| 1. |
- Andersson, Patric, et al.
(författare)
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Does Pro Forma Reporting Bias Analyst Forecasts?
- 2007
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Ingår i: European Accounting Review. - : Informa UK Limited. - 1468-4497 .- 0963-8180. ; 16:2, s. 277-298
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Tidskriftsartikel (refereegranskat)abstract
- Standard setters put much effort into the development of ‘better’ financial reporting standards, that is, standards that more accurately capture the economic substance of business activities. However, the more sophisticated accounting treatments caused by new standards, and the growing complexity of business activities as such, has made financial reports more difficult to understand. In response to this situation, some companies use pro forma reporting, which means that certain complex items required by financial reporting standards are excluded. This study adopts a user perspective and investigates how pro forma reporting affects analysts' judgments in an experimental setting. On the basis of psychological theory, our hypothesis suggests that analysts' judgments will be affected by differences in the way company performance is presented. Our results show that analysts who received both pro forma and Generally Accepted Accounting Principles (GAAP) information made significantly higher earnings per share (EPS) forecasts than those who received GAAP information only. It is argued that positive framing and higher levels of anchor explain this result, which suggests in turn that analysts' EPS forecasts can be manipulated by alternative ways of presenting company performance. Some possible implications of this finding for standard setters are discussed.
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| 2. |
- Athanasakou, Vasiliki, et al.
(författare)
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Annual Report Narratives and the Cost of Equity Capital: UK Evidence of a U-shaped Relation
- 2020
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Ingår i: European Accounting Review. - : Taylor & Francis (Routledge): SSH Titles. - 1468-4497 .- 0963-8180. ; 29:1, s. 27-54
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Tidskriftsartikel (refereegranskat)abstract
- We hypothesize and test for a U-shaped relation between the cost of equity capital and the level of disclosure in annual report narratives. Using a computer-generated word-count-based index of the level of disclosure in U.K. annual report narratives, we document a negative relation with the cost of equity capital at low levels of disclosure, and a positive relation at higher levels of disclosure, together implying the presence of an optimal level of disclosure. We interpret the positive relation at higher levels of disclosure as evidence of uninformative clutter increasing the cost of equity capital. Additional analyses indicate the presence of both firm-level learning and regulatory corporate reporting initiatives as factors shaping adjustments towards optimum levels of disclosure.
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| 3. |
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| 4. |
- Carlsson-Wall, Martin, et al.
(författare)
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Accounting talk through metaphorical representations – change agents and organisational change in home-based elderly care
- 2016
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Ingår i: European Accounting Review. - : Taylor & Francis (Routledge): SSH Titles. - 0963-8180 .- 1468-4497. ; 25:2, s. 215-243
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Tidskriftsartikel (refereegranskat)abstract
- This paper has analysed a change process within an organisation providing home-based elderly care. Using a theoretical framework from metaphor theory and insights from the literature on ‘accounting talk’, we followed how metaphorical representations of accounting were introduced and developed by the change agent. New core values and practices emerged within the home help unit that were in line with the ideas and inferences made by these accounting metaphors. The metaphorical representations of accounting concepts linked the unfamiliar domain of accounting to a more familiar domain, and provided rationales for organisational change. Our findings highlight the importance of change agents and ‘accounting talk’ for determining the trajectory of organisational change processes. The findings also suggest that metaphors are a potentially powerful tool for both changing organisational members’ general understanding of financial issues, and forging specific links between accounting concepts and work practices.
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| 5. |
- Carlsson-Wall, Martin, et al.
(författare)
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Exploring the Role of Management Control Anchor Practices in new Product Development
- 2021
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Ingår i: European Accounting Review. - : Taylor & Francis (Routledge): SSH Titles. - 1468-4497 .- 0963-8180. ; 30:2, s. 251-276
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Tidskriftsartikel (refereegranskat)abstract
- This paper shows how certain management controls become more guiding than others in the management of new product development (NPD). We detail how the opportunity space within which managers maneuver NPD can be underpinned by a hierarchically arranged management control infrastructure governed by management control anchor practices that enable 'anchored prioritizations' through which some concerns become 'more important' than others. As the anchor practice in our case was an integrative liaison device, we also contribute to research that emphasizes the use of social controls in NPD settings. As management control anchor practice, integrative liaison devices can go beyond the 'pure' sharing and integration of knowledge and play a crucial role in framing accountability-induced conflicts and negotiations. We also contribute to the notion of management control anchor practices by considering the dynamics between a constitutive rule and the strategies used to enact it. Management control anchor practices play a crucial role in the light of 'conservative dynamism' where strategies through which a constitutive rule is enacted are constantly adjusted. A key role of a management control anchor practice hereby is to avoid the emergence of a state of excessive proliferation where strategies are formed merely based on opportunism or short-term contingencies.
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| 6. |
- Carrington, Thomas, 1974-, et al.
(författare)
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Auditing stories about discomfort : Becoming comfortable with comfort theory
- 2007
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Ingår i: European Accounting Review. - : Informa UK Limited. - 0963-8180 .- 1468-4497. ; 16:1, s. 35-58
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Tidskriftsartikel (refereegranskat)abstract
- The sociological strand of auditing research has pointed to some difficulties of the American Accounting Association's (AAA) (and mainstream) definition asserting that auditing is about 'objectively obtaining and evaluating evidence regarding assertions about economic actions' (AAA, The Accounting Review, Suppl., 1972, p. 18). Instead, auditing has been described as rituals of verification that produce comfort. In this paper we seek to widen the understanding of the production of comfort by investigating the processes that end up as an audit. The processes are investigated by addressing the research question: how do auditors perceive the production of comfort? Twenty seniors were interviewed on the subject of identified discomforts in the audit process. The interviews were designed to identify the main allies and foes in the processes that make up an audit. In the presentation of the interviews, comfort theory is employed as a device to interpret the seniors' statements in terms of comfort as state, comfort as relief and comfort as renewal. Our conclusion is that the state of comfort that is demanded to become comfortable with an audit changes in relation to which actors get involved in the comfort production. Attaining a state of comfort involves a decision that sufficient discomforts have been relieved. In addition, as the definition of what it means to attain a state of comfort changes, more or less comfort as relief is required, and the audit, understood as becoming comfortable, is renewed. Suggested by comfort theory, the paper in this way develops the idea of auditing as a comfort-producing activity by examining three dimensions of audit comfort.
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| 7. |
- Catasus, Bino, et al.
(författare)
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Accounting and the Hope of Action
- 2016
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Ingår i: The European Accounting Review. - : Informa UK Limited. - 0963-8180 .- 1468-4497. ; 25:2, s. 403-419
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Tidskriftsartikel (refereegranskat)abstract
- The paper discusses the role of hope in the construction of an accounting technology to realize a program, by looking at a process of choosing non-financial indicators in an effort to achieve healthier workplaces. By exploring the literature dealing with the concept of hope and by drawing on the debate on the relationship between accounting and action, we highlight the features of three hope-related concepts (hopelessness, naive hope, and reflective hope). We also highlight how these concepts relate to different areas of uncertainty (validity, accuracy, and relevance) in the development of accounting technologies. Evidence collected through particiapant observation of a team involved in the construction of indicators offers empirical material to investigate the interplay between hopelessness, naive hope, and reflective hope in relation to uncertainties concerning the link between accounting and action. Beyond analyzing how team members move from a naive to a reflective hope in making the accounting-action link, the paper shows that among practitioners it is accepted that unintended consequences constitute the rule rather than the exception in the accounting-action link.
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| 8. |
- Catasús, Bino, et al.
(författare)
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Intangibles and credit decisions : results from an experiment
- 2003
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Ingår i: The European Accounting Review. - : Informa UK Limited. - 0963-8180 .- 1468-4497. ; 12:2, s. 327-355
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Tidskriftsartikel (refereegranskat)abstract
- The question in this paper is whether the inclusion of intangibles is meaningful in a credit decision context. To examine this issue we conducted an experiment with forty loan officers. The loan officers were presented with a situation of a company that required a credit of 5 million Swedish kronor. Half of the loan officers were given a traditional annual statement in which intangibles were treated as costs while the other half received a balance sheet in which brand, R&D and education were capitalized. The loan officers were asked to give their opinion regarding the credit decision and the importance of extra information. They were also confronted with four short cases where extra information about the company appeared. Statistical analysis revealed that none of three hypotheses relating to the statement that ‘accounting for intangibles does not matter’ could be falsified. Still, the acquired qualitative data that emerged from the study makes it possible to suggest another finding. The study shows that accounting for intangibles is accepted if the accounts were seen as reliable. The conclusion is that if it is possible to create reliable data about intangibles, accounting for intangibles is meaningful for credit decisions.
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| 9. |
- Cäker, Mikael
(författare)
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Customer focus : An accountability dilemma
- 2007
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Ingår i: The European Accounting Review. - : Routledge. - 0963-8180 .- 1468-4497. ; 16:1, s. 143-171
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Tidskriftsartikel (refereegranskat)abstract
- Customer-related measures are today often included in management accounting systems. In this paper, two situations are displayed where these measures are problematic to the managing process. The main argument of the paper is that customer accountability may serve to question demands for hierarchical accountability, as put forward in management accounting systems. The paper is based on a case study, in which two groups show strong customer accountability which is disturbing to the managing process. In the first group, socializing accountability processes to the customers override hierarchical accountability concerning delivery performance. In the second group, aligned accountability to customers and managers for customer-related measures override hierarchical demands for accountability for financial performance. The argument of the paper may be taken as a basis to question the broadening of management accounting to incorporate customer-related aspects. An organization needs to be managed in a balanced way. However, it should not be taken for granted that all aspects need to be incorporated into management accounting. With strong customer accountability, management accounting may need to be devoted to classical tasks of emphasizing financial performance and formalized processes.
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| 10. |
- Dong, Ting
(författare)
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Gender Salary Gap in the Auditing Profession: Trend and Explanations
- 2024
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Ingår i: European Accounting Review. - : Taylor & Francis (Routledge): SSH Titles. - 1468-4497 .- 0963-8180. ; 33:2, s. 617-645
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Tidskriftsartikel (refereegranskat)abstract
- This study documents the gender salary gap in the auditing profession and explains its development. Using Swedish administrative data from 2007 to 2015 for all Certified Public Accountants (CPAs), I find that the auditing profession's overall gender salary gap has substantially narrowed during this period, and more female auditors have moved up to the top earnings group, reducing the wide salary gap at the top of the income distribution. Further analysis shows that the increase in female auditors' client portfolio size accounts for approximately half of the decrease in the total salary gap. I also find evidence that the rise in female leadership in the Big Six firms is positively associated with the increase in female auditors' client portfolio size. This effect is more pronounced in the middle and bottom half of firms' hierarchy, suggesting that female representation at the top of a firm's hierarchy has spillover benefits for lower-ranked female auditors. The implications of this study may help audit firms narrow their gender gaps and cope better with the overall talent challenges of the auditing industry.
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