Analyzing the external auditor’s perception of the impact of IFRS 15 on the profitability and performance of emerging market companies
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Author(s)Cristina Gabriela CosmuleseLink to ORCID Index: https://orcid.org/0000-0002-8406-7004
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Veronica GrosuLink to ORCID Index: https://orcid.org/0000-0003-2465-4722
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Artur ZhavoronokLink to ORCID Index: https://orcid.org/0000-0001-9274-8240
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DOIhttp://dx.doi.org/10.21511/afc.04(1).2023.07
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Article InfoVolume 4 2022-2023, Issue #1, pp. 73-84
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32 Downloads
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Creative Commons Attribution 4.0 International License
Revenue recognition is a very complex area due to user interest in this metric and can even lead to errors and fraud in its understanding. The difficulties of revenue recognition are well known to practitioners because, even if the principles and standards are stable, economic conditions may require new experiences, adaptive knowledge, and flexibility. Therefore, thinking about how to apply the new IFRS 15 standard is more important than ever as the transition to the new standard takes place. In this context, this study aims to evaluate the way external auditors understand how implementing IFRS 15 will probably affect business performance and profitability, and to identify the main problems and obstacles that could come up during that process. In this sense, a quantitative study was conducted using a survey of auditors working for Big Four companies during 2021–2022. To address these problematic aspects of revenue disclosure under the standard, the study’s findings look into how external auditors perceive the complexity of IFRS 15, the openness of their professional judgment, and the anticipated advantages of engagement activities. In addition, the literature review identified business sectors that demonstrated a significant impact on revenue recognition as a result of the implementation of IFRS 15.
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JEL Classification (Paper profile tab)M41
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References33
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Tables1
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Figures4
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- Figure 1. Share of respondents who assessed the implementation of IFRS 15 in practice in audit missions taking into account the industry of entities
- Figure 2. Presentation of the level of interpretation and uncertainty of IFRS 15 in the vision of auditors
- Figure 3. Presentation of the level of discretion and manipulation of income through IFRS 15
- Figure 4. Disclosure of the level of internal control over revenue recognized based on IFRS 15
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- Table 1. Structure of the opinion surv
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Bora Aktan
doi: http://dx.doi.org/10.21511/imfi.15(2).2018.18
Investment Management and Financial Innovations Volume 15, 2018 Issue #2 pp. 203-212 Views: 871 Downloads: 235 TO CITE АНОТАЦІЯThis paper examines the long-term relationship between BRICS and US stock markets by employing the cointegration technique and Granger causality to investigate the cointegration and causality direction in the capital markets. The impulse response function it is also employed to evaluate the persistence of the shocks. In the analysis, daily spot stock index returns are used from 2010 till 2017. The main findings of the cointegration analysis indicate that the US and BRICS stock markets are cointegrated and at least one cointegration vector exists among them. The Granger causality test shows that unidirectional causality runs from the US market towards the Russian, South African and Indian stock markets, while there is a bidirectional causal relation between US and Brazil stock markets.
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The nexus between interest rate and bank profitability: Does bank prudential capital matter?
Rana Shahin ,
Manal Khalil ,
Helmy Sallam
doi: http://dx.doi.org/10.21511/bbs.17(2).2022.10
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Acknowledgments
The authors are grateful to Mr. Ali Shaker and Amira Ragab for their valuable support. -
Leverage and corporate investment – a cross country analysis
Souvik Banerjee ,
Amarnath Mitra ,
Debaditya Mohanti
doi: http://dx.doi.org/10.21511/imfi.20(3).2023.11
Investment Management and Financial Innovations Volume 20, 2023 Issue #3 pp. 126-136 Views: 243 Downloads: 89 TO CITE АНОТАЦІЯThe paper examines the impact of a firm’s financial leverage on its investment decisions in the period 2011–2019, which occurred between two financial crises (2008–2010 and 2020–2022) and was globally marked by low interest rates and high leverage. The study focuses on non-financial listed firms in world’s top 13 largest economies consisting of 11 OECD+ countries and two emerging nations. The analysis explores the relationship between firm leverage and investment decisions, considering the growth opportunities and corporate risks of the firms, as well as the type of economy they operate in. The findings indicate that, overall, there is a negative relationship between leverage and investment. In developed nations, such as the OECD+ countries, this negative effect is more pronounced for firms with limited growth opportunities. Contrary to the existing literature, emerging economies exhibit a positive relationship between firm leverage and investment. Specifically, in China and India, firms with low growth opportunities display a stronger positive correlation between leverage and investment. These results suggest that in developed countries, debt continues to have a disciplining effect on firm investment, even in a high liquidity environment. However, in high-growth emerging economies, both firm management and lending institutions show less concern regarding leverage. Lastly, the study finds that firm risk has an adverse impact on investment decisions. These empirical findings highlight the non-uniform nature of the relationship between firm leverage and investment, which depends on the type of economy and the growth opportunities of the firms.
Acknowledgments
The infrastructural support provided by Management Development Institute, Murshidabad, India and FORE School of Management, New Delhi, India in completing this paper is gratefully acknowledged.
