The relative significance of financial statement recognition and note disclosure is an important issue for accounting regulators, preparers and auditors. While standard-setters prioritise financial recognition over disclosure, the empirical evidence on the value-relevance of note disclosures is mixed. This is partly due to the severe methodological problems inherent in comparing the two modes of presentation. This paper examines this issue in a new context by exploiting the UK regulatory environment where old pre-FRS 10 goodwill continues to be disclosed in the notes to the accounts at the same time as new post-FRS 10 goodwill is capitalised. It thus uses a within-firm research method to examine the relative significance of the two goodwill amounts. The analysis is based on a sample of 243 non-financial firms containing amounts of both recognised and disclosed goodwill in their 2002 financial statements. Both variables are significantly associated with share price. In addition, for firms engaging in R&D, there is no significant difference between the contributions of disclosed and recognised goodwill in explaining market value, a result consistent with the markets efficiently incorporating goodwill information irrespective of where it appears in the annual report.

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"The UK regulatory requirements relating to going-concern disclosures require directors to report on the going-concern status of their firms. Such directors have incentives not to report fairly in the case of financially-distressed firms. We expect effective corporate governance mechanisms will encourage directors to report more truthfully in such situations. This paper tests this proposition explicitly using a large sample of going-concern cases over the period 1994-2000. We find that whereas auditors' going-concern opinions predict the subsequent resolution of going-concern uncertainties directors' going-concern statements convey arbitrary and unhelpful messages to users. However, robust corporate governance structures and high auditor reputation constrain directors to be more truthful in their going-concern disclosures, bringing these more into line with the more credible auditor opinions." Copyright 2006 The Authors Journal compilation (c) 2006 Blackwell Publishing Ltd.

The UK provides a virtually unique environment in which to examine the information content of the partial provision approach to deferred tax accounting. In addition this issue is of particular interest to UK accounting standard setters in the light of trends towards international accounting standard harmonisation. Taking the total amount of deferred taxation to be equal to the partial balance sheet provision plus the potential portion appearing in the notes, this study tests the relationship between these various deferred tax components and market value. It also examines the economic rationale for the potential portion. The study is based on 1,512 company/years from the period 1989-1991. It finds that, while the full amount of deferred taxation is not valued by the market as a liability, there is evidence of the partial balance sheet provision being so valued. There is also evidence that the potential portion is positively related to market value, consistent with its proxying for information about future growth. This result is supported by the positive relation between the potential portion and measures of future capital spending, indicative of an underlying economic rationale for this deferred taxation component. From a regulatory perspective, the study concludes that the main benefit of the partial provision approach is that the balance sheet amount constitutes a reasonably reliable measure of the portion likely to crystallise as a liability, information that would be lost were only the full amount to be disclosed. Copyright Blackwell Publishers Ltd 2001.

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.Abstract This paper examines how the UK Chartered Accountants Joint Ethics Committee's (CAJEC) 1996 Statement Integrity, Objectivity and Independence, which was developed at a time of mounting levels of criticism of the auditing profession, provides legitimization for the accounting profession's increased commercial activities, particularly in the area of other business services. Parallel with a major shift in the nature of the activities of the professional firm, this ethics Statement gives expression to changes in the profession's concept of independence. It adopts a more accommodating method for evaluating the adequacy of an auditor's independence, introducing a``framework'' approach in contrast with its predecessor's``rule book'' approach. Both the Statement and respondents to the preceding Consultation Papers support the flexible system afforded by the framework in terms of promoting clients' economic interests. Moreover CAJEC's proposals did not include any initiatives to promote audit firm transparency which might have enabled external monitoring of compliance with the framework. Thus, while the Statement does place some limitations on the flexibility of the framework and retains the distinction between audit and other activities, it ultimately embodies a notion of independence that is at one with the interests of the profession.