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- Accounting and Controlling M.A. (65) (remove)
The work performed by controllers changes over time, and due to technological evolution. Consequently, the controller competencies and academic formation to work change too. Therefore, this research aim was to answer: What is the required level of preparation of accounting and controlling graduates to handle the controller's role and tasks? To answer this question was realized an empiric research, where 32 graduates answered a survey, and it was collected 359 job advertisements. The job advertisement was analyzed using data mining applying phyton, and it was used descriptive statistics for the survey, both data set were compared using data visualization. The result demonstrated that a controller requires a set of controlling, interdisciplinary, methodological, socio-personal, and digital competencies. Obtaining these competencies are through business administration study or vocational training in business. digital competencies are not yet in demand by employer, except for business intelligence. The graduates do not master digital competencies. These findings can serve as a basis for the improvement of the curricula on which the controller training process is based.
The financial crises of 2008 emphasized the need to extend the information in the audit reports, which led to a new version of the Revised Auditor Reporting Standards. The new standard adds a new section in the audit report known as Key Audit Matters (KAMs). The focus of this study is the analysis of the reported KAMs from the financial year 2016. The analysis demonstrated a decrease in the number of reported KAMs from the BIG 4 audit firms from 2016 to 2019. The analysis is done only on companies whose country of origin is part of the European Union. Further this thesis attempts to empirically investigate the factors that influence the number of disclosed KAMs in a reporting period. The factors considered in the empirical estimation are the characteristics of the firm and auditor. The study uses a panel data set that has an annual frequency of 100 companies. The time interval of data gathering of these companies is 2015-2019 and 2016-2019 thus, to have a balanced panel the study estimated two different models. It has been concluded that the size of the firm and the change of auditor are particularly important in determining the number of disclosed KAMs.
Earnings management is considered as a strategy applied by managers of a firm to intentionally modify the financial information to deceive stakeholders and achieve economic and contractual benefits. One of the forms of earnings management is accruals-based earnings management that occurs from accounting choices, adjustments, and managerial decisions. The primary objective of this thesis project is to investigate the impact of accrual-based earnings management on firms’ financial performance. A sample of 14 firms is selected from German automobile manufacturing firms listed on the Frankfurt Stock Exchange (FSE) over the period from 2010 to 2019 using a purposive sampling technique. Data is gathered from financial reports of sample firms. This study measured accrual-based earnings management through discretionary accrual (DA) using the modified Jones model, while firms’ financial performance is measured using return on assets (ROA). In the econometric model, the dependent variable is return on assets (ROA), whereas the independent variable is discretionary accruals (DA) that incorporate with other three control variables such as firm size (SIZE), leverage (LEV), and liquidity (LIQ). This analysis is done using a panel data regression model to assess the relationship between variables. The findings show that automobile manufacturing firms listed on Frankfurt Stock Exchange are involved in income-decreasing discretionary accruals, and its impact on firms’ financial performance (ROA) is significantly positive. Furthermore, the finding of this study confirms that there is not only discretionary accruals but also size, which influences firms' financial performance. However, leverage and liquidity have an insignificant relationship with firms’ financial performance. Finally, the finding of this study may be useful for investors, financial analysts, and other interested parties to understand how firms’ earnings are manipulated and how its impact on firms' financial performance so that they can make their financial decisions and analysis accordingly.
This study was focused to determine the causal relationship between free cash flow (FCF) and profitability of public listed pharmaceutical companies in Germany. Based on the review of the past empirical studies it was found that contradictory evidences are present in the past studies regarding the relationship of FCF and the variables of profitability of publicly listed companies. To conduct this study, quantitative research was performed, where quantitative data was empirically testing to find evidence regarding the impact of FCF on variables of profitability of public listed pharmaceutical companies in Germany. A sample of 10 years panel data from 2011 to 2020 was selected for 10 German publicly listed pharmaceutical companies. The data was collected from the annual financial reports of the listed companies. Panel regression analysis with random effect was conducted to analyze the data. The results of the panel regression analysis suggested that FCF can have a significant positive impact on net profit margin (NPM) and return on asset (ROA) as variables of profitability. Therefore, the causal relationship of FCF with the two variables of profitability namely; NPM and ROA of the 10 German public listed pharmaceutical companies was found to be positive and significant. However, the causal relationship of FCF with the two variables of profitability namely; gross profit margin (GPM) and return on equity (ROE) of the 10 German public listed pharmaceutical companies was found to be insignificant. The FCF can increase the profitability in terms of NPM and ROA of German public listed pharmaceutical companies. Hence, the causal relationship between free cash available and profitability in term of ROA and NPM of the pharmaceutical public listed companies in Germany were found to be significant and positive. Therefore, the upwards movement of FCF can have a significant positive influence on profitability of pharmaceutical public listed companies in Germany in terms of ROA and NPM.
KEY AUDIT MATTERS & COVID-19: An analysis of the impact of COVID-19 on KAMs of DAX 40 Companies
(2022)
The collapse of Enron and WorldCom2 and the negative effects of the Global Financial Crisis catalyzed two major challenges for the accounting profession. The work of independent auditors was questioned by the public as they had given unqualified audit opinion soon before these companies filed for bankruptcy. To address the dissatisfaction of users of financial statements on the role of the auditor, in January 2015, the IAASB issued a new ISA 701. ISA 701 requires auditors of listed entities to report key audit matters in the audit report. The purpose of KAMs is to present the most significant entity-specific matters based on the auditor's judgement to provide more useful information to the users of the report. The auditors of the top 40 Germany listed entities had to comply with this requirement for accounting periods ending on or after 15 December 2016. Ever since the introduction of KAMs in the auditor’s report, the most reported matters in DAX 40 audit reports relates to asset impairment (including goodwill), revenue recognition and taxation (including valuation of deferred tax assets). With the current Covid-19 pandemic, the work of auditors was affected in different ways. Therefore, there is need to analyze if matters significant to auditors were influenced by the pandemic. To address this issue, an analysis of auditors reports from financial years 2018-2020 for the DAX 40 companies was carried out. The results showed that matters significant to auditors were more or less the same since the adoption of ISA 701. Furthermore, the existence of Covid-19 played a significant role for commonly reported KAM (goodwill impairment) to be of high importance in the audit of 2020 consolidated financial statements because of the increased audit risk.
Materiality in CSR-Reporting
(2020)
“What are the major amendments of the reform concerning sale and leaseback transactions?“
„What is the criticism behind IAS 17 and how does the reform impact real estate entities?“
With the publication of the new IFRS 16 lease accounting standard, the lease accounting is
going to entirely change, especially for the lessees. The following thesis shows the accounting
treatment of leasing and its specialisation sale and leaseback arrangements, which is compared to the previous and new accounting regulations. This paper focuses on the critical points regarding lease accounting in accordance with IAS 17, which suggested the discussion about a reform of lease accounting under The International Financial Reporting Standards at first. The new right-of-use-approach as well as IFRS 15 become of critical importance under the new standard. The final analysis of this thesis illustrates the expected impact and future challenges of applying IFRS 16 that lessees and lessors in the leasing industry are facing.
This paper focuses on the “International Financial Reporting Standards” (IFRS) and its
accounting treatment of sale and leaseback arrangements according to IAS 17 and IFRS 16.
Due to the increased use of innovative technologies and the opportunities that the digitalization age has to offer, Self-Service Reporting (SSR) has been identified by both research and practice as a trend that can change the steering of company activities as
well as the daily tasks of the Controller. This study assesses both the prerequisites for implementing Self-Service Business Intelligence (SSBI) solutions and the effects of SSR on decision-making to contribute to former findings from management accounting research. Based on state-of-the-art literature, a web-based survey was created and shared among Controlling, data analysis, and reporting experts, as well as managers.
The gathered sample data with 122 respondents from a variety of industries was analyzed with different statistical methods. Based on extensive quantitative analysis, it can be assumed that Controllers operating in an SSR environment need to become more independent and acquire new technological and social skills. Furthermore, the employer's digitalization strategy must be clearly defined and communicated transparently to all stakeholders before successfully introducing SSBI technology. Additionally, high data governance and data management standards are indispensable for the implementation of SSR software. Concerning the effects on decision-making, it can be summarized that organizations can achieve a higher degree of flexibility and agility with a digital reporting system such as SSR. Moreover, decision-making processes are expected to become faster.