Auditors' response to regulators during COVID-19: disclosures of key audit matters

PurposeNew Zealand regulatory bodies guided preparers and auditors of financial statements to deal with potential COVID-19 impacts on the financial statements and audit procedures. This study provides evidence of auditors' response to the impact of COVID-19 on the reporting of key audit matters (KAMs) in audit reports of listed companies in New Zealand. The purpose of this paper is to address this issue.Design/methodology/approachA sample of 50 New Zealand listed companies was selected to compare the KAMs in 2019 (pre-COVID-19) and 2020 (during COVID-19). The study uses content analysis to evaluate the KAMs' disclosures and descriptive analysis to examine the differences between 2019 and 2020 in terms of the auditor type, industry sector and accounting standards.FindingsAuditors responded positively to the request from regulators to communicate the impacts of COVID-19. The findings show an increase in the amount and length of KAMs in 2020 compared to 2019, with 82% of companies and 61% of KAMs reporting the impact of COVID-19. The real estate and information technology sectors disclosed more on the impact than other sectors. In analysing the KAMs, accounting standards for inventories, property plant and equipment, impairment of assets, investment property, revenue from contracts with customers and leases were highly affected by COVID-19.Practical implicationsThe findings support regulators to evaluate how well auditors communicated matters relating to COVID-19 in the audit report. Also, the findings will help standard setters to identify key accounting standards affected by COVID-19 of KAMs and provide insights to users on how the KAM reporting enhances communicative value during the pandemic.Originality/valueThe current study captures the impact of COVID-19 on the reporting of KAMs by comparing changes before and during the pandemic.

Guest editorial: Accounting in transition: influence of technology, sustainability and diversity

The conference saw a line-up of experts which among others included The Honourable James Shaw, Minister of Climate Change in New Zealand, who promoted the incorporating of climate change information as a part of the New Zealand financial reporting framework;and Distinguished Professor Paul Spoonley who shared his knowledge, experiences and thoughts on diversity and ethnicity. Impact of technology on the required skills of tomorrow’s accountants The adoption and use of new technology such as intelligent automation, big data, blockchain and cloud-based software have brought about significant changes to the accounting profession (Qasim and Kharbat, 2020). The authors find a climate of positive attitude towards new technology and accompanying actions in the Big-Four firms and that financial auditors are providing deep business insights through data visualisation. The manuscripts on the technological influences on accounting suggest that digital transformation has radically changed the nature of accounting practices and for accountants to be ready to leverage the potential of digital tools, they need to focus on developing their core competencies through lifelong education and skill development training.

Potential barriers towards achieving greater diversity: the case of Pasifika underrepresentation in accounting

Purpose>This paper aims to provide a commentary on how the accelerated utilisation of online learning in accounting education could further impede Pasifika students from completing an accounting qualification, thus perpetuating Pasifika underrepresentation in accounting.Design/methodology/approach>This commentary is based on the authors’ experiences and informal conversations with teaching colleagues and support staff. This paper uses Bourdieu’s (1977, 1990) theory of practice with a focus on his notion of symbolic violence to evaluate the challenges faced by Pasifika students in the learning of accounting.Findings>The social world is inherently unfair, and this can be seen in the inequality that persists in various settings, one of which is in the accounting field. Acquiring an accounting degree requires studying accounting content, which is taught and assessed in a particular way. Unfortunately for the Pasifika learner, learning and assessment in accounting education are according to the demands and rules of the accounting field. These demands and rules, with the increased utilisation of online learning, are at odds with the Pasifika student’s habitus. Thus, Pasifika accounting students are likely to be disadvantaged by the increased utilisation of online learning. This could potentially exacerbate their underachievement in accounting education and prolong Pasifika underrepresentation in the accounting profession.Practical implications>This paper contributes to teaching practice by bringing to the fore the potential of online learning as an additional impediment for Pasifika students in accounting education. This will help inform policymakers, tertiary institutions, accounting accreditation bodies, educators and support staff and could result in the formulation of suitable strategies to better support Pasifika students in online learning.Originality/value>This paper is original and provides a critical analysis of how some groups in society will be disadvantaged by the increased utilisation of online learning in accounting education, thus further hindering the slow progress in achieving greater diversity in the accounting profession.

The impact of emerging technologies on accounting curriculum and the accounting profession

Purpose>In this commentary, the author uses the development of data analytics curriculum at DePaul University as an example to highlight possible challenges and share the experience. In addition, seven different possible future research directions are identified so the readers are able to understand more about the impact of emerging technologies on the accounting profession and accounting curriculum.Findings>Challenges and experience when developing data analytics curriculum at DePaul University are discussed. In addition, seven different possible future research directions are identified so the readers are able to understand more about the impact of emerging technologies on the accounting profession and accounting curriculum.Originality/value>This paper expresses the author’s viewpoints regarding the impact of emerging technologies on accounting curriculum and the accounting profession.

Accounting students' perceptions of work–life balance, accounting career image and intention to pursue accounting careers

Purpose>The purpose of this study is to discover the impact of work–life balance on the intention to pursue accounting careers through accounting career image.Design/methodology/approach>The study managed to collect 693 closed questionnaires, using the five-point Likert Scale, from accounting students in several universities in Java, Sulawesi and Kalimantan, as the three most densely populated islands in Indonesia. The research model is analysed using partial least square method as a part of structural equation modelling.Findings>There are positive and significant influences between work–life balance and the intention to pursue accounting career when supported by accounting career image. The positive perception of accounting career image motivates accounting students to pursue accounting careers. Accounting students argue that attaining a balance between work and personal life can improve positive perceptions of accounting careers, which drive them to pursue a career in accounting. Work–life balance is an essential factor due to the fact that it can, directly and indirectly, affect the intention to pursue accounting careers. In addition, positive image of accounting profession is found to be able to strengthen the positive influence of the work–life balance to pursue accounting careers.Research limitations/implications>Further studies can continue along the line of this study as the intention to choose an accounting career can change from time to time. In addition, the generational difference may create a discrepancy in perception and orientation in choosing accounting careers. Therefore, future studies should consider a broader scope and more updated objects.Practical implications>The findings suggest that working experience is an essential part for accounting students in choosing accounting careers, and so higher education institutions need to consider including field work-practice in their curriculums. Companies are also expected to prioritise work–life balance since it will motivate accounting students to choose an accounting career.Originality/value>This study investigates the link between work–life balance and decisions to pursue accounting careers through accounting students' perceptions in Indonesia. This study combines the influences of work–life balance and accounting career image on the intention to pursue accounting careers in one model, in which accounting career image is the mediating variable in the indirect link of work–life balance.

Attributes of corporate boards and assurance of corporate social responsibility reporting: evidence from the UK

Purpose>This study aims to investigate the relationship between the attributes of corporate boards in UK companies and their tendency to assure their corporate social responsibility (CSR) reports.Design/methodology/approach>From the agency theory perspective, the authors examine the impact of board attributes on the assurance of CSR reports for the Financial Times Stock Exchange (FTSE) 350 during 2016–2019. The authors used annual integrated reports, companies’ websites and Thomson Reuters Eikon database for data collection and the logistic regression for data analysis.Findings>The results confirm that some board attributes significantly influence a company’s decision to assure its CSR reports. While board size, board tenure, the presence of female board members and female executive directors and Chief Executive Officers (CEOs)’ global working experience positively contribute to CSR assurance (CSRA) decisions, the chairman’s independence negatively contributes to it. However, board independence, board meetings and board financial expertise demonstrate no effect on the CSRA decision.Research limitations/implications>The authors focus on some attributes of board members, but the authors did not consider board diversity in its broader meaning. Moreover, the effect of board committees and their attributes on CSRA was not addressed. The authors also did not consider the impact of scope, the quality level of assurance service and the differences between assurance providers on companies’ decisions to neither undertake CSRA nor choose between assurance providers.Practical implications>The study provides insights into the increasing demand on voluntary assurance to boost the credibility of CSR reports and the role of the board of directors (BOD) in taking this initiative. The findings highlight the importance of board diversity (e.g. gender) in improving transparency and sustainability reporting, which can help policymakers and regulators in shaping future governance policies. Additionally, the findings refer to a drawback in the UK Corporate Governance Code regarding the chairman’s independence, which requires corrective actions from the Financial Reporting Council. The findings raise concern over the small share of audit firms in the assurance service market, despite the growing demand for these services in the UK, which may require more attention to these services from the audit firms.Social implications>Companies are increasingly pressurized, especially after the COVID-19 pandemic, to discharge their accountability to stakeholders and to act in a socially responsible manner in their business activities. CSR reporting is one of the main tools that companies use to communicate their social activities. Understanding the determinants of voluntary CSRA helps to increase the credibility of CSR reports and the favorable response to social pressure.Originality/value>The authors add empirical evidence to the limited literature on CSRA about the role of the BOD in undertaking companies’ social responsibility, improving CSR reporting and reducing information asymmetry. It also highlights the significance of maintaining a balanced BOD in terms of gender, experience and tenure, in minimizing the risk of perpetuating non-transparent integrated reporting.

Growing Today's Accounting Businesses: Certified Public Accountant

The shift in the public accounting firm model was a reaction to clients having access to the preparation of financial statements, reports, schedules, and analytical data as byproducts of their low-cost accounting programs. Moving away from these traditional services, assisting clients with borrowing (including finance leasing) has become more complex, as has risk measurement including internal controls, budgeting and strategic planning, inventory measurement, cash flow management, cost accounting systems, and personal financial planning. Nontraditional Services Added by Some Accounting Firms * Real estate and facilities management * Back office and supply chain operations * Networked billing and collections * Cost segregation * Research and development tax credit studies * Transfer pricing studies * Tangible and intangible asset appraisals * Forensic investigative services * Business valuations based on long-term value creation rather than projected cash flow and return on investment * Succession planning and training * Investment banking services * Merger, acquisition, and transactions advisory services * Asset and wealth management * Family office services * Insurance and risk management * Human resource management * Employee benefit plan conceptualization, establishment, oversight, and management * Medical practice, hospital and care facilities revenue optimization * Chief financial officer on demand service * Strategic, innovation, and change management planning and implementation * Business management optimization * Cybersecurity and incident remediation * Turnkey web-based commerce sites * Technology and vendor selection, and adaption and implementation * Data privacy, compliance and security, and customer immersion * Government agency regulation compliance risk assessments * Electronic discovery * Sustainability attestation

Management Accounting for Human Capital at SAP

Disruption caused by the COVID-19 pandemic has led to scaled-up application of digital technologies as well as new perspectives on employee well-being and the future of work. Interviews with senior managers at SAP shed light on the role of management accounting in managing human capital, including analytics, dashboarding, and mapping the business case for investment in human resource assets.

ESG ADOPTION BY HOUSING INDUSTRY IN INDIA FOR ATTAINING THE NATIONAL HOUSING GOAL: THE KEY ROLE OF CMAs

Given the national goal of 'Affordable Housing for all' in India on the one hand, and the utmost need for the revival of Indian economy from the adverse effects of the global pandemic COVID-19 on the other hand, added thrust on housing development is a vital and urgent need in India. With the vast forward and backward linkages of housing industry, it is imperative that Indian housing industry adopts ESG factors to attain the national housing goal and faster economic development of India. CMAs can play a vital role in this ESG adoption process.

Impact of audit committee characteristics and external audit quality on firm performance: evidence from India

PurposeThe purpose of this paper is to analyse the influence of audit committee characteristics and external audit quality on the performance of non-financial public limited companies listed on the National Stock Exchange 100.Design/methodology/approachOne-way random effect panel data regression was applied to 74 non-financial firms in the Nifty 100 from 2014 until 2019. The overall audit committee index and external audit index were built based on the new Indian Companies Act, 2013 and on a review of the literature to capture the impact of the new Act on firm financial performance.FindingsThe outcome of the study revealed that there is lack of evidence to show that audit committee characteristics improve the performance of top Indian non-financial listed firms. However, external audit quality was found to have a significant positive impact on the financial performance of firms as measured by Tobin’s Q, while firm size and leverage were found to have a significant impact on the financial performance of firms as measured by return on assets and return on equity.Practical implicationsThis paper will be greatly beneficial for financial practitioners and policymakers because it provides practical suggestions and recommendations about the types of external audit that are indispensable for the overall effectiveness and performance of firms. The study findings may also aid strategic policy formulation and execution for better corporate governance practices for the purpose of profit and wealth maximisation.Originality/valueTo the best of the authors’ knowledge, to date, no previous research has evaluated the effects of audit committee features and external audit quality on the financial performance of firms in India after the implementation of the new Companies Act, 2013. Hence, this study fills this void in the present literature by examining the overall features of the audit committee and external audit and their impact on firm performance in the setting of India.

How the Next Generation of CPAs Can Restore the Public Trust: Certified Public Accountant

According to the Association of Certified Fraud Examiners (ACFE) 2020 Report to The Nations-2020 Global Study on Occupational Fraud and Abuse, 43% of occupational frauds were detected by a tip, owners/executives committed 20% of the frauds with a median loss of $600,000, and 42% of fraudsters were living above their means. To support my initial reaction to the changing dynamic of fraud, technology, and audit quality, I interviewed a thought leader, an academic, and a technologist to gain a better perspective on what can be done across the entire spectrum of the accounting profession to improve the efficacy of the audit. Solon Angel, Founder & Chief Impact Officer, former Chief Strategy Officer of MindBridge Ai;Brian Fox, CPA, President & Founder of Confirmation (exited, acquired by Thomson Reuters);and Kecia Williams Smith, PhD, CPA, Assistant Professor and Director, Master of Accountancy (MACC) Program at North Carolina Agricultural and Technical State University. [...]the mission of the PCAOB is to protect the capital markets and to ensure the issuance of fair and informative audit reports.