Manipulation of earnings reports in Spain - some evidence

Accounting regulation is a highly topical issue for listed companies in Europe. From 1 January 2005 all companies listed in the EU member states are required to produce financial reports compliant with international accounting standards. Financial reports will be comparable with each other only if full compliance with the international standards can be ensured. Historically, however, an enduring weakness of the international standard-setting regime has been its inability to enforce compliance with its standards. There is a danger that implementation and compliance will be variable across the adopting countries, and that deeply ingrained national reporting practices will persist. The purpose of this paper is to examine some distinctive elements of Spanish financial reporting practices. Spanish financial reporting by major companies demonstrates a tendency towards quite overt manipulation of the earnings figures. The research reported in the paper firstly identifies four common earnings manipulation practices, and then proceeds to examine their incidence in the financial statements of the IBEX-35 companies over a three year period.Financial reporting, Spain, earnings manipulation, IBEX-35

International accounting harmonisation - A comparison of Spain, Sweden and Austria

Despite attempts to secure harmonisation of accounting practice, significant variations in accounting rules and practice continue to arise in European countries, variations which give rise to compliance costs for multinational companies. Firstly, this paper considers the relevance of international accounting harmonisation for European business. It then proceeds to examine accounting regulation in three countries: Spain, Sweden and Austria, highlighting the key regulatory issues of the 'true and fair' view requirement and the link between taxation and accounting. The three countries are selected because of the interesting contrasts which they provide; these contrasts are examined in detail in the paper. The work is based upon a series of interviews carried out with leading accounting practitioners in the three countries during 1996-97. The paper concludes that there are significant obstacles to accounting harmonisation in Europe and that there is potential for continuing diversity of national accounting practice.Accounting, harmonisation, international

A portrait of the Spanish accounting community

This study presents a portrait of the Spanish academic accounting community in 1995, based upon a questionnaire circulated to Spanish accounting academics in 1995 and upon an analysis of authorship and citations in the main Spanish accounting journals. The approach to these analyses is grounded in similar studies which have been carried out in the United States, Spain and elsewhere. but the combination of techniques used in this study is particularly broad in range. The results of the study are used to describe a range of characteristics of Spanish accounting academics, for example, publications records and length of academic experience. The analysis of publications produces a ranking by institutional affiliation of the most significant contributors to current debates on accounting. Citation analysis is used to identify the range and extent of international influences upon the Spanish academic accounting community, and to provide an additional ranking by institutional affiliation of the most frequently cited sources A significant finding was that the nature and extent of international influence had changed very little over the ten year period since Spain entered the European Union and started to implement European Directives. Perceptions of journal quality were elicited by questionnaire. Forty five journals, Spanish and international are included in a list ranked for perceived importance as outlets for publication. and as sources of support for teaching and research. The results of this exercise show that Spanish journals were ranked low relative to journals published in the United Kingdom and United States. Finally the study examines the extent of purpose upon Spanish accounting academies to publish, by presenting results of a question about criteria for promotion, and also by examining and increasing tendency to publish co-authored work.Accounting, academic community

Creative accounting in Spain : some evidence from Spanish quoted companies

The nature and incidence of earnings management practices have been examined in many research studies, especially in the United States. Research into such practices in Europe, and specifically in Spain has been less common. This paper makes a contribution to the existing literature by offering an analysis of certain features of Spanish accounting that can be classified as earnings management. The population of companies under review comprises those included in the IBEX-35 index, and so includes the largest companies in Spain. The effects upon earnings of four commonly encountered features in Spanish accounting practice are examined and quantified: audit report qualifications, special authorisations to override accounting regulation, changes in accounting policy and extraordinary items. The results of the analysis show that net earnings are affected to a significant extent by these items. The paper concludes that these relatively overt forms of earnings management are employed in the financial statements of several leading Spanish companies. While a reduction in the level of options offered by accounting regulation may help to reduce the incidence of earnings management, it is noted that a tightening of standards in one area tends to simply shift the location of earnings management. Remedial measures should, therefore, also include improvements in supervision

Issues concerning web-based business reporting: an analysis of the views of interested parties

Rapid developments in information and communications technology have led organisations in many countries to consider the impact of the Internet on the delivery and dissemination of business information. This paper reports the findings of a UK study into the views of various user groups, preparers and auditors regarding specific proposals for change and newly emerging practices. Over 500 individuals from six groups responded to a questionnaire study, representing an overall response rate of 33%. Views were elicited regarding: (i) the desirability of different kinds of additional information that could be provided electronically, (ii) the usefulness of different navigation and search aids, and (iii) the portability of information under different formats.It is found that users favour many of the expansions of scope made possible by the web. A range of navigation aids, search aids and file formats are found by all groups to be at least fairly useful, especially global navigation aids. Preferences regarding file formats vary across the groups. Paired group comparisons show that, while expert and non-expert users hold similar views in relation to many issues, users' and preparers' views differ considerably. Auditors' views generally fall in between those of users and preparers. Cyert and Ijiri's (1974) framework is used to rationalise the observed conflicts and congruences of interest, underpinning clear pointers for policy-makers

Making the Adjustment: A Grounded Theory Study of What Works and Does Not Work in Postdivorce Parenting Relationships

This study contributes to the growing knowledge base on postdivorce parenting. Recognizing the need to facilitate a better understanding of what makes the postdivorce parenting dyad work or not work, this study explored how individuals sustain a parenting relationship with their former partners when the couple relationship ends through separation or divorce. To date, knowledge about couples’ relationships has been absent from clinical approaches to assisting postdivorce parenting relationships and consequently there has been no bridge between the theories and paradigms of the couples’ literature and those of postdivorce parenting. This exploratory study examined the experiences and perspectives of 20 individual parents in Ontario, Canada. Individual interviews were held with each of the participants. The study identified key themes illuminating an emerging understanding of postdivorce relationships. These key themes will assist to better understand the postdivorce parenting relationship. Findings suggest that practitioners should consider that: (a) the postdivorce parenting relationship is highly complex and the development of a “working” or “not working” relationship results from an interaction among a range of factors; (b) understanding couple’s research is essential to comprehending this complexity because, despite the couple relationship ending, former couples remain a dyad because they are parents; (c) even when the postdivorce parenting relationship is “not working”, men and women describe other aspects of their lives as successful. The study’s findings have implications for mental health professionals and legal professionals working with parents during and following the divorce process.Ph