Readings Flashcards
(21 cards)
What are the rules for internet reporting in different countries according to Elliott and Elliott (2019)?
- US require public + foreign companies with float over $5bn to lodge reports in XBRL since 2009
- UK companies have had to use XBRL since 2011
- Singapore required to since 2014 and they also provide a “how to” guide to assist in preparation and filing
What are investors interests according to Elliott and Elliott (2019)?
- Long term view they value annual reports most because they know it is audited, reliable
- Short term view- real time reports are needed to access more data daily but it is less reliable info
- Interim reporting- some would like quarterly reports.
- Solution for them to provide sufficient warning if there maybe any unexpected changes in performance.
What did the ACCA survey (2013) find from Elliott and Elliott (2019)?
- Demand for real time reporting to increase investor returns and enhance level of confidence in reporting.
- 85% say real time data would improve their reaction time
- 71% said real time data would increase their understanding of the corporate performance
- Although 2/3’s believe real time reports would create financial instability and increase tendency to short term
What do Testra and BHP Biliton use to convey their half yearly results? (Elliott and Elliott, 2019)
-They provided the half yearly results through short internet videos to connect with stakeholders
What does Ahmed et al (2017) study?
-172 non-financial companies listed on the Egyptian Exchange (EGX)- 171 in 2011
What are the findings of Ahmed et al (2017)?
- The number of companies with financial information on their website was= 70 in 2010 and 73 in 2011
- The number of companies with no website at all was= 35 in 2010 and 30 in 2011
- Over both years they found that no companies were using XBRL for publishing their annual reports online- most used HTML or PDF format (first gen)
What did Dunne et al (2013) study?
-They studied stakeholders perceptions of the use of XBRL within UK businesses.
What were the findings in table 3 of Dunne et al (2013)?
- Does internet reporting improve accountability? - users strongly agreed while auditors were closer to neutral
- Does it improve search facilities? - all remained fairly neutral at 2.75
How many business practicioners used XBRL (Dunne et al, 2013)?
- 86 replies- around half used PDF format
- very few used HTML
- none used XBRL saying it wasn’t even being discussed within the company
What were Dunne et al (2013) findings about knowledge of XBRL?
- Only a few of the 13 auditors had knowledge of XBRL
- Tax practicioners were most aware about XBRL over business and audit practicioners.
What do Birt et al (2017) study about internet reporting?
- They assess the usefulness of financial reports with XBRL tagged info compared to PDF format in terms of non-professional investors.
- In terms of relevance, understandable + comparable
What do the results of Birt et al (2017) reveal about XBRL?
- Financial info with XBRL tagging are significantly more relevant, understandable + comparable for non-pro investors compared to PDF files
- Voluntary adoption of XBRL was low due to maybe the lack of awareness + knowledge of the potential benefits
- Regulators should raise awareness about the benefits and create impetus for more to adopt XBRL
Which academic talks about the future of international reporting being heavily focused on the internet?
Lymer (1999)
What are the steps used to complete a pensions calculation?
- Calculate the change in the pension obligation (liability)
- Calculate the change in the pension assets
- Calculate the SPL (IS) entry
- SFP (B/S) entry
What are the steps used to complete a leases calculation?
- Determine if there is a lease
- Recognise the initial lease liability and right of use asset
- Recognise the lease liability in subsequent periods
- Recognise the right of use asset in sub periods
- Demonstrate their impact on SFP and IS
How do you calculate the Herfindahl Index?
= (X1/y)^2 + (X2/y)^2 + … (Xn/y)^2
So X is each figure for the method used and Y is the total number of usage for that year.
How do you calculate the compatible index?
= (NxN-1) + (NxN-1)/ NxN-1
How do you calculate within and between C index?
Within is n x n-1 for all of the figures over total x total-1 for each row
Between is AxB + AxC + BxC for all figures over Atotal x Btotal + Atotal x Ctotal + Btotal x Ctotal
Why do we measure harmonisation?
- Identify problem areas where harmonisation is low
- Determine when + what extent of harmonisation
- Measure success of organisations seeking to harmonise financial reporting practice mandatory +non
- Measure harmonisation spontaneously
What do Evans and Taylor (1982) do in terms of harmonisation?
- Determine impact of IASC standards on FR
- France, Germany, Japan, UK, US
- 1975-78
- Examined the no. of companies in each country which complied with regulations
- Looked at period before and after issue of an IAS to see if accounting practice had changed
- “the IASC has had very little impact on the accounting practices of the countries surveyed”
Herrman and Thomas (1995) study and find what?
-Determine level of accounting harmonisation in EU
-217 largest companies from 8/12 EC countries
-6 issues; 1) fixed asset valuation, 2) depreciation, 3) goodwill, 4) R&D, 5) Inventory and 6) Foreign currency translation
-1992/93 financial reports
-Accounting for 5 and 6 = harmonised
1 to 4 = not harmonised
