Earnings management and audit quality:stakeholders’ perceptions

This paper examines the perceptions of Libyan Commercial Banks’ (LCBs) stakeholders regarding the role of the external auditor in relation to earnings management (EM). A total of 28 semi-structured interviews were carried out with a range of LCB stakeholders comprising preparers of financial statements, users, regulators and academics. A questionnaire survey of stakeholders which yielded 102 Responses (response rate 53%) was also carried out. A variety of views were held which varied to some extent according to stakeholder group. A widely held perception amongst interviewees was that the auditor has the ability to detect EM practices but may not be able to prevent it. However questionnaire respondents were, in aggregate, more confident of the auditor’s ability to deter EM due to the influence of the audit report. The paper provides insights into stakeholders’ perceptions of the quality of bank audits. The findings are of particular relevance to regulators, and specifically, the Central Bank of Libya. Perceptions of audit quality raise questions about its guidance and regulations especially in connection with audit firm rotation. Perceptions of audit quality, and therefore, of the credibility of financial statements should be of interest to all stakeholders. The importance of the banking sector for society has been amply demonstrated in recent years. A well-functioning audit function is a key component of its regulation. To the best of our knowledge, this paper is the first to examine issues related to banks’ audit quality and audit firm rotation in Libya

Global carbon budget 2022

Accurate assessment of anthropogenic carbon dioxide (CO2) emissions and their redistribution among the atmosphere, ocean, and terrestrial biosphere in a changing climate is critical to better understand the global carbon cycle, support the development of climate policies, and project future climate change. Here we describe and synthesize data sets and methodologies to quantify the five major components of the global carbon budget and their uncertainties. Fossil CO2 emissions (EFOS) are based on energy statistics and cement production data, while emissions from land-use change (ELUC), mainly deforestation, are based on land use and land-use change data and bookkeeping models. Atmospheric CO2 concentration is measured directly, and its growth rate (GATM) is computed from the annual changes in concentration. The ocean CO2 sink (SOCEAN) is estimated with global ocean biogeochemistry models and observation-based data products. The terrestrial CO2 sink (SLAND) is estimated with dynamic global vegetation models. The resulting carbon budget imbalance (BIM), the difference between the estimated total emissions and the estimated changes in the atmosphere, ocean, and terrestrial biosphere, is a measure of imperfect data and understanding of the contemporary carbon cycle. All uncertainties are reported as ±1σ. For the year 2021, EFOS increased by 5.1% relative to 2020, with fossil emissions at 10.1±0.5GtCyr-1 (9.9±0.5GtCyr-1 when the cement carbonation sink is included), and ELUC was 1.1±0.7GtCyr-1, for a total anthropogenic CO2 emission (including the cement carbonation sink) of 10.9±0.8GtCyr-1 (40.0±2.9GtCO2). Also, for 2021, GATM was 5.2±0.2GtCyr-1 (2.5±0.1ppmyr-1), SOCEAN was 2.9 ±0.4GtCyr-1, and SLAND was 3.5±0.9GtCyr-1, with a BIM of -0.6GtCyr-1 (i.e. the total estimated sources were too low or sinks were too high). The global atmospheric CO2 concentration averaged over 2021 reached 414.71±0.1ppm. Preliminary data for 2022 suggest an increase in EFOS relative to 2021 of +1.0% (0.1% to 1.9%) globally and atmospheric CO2 concentration reaching 417.2ppm, more than 50% above pre-industrial levels (around 278ppm). Overall, the mean and trend in the components of the global carbon budget are consistently estimated over the period 1959-2021, but discrepancies of up to 1GtCyr-1 persist for the representation of annual to semi-decadal variability in CO2 fluxes. Comparison of estimates from multiple approaches and observations shows (1) a persistent large uncertainty in the estimate of land-use change emissions, (2) a low agreement between the different methods on the magnitude of the land CO2 flux in the northern extratropics, and (3) a discrepancy between the different methods on the strength of the ocean sink over the last decade. This living data update documents changes in the methods and data sets used in this new global carbon budget and the progress in understanding of the global carbon cycle compared with previous publications of this data set. The data presented in this work are available at 10.18160/GCP-2022 (Friedlingstein et al., 2022b)

Global Carbon Budget 2022

Accurate assessment of anthropogenic carbon dioxide (CO$_2$) emissions and their redistribution among the atmosphere, ocean, and terrestrial biosphere in a changing climate is critical to better understand the global carbon cycle, support the development of climate policies, and project future climate change. Here we describe and synthesize data sets and methodologies to quantify the five major components of the global carbon budget and their uncertainties. Fossil CO$_2$ emissions (E$_{FOS}$) are based on energy statistics and cement production data, while emissions from land-use change (E$_{LUC}$), mainly deforestation, are based on land use and land-use change data and bookkeeping models. Atmospheric CO$_2$ concentration is measured directly, and its growth rate (G$_{ATM}$) is computed from the annual changes in concentration. The ocean CO$_2$ sink (S$_{OCEAN}$) is estimated with global ocean biogeochemistry models and observation-based data products. The terrestrial CO$_2$ sink (S$_{LAND}$) is estimated with dynamic global vegetation models. The resulting carbon budget imbalance (B$_{IM}$), the difference between the estimated total emissions and the estimated changes in the atmosphere, ocean, and terrestrial biosphere, is a measure of imperfect data and understanding of the contemporary carbon cycle. All uncertainties are reported as ±1σ. For the year 2021, E$_{FOS}$ increased by 5.1 % relative to 2020, with fossil emissions at 10.1 ± 0.5 GtC yr$^{−1}$ (9.9 ± 0.5 GtC yr$^{−1}$ when the cement carbonation sink is included), and E$_{LUC}$ was 1.1 ± 0.7 GtC yr$^{−1}$, for a total anthropogenic CO$_2$ emission (including the cement carbonation sink) of 10.9 ± 0.8 GtC yr$^{−1}$ (40.0 ± 2.9 GtCO$_2$). Also, for 2021, G$_{ATM}$ was 5.2 ± 0.2 GtC yr$^{−1}$ (2.5 ± 0.1 ppm yr$^{−1}$), S$_{OCEAN}$ was 2.9  ± 0.4 GtC yr$^{−1}$, and S$_{LAND}$ was 3.5 ± 0.9 GtC yr$^{−1}$, with a B$_{IM}$ of −0.6 GtC yr$^{−1}$ (i.e. the total estimated sources were too low or sinks were too high). The global atmospheric CO$_2$ concentration averaged over 2021 reached 414.71 ± 0.1 ppm. Preliminary data for 2022 suggest an increase in E$_{FOS}$ relative to 2021 of +1.0 % (0.1 % to 1.9 %) globally and atmospheric CO$_2$ concentration reaching 417.2 ppm, more than 50 % above pre-industrial levels (around 278 ppm). Overall, the mean and trend in the components of the global carbon budget are consistently estimated over the period 1959–2021, but discrepancies of up to 1 GtC yr$^{−1}$ persist for the representation of annual to semi-decadal variability in CO$_2$ fluxes. Comparison of estimates from multiple approaches and observations shows (1) a persistent large uncertainty in the estimate of land-use change emissions, (2) a low agreement between the different methods on the magnitude of the land CO$_2$ flux in the northern extratropics, and (3) a discrepancy between the different methods on the strength of the ocean sink over the last decade. This living data update documents changes in the methods and data sets used in this new global carbon budget and the progress in understanding of the global carbon cycle compared with previous publications of this data set. The data presented in this work are available at https://doi.org/10.18160/GCP-2022 (Friedlingstein et al., 2022b)

Global Carbon Budget 2023

Accurate assessment of anthropogenic carbon dioxide (CO2) emissions and their redistribution among the atmosphere, ocean, and terrestrial biosphere in a changing climate is critical to better understand the global carbon cycle, support the development of climate policies, and project future climate change. Here we describe and synthesize data sets and methodology to quantify the five major components of the global carbon budget and their uncertainties. Fossil CO2 emissions (EFOS) are based on energy statistics and cement production data, while emissions from land-use change (ELUC), mainly deforestation, are based on land-use and land-use change data and bookkeeping models. Atmospheric CO2 concentration is measured directly, and its growth rate (GATM) is computed from the annual changes in concentration. The ocean CO2 sink (SOCEAN) is estimated with global ocean biogeochemistry models and observation-based f CO2 products. The terrestrial CO2 sink (SLAND) is estimated with dynamic global vegetation models. Additional lines of evidence on land and ocean sinks are provided by atmospheric inversions, atmospheric oxygen measurements, and Earth system models. The resulting carbon budget imbalance (BIM), the difference between the estimated total emissions and the estimated changes in the atmosphere, ocean, and terrestrial biosphere, is a measure of imperfect data and incomplete understanding of the contemporary carbon cycle. All uncertainties are reported as ±1σ. For the year 2022, EFOS increased by 0.9 % relative to 2021, with fossil emissions at 9.9 ± 0.5 Gt C yr−1 (10.2 ± 0.5 Gt C yr−1 when the cement carbonation sink is not included), and ELUC was 1.2 ± 0.7 Gt C yr−1, for a total anthropogenic CO2 emission (including the cement carbonation sink) of 11.1 ± 0.8 Gt C yr−1 (40.7±3.2 Gt CO2 yr−1). Also, for 2022, GATM was 4.6±0.2 Gt C yr−1 (2.18±0.1 ppm yr−1; ppm denotes parts per million), SOCEAN was 2.8 ± 0.4 Gt C yr−1, and SLAND was 3.8 ± 0.8 Gt C yr−1, with a BIM of −0.1 Gt C yr−1 (i.e. total estimated sources marginally too low or sinks marginally too high). The global atmospheric CO2 concentration averaged over 2022 reached 417.1 ± 0.1 ppm. Preliminary data for 2023 suggest an increase in EFOS relative to 2022 of +1.1 % (0.0 % to 2.1 %) globally and atmospheric CO2 concentration reaching 419.3 ppm, 51 % above the pre-industrial level (around 278 ppm in 1750). Overall, the mean of and trend in the components of the global carbon budget are consistently estimated over the period 1959–2022, with a near-zero overall budget imbalance, although discrepancies of up to around 1 Gt C yr−1 persist for the representation of annual to semi-decadal variability in CO2 fluxes. Comparison of estimates from multiple approaches and observations shows the following: (1) a persistent large uncertainty in the estimate of land-use changes emissions, (2) a low agreement between the different methods on the magnitude of the land CO2 flux in the northern extra-tropics, and (3) a discrepancy between the different methods on the strength of the ocean sink over the last decade. This living-data update documents changes in methods and data sets applied to this most recent global carbon budget as well as evolving community understanding of the global carbon cycle. The data presented in this work are available at https://doi.org/10.18160/GCP-2023 (Friedlingstein et al., 2023)