article review on advanced financial accounting

Advanced Financial Accounting: An International Approach

Journal of Accounting & Organizational Change

ISSN : 1832-5912

Article publication date: 1 November 2011

Malthus, S. (2011), "Advanced Financial Accounting: An International Approach", Journal of Accounting & Organizational Change , Vol. 7 No. 4, pp. 410-412. https://doi.org/10.1108/18325911111182349

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

This is the first edition of an advanced financial accounting textbook, written by Jagdish Kothari, a retired partner of PricewaterhouseCoopers, and Elisabetta Barone, a Financial Accounting Lecturer at King's College London. Kothari and Barone also co‐authored the text Financial Accounting: An International Approach , which was written for introductory level courses in financial accounting. The background and expertise of the authors together with their previous book have had an obvious impact on the manner this book was conceived, being the product of the practical accounting experience of Kothari and the academic background of Barone.

This book is aimed at accounting students who possess a basic foundation of accounting principles and practices. It has been written primarily for second‐ and third‐year undergraduate students studying for a degree in accounting or finance, and for postgraduate students undertaking an MBA, or an MSc in accounting, finance or international accounting. It may also be helpful as a revision resource for students preparing for professional accounting qualifications.

The book covers most of the latest developments in International Financial Reporting Standards (IFRS) and has a strong European focus, with numerous examples of real‐world data taken from European listed companies' annual reports, such as Lufthansa and Puma. In addition, the Euro is used as the currency in the illustrative examples throughout the book. The European focus of the book caters to the needs of students across Europe and hence the book should have a wide appeal. In addition it could be used as a supplementary advanced financial accounting text in countries outside Europe that have implemented IFRS, such as Australia and New Zealand, particularly for international students studying in these countries.

Although the book covers advanced financial accounting topics, it stands out from most other texts in that it provides a more simplified and practical approach to teaching the application of IFRS than some other texts currently on the market. The approach taken by the authors is aimed, in part, at students for whom English is their second language, and hence the authors attempt to keep the use of technical language to a minimum. Each chapter summarises and explains the relevant IFRSs, along with their key underlying concepts, appropriate accounting treatment and the associated requirements in a concise and user‐friendly way.

The book is organised into six parts. Part one provides an introduction to IFRS (Chapters 1 and 2) and starts with a (very brief) history of accounting, which is not that common for a financial accounting text. This provides a good introduction to financial accounting and why it is needed. The section on the convergence in financial reporting standards is concise and easy to understand (except for the colour coding in Figure 1.2). Chapter 2 is comprehensive and easy to read.

Part two on reporting and presentation (Chapters 3 and 4) covers the presentation of financial statements including the Statement of Comprehensive Income. There is very limited explanation of what comprises “other comprehensive income” and why it is included in the income statement. Interestingly, if you look for the term in the index you will find a reference to the glossary only. Further, the first time adoption of IFRS (IFRS 1) is included in Chapter 4, along with accounting policies. This is an area that could be excluded given that IFRS 1 has been adopted by listed European companies since 2005 and therefore is only applicable to a relatively small number of companies.

Part three on income statement and balance sheet items (Chapters 5‐13) covers most of the topics and the IFRSs and IASs that are normally included in advanced financial accounting texts. The only exceptions are equity (share capital and reserves) and possibly IAS 21 The Effects of Changes in Foreign Exchange Rates. Some standards are covered only very briefly in Part three. However, the basics of their application are covered adequately, for example IAS 10 Events after the Reporting Period .

Chapter 6 includes the characteristics and consequences of LIFO. However, as this cost flow assumption is not permitted under IAS 2, it is unlikely that accounting graduates will use this inventory valuation method in practice and hence its inclusion may not be necessary. Chapter 7 covers the revaluation model for non‐current assets in a very concise manner (three pages) that will need to be expanded on when teaching to include the accounting for the reversal of revaluation increments and decrements, and the disposal of revalued non‐current assets.

Employee benefits are covered in Chapter 13; however there is no reference to share‐based payments. This is contrary to the list of International Financial Reporting Standards on pages xiv and xv of the book which suggests that IFRS 2 is covered in Chapter 13.

Part four on accounting for financial instruments (Chapters 14 and 15) covers the technically complex area of financial instruments. Chapter 14 deals with the classification of financial instruments whilst Chapter 15 covers the recognition, derecognition, measurement and disclosures of financial instruments. Those using the book should note that the classification of financial instruments on page 386 includes Held to Maturity, Available for Sale, and Loans and Receivables categories of financial assets previously considered under IAS 39 which have since been eliminated by IFRS 9 (issued by the IASB in November 2009).

Part five on reporting and disclosure (Chapters 16 and 17) covers other reporting and disclosure topics, including the Statement of Cash Flows in Chapter 16, which includes a good, comprehensive example. This example (Section 16.6) determines the cash receipts from customers and cash payments to suppliers and employees both by the columnar method and from the general ledgers, which is helpful for students.

Part six (Chapters 18 to 20) covers group reporting. Chapter 18 includes the concepts of control and consolidation and Chapter 19 covers the preparation of consolidated financial statements, including non‐controlling interests (NCI). Chapter 18 illustrates the three most common consolidation models with an example (Example 18.9). However, this example would have been easier to understand if the basic elimination consolidation journals had been shown first. Chapter 19 briefly explains the consolidation process and how goodwill is calculated. A comprehensive example, including the elimination journals and a consolidation worksheet for the purchase of a 100 percent holding would be helpful at this stage, before introducing the accounting for NCIs. Similarly, a consolidation worksheet showing each of the consolidation adjustments would assist the understanding of Example 19.10.

I very much enjoyed reading this book and would recommend it to students who are not native English speakers, and their lecturers. Additionally I would recommend it to students who struggle with the subject area, in particular the theoretical and very technical textbooks that are more often than not prescribed texts for this subject. The use of plain English and practical real‐world examples are the strengths of this book.

In summary, the challenge facing lecturers considering adopting this text is the level at which it is aimed. It appears to be too technical and advanced to be used in an introductory financial accounting class (as suggested by its title) however it appears to be rather lightweight to be used in an advanced level course. However, it appears to have a role as a supplementary text at the advanced level, in particular for students studying financial accounting at this level for whom English is not their first language.

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Ted Christensen has been a faculty member at Brigham Young University since 2000. Prior to coming to BYU, he was on the faculty at Case Western Reserve University for five years. He received a BS degree in accounting at San Jose State University, a MAcc degree in tax at Brigham Young University, and a PhD in accounting from the University of Georgia. Professor Christensen has authored and coauthored articles published in many journals including The Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, Review of Accounting Studies, Contemporary Accounting Research, Accounting Organizations and Society, Journal of Business Finance & Accounting, Accounting Horizons, and Issues in Accounting Education. Professor Christensen has taught financial accounting at all levels, financial statement analysis, both introductory and intermediate managerial accounting, and corporate taxation. He is the recipient of numerous awards for both teaching and research. He has been active in serving on various committees of the American Accounting Association and is a CPA.

Professor Cottrell joined the faculty at Brigham Young University in 1991. He currently serves as the Associate Director of the School of Accountancy. Prior to coming to BYU he spent five years at The Ohio State University, where he earned his PhD. Before pursuing a career in academics he worked as an auditor and consultant for the firm of Ernst & Young in its San Francisco office. At BYU, Professor Cottrell has developed and taught courses in the School of Accountancy, the MBA program, and the Finance program. He has won numerous awards from the alumni and faculty for his teaching and curriculum development. He has received the Outstanding Professor Award in the college of business as selected by the students in the Finance Society; he has received the Outstanding Teaching Award as selected by the Marriott School of Management; and he is a four-time winner of the collegewide Teaching Excellence Award for Management Skills, which is selected by the Alumni Board of the Marriott School of Management at BYU. Professor Cottrell also has authored many articles about accounting and auditing issues. His articles have been published in Issues in Accounting Education, Journal of Accounting Case Research, Quarterly Review of Distance Education, Journal of Accountancy, The CPA Journal, Internal Auditor, The Tax Executive, and Journal of International Taxation, among others.

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Chapter 5: Consolidated Financial Statements—Intra-Entity Asset Transactions 

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Joe B. Hoyle is an associate professor of accounting at the Robins School of Business at the University of Richmond. He is also an Accounting Teaching Fellow. In 2015, he was the first recipient of the J. Michael and Mary Anne Cook Prize for undergraduate teaching. The Cook Prize is awarded by the American Accounting Association and “is the foremost recognition of an individual who consistently demonstrates the attributes of a superior teacher in the discipline of accounting.” In 2019, former students raised money to create an Accounting Teaching Fellowship, which will be renamed the “Joe Hoyle Accounting Teaching Fellowship” on his eventual retirement. He has authored a book of essays titled Tips and Thoughts on Improving the Teaching Process in College , which is available at https://facultystaff.richmond.edu/~jhoyle/documents/book-teaching-x.doc.pdf. His blog, Teaching—Getting the Most from Your Students , at http://joehoyle-teaching.blogspot.com/ was named the Accounting Education Innovation of the Year for 2013 by the American Accounting Association. 

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Thomas F. Schaefer is a professor emeritus of accountancy at the University of Notre Dame. He has written a number of articles for scholarly journals such as the Accounting Review, Journal of Accounting Research, Journal of Accounting & Economics, Accounting Horizons, and others. His primary teaching and research interests are in financial accounting and reporting. Tom is a past president of the American Accounting Association’s Accounting Program Leadership Group. He received the 2007 Joseph A. Silvoso Faculty Merit Award from the Federation of Schools of Accountancy and the 2013 Notre Dame Master of Science in Accountancy Dincolo Outstanding Professor Award.

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Timothy S. Doupnik is a Distinguished Professor Emeritus of Accounting at the University of South Carolina, where he joined the faculty in 1982. He served as director of the School of Accounting from 2003 until 2010, and then as Vice Provost for international affairs until 2013. He has an undergraduate degree from California State University-Fullerton and received his master's and PhD from the University of Illinois. Professor Doupnik has published exclusively in the area of international accounting in various academic journals, including The Accounting Review; Accounting, Organizations, and Society; Abacus; Journal of International Accounting Research; Journal of Accounting Literature; International Journal of Accounting ; and Journal of International Business Studies. Professor Doupnik is a past president of the International Accounting Section of the American Accounting Association, and he received the section's Outstanding International Accounting Educator Award in 2008. He has taught or conducted research in international accounting at universities in a number of countries around the world, including Austria. Brazil. China, Dominican Republic, Finland. Germany, and Mexico.

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The impact of accounting practices on financial sustainability: A study of external block-holders and institutional ownership

• Review Paper
• Published: 07 June 2024

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• Yufei Cao 1 ,
• Abdulmajeed Mawhan H. Alfadhli 2 ,
• Mohammad Jaradat 3 ,
• Ramona Lile 4 ,
• Mihaela Gadoiu 5 ,
• Mariana Banuta 5 ,
• Daniela Mihai 6 &
• Malik Shahzad Shabbir 7  

This study intends to investigate the impact of the accounting number game on financial sustainability. It investigates the role of external block-holders and institutional ownership on the association between accounting number game and financial sustainability. This study uses a sample of listed companies in the Pakistan Stock Exchange (PSX). Logit analysis is used to see the influence of accounting numbers’ games on financial sustainability. Additionally, the moderating impact of external block-holders and institutional ownership on the association between accounting numbers’ game and financial sustainability is examined. This study documents the novel evidence that accounting numbers games worsen the financial sustainability of companies and it can be improved by limiting the earnings management practices of managers through “efficient-market hypothesis”.

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Acknowledgements

"The authors extend their appreciation to the Deputyship for Research and Innovation, "Ministry of Education" in Saudi Arabia for funding this research (IFKSUOR3-259-1)

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Social Training Center, Shandong Institute of Commerce and Technology, Jinan, 250103, Shandong, China

General Director of Internal Audit, King Saud University, Riyadh, Saudi Arabia

Abdulmajeed Mawhan H. Alfadhli

University, Bogdan Voda, Cluj-Napoca-Napoca, Romania

Mohammad Jaradat

Department of Economics, University of Aurel Vlaicu, Arad, Romania

Ramona Lile

Department of Finance, Accounting and Economics, National University of Science and Technology Politehnica Bucharest, Pitesti University Center, Pitesti, Romania

Mihaela Gadoiu & Mariana Banuta

Department of Management and Business Administration, National University of Science and Technology Politehnica Bucharest, Pitesti University Center, Pitesti, Romania

Daniela Mihai

Department of Management Sciences, ILMA University, Karachi, Pakistan

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Cao, Y., Alfadhli, A.M.H., Jaradat, M. et al. The impact of accounting practices on financial sustainability: A study of external block-holders and institutional ownership. Rev Manag Sci (2024). https://doi.org/10.1007/s11846-024-00761-1

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Received : 14 September 2022

Accepted : 22 March 2024

Published : 07 June 2024

DOI : https://doi.org/10.1007/s11846-024-00761-1

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QuickBooks Online Review 2024: Everything You Need to Know

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QuickBooks Online is a popular cloud-based accounting software that small and medium-sized businesses use. QuickBooks accounting dominates the field due to its history, customization options and comprehensive financial reports. However, it may be pricier than other options and can have a learning curve for those unfamiliar with basic accounting principles.

• Widely used. User permissions make sharing your files with trusted financial professionals simple.
• Over 750 integrations. QuickBooks Online connects with inventory, payroll, project management and CRMs so you can run in-depth reports and see the business’s financial health at a glance.
• Robust support. Access to live chat, email, phone support and the online user community ensures a variety of always-on support options.
• More expensive than other accounting software. It requires subscription pricing, which can add up if you have many users or want to use advanced features like inventory management or payroll processing.
• Limited users. The highest-tiered plan only allows 25 users, and you may need more if you have a large accounting team.
• Learning curve. QuickBooks’ flexibility can be a downside if you’re unfamiliar with common accounting principles. For example, incorrectly setting up the customized settings and transactions can lead to financial errors.

Vault’s Viewpoint on QuickBooks Online

QuickBooks Online is best for small- and medium-sized businesses, including freelancers. Its feature-rich software excels at general accounting and enables users to manage their business finances through invoicing, bank reconciliation and basic financial reporting. You can set up automation to trigger recurring invoices and other repetitive tasks. With the QuickBooks Online mobile app, you can even manage receipts and mileage while on the go. QuickBooks software also simplifies tax preparation because it’s easy to share access with your accountant and bookkeepers.

Since QuickBooks Online accounting software is cloud-based, it’s not good for businesses with limited internet or that prefer on-premise software. Additionally, businesses with large and complex accounting needs may not be a good fit. For example, complex businesses that require multi-entity accounting or healthcare may need more industry-specific accounting software to meet compliance requirements and manage patient billing.

Finally, because QuickBooks accounting software is a professional-grade program, it’s not a good pick for users without accounting knowledge. In QuickBooks Online reviews, users say it’s easy to get started, you must set up your categories accurately for factual reports, as it can be difficult to reorganize your account structure later.

About QuickBooks Online

QuickBooks software is an industry-standard accounting tool used by millions of businesses. With five plans at different price tiers, users can choose exactly the features they need. Free 30-day trials allow users to try before they buy and assess the different tiers in real time. Some features, like QuickBooks payroll management or time tracking software, are add-ons available at an additional cost.

QuickBooks Online Features

QuickBooks Online offers extensive financial reporting and inventory management . You can automate recurring transactions, create project estimates and track billable hours so you can better understand your margins and know the most profitable parts of your business. Such reports give you insights into trends and ways you might adjust your offerings.

Because QuickBooks Online offers over 750 integrations, you can customize this accounting software to fulfill all your financial needs. Users can create custom fields to track relevant customer information or vendors, and it takes just one click to connect Shopify, WooCommerce, eBay, Paypal, and hundreds of other third-party e-commerce platforms . Once you’re connected, you can enjoy real-time inventory tracking to prevent overselling and simplify fulfillment.

QuickBooks Online offers additional add-ons such as time tracking for employees, payroll and live bookkeeping. Because QuickBooks Online facilitates sharing with accounting firms, giving access to your financial professionals is simple. These add-ons may have additional fees.

What Plans Does QuickBooks Online Offer?

QuickBooks technically has five plans when you count the Solopreneur plan. This tier is best for one-person businesses with simple accounting needs. You can create invoices, track business expenses and run basic reports to make it easy come tax time. If you intend to pay 1099 contractors or want to track inventory, you’ll need a higher tier.

Most businesses will benefit from one of the following plans.

Simple Start

A step up from the self-employed plan, Simple Start allows you to pay contractors, claim tax deductions , track receipts and connect with Amazon or another sales channel.

This category includes everything in the first two tiers and adds time tracking. You can even assign billable hours to specific projects to track your most profitable projects and clients.

This tier includes inventory tracking, integration with three sales channels, such as eBay or Shopify, and the generation of detailed financial reports. It can be used by up to five users per account.

Larger businesses with more complex accounting should choose this tier. It allows up to 25 users and is geared toward those with an extensive accounting team to manage accounts payable/receivable and prepare financial reports. It also includes dedicated customer support.

Who Is QuickBooks Online Best For?

QuickBooks Online is best for small- and medium-sized service-based businesses that need a comprehensive way to track their finances. More efficient than spreadsheets, QuickBooks Online has dozens of features and hundreds of integrations and excels in general accounting operations.

QuickBooks Online accounting software allows you to share access with bookkeepers and accountants so they can prepare taxes and regular reports to track your business health. With that in mind, it’s also good for growth-focused businesses with robust accounting needs and self-employed users who need a good tax software .

Who Should Consider an Alternative to QuickBooks Online?

Larger businesses with multi-entity accounting, other complex workflows or industry-specific accounting needs may find another accounting software more valuable. QuickBooks Online may not be the best fit for companies with complex accounting needs or for industry-specific accounting software, such as healthcare, which may require special billing.

QuickBooks Online may also not be a good fit for a small business without an accounting expert. Getting up to speed on basic accounting principles can be challenging, and it’s easy to introduce financial errors if you don’t set the software up correctly.

How Does QuickBooks Online Stack up to Its Competitors?

QuickBooks Online reviews rate it as one of the most widely used online accounting software for small and medium businesses, but there’s growing competition.

QuickBooks Online vs QuickBooks Desktop Enterprise

One of the most significant differences between QuickBooks Online and QuickBooks Desktop is access. QuickBooks Online has a cloud-based subscription model, which makes it available anywhere with an internet connection. Because it’s cloud-based, there’s no software to install or maintain.

QuickBooks Desktop Enterprise is for large companies that prefer on-premise accounting software and have the IT team to maintain it. Such businesses may have industry-specific needs like customizable pricing and complex financial reporting. A knowledgeable accounting team can produce specific reports for projections and workflows. QuickBooks Desktop Enterprise offers comprehensive customer support and includes dedicated customer specialists.

QuickBooks Online vs Wave

Both QuickBooks Online and Wave offer invoicing, account reconciliation and financial reporting. However, the two programs have distinct differences in pricing, features and target users.

Unlike QuickBooks, Wave offers free accounting software, which makes it attractive to freelancers and other budget-conscious small businesses. Its core features include invoicing , payment processing, expense tracking and basic financial reports. If you choose the free plan, Wave charges a percentage of payments. Users who need payroll processing also pay an additional fee.

QuickBooks Online vs Freshbooks

Freshbooks offers cloud-based accounting software for freelancers, contractors and other small business owners. Established in 2003, Freshbooks offers multiple pricing options at competitive rates.

If you have a small business and don’t plan to scale, Freshbooks is a good, basic alternative to QuickBooks Online. It is easy to use, allows users to send customizable invoices and accepts credit cards and ACH bank deposits. However, QuickBooks software is a better option if you want more robust accounting functions like cash flow projections.

Frequently Asked Questions

What features does quickbooks online offer.

QuickBooks Online offers customizable invoices, income and expense reports and bank reconciliation. The 750+ integrations give you the flexibility of payroll management, time and inventory tracking and much more. And for on-the-go access, you can use the mobile app.

How Much Does QuickBooks Online Cost?

QuickBooks Online’s lowest-priced plan starts at $20/month and goes up to $200/month, with a 50% discount for the first three months. However, payroll management, inventory tracker and other advanced features may require a higher tier or a separate fee.

Where Can I Get Help With QuickBooks Online?

QuickBooks Online offers a Knowledge Base with dozens of articles addressing frequently asked questions. There’s also the QuickBooks Community, where power users and Intuit employees answer questions. For more help, you can contact support via chat, email or phone. For an additional fee, you can have a personal QuickBooks Pro Advisor to guide you through the accounting principles, accurate setup and more.

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