International Journal of Critical Accounting (10 papers in press)

Regular Issues

• Assurance and consultancy internal audit roles in information technology risk management and investment decisions  
  by Reda Elazab, Ismail Gomma 
  Abstract: The purpose of this paper is to explore the impact of the disclosure of assurance and consultancy internal auditing roles in Information Technology (IT) risk management on investment decisions. The methodology used is an experiment where the disclosure of assurance and consultancy internal auditing roles in IT risk management and judgments about investments are made for three internal auditing disclosure in IT risk management scenarios. The results indicate that the disclosure of internal auditing roles in IT risk management has a positive impact on either investment decisions or stock market expectations. These results provide evidence that the disclosure of assurance and consultancy internal auditing roles in IT risk management provides signals to the stock markets. This is the first paper to examine whether intentions to invest and stock price expectations might be affected by the disclosure of assurance and consultancy internal auditing roles in IT risk management.
  Keywords: internal audit; risk management; investment decisions.
  
  
• Factors influencing the perception of non-accounting students in introductory accounting taught in universities in Ghana  
  by Newman Amaning, Edward Quansah, Tahir Ahmed Andzie, Leticia Sam, Paschal Kpimekuu Boruzie 
  Abstract: Stereotyping of the accounting profession by the public dates back over half a century ago when O’Dowd and Beardslee in 1960 first reported evidence of prejudiced perceptions about the accounting profession. This issue has since attracted attention of accounting education. This study, thus, aimed to examine the factors influencing the perception of undergraduate non-accounting students in introductory accounting taught in Ghana. We used both purposive and convenient sampling methods to collect data from a cross section of undergraduate non-accounting students pursuing introductory accounting in universities in Ghana. The study employed PLS SEM and process models in analysing the data collected from 333 respondents. Our findings indicated that occupational choice factors, the accounting curriculum, media representation, and teachers and career advisors have significant influence on the perception of undergraduate non-accounting students in introductory accounting taught in Ghana. However, it was found that both workplace tension and ignorance do not have such influence. Besides, when the gender of the undergraduate students is controlled, their perception in the subject is improved. The outcomes of this study have policy and practical implications to enhance effective teaching and learning of introductory accounting taught in Ghana and are, thus, discussed.
  Keywords: perception; undergraduate non-accounting students; introductory accounting; Ghana.
  
  
• Contingent perspective on the auditor-client relationship: a new determinant of audit quality  
  by Niels Van Nieuw Amerongen, Patrick Nieuwenhuizen 
  Abstract: Agency theory, which emphasises the importance of auditor independence, has dominated auditing research for many decades. Under this theory, the dyadic contractual relationship between auditor and client is perceived as undesirable because it is seen as biasing the auditor towards their clients. We call for a re-evaluation of the impact on audit quality of the auditor-client relationship, based on important insights from sociology, in particular drawing on the literature on social exchange theory. We suggest that, while agency theory remains applicable in the domain of public interest entities (and other settings that include separation of management and ownership), social exchange theory is more closely applicable to small and medium-sized entities (in non-PIE settings) that value a relational approach over a transactional approach. Therefore, we argue that a contingent perspective should be applied. Subsequently, the contribution of a high-quality auditor-client relationship towards audit quality requires audit firms and individual auditors to implement both individual and organisational controls to maintain objectivity. Our analysis suggests that the benefits for audit quality of a good auditor-client relationship may have been underrated by auditors as well as audit clients.
  Keywords: agency theory; social exchange theory; SET; auditor-client relationship; sociological controls; audit quality.
  
  
• The identity of accounting profit - a trial of criticism to accounting  
  by Masaya Fujita 
  Abstract: To determine profit, we must subtract expenses from revenue. Why do we have to compute profit indirectly? Why can profit neither be touched nor seen? And what is accounting profit? These questions are important for financial accounting researchers. Below offers answers by analysing and identifying the characteristics of computing profit. Surplus value is the essence of profit. Its expression is frequently used in analysing capitalism, but it has existed from the start of human labour. Without it, there could be no ancient remains or increases in population. In this paper, 'surplus' is used instead of surplus value and accounting profit. The individual, historical and tangible form of surplus, is determined by double-entry bookkeeping (Fujita, 2002, 2017), i.e., it is the difference of capital at the beginning and the period end (computed on the balance sheet), and the difference of revenue and expenses (computed in the profit and loss account). Accounting profit is the individual, historical and concrete forms of surplus but what is a surplus is problematic. This paper asserts that it comes from the deprivation from nature (the earth) and the effects of accounting on economic actions can threaten the future of humankind.
  Keywords: accounting profit; surplus; only one cost; labour cost; depletion of resource and energy; deprivation from the earth; exhaustion of resources.
  DOI: 10.1504/IJCA.2024.10068020
   
  
• African accounting: past and present  
  by Aida Sy, Anthony Tinker 
  Abstract: Bring the discussion on African accounting to the largest accounting meeting. Many people think that Africa does not have accounting. That is a misconception. Data collections: to write this paper, we collected data from the New York Library, The Graduate Center at the City University of New York, the British Library, the Baruch College Newman Library and the Library of the Sorbonne. Another source is the African network for the accounting profession (Brown, 1905; Littleton, 1933). We do not use a market-study quantitative method as in this type of research, it is appropriate to use a historical and qualitative approach. The paper considers the Great African Empires' history: Nubian, Ethiopia, Egyptian, Lybian Mossi, Ghana, Mali, Songhay, Zimbabwe and Kanem-Bornu.
  Keywords: African Accounting; history; Big4; International Financial Reporting Standards; IFRS.
  DOI: 10.1504/IJCA.2024.10068022
   
  
• A comprehensive model for assessing university and campus sustainability, accreditation and global ranking  
  by Paulina Permatasari, Vania Natasha, Laura Angelica, Umesh Sharma, Uman Suherman 
  Abstract: This paper aims to create a comprehensive model of a sustainable university by combining the concepts of sustainable universities with various university assessment systems, including national and international university accreditation, professional accreditation, and global university ranking. The model conceptualisations of university sustainability and university assessment systems were taken from different existing models in higher education. These were summarised and conceptualised to create an integrated model of a sustainable university and its assessment criteria. It was found that the goals of both systems corresponded with one another. Thus, the aim of establishing sustainable universities is also in line with already existing university goals, such as achieving excellence in organisational and academic goals. An innovative model combining university sustainability and university assessment systems would be beneficial in simplifying the complex and multidimensional nature of a sustainable university and may portray a more attainable and relatable view of university sustainability overall.
  Keywords: university sustainability; higher education; university assessment systems; university accreditations; university global ranking.
  DOI: 10.1504/IJCA.2024.10068024
   
  
• The contribution of internal audit to fraud audit: evidence from Greece  
  by George Drogalas, Michail Pazarskis, Dimitris Mitskinis, Athanasios Koulikas 
  Abstract: This paper aims to examine the extent to which the establishment of internal auditing and the work of internal auditors contribute to fraud detection. For the purpose of this study, a questionnaire was sent to Greek companies and the sample of 114 was compiled from these. Statistical analysis was performed using the linear structural equation modelling (SEM) method. The results show that fraud audit is significantly influenced by the internal audit contribution, the audit committee's contribution, the internal auditor's contribution as well as their obligations. The originality of this study lies both in the fact that not enough research has been conducted that delves deeper into this subject and the method that was used for the data analysis.
  Keywords: fraud audit; internal audit; IA; audit committee; AC; internal auditor; internal audit effectiveness; structural equation modelling; SEM; Greece.
  DOI: 10.1504/IJCA.2024.10068018
   
  
• IFRS adoption and earnings management in Kuwait firms: pre and post-COVID-19  
  by Abdullah E. Alajmi, Rasheed Alrashidi 
  Abstract: This study examines how Kuwaiti firms managed their earnings before and after adopting International Financial Reporting Standards (IFRS), with a focus on the COVID-19 pandemic. It also identifies the factors that influence earnings management and how these factors differ between the two periods. The study used a quantitative approach and analysed financial data from annual reports of 60 Kuwaiti companies listed on the Kuwait Stock Exchange (KSE) from 2016 to 2021 using robust regression. It used discretionary accruals to measure earnings management and three models, including the standard Jones model, modified Jones model, and Kothari model, for the analysis. The findings show that firms are more likely to manage their earnings under IFRS than under the previous Kuwaiti accounting standards. Additionally, earnings management increased significantly during the COVID-19 pandemic as firms tried to meet analysts' expectations and avoid negative market reactions. The study also identified several motives for earnings management, such as increasing executive compensation and avoiding negative market reactions.
  Keywords: IFRS adoption; earnings management; COVID-19; Kuwait Stock Exchange; KSE; Kuwait.
  DOI: 10.1504/IJCA.2024.10068019
   
  
• Auditor choice and audit fees in family firms: evidence from Tehran Stock Exchange  
  by Javad Izadi, Mohammad Khorashadi, Maurice Pratt 
  Abstract: This paper examines auditor choice and audit fees in family firms on the Tehran Stock Exchange. The study analyses non-financial firms over ten years, using 1,050 firm-year observations. Probit and OLS regression methods are employed to test the hypotheses. Findings indicate that family firms, unlike non-family firms, are less likely to select large auditors and pay higher audit fees. Additionally, the choice of a large auditor mitigates the relationship between family ownership and audit fees. Family firms are also less likely to choose industry specialist auditors. This research enhances understanding of family ownership's impact on auditor selection and audit fees in Iran's emerging market. It contributes to accounting literature by providing empirical evidence on family control's effects on audit practices in a developing economy and offers a foundation for further research in similar contexts. The findings are based on Iran's unique financial conditions, differing from those in developed countries.
  Keywords: family firms; auditor choice; audit fee; agency problem.
  DOI: 10.1504/IJCA.2024.10068027
   
  
• CSR and firm's financial performance amidst mandatory CSR regulations in India: systematic review-based meta-analysis  
  by Satish Chandra Pant, Neha Kukrety, Pitresh Kaushik 
  Abstract: The purpose of this study is to critically analyse empirical findings of extant literature with respect to the financial performance of Indian enterprises amid mandatory CSR regulations. In this study, 19 empirical papers exhibiting 4,141 samples of Indian enterprises were systematically selected from the Scopus database. The meta-analysis method was utilised to examine the overall effect size in the existing literature. The study shows a positive but tiny significant association (r = 0.18) between CSR and financial performance, with implications for managers, customers, policymakers, and investors. With reference to the post-CSR required regime, the paper concludes the theoretical and practical contribution in the sphere of CSR and financial performance in India. It was concluded that a few systematic reviews have been conducted in India's post-CSR required regime. This study aims to investigate the selected papers using a meta-analytic technique to synthesise common views on the relationship between CSR and financial success for better planning by investors, corporations, and the government.
  Keywords: corporate social responsibility; CSR; financial performance; India.
  DOI: 10.1504/IJCA.2024.10068025