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2015 | Book

Introduction Read chapter Read first chapter

Corporate Financial Reporting and Performance: A New Approach

Authors: Önder Kaymaz, Özgür Kaymaz, A. R. Zafer Sayar

Publisher: Palgrave Macmillan UK

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

Globalization and the accompanying investment facilities available have resulted in rapid popularity for international financial reporting standards (IFRS). However, differences often exist in terms of what firms report, and once inconsistency between tax regulations and financial reporting regulations occur, differences between taxable and accounting practices are inevitable. This book introduces a new approach to corporate financial reporting by investigating goal incongruence (GING) in the context of the principal and agent (PA) setting. The authors argue that improving the method for the disclosure of information would not only increase the quality of corporate financial information and reporting but also reduce the possibility of any GING arising. This book presents the financial implications of international accounting and financial reporting standards (IAS and IFRS), presenting numerous real-life situations, cases, examples and implications to reveal how GING might influence the implementation of corporate financial reporting of profit volumes and sizes, which are the leading drivers of and widely accepted proxies for corporate financial performance.

Table of Contents

Frontmatter
1. Introduction
Abstract
The first chapter, Chapter 1, is comprised of three sections. It makes the introduction. The first section provides a detailed background on our understanding of corporate financial reporting and performance as well as the interface between them given international financial accounting and standards (IAS and IFRS). The second section sets the main research goals and establishes the research objectives. It provides the motivations inspiring this very book. The third section presents the organization and structure of this book. Chapter 1 stresses the salience and relevance of globalization, explores some of its important effects in our financial world and vouches for a new approach. It lays the foundations on examining the strong bond between corporate financial performance and corporate financial reporting.
Önder Kaymaz, Özgür Kaymaz, A. R. Zafer Sayar
2. Theory and Analysis
Abstract
The second chapter, Chapter 2, is comprised of two sections. It theorizes the research question and develops a strong ground for the analytical investigations. The first section sets the main framework. It identifies the place and significance of corporate earnings for modern accounting world. It examines the relevance of corporate earnings. The second section theorizes the research question and develops a rigor setup therefor. Chapter 2 helps build the theoretical and analytical foundation. The theory is borrowed from the principal and agent setting while embedding the dominant firm model. It is shown that the GING problem occurs at the nexus of the (conflicting) interests of the principal and the agent and may induce another problem: varying forms of corporate profits; accounting profits and taxable profits.
Önder Kaymaz, Özgür Kaymaz, A. R. Zafer Sayar
3. GING and Corporate Earnings
Abstract
The third chapter, Chapter 3, signifies Goal Incongruence Problem (GING). It connects GING with corporate earnings in a way to come down to a commonly known and real-life-related accounting narrative. Itfocuses on and delves into the recently emerging concept known as treasury loss while providing an in-depth examination. Chapter 3 investigates the relevance of corporate earnings and discusses the significant impact of the GING issue on corporate earnings. The treasury loss issue is well defined and structured while its implications, applications and implementations are all explored in its entirety.
Önder Kaymaz, Özgür Kaymaz, A. R. Zafer Sayar
4. The Model
Abstract
The fourth chapter, Chapter 4, is comprised of one section. It builds the model that has been already theorized in the preceding chapter. It analyses and strives on resolving the measurement issues while providing a real-life business case/scenario. Chapter 4 yields some solutions for measurement issues that are documented and discussed with the help of a real-life business case. The given case documents and suggests that market structure and market data be benchmarked to detect the existence or magnitude of any GING issue. This benchmark is argued to work as a best-fit estimator to a large extent.
Önder Kaymaz, Özgür Kaymaz, A. R. Zafer Sayar
5. Applications
Abstract
The fifth chapter, Chapter 5, embraces two sections and shows the applications. The first section provides some analytical applications using the pillars of the game theory-rhetoric. The second section documents some real-life applications in connection with international corporate financial corporate reporting while giving a special glance to IAS 12. Although the second chapter exerts a special focus to the relationship of GING with IFRS and IAS, both the sections present numerous cases of real-life implications of GING on corporate financial reporting implementations along with international corporate financial reporting regimes. Building on IAS 12, Chapter 5 tackles the discussion of deferred taxes and presents the implications for accounting and taxable profit figures while considering several real-life cases with varyingfinancial reporting tools, options and strategies.
Önder Kaymaz, Özgür Kaymaz, A. R. Zafer Sayar
6. Conclusion
Abstract
Being the last chapter, Chapter 6, concludes this book. It consists of two sections. The first section presents concluding remarks while discussing implications and offering suggestions. The second section discusses the limitations of this research and corroborates some ideas for future research.
Önder Kaymaz, Özgür Kaymaz, A. R. Zafer Sayar
Backmatter
Metadata
Title
Corporate Financial Reporting and Performance: A New Approach
Authors
Önder Kaymaz
Özgür Kaymaz
A. R. Zafer Sayar
Copyright Year
2015
Publisher
Palgrave Macmillan UK
Electronic ISBN
978-1-137-51533-9
Print ISBN
978-1-137-51532-2
DOI
https://doi.org/10.1057/9781137515339