Effects of financial statements information on firms’ value: evidence from Vietnamese listed firms

Past decade has witnessed several changes in the process of conduct of business activities across the world especially due to the wave of globalization. It has also made drastic changes in the process of financial reporting, in particular the continuing adoption of IFRS (International Financial Reporting Standards) worldwide. IFRS are high quality, understandable, enforceable and globally acceptable accounting standards issued by IASB (International Accounting Standard Board). Thus these are a set of international accounting standards stating how a particular type of transaction and other events should be reported in the financial statements. Thus IFRS are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. IFRS is becoming the global language of business with over 40% of the world adopting this as their standard for reporting. India also decided to converge to IFRS from 1st April 2016 in a phased manner, which in turn improves the financial statement comparability and transparency that helps to attract greater cross border investments. This paper focuses on the convergence of IFRS with Indian Accounting Standards, its utility, issues and challenges faced by the stakeholders. It also throws light to the ways through which problems can be addressed.

As it is known, Kosovo is a newly established and developing country. Naturally, creative accounting practices in Kosovo are becoming more frequent due to gaps and weaknesses in management and audit quality. This study aims to examine the relationship between creative accounting and corporate performance and management, as well as the impact of managers’ ethics including audit period on financial reporting and creative accounting limitation. The study adopted a survey-based approach. The questionnaires were distributed among 159 managers, auditors, and head accountants. Linear regression was used to analyze the hypotheses. The research results confirmed the rejection of the first hypothesis, as the mean is less than 3 (the average on a five-point Likert scale). The results confirmed that creative accounting has a significant impact on corporate performance. The results also confirmed the second hypothesis as the mean is greater than 3.5 (the average on a five-point Likert scale). Thus, managers’ ethics have a significant effect on the reliability of financial statements. In addition, the research results confirmed the acceptance of the third hypothesis, as the mean is greater than 3 (the average on a five-point Likert scale), thus there is a positive influence of the audit period on creative accounting limitation. The study found a negative impact of creative accounting on corporate performance. Furthermore, a significant effect of managers’ ethics on financial statements’ reliability was concluded; and finally, the findings concluded that audit period and quality could significantly contribute to the creative accounting limitation.

This paper aims at comparing the management perspectives with the audit conditions in the Visegrad Group (V4) countries (the Czech Republic, the Slovak Republic, Poland, and Hungary) in the following areas: legislation governing the auditing, statutory duty of auditing, mandatory rotation of auditors in public interest entities, requirements on auditors and professional activities, and audit supervision organizations. The paper also tests the hypothesis whether there is a relationship between the size of the accounting entity and the auditor’s opinion.
The methodology is based on the statistical analysis of the data using the Chi-square test of independence applied to a sample of 800 randomly selected accounting entities from all V4 countries (200 per each country in question).
The results demonstrated significant differences in the management approaches to financial reporting, especially in the area of the statutory duty of auditing. In addition, quantitative research was conducted to determine whether there is a relationship between the size of the accounting entity and the auditor’s opinion. At the 5% significance level, no such dependence has been found for any of the V4 countries, but at the 10% significance level, the dependence has already been proved in case of the Republic of Poland and Hungary.
The practical value of the obtained results is the knowledge of how to manage accounting standards for business entities in the V4 countries, as well as to determine the statutory duty to audit financial statements. These results might be of a special practical importance for business managers, tax authorities, and auditors operating in the EU countries.