Artificial Intelligence and COVID Effect on Accounting
- 2022
- Book
- Editors
- Assist. Prof. Bahaaeddin Alareeni
- Prof. Allam Hamdan
- Publisher
- Springer Nature Singapore
About this book
This book considers the effects of COVID-19 on accounting, particularly with regard to the role of artificial intelligence in accounting in the post-pandemic business environment. The contributions in the book consider a variety of sectors that have been affected by the pandemic, such as the stock market, forensic accounting, Bitcoin, as well as the economic and educational responses to the pandemic and the aftermath felt by both developing and developed countries.
This book will be a valuable read for academics, students and practitioners of accounting who are keen to explore the future of the field in light of the pandemic.
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Table of Contents
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Frontmatter
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Introduction Chapter
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Frontmatter
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Chapter 1. The Impact of Artificial Intelligence on Accounting and Auditing in Light of the COVID-19 Pandemic
Bahaaeddin Alareeni, Allam HamdanThe chapter delves into the transformative potential of artificial intelligence in accounting and auditing, particularly in the wake of the COVID-19 pandemic. It begins by outlining the significant disruptions caused by the pandemic and the urgent need for innovative solutions. The text then explores how AI can enhance the quality, efficiency, and complexity of accounting and auditing activities during and post-pandemic. It raises critical research questions to guide future studies and concludes by emphasizing the need for further investigation and education in AI techniques to fully harness their benefits in overcoming pandemic-related challenges.AI Generated
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AbstractThe relationship between Accounting, Audit activities, and Artificial Intelligence (AI) is extensive and continues to grow, especially now, in the time of the COVID-19 pandemic. All activities in these fields have now used online tools amid COVID-19 pandemic and many activities and practices are carried out taking the pandemic safety measures. The COVID-19 pandemic has impacted human behavior in many aspects and governments all over the world try to decrease the impact of it on businesses and economies. Thus, many efforts have been made to impose the COVID-19 safety measures that use modern technologies. This shows us that there is a need for efforts and extensive research to overcome this problem. AI is a technology used to better efficiency, quality, safety, and solve many problems, quicker than the traditional workers. In this paper, we will direct the researchers’ attention to the problems that arise in the field of accounting and auditing because of the ongoing pandemic and suggest some topics to researchers to work on them and help to discover the impact of AI on Accounting and Auditing professions amid and post COVID-19 pandemic.
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Accounting and COVID-19 Effects
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Frontmatter
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Chapter 2. Under the COVID Pandemic: Is It the Springtime for Forensic Accounting Field to Blossom?
Noor Aamer Al ShehabUnder the COVID-19 pandemic, the rise in digital financial services has increased the vulnerability to fraud, making the role of forensic accounting more crucial than ever. This chapter delves into the concept of forensic accounting, its benefits, and the theories related to fraud detection. It highlights the role of forensic accountants in various settings, including divorce cases, insurance claims, and fraud investigations. The chapter also explores the integration of artificial intelligence in forensic accounting, emphasizing the importance of advanced analytics and machine learning in detecting and preventing financial crimes. Additionally, it discusses the knowledge, skills, and training required for forensic accountants and the challenges faced by the profession. The chapter concludes by recommending strategies to improve forensic accounting education and practice, emphasizing the need for collaboration between academia and industry to combat financial crimes effectively.AI Generated
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AbstractWhile the principle of financial fraud remains the same, new methods and means have been developed as a result of the advanced technology. Due to the large financial scandals which have been recorded throughout the history, the need for “Forensic Accounting” has dramatically increased within business sphere. The pandemic of COVID-19 breeds several challenges for both governments and business firms in alleviating corporate scams, corruption, bankruptcy, money laundering, cybercrimes, and the like. The impact of such illegal practices hits the financial reporting and ultimately leads to misleading decisions. In fact, the internal and external auditors play different roles than the forensic accountants do. Seemingly, auditing and forensic accounting function in one area, but each drives its own way. Therefore, it is vital nowadays to assign forensic accountant who is well equipped with adequate knowledge, skills, and experience. Equally, it is essential to introduce forensic accounting education to meet the existed marketplace demands. This chapter is devoted to provide an overview about the concept of forensic accounting and how the entire world has significantly affected by the white-collar crimes especially during the global lockdown. In addition, it will clear the misunderstanding between forensic accounting and auditing. Furthermore, the chapter will explain the most important knowledge and skills a Forensic Accountant should acquire in order to perform successfully despite the fact that there is a lack of offered courses and degrees in Forensic Accounting globally. Finally, there are a number of issues facing the Forensic Accounting field which will be highlighted and discussed to be improved. -
Chapter 3. Co-movement Among COVID-19 Pandemic, Crude Oil, Stock Market of US, and Bitcoin: Empirical Evidence from WCA
Bassem Ghorbali, Kamel Naoui, Abdelkader DerbaliThe chapter examines the impact of the COVID-19 pandemic on crude oil prices, the US stock market (S&P500), and Bitcoin, using empirical evidence from the Western Cape Area. It begins by outlining the timeline of the pandemic's spread and its initial impact on global stock markets. The authors then delve into the existing literature on the interconnectedness of financial markets, highlighting previous studies that have used copula methods and GARCH models to analyze these relationships. The chapter focuses on the period from January 21, 2020, to September 10, 2020, during which the US COVID-19 confirmed cases and financial market returns were collected. The analysis reveals significant volatility in all variables, with Bitcoin showing the highest volatility and crude oil prices registering a negative average return. The wavelet coherence analysis shows a strong co-movement between the US COVID-19 confirmed cases and Bitcoin, with the pandemic leading the stock market during the crisis. The findings highlight the systematic risk posed by the COVID-19 outbreak and the reduction in diversification benefits during the pandemic. The chapter concludes by emphasizing the importance of considering health crises as a factor influencing financial markets.AI Generated
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AbstractIn this paper, we investigate empirically the time–frequency co-movement among the recent COVID-19 epidemic, the financial stock market indices in USA (S&P500), crude oil price (WTI), and cryptocurrency markets (Bitcoin) using both continuous wavelet transform and wavelet-based approach. In this study, we use continuous wavelet transforms (CWT) and wavelet coherence analyses to study the co-movement among recent spread of the COVID-19 epidemic and US financial market, including the stock market return (S&P500 index), the West Texas Intermediate (WTI) crude oil price and cryptocurrency market (Bitcoin) for the period January 17, 2020 to December 10, 2020. Overall, we find that all variables displays a strong volatility concentrated in the first four months of COVID-19 outbreak. In addition, our findings reveal a strong level of co-movement between US COVID-19 confirmed cases and each US financial market index. In contrast to comparative assessment in conditions of reactions to COVID-19 pandemic in US, US COVID-19 confirmed cases have relative higher impact on the co-movement in WTI and Bitcoin. -
Chapter 4. COVID-19 Surprises in China and in the USA: Which Is Useful in Explaining the Dynamic Nexus Among Energy Commodities and Bitcoin?
Abdelkader Derbali, Kamel Naoui, Lamia JamelThe chapter delves into the effects of COVID-19 surprises in China and the USA on the dynamic correlation between energy commodities and Bitcoin. Using the GARCH-DCC(1,1) model, it analyzes how these surprises influence the volatility and correlations of Bitcoin and energy commodities such as Crude Oil WTI, Brent Oil, and Natural Gas. The study covers the period from July 2019 to June 2020 and provides empirical findings that demonstrate the significant impact of COVID-19 surprises on financial markets. The results show a notable difference in the impact of surprises from China and the USA, with Chinese surprises having a more substantial effect on the volatility of energy commodities and Bitcoin. The chapter also highlights the persistence of volatility in the presence of COVID-19 surprises and the bidirectional spillover effects between energy commodities and Bitcoin. The research contributes to the understanding of the financial and economic impacts of the COVID-19 pandemic on global markets.AI Generated
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AbstractThis study investigates an important approach to assess the impact of the COVID-19 confirmed cases surprises and creation pronouncements used for the correlation among returns and volatilities of energy commodities and Bitcoin. To evaluate empirically the unanticipated factor of the COVID-19 confirmed cases surprises in China and in USA, we use the (Kuttner 2001) approach, and we employ the total of the COVID-19 confirmed cases in China and in USA to calculate the surprise element. Econometrically, we apply the GARCH-DCC(1,1) model as established by Engle (2002). The empirical findings of this article recommend important and significant correlation among energy commodities and Bitcoin indices if COVID-19 pandemic shocks are integrated in variance estimations. Also, these findings prove the financialization phenomena of energy commodities and Bitcoin indices. We remark that the correlation among energy commodities and Bitcoin indices begin to react significantly further in the case of COVID-19 in China than COVID-19 in USA. Finally, our research contributes to the financial literature on assessing the influence of the COVID-19 surprises on the correlation among returns and volatilities of energy commodities and Bitcoin through the period of study since July 01, 2019 to June 30, 2020. -
Chapter 5. Corona Virus (COVID-19) Pandemic: Economic and Educational Responses and Aftermath Effects in Developing and Developed Countries
Derar Eleyan, Mohammed W. A. Saleh, Nafieh A. Assaf, Zahraddeen Salisu MaigoshiThe chapter delves into the economic and educational responses to the COVID-19 pandemic across Nigeria, Malaysia, Palestine, the USA, and Germany. It examines the various palliative measures implemented by governments to cushion the economic blow, such as interest holidays on loans and direct cash transfers. The educational sector's response is also scrutinized, with a focus on the transition to online learning platforms and the challenges faced in developing countries due to inadequate infrastructure and resources. The chapter highlights the disparities in responses between developed and developing nations, underscoring the importance of robust economic and infrastructural support in effectively mitigating the pandemic's impact.AI Generated
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AbstractThe outbreak of novel infectious coronavirus pandemic is popularly known as COVID 2020-19; governments of many countries have taken several measures to curtail the spread of the virus among the populace. Since December 2019, the pandemic has spread rapidly (Wu and McGoogan 2020) propagating economic disruption globally and, in many cases, overwhelming health care resources (Grasselli et al. 2020). Among the measures suggested by World Health Organization (WHO) and implemented by governments include the total lockdown of number of cities across the globe. The total closure of business activities or some necessary physical distancing measures adopted to halt the wide spread of the disease has resulted to significant negative consequences on both businesses and workers (Anderson et al. 2020; Brenan 2020). Most of stock markets have recorded a more 50% decreases in stock prices, credit market activities were paralyzed, increased unemployment rate and decrease in the global GDP by at least 10%. In the United States of America (U.S.A), almost thirty percent of employment has been reduced the working circle, reduced working hours or frozen hiring because of the novel coronavirus outbreak, as par mid-March and part-time workers are more likely to be affected by these negative effects of the pandemic on their workplace (Brenan 2020). -
Chapter 6. The Influence of the Ownership Structure and the Corporate Governance Procedures on the Capital Structure of the Tunisian Insurance Enterprises
Abdelkader Derbali, Hany A. SalehThe chapter investigates the relationship between corporate governance, ownership structure, and capital structure in Tunisian insurance enterprises. It highlights how effective governance can enhance value creation and reduce conflicts of interest. Using a sample of 22 Tunisian insurance companies from 2000 to 2019, the study finds that improvements in governance have not significantly influenced financing policies. Key findings include a negative association between board size and leverage ratio, and a significant impact of independent members and institutional shareholders on debt levels. The study also underscores the importance of the ROE-dividend payout rate differential in shaping capital structure. This detailed analysis offers valuable insights into the complex interplay between governance, ownership, and financial strategies in the insurance sector.AI Generated
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AbstractThis article studies the influence of corporate governance and ownership structure on capital structure of Tunisian insurance enterprises. Then, we utilize a sample composed of 22 Tunisian insurance enterprises during the period of study from 2000 to 2019. From the empirical results, we show that the improvement in governance did not affect the financing policy. The indicator which measures the size of the board of directors is negatively associated with the indicator which measures leverage ratio and the growth of independent members has more influence on the debt policy. The ROE-dividend payout rate differential has a negative nexus with the capital structure but is not influential enough. In fact, the self-financing policies adopted slightly affect the leverage ratio. Finally, the ownership structure characterized by the managerial shareholders and the institutional investors can be considered as a determining factor of the capital structure. In Tunisian insurance companies, the ownership structure influences the capital structure more than corporate governance.
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Artificial Intelligence and the Future of Accountancy
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Frontmatter
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Chapter 7. An Investigation of Artificial Intelligence Application in Auditing
Tamanna Abdul Rahman Dalwai, Araby Madbouly, Syeeda Shafiya MohammadiThe chapter 'An Investigation of Artificial Intelligence Application in Auditing' delves into the transformative potential of AI in the auditing field. It discusses how AI, big data, and automation are revolutionizing audit processes, enhancing efficiency, and enabling auditors to gain deeper insights. The study also explores the ethical considerations and risks associated with AI implementation in auditing, emphasizing the need for proactive governance and regulatory updates. Additionally, it examines the future of auditing, suggesting a shift towards a continuous audit approach and the importance of developing new skill sets for auditors. The chapter provides a detailed literature review and concludes with insights into the implications of AI for the auditing profession.AI Generated
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AbstractThe auditing profession is changing due to the advent and enforcement of artificial intelligence (AI) in its field. The implementation of artificial intelligence is introducing the advantages of taking over manual processes and promoting effective value-added decision making by the auditors. This chapter discusses the development and use of artificial intelligence in auditing from the prospects of education, profession, and ethical implications. It is not sufficient for the auditors to have professional knowledge only but to also develop the acumen for the implementation of artificial intelligence. Undergraduate and postgraduate degrees are being revamped to include knowledge of AI. Additionally, auditors are catching up on AI developments through professional development courses. The audit process benefits from AI due to the coverage of all the transactions instead of relying only on a sample to make a judgment. Auditing firms are investing in contract analysis software to go through complex documents. However, the ethical implications of AI are new and regulatory authorities are still in the process of providing adequate coverage toward the use of AI. The bottom-line of implementing AI processes is that it is complementary to the function of auditing and not a replacement. -
Chapter 8. With Application of Agency Theory, Can Artificial Intelligence Eliminate Fraud Risk? A Conceptual Overview
Ali RehmanThis chapter delves into the persistent problem of fraud in organizations despite numerous controls and regulations. It highlights the potential of artificial intelligence (AI) in revolutionizing fraud prevention and mitigation, moving beyond its current role as a support tool. The study proposes that AI, when applied through agency theory, can act as an agent for shareholders, enhancing corporate governance and significantly reducing fraud risks. By examining recent prominent fraud cases and the ethical guidelines surrounding AI, the chapter offers a comprehensive overview of how AI can be effectively integrated into organizational policies to prevent and mitigate fraud. The conceptual framework presented suggests a direct relationship between AI and fraud prevention, positioning AI as a vital component of a robust governance management system. This chapter not only provides a detailed literature review but also offers practical insights into the future of AI in combating fraud, making it a must-read for professionals seeking to understand the transformative potential of AI in this domain.AI Generated
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AbstractPurpose of this study is to introduce conceptual framework to identify whether artificial intelligence can support public listed companies toward eliminating and mitigating fraud concerns or not by utilizing Agency Theory in this concept. In the current business environment, fraud is a major concern not only for the organizations but also for the shareholders and society as a whole. This study reviews the literature related to organizational governance, corporate fraud cases, and artificial intelligence supporting the business toward fraud elimination and mitigation. This study reviews the benefits related to the utilization of artificial intelligence within the corporate world and at organizational level toward mitigation and prevention of fraud. This study integrates significant empirical research and literature to broaden the potentials of artificial intelligence over fraud prevention and mitigation. This study provides reasoning that artificial intelligence can be utilized as an agent for the Agency Theory. This study is distinctive from the others because artificial intelligence’s support in the context of agency theory for the public listed companies has never been studied before; moreover, past studies have demonstrated artificial intelligence as control assistance only; whereas, this study will emphasize on artificial intelligence as support function and as agent working toward the support of management and shareholders for fraud mitigation and elimination. -
Chapter 9. The Study of Islamic P2P Crowd Funding Model as an Alternative to SME Financing in Nigeria
Shehu Abdulkadir, Auwal Adam Saad, Ashurov SharofiddinThis chapter delves into the Islamic P2P crowdfunding model as a viable alternative for SME financing in Nigeria, with a specific focus on startups. It introduces the concept of Islamic crowdfunding, highlighting its alignment with sharia principles and the benefits it offers in terms of equity, fairness, and sustainability. The study examines the impact of the COVID-19 pandemic on SMEs and how Islamic crowdfunding can serve as a resilient financing model during uncertain times. It also discusses the various models of Islamic crowdfunding, with a particular emphasis on the Mudarabah contract, which is widely used for equity-based financing. The chapter concludes by recommending the adoption of Fintech-supported Islamic P2P crowdfunding platforms to promote innovation, scalability, and sustainability among SMEs in emerging economies.AI Generated
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AbstractThis study adopts an exploratory approach to the Fintech supported Islamic Peer-to-Peer (P2P) crowd funding model structured on Mudarabah contract as an alternative response to SME financing in Nigeria. Mudarabah is a Trustee Partnership between a financier and an entrepreneur, where profits are shared, while the financier bears the whole financial loss. Secondary data would be relied upon in the study to support the need to explore the adoption of Fintech to support the Islamic P2P crowd funding, as an alternative to SME financing within the Nigerian financial landscape. The data were primarily sourced from journal articles, crowd funding platform websites and portals, and websites of players in the SME ecosystem. The collated secondary data contents were analyzed to demonstrate that P2P crowd funding supports a direct, semi-formal, and seamless contact between an investor(s) and an entrepreneur(s). The study found that a Mudarabah contract becomes more suitable for SMEs, especially the startups, since it tends to promote sustainable source of financing that aligns with the Islamic Social financing ideals and is conductive for the attainment of inclusive and equitable economic development. The recommendation of the study is that since the Fintech supported Islamic crowd funding has been proven to be an efficient, cheap, and innovative means of providing funding for SMEs and startups in emerging economies, it should hence be explored in Nigeria to engender the needed economic recoveries in the post COVID-19 pandemic era. -
Chapter 10. A Study on the Implementation of International Banking Standards by BCBS with Special Reference to Basel III Norms in Emerging Economies: Review of Empirical Literature
Asif Pervez, Nadia Mansour, Rohit BansalThe chapter delves into the implementation of Basel III norms by the Basel Committee on Banking Supervision (BCBS) with a focus on emerging economies. It begins by discussing the core pillars of the financial system—risk and return—and the importance of effective capital, liquidity, asset, and risk management. The historical context of BCBS and the evolution of Basel norms from Basel I to Basel III are examined, with a particular emphasis on the goals and components of Basel III. The chapter then explores the readiness and implementation of Basel III norms in various countries, such as India, UAE, and Nepal, and discusses the challenges and opportunities faced by banks in these regions. It also highlights the impact of Basel III on bank performance, credit risk, and regulatory compliance. The study concludes with recommendations for further research and practical implications for banks and regulators.AI Generated
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AbstractBasel Norms have been used by the Banks to manage risk in the banking system. Basel Committee on Banking Supervision (BCBS) releases banking standards after periodical intervals since 1988. The purpose of this study is to study the writing accessible on the Basel III Implementation, the readiness of bank for Basel III, and its effect on banks by reviewing the experimental investigations that were leading worldwide after the standards were proposed. Basel II norms were not effective in preventing financial emergencies in 2007–2008. Basel III norms were presented in 2010 by Bank for International Settlements due to this financial emergency. Since then, different studies have been conducted on the readiness of banks for Basel III, implementation of norms, and its impact on the banking framework. The present study endeavored to review tremendous writing accessible on Basel III and attempted to assess the pattern of different research perspectives identified with the Implementation of Basel III. The subjective methodology was used to study and review major findings of examination papers. -
Chapter 11. The Role of International Tax Accounting in Assessing Digital and Virtual Tax Issues
Hesham ZakariaThe chapter delves into the evolving role of international tax accounting in the digital era, highlighting the need for standardized practices to address complex electronic transactions. It discusses the limitations of current tax accounting systems and the potential of AI in enhancing audit processes. The text also explores the importance of international tax accounting in achieving tax compliance and harmonization, and it provides insights into the future directions for developing international tax accounting standards.AI Generated
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AbstractTax accounting depends on many aspects, dimensions, and constituents that interact together in order to achieve its main goal, which is to reach the determination of the profit or the tax base on which the tax is imposed according to the laws, legislation, and regulations that govern this, and in light of the aspects of tax accounting. Shortcomings related to its current, non-renewable nature and development, the matter called for many scientific and practical opinions dealing with the need to develop and improve the performance of tax accounting to become more appropriate and capable of dealing with changes and developments as well as reducing the deficiencies faced, and then the general agreement between many of those. The views are that tax compatibility and standardization of procedures are achieved in a scientific framework, followed by access to international tax accounting, as one of the most important modern trends that the requirements for achieving international tax harmonization and unification on the one hand have called for, and also as a start toward issuing and building accounting standards directly directed to tax accounting as one of the attempts Overcoming the tax gap between financial accounting and tax accounting, not only as developing current tax accounting to make it relevant. A modern approach, rather working to make it with an international dimension that takes into account the international requirements of tax systems in light of the international problems and issues facing those tax systems, and this is what can be achieved through international tax accounting, specifically when it comes to virtual and digital tax issues.
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Backmatter
- Title
- Artificial Intelligence and COVID Effect on Accounting
- Editors
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Assist. Prof. Bahaaeddin Alareeni
Prof. Allam Hamdan
- Copyright Year
- 2022
- Publisher
- Springer Nature Singapore
- Electronic ISBN
- 978-981-19-1036-4
- Print ISBN
- 978-981-19-1035-7
- DOI
- https://doi.org/10.1007/978-981-19-1036-4
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