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Report and Video: 5th EAA Financial Reporting Standards workshop on Post-implementation Review of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities

On 26 March 2021 The International Accounting Standards Board (the Board), in conjunction with the European Accounting Association (EAA) and the European Financial Reporting Advisory Group (EFRAG) held an EAA Financial Reporting Standards workshop that provide an overview of the Request for Information Post-implementation Review of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, published by the Board in December 2020, and EFRAG’s summary of the initial input gathered from European constituents.…
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Auditors Acknowledge Uncertainty for Airlines Amid COVID-19

This analysis was originally posted by Audit Analytics. The auditors of two FTSE 350 airlines cannot confirm whether the companies will be able to continue operating for the foreseeable future due to uncertainty created by the global pandemic. EY and PwC highlighted the unpredictability of the future operations of International Consolidated Airlines Group SA [LON:IAG] and easyJet PLC [LON:EZJ] in their 2020 audit opinions.  Despite recent optimism in the leisure travel industry that resulted in rising stock prices and…
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Persuasion in Auditing: A Review Through the Lens of the Communication-Persuasion Matrix

In a recent study, published in the European Accounting Review (EAR) Special Issue on Literature Reviews in Accounting, we provide a comprehensive review and synthesis of experimental research that examines persuasion in auditing. Our review spans 98 articles and includes both published papers in 27 leading academic journals and recent working papers on the Social Science Research Network. Persuasion is a strategic attempt to influence someone’s beliefs, attitudes, decisions, or actions. Persuasion attempts regularly occur…
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Optimising the Ph D Experience

Optimising the Ph D Experience Embarking on a PhD is a major commitment that should only be entered upon after a great deal of thought and preparation. The purpose of this article is to help you think about how to optimise the process of studying for a PhD. The hope is that the guidance provided by this article will help you maximise the lifetime value of the time you spend studying for your degree. If…
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Mobilizing accounting academia against the climate crisis

The following is an edited version of a (German-language) talk I gave at the annual meeting of the German Association of Business Professors' Accounting Section on 18 March 2021.   Crises and disasters are massive and threatening dysfunctions in a system. In the case of a crisis, a turning point is reached; in the case of a disaster, on the other hand, there is a permanent decline of often dramatic proportions. Unfortunately, the two can…
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Who Audits Public Companies – United Kingdom

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. Audit market share was highly concentrated among the top indexes in the United Kingdom at the end of 2019. PwC captured the highest percentage of the market, auditing 27% of London Stock Exchange index-listed companies. The rest of the Big Four combined audited 61% of the remaining companies. BDO and Grant…
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Auditor University Education: Does it matter?

Does the educational background of a certified auditor matter? A joint study from Bocconi University, Milan, and University of Cambridge finds that it does. Auditors with an undergraduate university degree emphasizing quantitative analysis, such as accounting, business, engineering, mathematics or economics, produce more accurate audited financial reports (as measured by levels of abnormal accruals recorded) than do auditors with a bachelor’s in fields with a more qualitative approach, such as law, classics, or history. There…
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Board Monitoring and Advising in Dynamic Agency

In a recent study, forthcoming in the European Accounting Review (EAR), Svetlana Katolnik, Sandra Kronenberger and Jens Robert Schöndube present a model to show that if managerial contract renegotiation is possible, then an active board of directors might not always be desirable from the shareholders’ perspective.   The shareholders delegate the roles of monitoring, advising, and incentivizing the manager to the board of directors (Larcker and Tayan, 2016). Monitoring is considered valuable because it is…
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EAA SRC “In Conversation with Mr. Patrick de Cambourg"

Following the mandates given by the European Commission on 25 June 2020 to EFRAG and to EFRAG Board President Jean-Paul Gauzès, and the establishment of a dedicated multi-stakeholders EFRAG Project Task Force on the preparatory work for the elaboration of possible EU non-financial reporting standards (EFRAG PTF NFRS), on March 8th 2021 EFRAG has published its final report setting out 54 recommendations on the development of E​U sustainability reporting standards. The EAA Stakeholder Reporting Committee is pleased to…
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EU V IFRS: Fundamentally different approaches to sustainability reporting

Main points: The IFRS Foundation and EU/EFRAG approaches are opposed in all key aspects; The EU/EFRAG approach is likely to contribute to addressing sustainable development (including climate change). The IFRS Foundation approach is likely to be a distraction from it; The IFRS Foundation has the backing of IOSCO, but the EU has legislative powers. A couple of days ago, I received a brief email update from the IFRS Foundation on their approach to Sustainability Reporting Standard Setting…