Most corporations are required by law to produce annual reports on their financial positions. These financial reports are accompanied by an auditor's report, which is an independent auditor's opinion on the fairness of the financial statements. To formulate their reports, auditors use a "personal-judgement" approach that heavily depends on their experience and expertise. This approach may be (1) ineffective and may lead to (2) different decisions, (3) personal bias, and (4) misleading judgements. These four drawbacks of a human auditor are a source of doubt and hesitation for every corporation. Therefore, the challenging question is: Can a computer do a better job? This paper focuses on the construction and implementation of a knowledge-based system, called the "Auditor's Report EXpert" (AREX), that is capable of formulating the opinion on financial statements, as expressed in the auditor's report. The knowledge used by AREX is acquired from the literature, and from a slate of practicing and academic auditors by means of questionnaires and in-depth interviews. A preliminary validation of AREX indicates that AREX is successful in performing the auditor's report task. Hence, we tentatively conclude that currently a computer program can support an auditor in his/her task. Moreover, in the foreseeable future (maybe in 2030), it is to be expected that a computer program can produce idiosyncratic auditor's reports that are effective, universal in their decisions, do not show a personal bias, and do not have misleading statements.

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.The international commercial airline sector was chosen as the subject of the present research in an attempt to study the factor groupings in a sector whose financial characteristics differ from manufacturing or retailing. Results show that factor categorization reflects the sector's financial characteristics. The study also draws conclusions on some observed differences between the empirical and theoretical ratio classification observed in the literature. The study lends support to the conclusion that factor analysis provides a useful means by which to develop and test the theoretical structure and grouping of financial ratios.

Purpose: This study investigated the impact of international financial reporting standards on aggressive accrual. The distinguishing feature of this research is the study of the recent adoption of international financial reporting standards in one of the most important economies and emerging markets in the world; the Saudi Security Exchange (Tadawul).   Theoretical framework: One important issue that has dominated accounting research for many years is the mandatory IFRS adoption. More specifically, the impact of mandatory IFRS adoption on accounting figures, notably accruals. Most of the studies document mixed effects resulting from IFRS adoption.   Design/methodology/methodology: This study focuses on Kingdom of Saudi Arabia's Financial Market due to the recent mandatory adoption of the IFRS by Saudi companies in 2017, using 781 firm-year observations. Our study sample will cover 6 years from 2014-2019, three years before adoption (2014-2015-2016) and three years after adoption (2017-2018-2019).   Find: The findings of this study were consistent with previous accounting literature. The study shows a decrease in aggressiveness accruals after adopting international financial reporting standards. The study concluded that the companies listed on the Saudi Stock Exchange (Tadawul), especially after the adoption of international financial reporting standards, do not often provide inflated financial reports with distractions that could lead to customers making irrational decisions.   Research, practical and social implications:  This study put a spotlight on Aggressive Accrual resulting from mandatory IFRS adoption in emerging markets, such as the Kingdom of Saudi Arabia's Financial Market. Therefore, this study provides an exciting opportunity to advance standards setters’ knowledge of the quality of financial reporting in emerging markets.   Originality/value: This is the first study to use Aggressive Accrual around mandatory IFRS adoption. worth noting that apart from the prior literature, no study was devoted to the aggressive accrual in the Kingdom of Saudi Arabia's Financial Market.

No abstract

No abstract