Journal of accounting, finance and auditing studies

14-30

Authors: O. Samuel Faboyede, O. Dick Mukoro, Francis Iyoha, A. Hannah Odafen

This study aimed at investigating the impact of the possible learning and adoption of Extensible Business Reporting Language (XBRL) in the Nigerian Stock Exchange. The data used for this study were gathered through the instruments of a questionnaire and secondary sources. One hundred and Fifty (150) copies of a questionnaire were administered, out of which one hundred and thirty-one (131) were collated for analysis. Kruskal-Wallis and descriptive statistical tools were used in testing these three hypotheses. Findings showed that environmental factors and problems in the Nigerian Stock exchange will affect the learning and implementation of XBRL in the Stock Exchange as well as the fact that certain infrastructure must be put in place before the implementation of XBRL. The study recommended that the Federal government should announce and compel the educational awareness and adoption of XBRL as a format for regulatory filing and financial reporting in the Nigerian Stock Exchange.

74-92

Authors: Richard M. Kiai

Financial inclusion is a poverty reduction tool and many economies have taken it up as a national agenda. To meet the expected levels of financial inclusion, governments have worked with financial intermediaries to reach the expected target group; the unbanked poor. As per financial intermediation theory, the role of financial intermediaries is to reduce information asymmetry in the financial system. To enhance financial inclusion, many countries and financial institutions have embraced Information Communication Technology (ICT). ICT is recognized as a tool that has worked greatly towards enhancing sharing of information at a low-cost and thus helped in improving financial inclusion. Though many countries have achieved high levels of financial inclusion through ICT, the levels of poverty have not changed. The purpose of this study was to find out the relationship between ICT, financial intermediation, and household investment. Study methodology was a review of the literature on financial inclusion, financial intermediation, ICT and household investment. The study noted that ICT is helping in financial intermediation and thus more people can access financial services. Unfortunately, the levels of ICT capability among the poor is low, and in that case, the poor are not able to use financial services offered through ICT platforms to undertake household investment. This is the reason as to why, despite the high levels of financial inclusion, the poor remains poor. This study recommends that the government make sure that the levels of ICT among the populace is high. Financial institutions should provide financial services with more user-friendly ICT platforms.

108-131

Authors: Ahmet Gökgöz

As per the concept “continuity of enterprises”, the lifetime of enterprises is considered as indefinite and financial statements are issued under this assumption. However, the lifetime of enterprises may come to an end due to economic and commercial circumstances. The situation “the lifetime of an enterprise has come to an end”, which is characterised as bankruptcy in the law literature, is never a desired situation for any parties associated with such enterprise. Over-indebtedness constitutes one of the signs indicating that the enterprise is about to go bankrupt. Over-indebtedness is a situation where the assets of an enterprise remain insufficient to fulfil its debts and liabilities or where its shareholder equity becomes negative. The board of directors of an over-indebted company should apply for a competent court, for bankruptcy. However, such company may request for postponement of bankruptcy if it submits to the court reasonable recovery projects to overcome over-indebtedness. If a company applies for a competent court, for postponement of its bankruptcy; it will be necessary for that company to submit to the court an interim balance sheet issued on the basis of the current values of its assets, debts and liabilities to determine the situation of over-indebtedness, in addition to its balance sheet issued by taking its accounting records as basis. This interim balance sheet is called as over-indebtedness balance sheet. The purpose of this study is to scrutinize the concepts “bankruptcy”, “postponement of bankruptcy” and “over-indebtedness” within the legal system and to describe the transaction “issuance of an over-indebtedness balance sheet” within the accounting system.

16-43

Authors: Peter J Baldacchino, Miraine Falzon, Simon Grima

The objectives of this research are to identify the major areas needing reform in the co-operative regulatory framework of the small state of Malta and to evaluate possible alternatives. Objectives were achieved by the analysis of the legal framework and the conduct of semi-structured interviews. Findings indicate a general yearning for co-operative regulation to be less paternalistic and to allow greater financial and operational autonomy to co-operatives and their institutions. However, results highlight the importance of upholding the distinct co-operative identity encompassed by the co-operative values and principles. The article concludes that it is the areas of co-operative financing, the distribution of returns and the role of co-operative institutions needing most addressing. Recommendations include amending the provisions relating to the redemption of capital upon member exit, removing the asset lock on ploughed-back surpluses, and updating regulations regarding representative co-operative organisations and the Maltese co-operative funding entity, the Central Co-operative Fund.

64-80

Authors: Rashedul Hasan, Niaz Mohammad, Mohammad Faridul Alam

Intellectual capital has been found to have a significant association with profitability in the financial sector of various parts of the world. As a result, this study aims to empirically investigate the relationship between intellectual capital and financial performance of twenty-seven private commercial banks for the year 2013 in Bangladesh. Annual reports for the relevant year of the selected banks have been used to gather secondary information for the empirical models based on Pulic’s VAIC model. Stepwise regression was performed for the full sample, conventional and Islamic banks separately. The analysis indicates that both VIAC and its components have a significant association with profitability. Results for conventional and Islamic banks established different components of VIAC as a significant predictor of bank’s profitability. A future study including all financial institutions could provide a better estimate of the impact of intellectual capital on profitability for the finance sector.

96-115

Authors: Feden Koç

This study aims to comparatively analyze scope and valuation measures of the financial investment account group in terms of Turkish Accounting Standards (TAS) / Turkish Financial Reporting Standards (TFRS) / Turkish Tax Procedure Law (TTPL). The study covers valuation measures used at the end of the period on the basis of the financial investments account group and does not include valuation measures used at the beginning of the period. It was aimed to reveal valuation differences between the companies applying TAS / TFRS / TTPL in terms of scope and valuation standards. For this reason, an example on evaluation of the financial investments account group with valuation measures included in TAS / TFRS / TTPL was presented. It has been determined that there are significant differences in the context of scope and valuation within the financial investment account group in terms of TAS/TFRS/TTPL.

158-174

Authors: Ahmet Gökgöz

The objective of this study is to determine the place of commercial documents in accounting education. For this purpose, at first an inventory study was conducted whether there is a lecture about commercial documents within associate’s degree and undergraduate degree programs in state and foundation universities offering accounting education in Turkey. Afterwards, 393 associate’s degree and undergraduate students, who were chosen with convenience sampling method and who are studying in 15 universities were included in the study. An application was used on the students in universities constituting the sample, who at least took and succeeded in fundamental level accounting courses such as general accounting of financial accounting, end of period accounting transactions, inventory balance sheet to measure whether they recognize commercial documents or not and whether they are able to make accounting records based on the commercial documents. In accordance with the results of the research, although the students studying in the universities within the scope of the analysis have knowledge about these documents and know their features, it is determined that they experience difficulties in preparing aforementioned documents and statements and making coverage entries.

17-36

Authors: Gladys Wanjiku THUITA

The study sought to investigate tax incentives, exclusively tax holiday and capital deductions and how they influence the attraction and retention of the Foreign Direct Investments in Export Processing Zones. A sample size of 72 employees of the firms operating under EPZs was selected for the study using stratified method for the firms and purposive method for the respondents. The study utilized descriptive survey design using self administered questionnaires to solicit information from sampled senior of Export Processing Zones firms. The study found that the use of tax holiday greatly influences the attraction and retention of Foreign Direct Investments. Arguably, the manufacturing sector seems greatly favored by the tax incentives compared to other sectors due to extended capital allowances. The research concludes that tax incentives should be enhanced towards boosting the growth and expansion of the foreign director investors and that the government should be willing to extend the tax holiday beyond ten years for the firms depending on capital injected on long term basis.

52-63

Authors: Hasan BASRI, Dahlia BUCHARI

This research was conducted to address the prevalent issues regarding the effect of industrial diversification and geographic diversification either partially or simultaneously on the practice of earnings management. By utilizing purposive sampling techniques on the secondary data, the total of 80 sample studies were drawn from manufacturing companies listed on Indonesian Stock Exchange for the period of 2011-2014. Multiple linear regression analysis provided by SPSS 21.0 was also employed to test the hypotheses constructed within this research. The result of the multiple linear regression analysis presents evidence that industrial diversification and geographic diversification simultaneously have a significant effect on the practice of earnings management. Alongside, it also affirms that partially, industrial diversification and geographic diversification have a significance effect on the practice of earnings management. These findings provide scholarly evidence on the implication of diversification strategies on the practice of earnings management to help financial statement users (investors, creditors, stakeholders, etc.), accounting standard setters, and regulators to assess the pervasiveness of earnings management within the company.

80-90

Authors: Dirk BEERBAUM, Maciej PIECHOCKI

Manuscript Type: Theoretical Main topic: A tsunami of regulations since the 2013 financial crisis is steering toward’s Europe’s financial service sector. At the same time the accounting standard for financial institutions’ core products the financial instruments will be changing. As disclosures according to IFRS 9 become mandatory by 2018, the existing IFRS Taxonomy for IFRS 9 already developed by the IFRS Foundation, represents a suitable and objective framework to assess IFRS 9 impact on disclosures. The specific goal of this paper is to perform a conceptual gap analysis considering the IFRS 9 taxonomy issued by the IASB and the Financial Reporting (FinRep) taxonomy on IFRS 9 issued by the European Banking Authority (EBA). In general, the IFRS Taxonomy is not used very much in practice. This is not understandable as several advantages relate to the IFRS taxonomy: as it is not the objective of a principle-based accounting standard to define specific rules for each and every disclosure, this is the reason why to derive reporting elements would be very difficult to accomplish. The IASB started to perform a review process of the XBRL Due Process in 2013. As a result the development of the IFRS taxonomy should become part of the general due process of the financial reporting standards. Due to these changes it is expected that the importance of the IFRS taxonomy will be growing. The FinRep-taxonomy has become mandatory since 2014 for all banks within Europe, to fulfill the regulatory reporting requirements according to the Capital Requirements Directive (CRR) IV. Results: Even though the disclosures for external reporting and for regulatory reporting are based on the same accounting framework International Financial Reporting Standards Boards (IFRS), differences can be observed with regard to disclosures, which are partly material. These differences become transparent when analysing IFRS- and FinRep-taxonomy reporting elements. This is caused by the principle-based IFRS, which enable scope of interpretation and the different objectives of the IASB and the banking supervision. Whereas the IASB follows the objective to develop industry non-specific international financial reporting standards, the banking supervision core focus lies on the banking industry. The EBA follows specific information requests with the FinRep-taxonomy in the role as banking supervisory. The IASB intends to provide decision useful information for investors. Nevertheless these two taxonomies provide the possibility for a starting point for the harmonization and the development of common practice disclosures, which could counteract against heterogeneous financial reporting and the issue of “information overload”. Method: Analytical Practical Implications: This paper is relevant for managers who are responsible for external and regulatory reporting.

20-42

Authors: Ahmet ONAY, Çağlar KARAMAŞA, Bilal SARAÇ

Elective courses, provide students development in terms of interest and ability consist important part of education system and can be used as effective tool for making career plan. Additionally they play important role in curriculum and education quality development. In this study selection criteria of accounting elective courses in business undergraduate and accounting graduate education are determined from the viewpoint of students. For this purpose survey consisting of course selection main criteria and sub-criteria was designed and conducted with final year students in business administration undergraduate and accounting graduate level students via four different fuzzy ranking methods. Furthermore, result of this methods were compared too.

60-74

Authors: Hasan BASRI, Heru FAHLEVI, Syarifah Hanifa SORAYA

This study intended to examine the effect of the capacity of human resources, the use of information technology and organizational commitment on the readiness of government agencies in the implementation of an accrual based government accounting system. The population in this study was all budget authorities within the Office of Religious Affairs Agencies of Banda Aceh with a total of 80 respondents. Data was collected from questionnaires and analysed by using multiple linear regression. The number of returned and usable questionnaires were 75 copies or 93.75% of the total distributed. The results showed that the capacity of human resources, the use of information technology and organizational commitment simultaneously and partially have a positive effect on the readiness of government agencies in the implementation of accrual based accounting. Further studies are recommended to include interviews with the informants and agencies from different ministries and local governments.

108-128

Authors: Mehmet Maşuk FİDAN

Republic of Turkey, Undersecretariat of Treasury has published The Communique number 2008-32/35 which has allowed banks to grant credits on gold, silver and platinum. Although, gold credits that have granted by banks have reached a volume of 2.273,2 Million Turkish Liras date 31.03.2016, there are no explanatory and regulatory information how to measure and accounting those loans in Turkish tax legislation. Similarly, Turkish Accounting and Financial Reporting Standards has no adequate explanation of the measurement and presentation about commodity loans which are not considered as financial instruments. In this article, we shows the Turkish Tax Procedure Law’s and Turkish Accounting and Financial Reporting Standards’ measurement and accounting principles of commodity loans which are not considered as financial instruments according to Turkish Accounting and Financial Reporting Standards.

142-154

Authors: Ahmet GÖKGÖZ, Fatma TEMELLİ

According to 5th annex of TAS 41 Agricultural Activities Standards, carrier plants mean a plant which is used for producing or providing agricultural productions, is expected to yield more than an accounting period, has very little salability as an agricultural product except for the insignificant sales. Carrier plants have been extracted from TAS 31, 30 and 31 numbered notices of Public Oversight Accounting and Auditing Standards Authority, dating 12.11.2014 and have been included in TMS 16 Class of Property Standards. With the mentioned change, many changes occurred related to the cognition and measurement of the carrier products. The purpose of this study is to explain how the carrier products can be accounted within the frame of Turkish Accounting Standards after the changes occurred with the 30 and 31 numbered notices of Public Oversight Accounting and Auditing Standards Authority, dating 12.11.2014.

172-194

Authors: Bilal Ahmad PANDOW

The mutual fund industry in India consists of public sector, private sector and foreign funds. All the three sectors were studied to compare the selectivity and timing performance on the basis of sponsorship of funds. However, from these only active funds belongings to Growth, Income, Balanced and Tax-Saving Schemes were selected for the study. The period of study is five years from April 2007 to 31st March 2011. The rationale for selecting the study period of 5-years from 1st April 2007 to 31st March 2011 stems from two reasons. Firstly, during this period, the stock market experienced higher volatility, as such chosen to find-out whether the funds have succeeded in surpassing the market performance even under depressed market conditions. Secondly, the five years were long enough to capture different market phases and to draw meaningful conclusions. Regarding timing performance empirical results have indicated that the majority i.e. 85 percent of fund managers have shown superior timing performance. As such, it is evident that Indian fund managers during the reference period were more inclined towards timing performance and market timing was evidenced, suggesting that there is a trade –off between a fund managers stock selection and market timing performance. This is indicative of the evidence of activity specialization among fund managers, implying that no manager can excel in both the activities.

20-35

Authors: Bilgehan TEKİN

This study aims to determine the articles that are most concerned with the subject of queuing theory in the world, most cited studies, the scientific meetings that related to the topic and the most used keywords based on Web of Science (WOS) bibliographic database. The study is intended a bibliometric mapping and analysis of academic papers that carried out in the field of queuing theory in the international area. The search that made on WOS, includes between 1990 and 2015 November. According to the initial screening result on WOS, it has seen that a total of 59 studies were published since 1990 with the topic of "queuing theory" in social sciences and in operations research indexes. Then these studies were analyzed.

56-63

Authors: Obigbemi Imoleayo FOYEKE, Faboyede Samuel OLUSOLA, Adeyemo Kingsley ADEREMI

Finance mix is a major factor that affects the liquidity and the going concern of a business enterprise. After an idea has been conceived by an entrepreneur, there is need to also analyse the capital required for startup and means of financing the project. A good combination of sources of finance is expected to boost the profitability of an organization, but if not properly mixed, could have a negative effect on the profitability of the organization. The main objective of the study is to evaluate the effects of financial structure on the profitability of manufacturing companies in Nigeria. This study employed the use of secondary data. The Spearman’s Rank correlation and regression techniques were used for analysis, using the STATA Package for a sample of 25 manufacturing companies quoted on the Nigerian Stock Exchange for the period 2008-2012. The study showed that equity has a significant positive relationship with the profitability of manufacturing companies in Nigeria. The study recommends that managers should place greater emphasis on the facilitation of equity capital and policy makers should encourage manufacturing companies by reducing the cost of debt.

85-97

Authors: Samuel FABOYEDE, Obiamaka NWOBU, Oladimeji AKANDE, Olufemi OLADIPO

21st century education standards focus on 21st century skills, content knowledge and expertise. Technology advances such as eXtensible Business Reporting Language (XBRL) have revolutionized the way information is exchanged and the way business is conducted. These days, speed is of the essence and loss of accuracy, lack of transparency, and difficulty in analysis are increasingly becoming apparent risks. This research exposes XBRL as a phenomenon that represents the future of global accounting education. It discusses the concept and need for XBRL as well as its potential uses and challenges. The research found that there is an ongoing transformation in the way business is conducted and regulated world-wide. The onslaught of the information revolution has profound ramifications for corporate reporting information preparers and users. It therefore recommends that the greater the degree of collaboration between all participants in the financial information supply chain, including government regulators and public sector accountants, the greater the benefits that this information format enables for all participants, educationists, academics, companies, regulators, investors, and government agencies alike.

115-132

Authors: Hilmi KIRLIOĞLU, Fırat ALTINKAYNAK

Globalization has removed borders of trade on the world and this result has directed to globalize the accounting systems. IAS (International Accounting Standards) and IFRS (International Financial Reporting Standards) are developed and updated everyday and these systems are integrated our country. “Capital Stock’s Conservation and Persistence” has been emphasized with importance on the IAS / IFRS’s "Conceptual Framework" and for that reason, the profit-loss calculations have been made with method of "Economic Profit and EBITDA (earnings before interest tax depreciation and amortization)" and the aim of this study is; giving a different standpoint for companies performance evaluations may be made more effective. Companies are to declare periodic amounts of profit or loss and as a result of this study is; these amounts have been found to reflect only tax or financial amounts. Hence, can be correctly calculated the real commercial amounts of profit-loss is demonstrating once more face the day importance of companies performance evaluation.

158-184

Authors: M.Fevzi ESEN

In an efficient market that has reduced systematic risk, the essential requirement of accurate pricing of financial instruments is equal access to the information, namely, disclosure. Insider trading as one of the problems related asymmetric information on financial markets prevents market transparency and beats investors' confidence. For this reason, the transmission of accurate and timely disclosed inside information to investors is intended to prevent monopolization and the use of privileged information that is unknown to everyone is prohibited in many markets around the world. In this study, the historical evaluation of insider trading with important cases beginning from the birth of stock markets is addressed. The regulations of insider trading is sorted in chronological order and referred to prosecuted cases. Moreover, EU regulations on insider trading is mentioned and the approach of new Capital Market Law No. 6362 which came into force on 2012 to insider trading is discussed. It is concluded that, the penal provisions on insider trading that can cause missappropriation must be clearly defined.

200-231

Authors: Alpaslan YAŞAR

There has been ongoing regulatory debates in the United States and European Union countries on whether audit partner rotation really improve the audit quality, showed that there has been continuing doubts on how mandatory rotation implemented. This situation point out that rotation policy choice of countries should be supported by empirical research. The aim of this study is to make a literature review on what extent of empirical evidence support the mandatory rotation decisions of countries. For this purpose, development of the mandatory rotation regulation in the United States, European Union countries and Turkey and the findings and limitations of empirical research has revealed. The presence of important limitations of the studies in the literature, indicate that there have been no enough empirical evidence that support the mandatory audit firm rotation or mandatory audit partner rotation decisions of countries.

255-270

Authors: Gencay KARAKAYA, Cengiz SEVİM

We face various challenges in time from the calculation of the tax charged on profits (only the income of the corporations required by the relevant standard) to the recognition. The main reason of these challenges is the emergence of two different concepts of profit over which the tax is to be calculated because of the incompatibilities between the Turkish Accounting Standards and the Tax Procedure Law. The first of these is the commercial profit calculated according to the principles which the relevant standard/standards has/have determined; the other one is the financial profit calculated according to the policies and principles in the tax law. If the differences between accounting profit and financial profit are temporary, it is reported as deferred taxes in the relevant period of balance sheet. TAS-IAS 12 Income Taxes Standard describes the differences in question. The differences in question emerge as deferred tax assets or deferred tax liabilities. The purpose of this article is to analyse TAS-IAS 12 Income Taxes Standard and is to explain the application of the standard in question in what manner that will be made. Therefore, with the help of an example of an application, TAS-IAS 12 Income Taxes Standard is compared with the current practice in Turkey.

292-306

Authors: Sylvester ERIABIE, Ben-Caleb EGBIDE

The main objective of the study is to examine whether accounting information is value relevant in both the food and beverage, and the conglomerate subsectors of the Nigerian Stock Exchange (NSE). The study also compared the value relevance of accounting information for both sectors. A random sample of seven companies was selected from a total population of thirteen companies listed in the Food and Beverage subsector of the NSE. The study also took a random sample of another seven companies in the conglomerate subsector. Data were gathered from these companies for the period 2005 to 2014. Using the Ohlson (1995) model and the multiple regression method, we found that market price per share (MPS) is positively, but insignificantly related to book value per share (BVPS) and earnings per share (EPS) in the conglomerate sub sector. On the other hand, for food and beverage sub sector, MPS is positively and significantly related to BVPS and EPS. Accounting information is more value relevant in the food and beverage subsector than the conglomerate subsector as shown by the adjusted R2 of 0.89 for Food and Beverage subsector and 0.15 for the conglomerate sub sector. We recommended that accounting rules should be more sector-specific, and monitoring should be taken more seriously in the conglomerate subsector to enhance value relevance of accounting information in NSE.