Issue #1 (Volume 5 2024)

Accounting information systems are an important instrument in the hands of administrators seeking to maintain a competitive edge in the face of fast technological innovation, having the knowledge, and demanding expectations from customers and business owners. The objective of the study is to investigate the empirical literature pertaining to accounting information systems and companies. This study uses a systematic literature review method to provide responses to the research issue, and the bulk of the research was conducted in industrialized economies where computerized accounting system approaches were widely adopted. The selected method of inquiry consists of the following phases: study choice, development of both inclusion and exclusion guidelines, research designation, quality of research assessment, data collection, and data compilation. Based on the paper’s findings, most small businesses fail to implement accounting information systems in their operations, resulting in low-efficiency levels because of the difficulty of preserving company information records. Furthermore, this systematic literature review adds to the prior literature in three ways: (1) it indicates the usefulness of accounting information systems; (2) it expresses the suggestions that might be implemented to boost the accounting information system; and (3) it describes the research gaps that require to be filled to encourage an improved adoption of accounting information systems for small business profitability.

Micro, Small and Medium Enterprises (MSMEs) play a crucial role in the global economy, but often face challenges in compiling and understanding financial statements. This study aims to identify effective financial reporting models for MSMEs in supporting the sustainability of their businesses in Indonesia. This qualitative field research focuses on MSME actors in the handicraft sector, household accessories retail, and laundry services. Through interviews, observations, and analysis of financial statement documents, it was found that the “3-in-1” financial statement model that integrates balance sheet, profit and loss, and cash flow in one worksheet provides significant benefits for MSMEs. This model offers a concise, easy-to-understand, and integrated presentation of financial information, allowing MSME actors to comprehensively understand the financial performance of their business. The results show that after 14 months of implementing the “3-in-1” model, the assets of one of the MSMEs increased by more than 1 billion rupiah. In addition, an informant in the retail sector reported a change from a loss of 16 million Rupiah to a profit of 44 million rupiah after improving the pricing procedure based on the “3-in-1” report. In the laundry service sector, the implementation of the “3-in-1” model allows business owners to pay themselves 50 thousand rupiah every day. This model has proven to be effective in supporting the sustainability of MSMEs by providing easy-to-understand financial reports, saving time and resources, and encouraging business growth. This study contributes to improving MSME financial literacy, better business decision-making, and encouraging innovation in financial reporting for the MSME sector.

Strategic management accounting (SMA) is essential for small enterprises to enhance business decision-making and optimize resource allocation, thereby fostering competitiveness and long-term sustainability in dynamic markets. The study aims to investigate the factors influencing the adoption of SMA by small enterprises in South Africa, using KwaZulu-Natal as a case study. To achieve this objective, a quantitative and cross-sectional design was employed, utilizing a questionnaire and covering 191 SEs owners. The research framework is based on contingency theory, and data analysis was performed using Stata. The vector autoregression analysis indicates that the adoption of SMA is driven by its perceived ability to address financial aspects such as cash management, decision-making regarding return on investment, and financial variance analysis. Furthermore, SMA adoption is influenced by its effectiveness in addressing non-financial factors, such as customer service. The observed relationships between SMA adoption and both financial and non-financial factors are all statistically significant at the 0.000 level. These findings underscore the critical role of SMA for small enterprises in South Africa, emphasizing its significance in their success and long-term sustainability.

In the context of growing economic uncertainty, capital structure optimization is becoming a critical tool for minimizing financial risks, providing companies with the necessary stability and adaptability in modern conditions. This paper aims to develop theoretical foundations for the existing capital structure optimization methods and elaborate an optimal capital structure formation strategy to ensure companies’ financial stability and flexibility in conditions of high financial uncertainty. The article offers a stabilization-flexible approach to optimizing companies’ capital structure in financial instability and crises, making it possible to ensure the companies’ financial stability while preserving their ability to adapt to a volatile environment quickly. The main idea of the approach is the balanced use of equity capital and long-term and short-term liabilities to finance various components of assets, which helps to minimize risks and increase the efficiency of financial management. A roadmap for the implementation of the stabilization-flexible approach to optimizing the capital structure has been formed, the basis of which is the construction of a logical chain of actions, including the definition of companies’ goals, the assessment of available financial resources and risks, and the development of financing strategies, their implementation, further control and monitoring of results. The study results can be helpful for financial managers, analysts, and investors seeking to improve the efficiency of capital management and reduce the impact of external and internal risks on the financial condition of companies.

One of the industries with the fastest development is the hospitality and tourism (HoReCa) sector. However, there is also a growing trend in this sector to evade some state taxes. Despite promises that digitalization will reduce tax evasion, this practice nevertheless is a serious threat to the economy and the state. This study aims to process a comprehensive model for screening and risk assessment of tax fraud in the HoReCa sector in Romania. In this sense, an empirical study was conducted using an econometric model to detect tax evasion in the HoReCa sector in Romania, based on a sample of 50 firms for each sub-sector (hotels, restaurants, cafes), analyzing the period 2018–2022. The dependent variable of the model was the tax evasion risk indicator, calculated as the difference between the average financial ratios of each firm and the average for the entire sector. The results show that the leverage ratio has the strongest positive impact on the tax evasion risk indicator. The fixed asset turnover ratio and the accounts receivable turnover ratio also have a significant impact, indicating false sales reports or collection irregularities. The solvency ratio and the immediate liquidity ratio show positive effects on the risk of tax fraud, while the net rate of return is the only one with a negative effect, suggesting that profitable entities are less prone to tax evasion. The proposed model provides a solid basis for identifying high-risk companies directing tax authorities to improve supervision in the HoReCa industry. The findings also highlight the importance of further automating tax reporting systems to reduce the risks of evasion.

The paper addresses ESG-based disclosure and transparency measurement in the context of a comparative analysis of Finnish and Ukrainian agri-food businesses based on the Sustainability Transparency Index (STI) and Sustainable Development Goals (SDG). Based on the normalization method, SDG-related text mining, and qualitative text analytics, the sustainability information of the largest agri-food companies was traced. Among GRI, ISSB, and ESRS disclosure standards, only GRI 13 has clearly established SDG alignment with most material stakeholders’ requests. The results of the study give a snapshot of sustainability transparency in the agri-food business in 2023, where the indices of Finnish companies are higher than those of Ukrainian ones, with clear SDG 12, waste and water management priority compared to SDG 2 and sustainable agriculture in Ukraine. Regulatory recommendations based on a comparative analysis of sustainability disclosure in both countries include better alignment with EU (Finnish) benchmarks, reporting and assurance practices for Ukrainian companies, and the incorporation of recent EU sustainability disclosure approaches for Finnish companies.

Acknowledgment
Inna Makarenko gratefully acknowledges the support of the Academy of Finland (Decision 353888).

Deferred taxes emerge from timing differences in recognizing income and expenses between commercial and tax financial statements. However, the capitalization of deferred tax assets remains contentious, with questions raised about their value relevance to investors. This study aims to investigate the informational value and economic significance of deferred tax assets in financial statements prepared in accordance with both German commercial law (HGB) and International Financial Reporting Standards (IFRS). The analysis is based on financial data from 1,066 firm-year observations of HDAX-listed companies from 2000 to 2022. Using an Ordinary Least Squares (OLS) regression model, the study examines the relationship between deferred tax assets and the market value of equity. Key financial variables, including research and development expenses, deferred tax liabilities, net income, and the market-to-book ratio, are incorporated to provide a comprehensive assessment of deferred tax asset relevance in capital markets. The results demonstrate that deferred tax assets have a negligible impact on the market value of companies, with no statistically significant effect detected. Conversely, research and development costs, as well as net income, exhibit a strong positive influence on firm valuation. These findings suggest that deferred tax assets serve largely as an accounting mechanism, lacking informational value for investors.