AUDITING FAIR VALUES IN A SENSITIVE SOCIO-ECONOMICAL CONTEXT

The concept of fair value was subject of many debates and disputes in recentyears. These debates have focused mainly on the relevance of the concept, but also on thepractical difficulties in determining reasonable estimates, raising particularly the interest ofpractitioners in terms of identifying the best valuation procedures and techniques,respectively auditing fair values. Determining the fair value involves a broad spectrum ofapproaches, from the simplest to the most complex and burdensome ones. In the currentsocio-economical context, market and stock volatility raises questions about fair values, evenif there are conditions for the existence of market information. The problem gets morecomplicated where fair value is determined based on cash-flows, especially where there areuncertainties about the value and timing of cash-flows and adjustment rates, and the impactof used assumptions related to future conditions, transactions and events.Last but not least, assessment of fair value is based on the going concern assumption, whichmay not be applicable in the context of an economic crisis.The International Financial Reporting Standards (IFRS) provide for financial instruments tobe measured generally at fair value. Because fair value is primarily assimilated with marketprice, its assessment requires the existence of a market able to operate under normalconditions, or in other words, sufficiently liquid to assess the price of financial instruments.And, one of the features of the current crisis consists in the significant decrease of liquiditieson the market, which in turn caused a high impairment of derivatives (those based onAmerican real estate). As American real estate can never be zero, market prices are not thereal ones. However, this situation highlights the volume of liquidities available to buyers,which is a feature of imperfect markets. But the International Financial Reporting Standardsdid not anticipate the effects of liquidities on financial instruments, as their development isbased on perfect functioning of financial markets. Under these circumstances, fair valuemeasurement started to be increasingly criticised, and the International AccountingStandards Board (IASB) has changed the rules for measurement of financial instruments atfair value.Given the high degree of volatility, auditors should ensure that valuation methods andassumptions used by management under normal conditions for determining fair values areappropriate in a sensitive socio-economical context as well, and that the valuation modelincludes also the effects of subsequent events.fair value, historical costs, fair value audit, volatility, economic crisis

Auditors’ perceptions on work adaptability in remote audit: a COVID-19 perspective

In the context of COVID-19, adoption of teleworking challenges companies’ culture and social interaction to foster a creative and innovative workplace. The article aims to identify the auditors’ perception of different factors that influence work adaptability in remote audit activity. The research method is based on multivariate data analysis that consist of correspondence analysis, exploratory factor analysis, confirmatory factor analysis and generalised linear ordinal regression. On one hand, findings emphasise that auditors’ perception on the work efficiency of auditors in remote audits is significantly influenced by the digitalization degree of audit activities. On the other hand, the research outlines the main threats and opportunities of remote auditing in the context of the current pandemic restrictions. Where auditors perceive the benefits of remote audit, they appreciate positively the degree of adaptability and work efficiency as regards teleworking. Opportunities perceived lead to enhanced audit activity outcome if audit companies embrace emergent technologies in the new digital workplace. Nevertheless, as transition to remote audit determines increased auditors’ liability and audit risks, auditors are more cautious and sometimes reluctant about future scenarios of remote audit, if innovative emerging audit technologies and integrated GRCs are not used or are not properly implemented. Whatever the future holds for the new digital audit workplace, it is obvious that auditors working from home face specific challenges, because what they earn in efficiency, they lose in benefits that are harder to quantify, such as innovative thinking and creativity

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Big Data’s Disruptive Effect on Job Profiles: Management Accountants’ Case Study

The abundance of new innovative data sources creates opportunities and challenges for all professions and professionals working with information. One of these professionals is the management accountant (MA). Although their tasks have expanded over time and especially recently, MAs have not fully employed all the available internal and external data sources to describe, diagnose, visualize, predict and prescribe possible solutions that enable smart decisions with positive effects on businesses. Thus, the paper investigates the impact of Big Data, including Data Analytics, on MA’s job profile. Through a review of the most recent academic and professional publications, the paper contributes to the debate surrounding the redefinition of the role of MAs in organizations in a novel informational perspective of Abbott’s theory. The results could serve as a research agenda and incentive for further studies, as well as provide MAs with a guide on the topic of the enlargement of their role(s), respectively, the augmentation of their tasks and responsibilities regarding the analysis of Big Data. Furthermore, the research may provide both a rich and flexible framework to help practitioners in their analysis of potential risks, opportunities and challenges when handling Big Data, and a lens for professional accounting associations and bodies by helping them to prioritize the holding and seizing of jurisdictions as an imperative part of safety and security

THE RELEVANCE OF ACCOUNTING INFORMATION GENERATED BY THE APPLICATION OF IAS 29 RELATED TO SHAREHOLDERS CAPITAL

The current economic environment evolves under globalization circumstances, and it stands for the markets' globalization trend. Under these circumstances, information has a primordial role. The content of the transmitted information has changed significantly. As part of the economic information, the accounting information evolved as well and its whole circuit has been continuously modernized in the rhythm of the global changes. Thus, it had to adapt to the swing of capital markets worldwide and to aim toward a unique international accounting language, for the taste and understanding of its users. Historically, Romanian accounting records have been heavily influenced by the use of information for tax compliance purposes. The primary function of financial/accounting details collection and recording process has been seen by many Romanian entities and management/staff within the entities (both State and private) as being for taxation compliance and taxation reporting purposes. As a result of this, the reported information has tended to reflect a “form over substance” disclosure, that is, greater importance is placed on having particular documents or recording something in a specific way, rather than in “accurately” reflecting the financial position of the enterprise at a point in time or indicating whether the results for the period are an appropriate representation of what has occurred. Romanian accounting laws and regulations are not as such at fault, with the regulations providing for and encouraging treatments that are consistent in many ways with international accounting principles. Issues have however arisen on how laws and regulations are applied and have tended to reflect the background and outlook of Romanian accountants. Up to 31 December 2003, Romania was considered to be a hyperinflationary economy, under the criteria of IAS 29 “Financial reporting in hyperinflationary economies”. For Romanian statutory reporting, IAS 29 was not applied. In looking at financial statements where there are significant non-monetary items, users should keep this in mind and consider if there have been any revaluation of tangible and intangible assets and on what basis. The objective of IAS 29 is to establish specific standards for entities reporting in the currency of a hyperinflationary economy, so that the financial information provided is meaningful. Our empirical analysis encompasses a hyperinflationary economy covering a wide variety of hyperinflationary conditions

Gender Discrimination Insights in Romanian Accounting Organisations

The paper investigated gender inequalities in the accounting profession in the specific context of an eastern European country, in the past heavily dominated by men, but now with a substantial number of women. Thus, we used a questionnaire survey explored the relationship between women’s perception of discrimination and institutional and individual characteristics. Institutional factors such as rewards practices, opportunities, and access to top positions in organisations influence women’s perception of gender discrimination. Concerning the intersectionality of individual characteristics interaction, our results revealed that women professionals with higher academic achievement and children are more likely to report discrimination. In contrast, women professionals with a higher-ranking position in organisations and those working in the public sector are less likely to report it compared with those from the private sector. These findings are of interest from a theoretical perspective to those who explore gender-related issues in general and in the case of accounting organisations. They are also helpful from a practical standpoint regarding the management of these accounting organisations, which should ensure gender-equitable policies for employees

Roll the Dice—Let’s See If Differences Really Matter! Accounting Judgments and Sustainable Decisions in the Light of a Gender and Age Analysis

This research aims to investigate whether gender and age of Professional Accountants influence their opinion upon accounting judgments and sustainable decision-making. Through a questionnaire, accountants were interrogated about their education, professional profile, age, gender, personality traits, and their perception on accounting judgment and professional behavior. On one hand, results showed that women accountants are more inclined to comply with accounting regulations and more interested in following an ethical behavior. Moreover, women tend to be more interested in fulfilling managers’ expectations and more willing to collaborate. On the other hand, men accountants proved to be more independent in judgments and more skeptical. Furthermore, men have a greater propensity to make accurate, sustainable judgments, considering the evaluation of goodwill as more important than women. However, no correlations were found between age, gender and accountants’ perception on the theoretical framework of professional accounting judgment. As the age of accountants grows, the compliance degree to regulations increases. This study adds value to gender accounting literature by the way it examines accountants’ behavior and perception towards accounting judgments and sustainable decisions in correlation to gender diversity and age

Intention to Use Accounting Platforms in Romania: A Quantitative Study on Sustainability and Social Influence

Technological innovation evolves through the use of information systems and this study highlights the intentions of using accounting platforms by conducting a quantitative study on sustainability and its social influence. The purpose of this study is to investigate the factors that influence the acceptance and use by company managers of accounting platforms available online by developing the unified theory of acceptance and use of technology (UTAUT) construct model. The research method used in the quantitative study was the sample survey, using the online questionnaire as a data collection tool. A number of 401 companies provided complete and useful answers to this research. The major contributions of the research were the use of two variables considered significant in the study: perceived credibility (PC) and perception of risk (PR). The results of the study showed that performance expectancy (PE), social influence (SI), and perceived risk (PR) have a positive influence on the intention to use the accounting platforms available online, while perceived credibility shows a much more significant and stronger influence