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In recent years, artificial intelligence has increasingly been interesting for its role in improving accounting practices. This research investigates whether there is a significant difference in value-added tax (VAT) reporting quality between traditional methods and those assisted by artificial intelligence (AI) in emerging markets. The experiment introduces an AI intervention using ChatGPT-4 to analyze data for accounting errors. The results demonstrate that AI-assisted reporting significantly improves reporting quality, as the AI effectively identified accounting errors that were missed in traditional reporting. This study makes a valuable contribution by providing novel, practical insights into the role and capabilities of AI in tax reporting, employing a rarely used experimental methodology to explore this topic. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Accounting Institute / Muhasebe Enstitüsü Dergisi is the property of Journal of Accounting Institute / Muhasebe Enstitusu Dergisi and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The purpose of the research was to find out the role of the control and internal auditing department in dealing with financial errors and the reasons for and type of such errors. The opinions of a group of staff of the control and internal auditing department of the University of Kerbala were taken. The findings of the researcher through the research sample responses showed that the Internal Audit Section has a significant role to play in detecting and processing financial errors that occur at work at all stages of the accounting cycle. [ABSTRACT FROM AUTHOR]

Copyright of Revista Técnica Tributaria is the property of Asociacion Espanola de Asesores Fiscales and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Using a comprehensive database of U.S. internal auditor job postings, we find that firms are about 10 percent more likely to post an internal auditor job after the revelation of accounting and operational failures. Also, the demand for internal auditors is stronger when a failure is more severe. Among firms posting internal auditor jobs, firms demand higher-quality internal auditors in response to a failure compared with when there has not been a recent failure. We find evidence of internal audit demand spillovers through connected directors, which helps mitigate concerns that the primary results are due to replacing internal auditors that recently left or due to endogenous links between hiring internal auditors and failure revelations. Overall, our evidence suggests that firms demand internal auditors to help ensure high-quality financial reporting and effective operations. JEL Classifications: G34, J23, M41, M42. [ABSTRACT FROM AUTHOR]

Copyright of InTraders International Trade Academic Journal / InTraders Uluslararası Ticaret Akademik Dergisi is the property of Kursat Capraz and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

There is an ongoing debate over uniformity versus flexibility in accounting regulation. This study examines the financial reporting consequences of a rigid accounting rule in China under which the fiscal year-end is uniform for all companies. Using extensive interviews together with large-sample archival analyses, we find that "mismatched" firms—those whose mandated financial reporting cycles are not aligned with their business cycles—exhibit higher levels of absolute abnormal accruals than their nonmismatched counterparts. Further analyses suggest that the negative association between mismatching and financial reporting quality is mainly driven by unintentional estimation errors rather than intentional earnings manipulation. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M41; M48; K22. [ABSTRACT FROM AUTHOR]

Copyright of Accounting & Auditing Perspective Magazine / Muhasebe ve Denetime Bakış is the property of Union of Chambers of Certified Public Accountants of Turkey (TURMOB) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Accounting & Auditing Perspective Magazine / Muhasebe ve Denetime Bakış is the property of Union of Chambers of Certified Public Accountants of Turkey (TURMOB) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper aimed to examine the role of management errors and accounting errors in the factors causing bankruptcy in Iranian firms. Using random sampling method, fifteen experts were recruited to collect the qualitative data. A questionnaire was prepared and finalized using the Delphi method. As for quantitative data, 191 experts accountants, auditors, judges, and lawyers participated in data collection. Research questions examined the relationships between five confounding variables with each other and the items of measurement of each confounding variable with the related variable by employing structural equation modeling method with partial least squares approach and LISREL software. The sample included 191 experts in bankruptcy. Regression was used to test the research questions, the results showed that five factors of managerial errors, criminal conducts, environmental crises, accounting errors, and unpredicted events were major causes of bankruptcy in Iranian firms, with managerial errors being the most important one. Therefore, using modern management techniques at different levels of firms will be useful in preventing managerial errors in decision making and rescuing firms from bankruptcy

The ability to detect misreporting is an important aspect of financial reporting regulation. I derive a measure of SEC error detection rates using information from comment letter reviews. Conditional on the SEC issuing a comment letter, I find that the review team detects an error resulting in a restatement in 4.6 percent of cases, while firms eventually restate financial reports for 13.6 percent of periods under review. My measure of SEC error detection rates is the ratio of reviews that detect an error to total reviews that could have detected an error. I document a positive association between detection rates and review team size. Using a novel approach to identify examiner characteristics, I show that this association is driven by the number of accountants on the review team. I find an economically insignificant association between individual examiner performance and economic or career incentives. JEL Classifications: G18; M41; M48. Data Availability: The examiner characteristics data used in this study are available upon request. All other data are available from the sources cited in the text. [ABSTRACT FROM AUTHOR]

While prior research on performance evaluation bias has mainly focused on the determinants and consequences of rating errors, we investigate how a firm can provide implicit incentives to supervisors to mitigate these errors via its calibration committee. We empirically examine the extent to which a calibration committee incorporates supervisors' evaluation behavior with respect to their subordinates in the performance evaluation outcomes, i.e., performance ratings and promotion decisions, for these supervisors. In our study, we distinguish between lack of skills and opportunism as two important facets of evaluation behavior, which we expect the calibration committee to address differently. Using panel data of a professional service firm, we show that supervisors' opportunistic behavior to strategically inflate subordinates' performance ratings is disciplined through a decrease in the supervisors' own performance rating, while the supervisors' skills to provide less compressed and, thus, more informative performance ratings is rewarded through a higher likelihood of promotion. [ABSTRACT FROM AUTHOR]

The Technical Pronouncement CPC 23 defines the criteria for rectifying errors from previous periods, including the necessary elements in their disclosure, thus, this study aims to analyze the way in which companies evidence the correction of accounting errors in their explanatory notes, for the years 2015 to 2018. For that, a descriptive research was carried out as to its objectives and documentary, as to its outline. The documentary analysis focused on the explanatory notes of the financial reports of the companies and the compilation of data proceeded through the elaboration of a checklist using scores 0 and 1 to indicate the fulfillment or not of the disclosure requirements of CPC 23 and the exhaustive reading of the notes, for analysis of the speech contained in them. A report of frequency of terms was also generated, to identify keywords, but frequent ones. The results indicated that among the 149 errors identified, the category "registration errors" was the most frequent (100%), whereas there was only one record of rectification of "presentation errors", "measurement errors". As for meeting the requirements of CPC 23, there was a balance between three of the four categories (in only one there was low disclosure). The discourse present in the notes is very marked by an attempt to soften the effects of errors, using similar terms with less semantic impact, and to highlight the positive effects of the corrections made. [ABSTRACT FROM AUTHOR]

The aim of the study is to define precisely and summarize the theoretical treatments about accounting errors thus helping both practitioners and students within the sphere of accounting and audit to understand how to find out easily and correct prior period accounting errors. The nature and the typology of the accounting errors are explained in further detail. A special attention has been paid to the distinction between changes in accounting estimates and accounting errors correction through a detailed enumeration of the cases, in which accounting estimates are performed. The determined approaches for correction of the assumed mistakes in the preparation and presentation of general-purpose financial statements in accordance with the two applicable bases of accounting in Bulgaria - IFRS/IAS and NAS are considered. By means of particular examples their practical applicability has been illustrated. [ABSTRACT FROM AUTHOR]

Basic financial indicators are based on accounting information. These indicators help to manage and plan every business and are quite important in the performance assessment of accounting units. The road to success for every business is to increase its competitiveness, which is not possible without access to the proper information. This article briefly describes the effect of accounting errors, mainly in the area of taxable expenses and revenues, on economic indicators. The aim of the article is to present research results focused on reasons for the occurrence of inaccurate accounting information and its impact on economic indicators. The first part of the paper analyses the error rate in individual areas of accounting. The difficulty of valuation, adjustments, depreciation, tax impacts and the accruals were proven to be the riskiest areas and the subsequent research focused on them. The second part of the research focused on the use of economic indicators in companies and the influence of errors on firms' ability to provide information. The data were processed using descriptive statistics and statistical analysis methods. In the following discussion, special attention was devoted to the distortion of economic indicators due to bad accounting information, the occurrence of which was statistically confirmed. [ABSTRACT FROM AUTHOR]

Accounting records constitute the basic information sources for various groups of users. The quality of information acquired may considerably affect their decision-making based on accounting data and information reported. The focus of this contribution is laid on the CFEBT method of risk detection of accounting records from the view of a risk of accounting errors and frauds, with a result in the reduction in the information asymmetry between their authors and users. The main article objective is to analyze the risk of accounting errors and frauds through CFEBT risk triangle and a case study of selected small entities which operate predominantly in processing industry. The CFEBT risk triangle was designed as a tool for detection, evaluation and management of the risk of accounting errors and frauds in circumstances of the Czech accounting standards and International Financial Reporting Standards (IFRS). The case study results that it was ascertained that the most significant discrepancy between the economic substance of the business activity of the accounting unit and the generation of cash flow is a consequence of reported financial revenues. [ABSTRACT FROM AUTHOR]

This study investigates how those in charge of monitoring nonprofits--donors and boards of directors--react to disclosure of financial reporting problems (accounting errors and internal control deficiencies). I find that donations tend to fall following disclosure of severe errors and control deficiencies. Furthermore, donations fall following errors only when they are disclosed in the report that is most widely accessible by donors. Turnover of chief financial officers (CFOs), representing a possible response of boards to financial reporting problems, increases following disclosure of errors. CFO turnover is not robustly related to control deficiencies. Overall, the results are consistent with donors and boards being willing to take action in response to concerns about financial reporting quality, thus indicating that they consider financial reporting important and that they act on signals of low quality. Interviews with nonprofit board members suggest that the value of error-free financial reporting derives less from the decision usefulness of the information and more from demonstrating that the organization is competent and trustworthy. [ABSTRACT FROM AUTHOR]

The objective of the present contribution is to evaluate the risk of accounting errors and frauds in small companies predominantly operating in agriculture. It is based on an analysis of the CFEBT risk triangle for financial statements reported for the years 2012 -- 2016. The CFEBT risk triangle is applied in form of a case study aimed at risk detection of occurrence of accounting errors and frauds for a selected sample of companies. A detailed analysis of a risk of impact of accounting errors and frauds is illustrated in the case study of an accounting unit chosen from the sample of companies evaluated. Results of the presented case study into the detection and evaluation of the risk based on interconnections between the reported profit (loss) and the generated cash flow during 5 accounting periods confirm the significance of having a complex view for decision making of users based on reported accounting records and accounting data. Future research into the CFEBT risk triangle focuses on performance of complex analyses for individual types of business activities of small and middle-sized companies in the context of Czech accounting standards and IFRS. [ABSTRACT FROM AUTHOR]

The study scope is to present the typology of the events analyzed through our research and their impact on the quality of reported financial data. The objectives of the study are to analyze the vulnerability of enterprises according to methodological criteria such as risks and calculations of the risk profile, as well as to establish the necessary measures for correcting the accounting errors based on the conclusions drawn from the analysis. The method used is prospective, financial analysis of the data taken from the financial statements of the companies included in the sample, dynamic for a period of 6 years (2011–2016). Based on the method used, a risk model has been conceptualized to identify the vulnerabilities and risks reported in the financial statements and to define a company risk profile based on which error correction measures can be adopted. Considering the amplitude of the necessary check-ups and the methodology of the imposed accounting treatments, we believe that the topic addressed is a real area of interest for the professional accountants because it organizes the application procedures and limits the impact of errors on the quality of financial reporting in Romania.

The IAS adopted in Bulgaria following its accession to the European Union introduced some new terms in the field of accounting, such as "accounting policy", "accounting estimate", and "accounting error". Generally, the indigenous scepticism of professional accountants is an obstacle to their accepting the new knowledge and points of view and subsequently applying them in practice. The aim of this paper is to investigate the possibilities of unifying the professional competence of accountants and auditors in terms of using accounting estimates in financial statements of non-financial enterprises in compliance with the accounting legislation in force. In order to achieve this aim, the author has tried to outline the different meanings attributed to this term by accountants and auditors in related standards. [ABSTRACT FROM AUTHOR]

This paper studies the reliability of financial reporting when the credibility of the manager, represented by his misreporting propensity, is unknown. We show that credibility concerns affect the time-series of reported earnings, book values, and stock prices in ways that seem consistent with empirical evidence. When investors are uncertain about the credibility of the reporting process, earnings response coefficients, as well as market-to-book values (MTB), are random and time-varying; relatively low MTB reflect poor credibility of financial reporting; stock prices are s-shaped in earnings surprises and relatively insensitive to bad news. Finally, when the manager is more likely to have reporting discretion, discretionary accruals tend to be larger and more volatile. We estimate the model using U.S. earnings announcement data during 2002-2012 and find that the probability of misreporting is 7 percent. A counterfactual analysis reveals that ignoring the possibility of misreporting leads to overestimation of the mean (3.5 percent), volatility (13 percent), and persistence of earnings (17 percent). [ABSTRACT FROM AUTHOR]

We propose a new measure of accounting reporting complexity (ARC) based on the count of accounting items (XBRL tags) disclosed in 10-K filings. The preparation and disclosure of more accounting items is complicated because it requires greater knowledge of authoritative accounting standards. This aspect of complexity can increase the likelihood of mistakes, incorrect application of GAAP, and can ultimately lead to less credible financial reports. Consistently, we find that ARC is associated with a greater likelihood of misstatements and material weakness disclosures, longer audit delay, and higher audit fees. In comparison to commonly used measures of operating and linguistic complexity, the associations between ARC and these outcomes are more consistent, exhibit greater explanatory power, and have stronger economic significance. These and additional validation and robustness tests suggest that ARC more completely reflects accounting complexity. In addition, ARC exhibits several advantageous properties, including across- and within-firm variation, availability for the universe of SEC filers, and a direct connection to accounting, inherent in its derivation from detailed accounting disclosures. Finally, because it relies on a comprehensive set of detailed accounting data, ARC broadly captures accounting complexity, while, at the same time, it can be disaggregated into account-specific measures of complexity. [ABSTRACT FROM AUTHOR]

There are still different views on the intangibility of the opening balance sheet at global level in the process of convergence and accounting harmonization. Fnding a total difference between the Anglo-Saxon accounting system and that of the Western European continental influence, in the sense that the former is less rigid in regard with the application of the principle of intangibility, whereas that of mainland inspiration apply the provisions of this principle in its entirety. Looking from this perspective and taking into account the major importance of the financial statements that are intended to provide information for all categories of users, ie both for managers and users external to the entity whose position does not allow them to request specific reports, we considered useful to conduct a study aimed at correcting the errors in the context of compliance with the opening balance sheet intangibility principle versus the need to adjust the comparative information on the financial position, financial performance and change in the financial position generated by the correction of the errors in the previous years. In this regard, we will perform a comparative analysis of the application of the intangibility principle both in the two major accounting systems and at international level and we will approach issues related to the correction of the errors in terms of the main differences between the provisions of the continental accounting regulations (represented by the European and national ones in our approach), Anglo-Saxon and those of the international referential on the opening balance sheet intangibility. [ABSTRACT FROM AUTHOR]

Errors and bias are both inherent features of accounting. In theory, while errors discourage bias by lowering the value relevance of accounting, they can also facilitate bias by providing camouflage. Consistent with theory, we find a hump-shaped relation between a firm's propensity to engage in intentional misstatement and the prevalence of unintentional misstatements in the firm's industry for the whole economy and a majority of the industries. The result is robust to using firms' number of items in financial statements and exposure to complex accounting rules as alternative proxies for errors and to using the restatement amount in net income to quantify the magnitude of bias and errors. To directly test for the two effects of errors, we show that when errors are more prevalent, the market reacts less to firms' earnings surprises and bias is more difficult to detect. Our results highlight the imperfectness of accounting, advance understanding of firms' reporting incentives, and shed light on accounting standard setting. [ABSTRACT FROM AUTHOR]

Land surface models are notorious for containing many parameters that control the exchange of heat and moisture between land and atmosphere. Properly modeling the partitioning of total evapotranspiration (ET) between transpiration and evaporation is critical for accurate hydrological modeling, but depends heavily on the treatment of turbulence within and above canopies. Previous work has constrained estimates of evapotranspiration and its partitioning using statistical approaches that calibrate land surface model parameters by assimilating in situ measurements. These studies, however, are silent on the impacts of the accounting of uncertainty within the statistical calibration framework. The present study calibrates the aerodynamic, leaf boundary layer, and stomatal resistance parameters, which partially control canopy turbulent exchange and thus the evapotranspiration flux partitioning. Using an adaptive Metropolis-Hastings algorithm to construct a Markov chain of draws from the joint posterior distribution of these resistance parameters, an ensemble of model realizations is generated, in which latent and sensible heat fluxes and top soil layer temperature are optimized. A set of five calibration experiments demonstrate that model performance is sensitive to the accounting of various sources of uncertainty in the field observations and model output and that it is critical to account for model structural uncertainty. After calibration, the modeled fluxes and top soil layer temperature are largely free from bias, and this calibration approach successfully informs and characterizes uncertainty in these parameters, which is essential for model improvement and development. The key points of this paper are 1) a Markov chain Monte Carlo calibration approach successfully improves modeled turbulent fluxes; 2) ET partitioning estimates hinge on the representation of uncertainties in the model and data; and 3) despite these inherent uncertainties, constrained posterior estimates of ET partitioning emerge. [ABSTRACT FROM AUTHOR]

Given that the usage and complexity of spreadsheets in the accounting profession are expected to increase, it is more important than ever to ensure that accounting graduates are aware of the dangers of spreadsheet errors and are equipped with design skills to minimize those errors. Although spreadsheet mechanics are prevalent in accounting curricula, less attention has been given to design considerations that can reduce the incidence of spreadsheet errors. The extant literature provides evidence of the most common types of spreadsheet errors and explanations as to why they occur. Using the work of Panko and others, this paper outlines a three-step approach for introducing spreadsheet design practices to novice spreadsheet developers. To facilitate design instruction, this paper provides a summary of foundational readings related to spreadsheet errors as well as specific teaching strategies for addressing the most common spreadsheet errors identified in the literature. [ABSTRACT FROM AUTHOR]

The accounting information is reliable when it does not contain significant errors, is not biasedand accurately represents the transactions and events. In the light of the regulations complying with Europeandirectives, the information is significant if its omission or wrong presentation may influence the decisions users makebased on annual financial statements. Given that the professional practice sees errors in registering or interpretinginformation, as well as omissions and wrong calculations, the Romanian accounting regulations stipulate treatmentsfor correcting errors in compliance with international references. Thus, the correction of the errors corresponding tothe current period is accomplished based on the retained earnings in the case of significant errors or on the currentearnings when the errors are insignificant. The different situations in the professional practice triggered by errorsrequire both knowledge of regulations and professional rationale to be addressed.

This study considers risky investment projects under adverse selection and examines optimal penalties for erroneous auditing reports to maximize social welfare. These penalties give firms an incentive to choose accounting policies that maximize social welfare. We characterize the optimal penalties such that efficient firms choose an aggressive accounting policy and inefficient firms choose a conservative accounting policy. [ABSTRACT FROM AUTHOR]

This paper builds on and contributes to the literature on Chief Financial Officer's (CFO) compensation and turnover. We contend that the accounting talent of CFOs can be measured by accounting errors that occur when CFOs implement accounting standards. We find (i) a positive association between the CFO's accounting talent and the CFO's compensation ex ante in the transition year; (ii) a positive association between the CFO's accounting talent and the CFO's bonus in the subsequent year (adoption year); and (iii) an inverse association between the CFO's accounting talent and CFO turnover in the subsequent year (adoption year). [ABSTRACT FROM AUTHOR]

"Little r" restatements occur when a firm's immaterial errors accumulate to a material error in a given year. Unlike "Big R" restatements that must be reported through an SEC 8-K material event filing, little r restatements do not require an 8-K form or a withdrawal of the auditor opinion. This paper documents this previously unexamined form of restatement and analyzes the characteristics of the firms that have used this method of correcting accounting errors over the period 2009 through 2012. Contrary to concerns voiced by regulators and research agencies we find, in multivariate tests, that little r firms are generally more profitable, less complex, and show some evidence of stronger corporate governance and higher audit quality than Big R firms. Compared to non-revising or restating firms, little r firms have lower free cash flows, higher board expertise, higher CFO tenure, are less likely to use a specialist auditor, and less likely to have material weaknesses in their internal controls. We also find that the majority of little r firms do not include any discussion of why these little r's occurred. We discuss policy implications related to disclosure of little r revisions. [ABSTRACT FROM AUTHOR]

A recently published academic study by Causholli, Chambers, and Payne (2014) brings new evidence to a long-standing debate about whether the provision of non-audit services (NAS) can impair auditor independence. Prior research on this question has largely found no evidence of lower financial reporting quality when auditors provide high levels of NAS. By considering the potential that future NAS, rather than current NAS levels, could impair auditor independence, Causholli et al. (2014) bring a fresh perspective on the question. They argue that it is the potential for new NAS revenue that would most likely cause auditors to have impaired independence. They find strong evidence that audit quality suffers when clients are willing to purchase future NAS from their auditor. [ABSTRACT FROM AUTHOR]

This study examines the accounting errors committed by public charities as revealed by searching for disclosures of their corrections in auditor reports, financial statements, and footnotes. A sample of 5,511 audited financial statements, predominantly from the years 2006 to 2010, was obtained from GuideStar, a data provider for nonprofits. Public charities report errors at a rate that is 60 percent higher than that of publicly traded corporations, and almost twice as high as that of similar-sized corporations. The errors are commonly errors of omission (i.e., failing to recognize items). The error rate has a strong positive association with internal control deficiencies and a strong negative association with Big 4 and second-tier auditors. Regressions are unable to detect a significant association between the error rate and organization size, type, or portion of the budget devoted to administrative activities. The error corrections often have low visibility in the financial reports issued by public charities; although they are reported in the footnotes of the audited financial statements, they often are not mentioned in auditor reports and in IRS Form 990s. The study improves our understanding of the accounting challenges faced by nonprofits, and may enhance nonprofit financial reporting by helping nonprofit managers and auditors understand the common circumstances and types of errors, and thus what activities to monitor more closely. The study also contributes to the academic literature by comparing the errors of nonprofits to those of corporations, by examining the outcomes of audits conducted by large as well as small auditors, and by advancing our understanding of discrepancies between audited and unaudited financial reports. [ABSTRACT FROM AUTHOR]

Academics and practitioners agree that the enforcement of accounting standards has an important role in promoting high quality financial reporting and favourable capital market outcomes. We test three new enforcement proxies from Brown, Preiato and Tarca (2014) that focus specifically on auditing and accounting enforcement. We examine firms' information environments, represented by the error in analysts' consensus forecasts and the extent of disagreement among analysts, as indicated by forecast dispersion. For financial years ending from 2003 to 2009, we construct a sample of 357,034 firm-month observations on the errors and dispersion of analysts' earnings forecasts for 10,769 firms domiciled in those 39 countries. We find that higher scores for all three proxies are associated with lower error and less disagreement in forecasts. In addition, we find that the indices have significant explanatory power when previously used enforcement proxies (such as Kaufmann et al.'s 2010 rule of law measure) are included in the regression models, pointing to the importance of specific measures of accounting enforcement. We conclude that accounting enforcement may be more important in securing favourable economic outcomes than has been previously realised, because researchers commonly have used noisier, more general legal proxies for enforcement that understate its marginal effects. [ABSTRACT FROM AUTHOR]

The article discusses the use of risk management in financial auditing of small & medium-sized businesses (SMEs). Topics dicussed include the categories of risk factors and their importance, identification of significant systems and accounts, and the factors that influence the occurence of error and fraud in audits.

In respect to record keeping of accounting and issuance of financial statements, two types of accounting frauds may be refer to camouflage or make up in general. Camouflage generally aims to reduce liabilities to public authorities by understating revenues and overstating expenses. On the other hand, make up targets to increase entity values by overstating revenues and assets, understating expenses and liabilities. In this study, accounting and financial reporting errorsand frauds with correlated penalties in the scope of legal legislations, including Turkish Commercial Code, Capital Market Code, Tax Procedural Law and Turkish Penal Code, have been evaluated. [ABSTRACT FROM AUTHOR]

This article reviews the literature concerning the emergence of developmental states in Africa and gives an overview of debates on the usefulness of the 'East Asian model' for sub-Saharan Africa. The conclusion highlights how historic developmental states were often the product of trial and error rather than a grand plan; the concept of a developmental state therefore often works less as a model and more as a 'buzzword' with its own uses and effects. [ABSTRACT FROM AUTHOR]

Fair value accounting has been a hotly debated topic during the recent financial crisis. Supporters argue that fair values are more relevant to investors, while detractors point to the measurement error in the estimation of the reported fair values to attack its reliability. This study examines how noise in reported fair values impacts bank capital adequacy ratios. If measurement error causes reported capital levels to deviate from fundamental levels, then regulators could misidentify a financially healthy bank as troubled (type I error) or a financially troubled bank as safe (type II error), leading to suboptimal resource allocations for banks, regulators, and investors. We use a Monte Carlo simulation to generate our data, and find that while noise leads to both type I and type II errors around key Federal Deposit Insurance Corporation (FDIC) capital adequacy benchmarks, the type I error dominates. Specifically, noise is associated with 2.58 (2.60) [1.092], 5.67 (6.44) [1.94], and 10.60 (26.83) [3.423] times more type I errors than type II errors around the Tier 1 (Total) [Leverage] well-capitalized, adequately capitalized, and significantly undercapitalized benchmarks, respectively. Economically, our results suggest that noise can lead to inefficient allocation of resources on the part of regulators (increased monitoring costs) and banks (increased compliance costs). [ABSTRACT FROM AUTHOR]

The accounting information is reliable when it does not contain significant errors, is not biased and accurately represents the transactions and events. In the light of the regulations complying with European directives, the information is significant if its omission or wrong presentation may influence the decisions users make based on annual financial statements. Given that the professional practice sees errors in registering or interpreting information, as well as omissions and wrong calculations, the Romanian accounting regulations stipulate treatments for correcting errors in compliance with international references. Thus, the correction of the errors corresponding to the current period is accomplished based on the retained earnings in the case of significant errors or on the current earnings when the errors are insignificant. The different situations in the professional practice triggered by errors require both knowledge of regulations and professional rationale to be addressed. [ABSTRACT FROM AUTHOR]

This research note examines whether auditors ''link'' their entity-level risk assessments to their core business process risk assessments. For auditors who performed a business process analysis of the core business process, there is a positive association between the identification of significant process-level business risks and the identification of significant business risks at the entity level. We also find that performing a business process analysis leads to higher assessments of the risk of material misstatement at the process level. With respect to the linkages between risk-related judgments, we find that auditors link their assessments of misstatement risk at the process level to similar assessments at the entity level, while taking into account significant process-level risks. [ABSTRACT FROM AUTHOR]