Ethics and Sustainability in Accounting and Finance, Volume IV

Table of Contents

1. Frontmatter

2. Introduction

   1. Frontmatter

   2. Chapter 1. Introduction Challenges in Collecting Climate Finance Data: Case Study for Bosnia and Herzegovina

      Vesna Novaković, Kıymet Tunca Çalıyurt, Mahdi Salehi

      Abstract

      This paper examines the importance of proper accounting records of climate finance, both because of the obligations Bosnia and Herzegovina assumed as a member of the United Nations Framework Convention on Climate Change (UNFCCC), and securing future climate finance and international sources. The research problem is posed by the question: to what extent has the climate finance recording system been established in Bosnia and Herzegovina? The following statement defines the hypothesis of the paper: The degree of establishment of the system of internal financial controls ensures business improvement. After the research, we will reject, partially confirm, or fully confirm the primary hypothesis of the work. In the first part of the paper, we analyze the concept of climate finance and the challenges in collecting data on climate investments. In the continuation of the paper, we deal with the constitutional arrangement of Bosnia and Herzegovina and propose establishing a mechanism for recording investments and reporting regarding climate finance.

3. Sustainability and Climate Change in Accounting and Finance and Trade

   1. Frontmatter

   2. Chapter 2. An Investigation of Sustainable Development Goals Within Scope of Sustainability Reporting: A Case of Turkey

      Birsel Sabuncu

      Abstract

      The 2030 Sustainable Development Agenda, consisting of the Sustainable Development Goals (SDGs), has officially entered into force on 1 January 2016. These SDGs, which are adopted by the United Nations, are a guide to the business world in terms of supporting social development. The 2030 Agenda imposes responsibility not only on governments but also on the business world, non-governmental organizations, and the academic world. In order to provide an inclusive, strong, and consistent economy for everyone and to obtain social welfare in the world, SDGs need to be adopted in various ways. In this study, the contribution levels of the companies in Istanbul Stock Exchange in Turkey, which were also included in the BIST Sustainability index between 2016–2020, regarding the Sustainable Development Goals (SDGs) are determined by examining their sustainability reports and the importance of SDGs is emphasized. To make the 2030 Agenda a reality, SDGs need to be broadly owned.

   3. Chapter 3. International Experience of Mechanisms for the Development of Management Accounting for Inventory Management and Its Application in Kazakhstan

      Oxana Yu. Kogut, Yuryevna Kogut, Almira Arystambaeva

      Abstract

      The article discusses the mechanisms for the development of management accounting for inventory management, from the point of view of applying international experience in Kazakhstan. Foreign experience in supply planning and determining the optimal inventory level, in our opinion, is an important point in purchasing and supply management. The relevance of developing a methodology for obtaining economic benefits from the “procurement-supply process” is considered, highlighting the accounting object “purchase management” and “inventory management”. The basis for effective procurement management is information in accounting about the availability of these stocks in the warehouse. In purchasing management in market conditions, warehouse costs should be determined, planned, and relevant costs considered. While exploring the issues of inventory accounting and inventory management in market conditions, many authors focused on the issue of logistics management. Foreign scientists consider stocks mainly as goods. The definition of reserves has significant differences in relation to national accounting schools, which is reflected in national accounting and reporting standards. Classification of inventories in management accounting will create the opportunity to plan and account for the initial stage in inventory management, the “procurement-supply process.” The four stages of the procurement and supply process required the development of a methodology for operational, internal cost accounting.

   4. Chapter 4. Sustainability in International Trade: The Importance of Political Risk Analysis

      A. Murat Köseoğlu

      Abstract

      Sustainability in international trade is increasingly an important factor for companies. Political risk analysis has great importance in this context. Political risk analysis supports companies’ decision-making processes in international trade. This analysis helps them to determine the countries that are riskier to do business in and contributes to making strategic decisions to increase sustainability. Political risk analysis also guides companies in identifying markets that align with their sustainability goals. Companies need to make decisions based on political risk analysis results to minimize risks and carry out their business projects sustainably. Managing political risks positively affects the financial performance of companies. Minimizing risks increases confidence in long-term decision-making processes and makes businesses more attractive to investors. Companies can use political risk analysis to protect their supply chains against political risks that could threaten sustainability. Political risk analysis affects not only financial sustainability but also social and environmental sustainability. Within this scope the aim of this study is to examine the role and importance of political risk analysis for the sustainability of international trade. Political risk, political risk factors, the dimensions of political risk factors, and the relationship between political risk and sustainability in international trade have been examined in detail in this context. This relationship has been handled globally depending on the political risk comparison of countries. The study found that the most significant political risks are political instability, changing political regulations, and customs and trade restrictions. In addition, it has been observed that some countries have better policies and regulations on environmental and social sustainability issues. As a result, political risk analysis is a critical tool to help companies achieve sustainability goals in international business. It has also been considered that political risk analysis is very important in identifying potential risks, guiding decision-making processes, and increasing sustainability.

   5. Chapter 5. Curriculum for Accounting Education in Higher Education Institutions. An Exploratory Study of Professors’ Perceptions

      Athanasios Mandilas, Dimitrios Kourtidis, Eleftheria Panagiotidou

      Abstract

      The purpose of this study is to examine professors’ perceptions about curriculum in accounting department of higher education institutions in Greece. A structural questionnaire was used to reveal these perceptions using a sample of 69 professors. The teaching staff of educational programs in accounting science in Greece believes that students receive sufficient knowledge, however, show deficiencies in their level of work preparedness. Professors support that social, technological, and participation skills are crucial for their integration in the labor market. This study reveals the need to strengthen graduates’ competency developments improving accounting education and thus enhancing graduates’ employability.

   6. Chapter 6. How Can Accounting Help Crypto Asset Projects for a Better Assurance?

      Burak Özdoğan, Pınar Okan Gökten, Soner Gökten

      Abstract

      Crypto asset projects based on blockchain technology, which have found a niche in both financial and non-financial business applications with Bitcoin, have created an ecosystem worth billions of dollars. Most of these projects offer their crypto assets, which initially do not have any value, to their users. If the project fulfills its promises, the value of the crypto assets in question becomes apparent. The most important resource used in this offering process, that is, in introducing a crypto asset project to the world, is the prospectus called whitepaper. There is no standard regarding the content of this document, which is almost a commitment of the project’s developers. Accounting has its technical tools like reports, investor meetings, public disclosures, etc., to connect relevant information with stakeholders while blockchain-based crypto asset projects have more pluses than minuses in terms of communication tools. The knowledge and experience of accounting can be an important support for crypto assets, whose boundaries are tried to be drawn by legal regulations all over the world, to take their place as an asset class based on solid foundations. In this study, it is discussed how accounting standards and accounting language can contribute to crypto asset projects and the blockchain ecosystem.

   7. Chapter 7. Advancing Global Innovation Metrics: A Comprehensive Country Ranking Using the Novel LOPCOW-CoCoSo Model

      Rauf Nişel, Seyhan Nişel

      Abstract

      In today's rapidly evolving world, innovation plays a crucial role in a country’s economic well-being. This research presents a new approach to assessing and ranking nations based on their innovation capabilities. Using a wide range of indicators from the OECD guidelines, the study examines various aspects of innovation, such as research and development (R&D), collaboration, and the economic impact of innovative efforts. The study uses the LOPCOW method to carefully weigh these indicators and the COCOSO method to systematically classify countries. This comprehensive analysis highlights global innovation competencies. Our results reveal clear patterns in global innovation. We see that traditionally innovative countries continue to be ahead. In addition, the methodology used covers specific criteria that involve not only the development of new technologies, but also the improvement of the production process and innovations in services and policies. It ensures comprehensive coverage and represents national innovation capabilities in multiple dimensions. Therefore, the presented research validates the efficiency of the integrated LOPCOW-COCOSO method in sorting countries according to the level of innovation and provides useful insights for policymakers, industry leaders, and researchers.

   8. Chapter 8. Digitalization as a Measure of Improving Financial Management and Controls

      Vesna Novaković, Elvis Mujkić, Branka Savić, Boban Sašić

      Abstract

      This paper examines the importance of the system of internal financial controls in the Republic of Srpska public sector, with a special emphasis on financial management and control (FMC) and the degree of its digitization. The research problem is posed by the question: Has digitalization of financial management and control improved the system of financial management and control in the public sector of the Republic of Srpska. The basic hypothesis of the work is defined by the following statement: Digitization of financial management and control is not applicable in the public sector at this stage of establishing the FMC. After the research, we will reject, partially confirm or fully confirm the basic hypothesis of the work. In the first part of the paper, we analyze the concept of financial management and control and the importance of the system of internal financial controls. In the continuation of the work, we deal with the digitization of the public sector, while in the research results section, we present the findings that we obtained after the research analysis. The considerations that we give through the conclusion of the paper will give us an answer to the set research problem and confirm or deny the truth of the set hypothesis.

4. Digitalization and Fraud Prevention in Accounting and Finance

   1. Frontmatter

   2. Chapter 9. Understanding the Role of Initial Public Offerings in Financial Manipulation: Institutionalization or Cautiousness?

      Esra Aydin, Emre Bilgiç

      Abstract

      In recent years, it is observed that there has been an increase in enterprises that have initial public offerings (IPO) on Istanbul Stock Exchange (ISE). In IPO process, it is significant for firms to show strong financial position in their prospectuses to be approved by officials and to attract investors. Although it is expected that firms are cautiously and transparently prepare their prospectuses because they are legally responsible for information in prospectuses, they may sometimes manipulate their financial statements in the prospectuses to show strong financial position. On the other hand, it is theoretically assumed that firms become more institutionalized through IPO process and the tendency of institutionalized firms to manipulate financial statements becomes lower. However, it is known that there are institutionalized firms that conducted financial manipulation in the past. In this sense, this study aims to analyze how does the financial manipulation behavior of firms in Türkiye differs before and after the IPO? To this end, two different samples consisting of Turkish firms were analyzed by Beneish M Score model and differences between 2020, 2021, and 2022 years in terms of financial manipulation possibility were investigated by one-way Anova and Kruskal Wallis tests. The tendency of firms to conduct financial manipulation is lower in pre-IPO period than in post-IPO period. Also, it can be said that the average of enterprises is below the critical threshold which means that there is no strong evidence indicating that they are manipulator enterprises.

   3. Chapter 10. Everything but Deterrence: Curbing Energy Fraud

      Gökçe Sinem Erbuğa

      Abstract

      In the period following the Industrial Revolution, the changing production and consumption patterns and the effects of companies on the environment have also changed. As a result of the large-scale production of many established factories and production units, they have had a large share in the pollution of the environment by producing waste at the same rate. Pollution has started to originate from both the production facilities and the wastes of the end user, so polluting factors have now penetrated a much wider geography than before. As a result of increasing environmental pollution, it is seen that the wastes produced by companies and the negative externalities they cause are being questioned at the social level. Developing environmental awareness enables businesses to adopt an attitude that is sensitive to nature, which is also known as green management, that protects and sustains all living and non-living assets, and aims to minimize or even eliminate the environmental and economic damages caused to the environment during production. As a result of the adoption of the green management approach, the increase in low carbon energy demand reduces the demand for oil and gas in the energy sector, pushing the use of traditional energy sources into question. In this direction, the possibility of fraud is more likely in enterprises operating in the energy sector, especially in gas and oil producing enterprises. In this study, firstly, the concept of fraud was discussed in detail; afterward, examples of fraud that occurred in the energy sector are included. The potential fraud possibilities that the businesses in the sector may encounter were evaluated and in the conclusion part of the study, prevention methods were discussed.

   4. Chapter 11. Risk Assessment Model for Failures and Errors in Maritime Accidents

      Bülent Bakan, Rauf Nişel

      Abstract

      This study involved an examination of 3200 maritime accident investigation reports to identify factors contributing to maritime accidents and their consequences. The information extracted from these reports was categorized and integrated into a database comprising details from 997 reports. This database served as the foundation for developing a model aimed at assessing accident risk by analyzing the causes and consequences of maritime accidents. The primary objective of this research was to identify risks stemming from errors and failures in maritime operations and to devise a strategy for evaluating these risks. The risk assessment model proposed in this study underwent statistical analysis using data extracted from the maritime accident investigation reports incorporated into the database. Various sources of accidents, including violations of collision regulations (COLREG), Bridge Resource Management (BRM) failures, propulsion errors, adverse sea states, and instances of misbehavior, were identified and analyzed. We anticipate that the results derived from our risk assessment model will offer valuable insights for formulating strategies aimed at mitigating the underlying causes of maritime accidents. This study endeavors to contribute to the enhancement of maritime safety by providing a systematic approach to identify and address potential risks in maritime operations.

   5. Chapter 12. Correlating Lower Record to Its Waiting Times with Hemoglobin Analysis

      Ramalingam Shanmugam, Karan P. Singh

      Abstract

      A bivariate probability model is introduced to detect information in the data to address between the lower record values and their occurring times. Statistical properties of the bivariate probability model are probed and presented, with their utilities of data analytics. Specific expressions are provided for several underlying frequency patterns of the collected data. The concepts and the analytic expressions including new measures of dependence are illustrated using the hemoglobin level data among Australian athletes. In other words, this article provides a framework of occurrence of lower record values. The framework provides methods to explore the causes and effects of next lower value and its time. Some concluding remarks for further research direction are given.

5. 13. Correction to: Ethics and Sustainability in Accounting and Finance, Volume IV

   Kıymet Tunca Çalıyurt

6. Backmatter