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- Carrington, Thomas, 1974-, et al.
(author)
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Facing financial instruments in financial institutions: The Fair Value Hierarchy as coding practice
- 2013
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Conference paper (peer-reviewed)abstract
- One of the more debated consequences of the introduction of fair value accounting is the ejection of the principle of prudence, also mirrored in IASB’s updated conceptual framework. The rise of fair value accounting has been explained as largely due to the increased influence of the financial economics paradigm over the accounting standard-setting process (Power, 2010). Whereas the quantitatively inclined accounting research has debated the effects of these changes on accounting quality and the possibilities for earnings management more qualitatively inclined studies have shown these changes to be challenging for auditors (Smith-Lacroix et al., 2012) and accountants in financial institutions (Cleverton et al., 2011). Another jurisdictional change in financial institutions that have been noted is the rise of risk managers (Mikes, 2009; 2011). By studying the coding practices related to an accounting device central for the production of fair values—The Fair Value Hierarchy—we are able to visualize these issues. What our analysis show is how the previously reported marginalisation of traditional accountants and relative increase in the importance of risk management mediates IASB’s financial economics inspired fair values in a way that make them more, prudent. More particularly, we find a strong support for, risk managers preferring Level 2 in the Fair Value Hierarchy, which allows for more control of the numbers. Hence, although our findings support the claims that traditional accountants are becoming increasingly marginalised, it is also evident that accounting is not.
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- Crawford, Jason, et al.
(author)
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Accounting and control in banks : A literature review
- 2017. - 1
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In: Bank Regulation. - New York : Routledge. - 9781138680500 - 9781315563893 ; , s. 15-63
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Book chapter (other academic/artistic)abstract
- This chapter addresses the gap by identifying and analyzing present knowledge on accounting and control in banks, examines how this research has developed over the time period studied, and proposes some possible avenues for future research. It analyzes the literature studied by applying the reasoning contained in the Fredrik Nilsson and Anna-Karin Stockenstrand framework. The framework supports an empirical categorization of studies using a top-down perspective of banks from regulation, to governance, to financial reporting, and to internal aspects of banks. The Financial and Accounting Regulation category address several issues affecting accounting and control in the banking sector. E. Bengtsson identifies increased political influences on international accounting standard-setting as well as International Accounting Standards Board governance and accountability structures following the 2007 crisis. The financial reporting and disclosure literature addresses issues surrounding risk assessment, investor decision-usefulness, valuation, and governance. The literature on bank visibility addresses bank architecture as well as bank profits and their influence on legitimacy.
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