (2010) reported that 89 countries have adopted or intend to adopt IFRS for all their domestic listed companies. Currently, more than 100 jurisdictions require or permit the use of IFRS, with countries such as Canada, Brazil, and Argentina being the most recent adopters (IFRS Foundation, 2011b). This growing number of countries implementing IFRS and their experiences and emerging challenges have further raised researchers' interest in this controversial topic (Ashbaugh & Pincus, 2001; Atwood et al., 2011; Byard et al., 2011; Christensen et al., 2007; Daske et al., 2008; Ding et al., 2007; Hail et al., 2010a, 2010b; Kvaal & Nobes, 2010; McAnally et al., 2010; Mechelli, 2009; Niskanen, Kinnunen, & Kasanen, 2000; Stolowy, Haller, & Klockhaus, 2001; Tyrrall et al., 2007). However, these studies have concentrated on the development and application of specific accounting standards and practices and/or cross-national and cross-cultural issues concerning adaptation, implementation, and evaluation of IFRS. Moreover, an increasing number of studies have been devoted to classifications of accounting models and categorization of accounting standards, principles, and values (Chanchani & Willett, 2004; D'Arcy, 2000, 2001; Doupnik & Richter, 2004; Doupnik & Salter, 1993; Gray, 1988; Kamla, Gallhofer, & Haslam, 2006; Nair & Frank, 1980; Patel, 2003, 2007; Perera & Mathews, 1990; Salter & Doupnik, 1992). However, very few studies have critically examined the historical development of accounting practices and issues related to convergence in its socioeconomic context and, importantly, we are not aware of any study that has rigorously examined the institutionalization of Anglo-American accounting practices as international practice with an emphasis on power and legitimacy in the move toward convergence of accounting standards.

In the previous issue of this Journal, the authors described, analysed and enlarged a micro‐economic model by Billstroem and Thore. In this part they present their own simulation model. The model is a three loop system of price‐, advertising‐, production‐, and stock‐policy. Main differences compared with the Billstroem/Thore‐approach are: The model includes interactions between the different business policies mentioned. Both control‐variables and exogenous disturbance‐variables have been included. Each of three subsystems is controlled by a regulator and feed‐forward control unit. Therefore the model of Billstroem/Thore can be called a feedback approach, while the model to be introduced is a feedback‐feed‐forward system with disturbance.

This is the first of two parts of a paper in which we shall develop microeconomic price models of monopolistic competition using methods and tools of feedback theory. The models discussed are based on an approach presented by Billstroem and Thore in 1964. In the second part we will develop a different approach which can better deal with real problems. All feedback models will be simulated by means of the simulation language CSMP/360 III.

The aim of this paper is to provide evidence on the extent and the consequences of the provision of non-audit services (NAS) by statutory auditors to German family firms.

The study analyzes hand collected fee data of 368 listed and private family firms in Germany. It employs univariate tests, ordinary least squares and two-stage least squares regressions to investigate potential threats to perceived auditor independence and knowledge spillovers between jointly provided NAS and audit services.

Incumbent auditors are shown to be a significant source of various types of NAS to family firms. There is weak evidence on threats to perceived auditor independence and support for reciprocal knowledge spillovers between the services. While listed and private family firms do not differ in regard to the proportion of NAS fees, comparative findings suggest that key threats and benefits of jointly provided services are more prevalent among private than among listed family firms.

The study suffers from limited data availability and is restricted to the initial year of mandatory audit fee disclosure of private firms in Germany. Particularities of family firms and the German setting, as well as differential results for listed and private family firms, suggest fruitful avenues for future research.

The study addresses the current issues in audit regulation. Regulatory bodies should consider that key threats and benefits of auditor-provided NAS decrease with stronger exogenous restrictions. Attempts to restrict jointly provided services in the EU suggest family firms to reconsider their reliance on auditors as a trusted source of NAS.

This study is the first to provide evidence on the extent and consequences of auditor-provided NAS in family firms based on fee disclosure. It is also among the few studies that investigate private firms in a code law country and complements prior evidence from Germany that is restricted to listed firms. More generally, it contributes to limited evidence at the intersection of audit and family business research.

Regarding the immense real estate divestitures that have taken place over the last couple of years, some stakeholders have begun to wonder if these short‐term activities may affect the long‐term competitive advantage of a company. While it appears reasonable that property divestitures enhance the financial situation of a company from a so‐called owner perspective, there is no equivalent quantitative evaluation for the loss in space utilisation and flexibility from a user perspective. Consequently, real estate decision making is based upon an insufficient information basis and is dominated by the investment perspective. In order to better align corporate real estate and real estate investment functions better, this paper introduces a formal decision model which describes the situation of corporate real estate decision makers. They have to trade off entrepreneurial flexibility gained by real estate holdings against the financial opportunity cost of freeing up capital. Making use of a prototype decision situation, the paper demonstrates how the decision maker can improve the underlying information basis for property divestment decisions, using a real option approach. Hence, real estate decisions gain in two respects: they are more transparent and, more importantly, their design is more suitable if the company wants to employ real estate holdings to increase the overall value of the company.

The purpose of this paper is to document a gap between generation X and Y’s behavior toward decision making for hiring a professional financial planner in context of an emerging country.

This research is based on a public survey in Malaysia on the effect of five major contributing factors (namely, awareness, acceptability, affordability, accessibility and assurance) on the decision to hire a professional financial planner. The study further shed light into the difference among the influential factors among generation X and Y.

Although awareness, acceptability, affordability and assurance have demonstrated significant effect on decision making in general, their impact varies among different age groups. Results of moderation tests on the role of age suggest that for Gen X, the determinant factor is only their acceptability of the financial planning service. However, awareness, affordability, acceptability and assurance are critical factors for Gen Y respondents. In contrast to Gen Y, the Gen X respondents tend to have more awareness toward their needs for financial planning; they have gained enough experience to assess the credibility of the planner and test their assurance; and have higher earnings to afford the financial planners services.

Findings of this study are novel as it provide first hand picture from an emerging market in South-East Asia. Moreover, the study documents generation gap in financial decision making process.

This paper aims to provide insight whether disclosed compliance with the German Corporate Governance Code (GCGC) leads to higher valuation on the German stock market.

Based on agency theory, stakeholder theory and institutional theory, the authors conduct a meta-analysis and evaluate the value relevance of the compliance with the GCGC.

The research finds that compliance with the GCGC is mainly not a value-relevant factor for German companies listed at the Frankfurt Stock Exchange.

The research considered is not fully comparable with regard to observation date, full integration of the GCGC rules and company selection/sample size. Future research is encouraged to research the valuation effects of compliance with the GCGC for a longer time horizon, the use of uniform performance measures and the integration of all GCGC rules.

Compliance with the GCGC has not proven to be a value-driver for German listed companies. The authors recommend companies to search for opportunities to make their corporate governance more comprehensive by expanding their corporate governance reporting and thus providing deeper insights on how their processes of management and control work.

The paper is the first investigation integrating the results of ten years of “code compliance – market valuation” research in Germany. We detect reasons why soft law regulation by corporate governance codes did not function on the German stock market. We additionally address behavioral aspects why investors do not give enough relevance to companies’ corporate governance statements so far.

The purpose of this paper is to examine translation in the context of International Financial Reporting Standards (IFRS) by taking the example of the English term “impairment” in IAS 36, and following it into 19 translations. The paper then examines the terms used for impairment in English translations of annual reports provided by firms. Consideration is given to the best approach for translating regulations and whether that is also suitable for the translation of annual reports.

The two empirical parts of the paper involve: first, identifying the terms for impairment used in 19 official translations of IAS 36, and second, examining English-language translations of reports provided by 393 listed firms from 11 major countries.

Nearly all the terms used for “impairment” in translations of IAS 36 do not convey the message of damage to assets. In annual reports translated into English, many terms are misleading in that they do not mention impairment, peaking at 39 per cent in German and Italian reports in one year.

Researchers should note that the information related to impairment in international databases is likely to contain errors, and the authors recommend that data should be hand-collected and then carefully checked by experts. The authors make suggestions for further research.

Translators of regulations should aim to convey the messages of the source documents, but translators of annual reports should not look only at the reports but also consult the terminology in the original regulations. The authors also suggest implications for regulators and analysts.

The paper innovates by separately considering regulations and annual reports. The authors examine a key accounting term systematically into a wide range of official translations. The core section of the paper is a new field of research: an empirical study of the translations of firms’ financial statements.

The use of technical terms to communicate accounting information can lead to misunderstandings when the meaning of such terms is not fully appreciated by the recipient of the information. The discipline of translation studies suggests that full equivalence in translation between languages is rare. This suggests that the risk of misunderstanding is exacerbated when technical terms are translated into another language. This paper examines the implications of mistranslations of technical terms in the context of theories from linguistics, which suggest that language influences the way we think. It uses three examples of accounting terminology to illustrate these problems. It concludes that the choice of an inappropriate label in the translation of accounting terminology is detrimental to international accounting communication and creates problems for users and preparers of translated financial statements as well as for researchers in, and students of, international accounting and for those involved in harmonisation and standardisation of accounting.