In a recent study, published in the European Accounting Review (EAR), Yi Liu, Khalid Nainar and I examine the impact of banks’ organizational memory of past history on the conservatism of accounting policy. We investigate two types of bad time history: banks’ undercapitalization and the failures of other banks during financial crises. Using a large sample of U.S. banks over the period 1997–2013, we find that both types of bad times are positively related to…

Anastasios Elemes (ESSEC Business School), Jeff Zeyun Chen (Texas Christian University) Auditors’ lobbying activities were until now generally assumed to take place exclusively through audit firms’ national offices. However, our recent article, published in the European Accounting Review, questions this assumption. In our study we retrieve for the first time the contributions of all politically connected Big 4 employees to members of the Senate and House of Representatives Committees that oversee the audit industry and compile…

This analysis was originally posted by Audit Analytics. As the Audit Analytics Europe databases continue to grow in breadth and depth, we watch some interesting stories unfold. For example, AIM-listed London-based advertising agency M&C Saatchi [LON:SAA] has faced a few challenges in the past year and a half.   From 1 October 2020 to 7 December 2020, the Company’s trading was suspended due to late publication of the December 2019 Annual Report. The delay was the result of an extremely costly and complex audit to address a significant…

  European Accounting Review Announcement of Best Paper and Best Reviewer Awards   After careful revision of all the manuscripts published in European Accounting Review in 2020, and having received the votes of both the Associate Editors and the Editorial Board members, I am delighted to announce the awards for Best Paper published during the year:   2020 European Accounting Review Best Paper Award “Camouflaged Indicators of Earnings Management” by Itay Kama (University of Michigan)…

This analysis was originally posted by Audit Analytics. Note: This analysis will be updated to reflect 2020’s market share once all annual reports have been filed. In a previous blog, we noted that as of the end of 2019, there were only six audit firms licensed to audit PIEs (Public Interest Entities) in the Netherlands and we looked at the market concentration of these auditors. Here, we examine the auditor market share of Euronext Amsterdam’s top three…

On 29 January 2021, the International Accounting Standards Board (IASB) in conjunction with the European Accounting Association (EAA) and the European Financial Reporting Advisory Group (EFRAG) held an IFRS-EAA Virtual Workshop that provide an overview of the IASB’s Business Combinations under Common Control (BCUCC) Discussion Paper (DP) and EFRAG’s developing views for consultation on that DP. Attended by roughly 200 participants, the workshop covered issues including: a) When to apply the acquisition method and a book-value method to a BCUCC in…

Call for Papers A Joint Conference of the Financial Accounting Standards Board (FASB), the International Accounting Standards Board (IASB), and The Accounting Review (TAR) Accounting for an Ever-Changing World November 2-4, 2022, New York City, NY This co-sponsored conference will provide a forum for the presentation of academic research studies that produce insights into whether the FASB and/or IASB standards on revenue recognition (Topic 606 and IFRS 15, Revenue from Contracts with Customers), leases (Topic…

This webinar will open the continuing series of discussions under the common title “Тhe Challenges in Business Analytics”. We are happy to announce the first webinar “ESG Reporting Insights”, during which we will look into the main issues and discussion topics of ESG reporting. What are the most promising recent events? Why are banks switching to ESG reports?  What are the criteria for identify best practices? We invite anyone who is interested to join us…

Taxes are an important factor when it comes to financial decisions, such as investments, savings and financing. This applies to decisions made by private individuals as well as to decisions made in companies. It is therefore important that individuals making such decisions are aware of the actual tax burden, as misperceptions can lead to incorrect decisions and undesirable tax planning activities. A comprehensive literature review by Kay Blaufus, Malte Chirvi, Hans-Peter Huber, Ralf Maiterth and…

This analysis was originally posted by Audit Analytics.com Earlier this week, the Financial Conduct Authority (FCA) and the Financial Reporting Council (FRC) reminded companies in the UK that the permission to delay publication of financial reports is still in effect. The initial joint statement was issued in the early days of the lockdown in the UK on 26 March 2020.    The relief, prompted by the challenges of publishing accurate financial information in the midst of the pandemic, allows listed companies on regulated markets to delay publishing their annual…