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Financial accounting information and corporate governance $

Financial accounting information and corporate governance $

A substantial literature examines the use of accounting information in incentive compensation contracts. Much of this work relies on economic theory, and is best understood in the context of the broad sweep of economic research on executive compensation. The roots of corporate governance research can be traced back to at least Berle and Means (1932), who argued that management ownership in large firms is insufficient to create managerial incentives for value maximization. Given the widespread existence of firms characterized by the separation of control over capital from ownership of capital, corporate governance research has focused on understanding the mechanisms that mitigate agency problems and support this form of economic organization. Scholars have isolated a number of pure market forces that discipline managerial behavior. These include product market competition (Alchian, 1950; Stigler, 1958), the market for corporate control (Manne, 1965), and labor market pressure (Fama, 1980). However, despite these market forces, there evidently remains a residual demand for additional governance mechanisms that can be tailored to the specific circumstances of individual firms. This demand is documented in the large body of economics research examining boards of directors, compensation contracts, concentrated owner- ship, debt contracts, and the role of securities law in disciplining managers to act in the interests of capital suppliers (see Shleifer and Vishny (1997) for an insightful review of this literature). A separate compensation literature has evolved as a branch of governance research.
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Evaluation Of The Effectiveness Of Accounting Information Systems

Evaluation Of The Effectiveness Of Accounting Information Systems

under two groups; 1) information that influences decision-making and mainly used for the purpose controlling the organization and 2) information that facilitates decision- making process and mostly used for coordination within an organization [15,17]. Huber [11] argues that, integration of accounting information systems leads to coordination in organization which, in turn, increases the quality of the decisions. Some researches in accounting show that the effectiveness of accounting information systems depend upon the quality of the output of the information system that can satisfy the users' needs [3,8,13,16,21].
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Development of accounting information system and accounting standards for small and medium enterprises (SME)

Development of accounting information system and accounting standards for small and medium enterprises (SME)

The accounting system and the accounting information system have the same idea, namely: a series of administrative activities to handle corporate transactions so that they are uniform. They both are equipped with a variety of procedures, documents and journals where their results are financial reports for internal and external uses 1994 [6]. The accounting system utilizes the existing resources within the company, namely: employees, automatic machines, computers and other resources. The accounting system can be carried out manually (by utilizing the employees and support automated machines such as copy machines, calculators, and typewriters) or by computerized ones (by using computers).
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Influence of user ability and top management support on the quality of accounting information system and its impact on the quality of accounting information

Influence of user ability and top management support on the quality of accounting information system and its impact on the quality of accounting information

Top management support is the willingness of the top management to provide the necessary resource and authority or power for project success (Verhage, 2009). Cerrulo (1980) in Choe (1996) explains that top management support includes the preparation of the assessment objectives or goals, evaluate the proposed information system development project, defines the information and processes necessary, conduct program reviews and information systems development plan. Choe (1996) cites the opinion Doll (1985) who stated that top management support includes funding guarantee and prioritize the development of the system. According Muntoro (1994) top management support is not only important for the allocation of the necessary resources, but gave a strong signal to employees that the changes made is essential. In line with the theory of Bodnar and Hopwood (2010: 29) which states that the factors that affect the application of accounting information systems is the use of information technology, the expertise of users, user participation, training, top management support and user conflicts. The theory expressed by Arpan and Isaac (2005: 7), that top management support is an important factor in determining the effectiveness of the application of information systems in organizations. Support of top management in this study was defined as top management understanding of computer systems and the level of interest, support and knowledge of the information systems or computerized (Lee and Kim, 1992). According to Arpan and Isaac (2007: 7) top management support is an important factor that determines the effectiveness of the organization's information systems acceptance. Thus, from the above definition it could be said the top management support are management wishes to provide information and processes required and determine the priority of system development.
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Company's Characteristics and Accounting Information Relevance

Company's Characteristics and Accounting Information Relevance

The study contributes to the literature by extending valuation research to include Jordan as a developing country. Also, valuation models and analysis are extended by examining the accounting information value relevance affected by company’s characteristics using three different stock price measures. Then, the expected results of this study are important to investors and other market participants for better understanding the effect of company’s characteristics on the accounting information value relevance and to indicate which measure for stock price is more dependable in representing firm value. The study presents evidence that can serve as a guideline to investors, managers, and financial analysts to better evaluate the firm value. Also, this evidence can serve educational institutions in their courses.
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MANAGEMENT COMMITMENT AND ACCOUNTING INFORMATION SYSTEM

MANAGEMENT COMMITMENT AND ACCOUNTING INFORMATION SYSTEM

Quality of accounting information which can provide benefits in the form of an opportunity to do things faster, more correctly (effective) and cheaper (efficient) (Azhar Susanto, 2008:12). Accounting information quality can lead to decisions taken by the user is not qualified so can result in losses (Huang et al., 1999). The wrong decision can in turn lead to additional costs, adding a longer time, lower the reputation of the organization, causing difficulty in identifying opportunities, as well as lost opportunities (Baltzan, 2012:209). The information produced by the accounting information system is not just the financial statements, but all the information that support increased productivity, efficiency and control (Azhar Susanto, 2008:11). In practice, masih` many problems occurred in accounting information systems that are not relevant to non-business entities such as accounting information system applied to SOEs still bad proved inaccurate recording and reporting process is not in accordance with the former SOE SOE Minister Metri (Dahlan Iskan, 2012). Obviously the conditions relating to the problems in the quality of input data and the application of accounting information systems above require attention from management in the organization, management must demonstrate its commitment in the determination of the data inputted into the accounting information system, because without the commitment of management, there is no data input quality (Hubley, 2001; Adelman, 2009), which is needed to produce quality information (Kimbal et al., 2008). Management commitment is needed in determining the scope of data quality clear because not all data need to be connected to the accounting information system (Vodapaali: 2009).
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The Effect of IFRS, Information Asymmetry and Corporate Governance on the Quality of Accounting Information

The Effect of IFRS, Information Asymmetry and Corporate Governance on the Quality of Accounting Information

235 Pledge on shares can access capital but maintain control; hence, it is a common practice for directors and supervisors to borrow money by using company shares as collateral. This leverage by credit expansion enhances the correlation between the personal wealth of major shareholders, directors and supervisors and the company’s share prices (Shen and Huang, 2001). Once share prices drop, controlling shareholders will face the pressure of providing additional collaterals. Therefore, they have incentives to manage earnings. Kao (2002) investigates accounting information in the context of agency problems associated with pledge on shares owned by directors and supervisors and suggests that this practice worsens the agency problems between controlling shareholders and external shareholders. It deepens the influence of directors and supervisors on the management and undermines the predictability of earnings of the current period to future performances. Chang et al. (2007) sample listed companies in Taiwan and find that earnings management becomes more pronounced along with an increase of pledge on shares owned by directors and supervisors. However, this paper anticipates that IFRS can enhance accounting information quality because it enhances the transparency of financial reporting and mitigates the negative effects of pledge on shares owned by supervisors and directors. Hence, this paper establishes H6:
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Influence Effectiveness of Internal Control System and Implementation of Financial Accounting Information System on the Quality of Accounting Information

Influence Effectiveness of Internal Control System and Implementation of Financial Accounting Information System on the Quality of Accounting Information

The effectiveness of the accounting information system impact on the quality of financial reporting. This was stated by Pornpandejwittaya and Pairat (2012) in his research that the effectiveness of AIS refer to collecting, storing a data processing entering managing, controlling and report information of accounting so that an organization can achieve financial statement quality. AIS financial should be prepared based on the Indonesian Financial Accounting Standards (GAAP) to produce quality information (Azhar Susanto, 2013). From research Nomsa Mndzebele (2012) showed that the accounting information system to provide accurate information in a timely and clear control. Bonson, et al., (2010) suggested that the characteristics of accounting information systems can improve the quantity and quality of information. Xu, et al., (2003) in his research suggests that based on the case study analysis, it is clear that human, systems, and organizational issues were regard as being very critical for high quality information. In addition external factors may have significant impact on information quality. From research Doyle, et al., (2007) examined the relationship between accruals quality and internal control. This is related to the weakness of the overall level of internal control. Procedures and instructions in accounting information systems used to collect, process, and store data (Romney, et al., 2012). Implementation is the carrying out, execution or practice of a plan, a method, or any design for doing something. Implementation is the action that must follow any preliminary thinking in order for something to actually happen (Rouse, 2007).
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Accounting Information: Which Information Attracts Investors Attention First?

Accounting Information: Which Information Attracts Investors Attention First?

Whereas prior studies suggested that the value relevance of earnings information and cash flows information is conditional and vary from one country to another depending on firms’ specific factors and economic conditions Bepari et al. (2013). The results concerning the comparison between them indicated that the value relevance of earning information is superior to the value relevance of cash flow information in ASE. This result supports most of pervious studies in Jordan (e.g., Abu-Nassar & Al-Thnaibat 2005, Hamdan et al. 2008). On the other hand, this study documented that individual investors have the time and abilities to assess the accounting information for investment decisions. Two important facts justify these results: first, more than half of the investors (56.4%) have a university certification in business majors which means that they are familiar with accounting information and face no problem in assessing such information. Second, the majority of investors (87.2%) currently have less than fifteen companies in their portfolios and a considerable percentage of them (76.3%) make less than fifteen trading transactions monthly. So they do not need a lot of time and effort to gather accounting information and assess it for a few numbers of companies and transactions.
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Accounting information and the prediction of farm viability

Accounting information and the prediction of farm viability

Any firm or entity whatever will require accounting information. This should cause no raised eyebrows and no-one presumably finds the proposition contentious. Particularly in agriculture, it is generally assumed that the introduction of accounting will improve farm management and produce better farm performance (see for example Luening, 1989). However, Poppe (1991) regrets that no research has yet been able to demonstrate this, and has reported the limited use of accounting in agriculture. Moreover, To the author's knowledge there is no published empirical research as to whether the use of accounting data can significantly improve the explanation and prediction of farm viability/failure.
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Essays on the value relevance of accounting information

Essays on the value relevance of accounting information

irrelevant to investors, then adjusting merely for the losses is likely to be a biased procedure. 1 Both predictable and unpredictable changes in e.g. customer demand and input prices affect (positive and negative) earnings and make it vary over time. A conservative accounting system ensures that these known/predictable effects are accounted for after their occurence. There is an abundant accounting literature on earnings persistence (see e.g., Penman [1999], Ramakrishnan and Thomas [1999], Penman and Zhang [2002]) suggesting that the nature of events and accounting rules cause reported earnings to have several distinguishable components. To understand these it is vital to also understand firms’ long-term profitability prospects. Profitability is known to reverse to a firm and/or industry mean. 2 Penman and Zhang [2002] and [2004] use the return on net operating assets to determine the mean reversion pattern in earnings. In a similar study, Fama and French [2000] use the return on capital employed and find a negative autocorrelation over time. A most fundamental aspect of the investment strategy proposed by Sloan [1996] is the finding that persistence (or mean reversion patterns) of cash flows and accruals differ. Most of these models do not take industry-differences into account (although at least Penman and Zhang [2004] note that this probably would improve results further). Even simple models that just separate reported earnings into a sustainable and transitory component prove useful in investment strategies (e.g., Penman and Zhang [2004], Anderson and Brooks [2006]). We expect that adjustments for the different properties of sustainable and transitory components of earnings increase the overall value relevance of accounting information.
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Information Technology and Accounting Information System in the Nigerian Banking Industry

Information Technology and Accounting Information System in the Nigerian Banking Industry

Information technology has tremendously stimulated expansion of the banking networks and range of the offered services during recent years. The information technology has become a critical business resource because its absence could result in poor decisions and ultimately business failure. This study intends to find out the information technology influence on accounting information production in the Nigerian banking industry. Both primary and secondary data were used and Analysis of Variance (ANOVA) was used to test the hypothesis. Judgmental sampling method was used to obtain a representative sample of the population. Although for all Nigerian banks the efficiency has increased, the improvement of cost of efficiency is relatively much smaller than in the case of profit efficiency. It is also observed that accounting information technology can improve banks performance by reducing operational cost and by facilitating transactions among customers within the same or different network. It is, therefore, concludedthat accounting information technology is relevant in simplifying issues and in the provision of quality information in the Nigerian banking industry. That explains why the banks spend a greater part of their resources on information technology and consider its application as a comparative edge in the competitive banking industry. This paper recommends that the impact of the progress in accounting information technology on banking service should not lead to a very strong increase of cost of their processing, which put in question possibility to achieve economy of scale by Nigerian banks. Also all Nigerian banks should continue to utilize and upgrade their information technology for efficient service delivery and profitability.
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Essays on Accounting Information Quality in China

Essays on Accounting Information Quality in China

This research contributes to provide a better understanding of the nature of accounting information reliability by measuring the relation between the informativeness of earnings and corporate governance based on the Chinese context with its unique political, social, cultural and economic environment and large sample size. In particular, mainland China has a distinct two-tier board structure comprising a supervisor board including employee representatives and board of directors of whom at least one third are independent directors. The objective of this thesis is to investigate accounting information reliability and corporate governance by addressing three predominant empirical research questions in three studies. The first study examines the impact of board composition and independence on earnings management in mainland China through investigating whether independent directors and supervisors are effective at restraining earnings management. To fully capture the earnings attributes, the second study investigates the quality of reported earnings in China from the perspective of both accounting-based (including accrual quality, persistence, predictability and smoothness) and market-based earnings attributes (including value relevance, timeliness, and conservatism and earnings response coefficient). A two-way test has been conducted to compare the difference in earnings quality between State-Owned and Non-State-Owned enterprises. According to financial distress theory, the incentives for Non-SOEs to manipulate earnings are stronger than in SOEs, since SOEs have the advantage to receive financial subsidies from government while Non-SOEs face more financing constraints. The agency theory, however, argues that state ownership in SOEs creates incentives and regulatory backing for self-serving purposes, thus motivating SOEs to manipulate accounting numbers. The political cost hypothesis complements the agency theory and illustrates that SOEs’ managers would manipulate accounting numbers in response to government intervention (report conservatively to disguise the profits or report aggressively to meet specific thresholds). In addition, it tests whether analysts' forecasts are more accurate than forecasts based on time- series predicted statistics with random walk. Finally, the third empirical study detects whether managers intend to manipulate earnings via discretionary accruals in order to just meet or beat consensus analyst forecasts on the basis of earnings surprise (analyst forecast error).
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Accounting Information System:  An Application of Information Technology in the Area of Accounting

Accounting Information System: An Application of Information Technology in the Area of Accounting

ABSTRACT: Accounting Information System is essential to all type of organizations nowadays. The economic and industrial scenario in the recent past has been changing rapidly both in India and elsewhere. Especially, the growing intensity of competition has forced corporate sector to establish more innovative production and communication systems. To the modern business, the information flows are as important to the life and health of the business as the flow of blood is to the life and the health of the individual. As such the managerial functions centers around its decision making capabilities of the organization towards its cherished goal. This would not be possible without having adequate knowledge which in turn depends on relevant information. All over the world, Information and communication Technology (ICT) is playing an increasingly important role in both business and individual’s private lives. This is the era of Information and Communication technology and informational technology has touched
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The implementation of the finacial-accounting information system

The implementation of the finacial-accounting information system

The development of modern information and technologies in systems result in significant changes in a company's activity and changes in accounting information systems. Accounting system development goes back to Babylon, 3600 BC, when the oldest record of a business event occurred. There is ample evidence that accounting systems were used in ancient Greece, China and Rome. Trade activities have become more complex, which led to the development of higher forms of organization. Changes in accounting _ were consistent with changes in data processing methods, along with the development of technology, starting with the manual, the data processing computer as the most modern method.
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Determinants of Quality Accounting Information Disclosure

Determinants of Quality Accounting Information Disclosure

The aim of this study was to empirically examine the determinants of quality of accounting information disclosed over the years which have been subject to a lot of criticism following the recent scandals across the world. Proper information has to be disclosed due to the fact that a lot of persons need the information for different reasons. Thus the information reported has to be qualitative. This study made use of five variables with disclosure quality as dependent variable. We found size, institutional ownership, performance and earning as strong determinants of disclosure quality. Firm leverage was found to be a weak determinant of disclosure quality. This study recommends that firms should embrace the issue of institutional ownership and also minimize leverage employed by a firm.
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Factors Affecting The Quality Of Accounting Information

Factors Affecting The Quality Of Accounting Information

The quality of accounting information (AI) is essential to make quality decisions [1]. The users desperately need information that fits their needs [2]. The quality AI the output of a quality accounting information system (AIS) [3]. The essential role of a quality AIS is that accounting information system is an integrated framework in hiring physical resources to transform economic data into financial information in operating and managing company activities, and reporting company achievements to interested parties [4]. Many types of companies in Indonesia have not had a quality information system (IS) yet as several experts claim. Iwan Faidi (2017) claimed that, until now, the micro, small and medium enterprises in Indonesia are still constrained by financial statements [5]. The Chairman of the Supreme Audit Board, Harry Azhar Azis (2016), stated that, in general, the central government’s current financial report cannot be said to be perfect from which six problems are found by the Supreme Audit Agency [6]. Tjahjo Kumolo (2014) said that the performance of the financial management and accountability of regions in Indonesia has not improved and, based on the data obtained from the ministries, regions able to calculate their own financial statements only reach 34%, meaning that there are still 64% regions in Indonesia that have not been able to account for their financial statements well [7]. Leadership is one of the factors affecting the quality of AIS [8]. Leadership, in the context of this study, is defined as the ability to influence and motivate users to use an AIS under any circumstances and be able to provide and communicate the generated AI with the users [9]. The concept of transformational leadership explains how leaders can change their organizations by creating communication and visions so as to transform and inspire their employees to fight for the visions [10]. Transformational leaders are those who are capable of improving values and motivating employees to do more than expected [10].
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Accounting Information Systems

Accounting Information Systems

Accounting Information Systems 401 Case 1. A fire destroyed certain accounting records of Golden Books. The owner, Marilyn Golden, asks your help in reconstructing the records. She needs to know (1) the beginning and ending balances of Accounts Receivable, (2) the sales on account and (3) total cash receipts on account from customers during April. All of the sales are on account, with credit terms of 2/10 n/30. All cash receipts on account reached the store within the 10-day discount period, except as noted. The only accounting record pre- served from the fire is the accounts receivable subsidiary ledger, which follows. (p. 365)
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Accounting Information and Cost of Capital: A Theoretical Approach

Accounting Information and Cost of Capital: A Theoretical Approach

An alternative stream of research gives emphasis on the role of information disclosure by firms. Accounting information is the key turning private into public infor- mation. This is the framework in which our study be- longs. [18], through an equilibrium model, shows that information production is costly, implying the need for each investor to expend resources to collect the needed information. [3] analyze how disclosure affects the will- ingness of market makers to provide liquidity by invest- ing in a particular stock. They also show that disclosure changes the risks to market makers, which in turn in- duces entry or exit by dealers. [1,19] show that disclo- sure is affected by insiders and strategic issues, while [20] use a structural microstructure model, which provides estimates information-based trading for a large cross section of stocks. [21] reaches the same conclusions only if the accounting practices, i.e. those that contribute to accounting information, are characterized as aggressive. [22] investigate the influence of accounting information on individual giving decisions through its impact on market liquidity and the cost of capital for business enti- ties. However, their experimental empirical results dis- play a minimal of such impact. Finally, [23] find that higher levels of accounting information and disclosure due to the adoption of IAS lead to higher excess returns, results that are consistent with the negative impact ac- counting information exerts on the cost of capital.
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The Approach of the Accounting Information throught the Prism of Managerial Accounting

The Approach of the Accounting Information throught the Prism of Managerial Accounting

Information cost means the raw material cost for financial analysis aimed at assessing strategic alternatives available, of which are chosen as financially feasible. For the strategy is the most important means of transmitting information is the accounting reports. These should be based on critical success factors necessary to achieve the chosen strategy. Implementing any strategy is based on all the financial analysis is performed using accounting information and aims to develop specific tactics chosen strategy. Performance monitoring is partly based on a cost information provided by management accounting, particularly on the results of such methods as target cost, expense budgets or annual planning profit.
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