Some Aspects Regarding Changes in Accounting Policies, Estimates and Correction of Errors

Changes in accounting policies may be precipitated by a change in the company’s economic environment. Accounting changes may also result from changes in ownership that cause a shift in the financial reporting objectives, such as from private to public ownership, or vice versa. At each statement date, whether annual or quarterly, management must re-evaluate the many estimates that are required when financial statements are prepared. Changes in estimates may have a significant impact on reported results. Finally, there are necessary accounting changes that arise when a company discovers that it has made an accounting error in previous accounting periods. Obviously, errors need to be corrected in order to present fairly the financial condition and results of operations of the prior periods, even if the current period is not affected. Consistency and comparability must be achieved by correcting any errors that have a material effect on previously reported results. All types of accounting changes affect reported results, but not necessarily in the same way. The objective of our study is to describe the different types of accounting changes, the ways in which they affect reported results, and the accounting approach used to adjust for the changes.accounting policies, changes in accounting estimates, errors of the prior financial year

Online Financial Reporting Disclosure Requirements Across Central and Eastern European Countries

The business community has admitted that the accounting is “the language of business”. They are using the accounting to communicate the existence and the evolution of the financial situation and also of the performance for the economical entities. Financial information is a form of a language. The purpose of this paper is to investigate the various elements of financial reporting frameworks and practice in the context of the Internet. The Internet has emerged as a recent medium of presentation of corporate information in the United States, Germany, Great Britain, but also in the Central and Eastern European Countries. Actual disclosure by companies from CEE was investigated in order to compare de jure and the facto financial reporting disclosure.financial reporting, Internet, disclosure, CEE countries

ROMANIAN PRACTITIONNERS AND THE USE OF ESTIMATES IN ROMANIAN BUSINESS ENVIRONMENT

Our research is based on a survey conducted among accountants, in order toinvestigate how the accounting profession feels in respect to the use of estimates at company level.By conducting this research we tried to obtain a realistic view on estimates applied in companiesand on the degree of familiarity of Romanian accountants with estimation techniques, especially inthe three representative fields at micro-level, namely: financials, accounting and auditing. We alsointended to track down those fields of the estimation evaluation process where professionals facemajor challenges and to come up with solutions eventually.accounting profession, estimations, evaluation, financial reporting.

INTELLECTUAL CAPITAL REPORTING AND DISCLOSURE IN THE ANNUAL REPORTS OF ROMANIAN MANUFACTURING LISTED COMPANIES â€" THEORETICAL FRAMEWORK

One of the most researched topic regarding financial reporting and disclosure of today is the way intellectual capital or knowledge assets contributes to the improving of the quality of information disclosed and create or add value to business performance. Also, it is acknowledged that a company has access to a variety of tools for disclosing information on intellectual capital. In our study we have decided to investigate the concept, the measurement models and the intellectual capital disclosure practices using as the source of our documentation books, articles, working papers and online publications. So, in the first part of our research we have presented several points of view in respect to the concept of knowledge assets or intellectual capital and in the second part we have reviewed the literature on the topic highlightening several scholars opinion on reporting and disclosure issues.knowledge, intellectual capital, reporting practices, disclosure, annual reports

ROMANIAN COMPANIES’ WEB-BASED DISCLOSURE CHOICES AND CAPITAL MARKETS

This article aims to investigate the web-based disclosure choices andpractices among Romanian companies listed on Bucharest Stock Exchange. Web-based disclosure offers advantages that are absent in paper-based voluntarydisclosure: it can be accessed globally at much lower costs and it can be updatedmuch more timely also at much lower costs. Another goal of the paper is to establishthe criteria in order to select properly the sample companies. After presenting theadvantages and eventual risks of Internet Financial Reporting and analyzing previousinvestigative reports and articles, this paper investigates the degree to whichRomanian listed companies to disclose financial and non-financial information areusing the Internet. The web sites of these companies were examined throughout May2007 to May 2008, with a view to determining which companies present voluntaryfinancial or non-financial data in addition to the Annual Report and Accounts.internet financial reporting, mandatory and voluntary disclosure, capital markets,listed companies

Operational Risk Modelling and Capital Adequacy – are There any Rewards in Greater Complexity?

The paper applies the methodologies proposed by Basel Committee on Banking Supervision for assessing the capital requirements in the context of operational risk to a Romanian commercial bank. The basic indicator, standard and internal measurement approaches (IMA) have been used to asses the capital requirement levels needed to cover the operational risk. The IMA is implemented using the loss distribution methodology (LDA). The capital at risk is computed from the loss distribution that aggregates, using Monte-Carlo simulations, the frequency and loss size distributions, fitted to the empirical data, for each business line and event type pair. Even though IMA is more costly and difficult to implement, it has, in some circumstances, considerable rewards in terms of capital requirements.operational risk, basic indicator approach, standardized approach, internal measurement approach, loss distribution methodology, Monte-Carlo simulation

INTELLECTUAL CAPITAL REPORTING AND DISCLOSURE IN THE ANNUAL REPORTS OF ROMANIAN MANUFACTURING LISTED COMPANIES â€" METHODOLOGY AND DISCUSSION OF RESULTS

In our study we have proposed to measure the extent of intellectual capital disclosure using annual reports as the source of our documentation. The empirical analysis is twofold: firstly we are interested in analyzing the value of intellectual capital using a value-based approach, through the evolution of market to book value ratio over the selected period and secondly we carry out a content-based analysis of the complete annual reports of the selected companies over the five year period and calculate an intellectual capital disclosure index. Looking at the figures we can conclude that only 50% of Romanian manufacturing companies hold intellectual capital assets for the period analysed and also they are mostly disclose information that refers to relational capital. The intellectual capital voluntary disclosure index for the 2005-2009 years for the sampled companies is on average almost 19%, considered very low.knowledge, intellectual capital reporting, annual reports, listed companies, disclosure

A BRIEF REVIEW OF CREATIVE ACCOUNTING LITERATURE AND ITS CONSEQUENCES IN PRACTICE

Our research has as main objective a short review of the aspects approached at theEuropean level regarding the role that creative accounting plays in the life of an enterprise. Inorder to achieve our goal, we have analysed approximately 40 academic articles indexed ininternational database, such as Science Direct, Emerald and ProQuest. We have used alongitudinal classification of the selected articles, studied between the years 1999 and 2009; wehave tried, also, a classification of these papers according to the most frequent debating themes. In the end of our research, we have formulated our own conclusion,, that there is nounanimously or unifying accepted theory at the international or European level regarding what is,what the creative accounting represents or which are its basic principles.creative accounting, financial scandals, financial reporting

ACCOUNTANTS ABOUT ACCOUNTING POLICIES. AN EMIPRICAL INVESTIGATION OF SMES FROM BIHOR COUNTY

This paper examines the setting up of accounting procedures and policies in sampled SMEs from Bihor, county selected after criteria of size at the end of 2008. In order to conduct our research we have set up a questionnaire of 25 questions which has been applied to 100 SMEs. The obtained results showed that out of the 83 respondents, only 92,68% agree with the provisions of Article 10 of Order 3055/2009, according to which entities must develop their own accounting policies approved by the managers, only 75,60% of the respondents agree that the existence of written accounting policies at the enterprise level improves the quality of financial reporting and managers’ decision making process and a significant number of respondents (21,95%) do not know the fact that during a financial year, a firm’s accounting policies cannot be changed. The most relevant result of our investigative research consist in identifying the need to train the human resources involved in the process of writing and applying accounting policies and procedures in SMEs and the necessity to set up a manual of accounting department.accounting policies, financial reporting, disclosure, SMEs

THE RELEVANCE OF PSYCHOLOGY THEORIES TO FINANCIAL ACCOUNTING

Starting from the interest that we have found in psychology sciences in order to understand better the way managers, analysts and last but not least investors behave in the decision making process our study focuses on the link between financial reporting, disclosure policies and investors judgment under uncertainty. The theoretical background describes the rational judgment of investors found in economic utility theories but also looks upon the main cognitive and social psychology for irrational behavior in the decision making process. Our research mainly focuses on measuring the influence of five psychological factors on the irrational behavior of potential investor. We showed that overconfidence occurs when investors overestimate the precision of their private signals and their knowledge about the value of a financial transaction and always remember the successfully times and easily forget the failures. Also, we have pointed out that limited attention is frequently associated with changing in disclosure policies and selfcontrol is negatively related to irrational behavior of investor.psychology theories, financial reporting, disclosure, investor, judgment, decision making process, psychology variables