• News Archive
  • Simaster
  • Webmail
  • Directory
  • Crisis Center
  •  English
    • Indonesia
Universitas Gadjah Mada Universitas Gadjah Mada Universitas Gadjah Mada Universitas Gadjah Mada
  • Education
    • Doctoral dissertation
    • Inauguration of Professor
    • Graduation
  • Achievement
  • Research and Innovation
    • Research
    • Innovation
  • Campus Info
    • Cooperation
    • Seminar and Workshop
    • Student Community Service Program
    • Other
  • News Report
  • Home
  • Doctoral dissertation
  • Studying the Risk of Financial Statements Information, Ibnu Qizam Achieves Doctoral Degree

Studying the Risk of Financial Statements Information, Ibnu Qizam Achieves Doctoral Degree

  • 03 August 2011, 08:30 WIB
  • By: Marwati
  • 12172
  • PDF Version

 

Users of financial statements information have different interests and needs. The differences of interests force the providers of financial statements to face a trade-off between relevance and reliability as the qualitative characteristics of the content of financial statements information.

According to Drs. Ibnu Qizam, S.E, M. Si, Akt., in practice, relevance and reliability could not be displayed together maximally of an information object in financial reporting. Thus, what are possible are optimal conditions in which at the time only one of the characteristics (relevance or reliability) which may be more emphasized at the expense of other characteristics. "Accounting which is largely based on historical value, for example in measuring assets, is one example of how accounting sacrifices the value of relevance to increase reliability," he said at the BRI Auditorium, M.Si and Doctoral Program in Faculty of Economics and Business on Friday (29/7).

Lecturer from Islamic Finance Program Studies Faculty of Shariah, UIN Sunan Kalijaga Yogyakarta said about this in the examination of his doctoral program. He defended his dissertation 'Economic Value of Financial Statements Information Risk and Relevance of Fundamental Risk', with the promoter Prof. Dr. Jogiyanto H.M., M.B.A. and co-promoter Dr. Hardo Basuki, M. Soc., Sc.

He said that if only emphasizing on the reliability in measurement, recognition and presentation of accounting data, it will implicate the diminishing usefulness level of financial statements since the financial statements become irrelevant. As a result, there will be financial information that comes from other media besides the financial statements produced by accountants. Conversely, if only emphasizing on the relevance in the measurement, recognition and presentation of accounting data, the users of financial statements no longer believe in the information submitted since the measurement, recognition and presentation of accounting data is not verifiable. "It is biased and inaccurate in symbolizing the posts in the financial statements. As a result, the financial statements also face the issue of usefulness for the users," he said.

Concrete example of how accounting sacrifices the value of relevance to emphasize reliability can be seen on the Interbrand survey report. It is mentioned that Coke has a brand value estimated at $72.5 billion, which represents 51% of the total market capitalization value of its shares. Nike has a brand value estimated at $ 8 billion, which represents 72% of the market capitalization value. Two other brands, Hertz and Adidas, respectively have a brand 110% and 151% of the market capitalization value.

Another example is in the R & D accounting, it was reported that Microsoft is expected to release funds for R & D amounting to $3.8 billion, while Ciso to spend $2.7 billion. "Of course, the result is that the two companies become the market leader, hence the cost of R & D in this context is actually an investment that creates “future economic benefits' despite the fact that the sheet has not given the space to the cost of R & D as an investment post," he explained.

Quoting the opinion of Entwistle and Phillips, the man born in Jepara, January 2, 1968 describes all of them are considered an ‘iceberg' phenomenon of intangible assets that has not been revealed as a whole, because, once again, they have yet to wait for a reliability signal which is possible to be admitted in the financial statements (balance sheet). All of them shows how the provider of financial statements information is always facing the trade-off problem of reliability and relevance, not only because of the limitations of measurement and recognition in accounting systems, but also changes and the circulations of 'hard assets' and 'soft assets' that are so quick at a company in line with the changes of the present business environment.

"In the past, most of the company's assets are tangible assets, like buildings and machines, now invisible assets or intangible assets like brand, corporate image or goodwill are increasingly dominant. Moreover, the evolution of a modern enterprise with conglomeration that result on subsidiary cooperation, assets renting is increasingly blurring the boundaries of traditional corporate boundaries. Current accounting system is considered unable to capture the rapid turnover of the modern enterprise. This means that the usefulness of accounting information decision once again has another tough challenge," said the husband of Emy Fatmawati and the father of three children who is declared as 1440th doctor graduating from UGM.

Related News

  • Political Closeness Makes Companies Less Transparent in Information Provision

    Friday,20 May 2011 - 14:55
  • Study on Adolescent Smoking Behavior, Kamsih Astuti Achieves Doctorate Degree

    Friday,14 May 2010 - 9:15
  • Earning Doctorate After Assessing Information-Seeking Behavior of Tax Consultants

    Tuesday,09 October 2018 - 15:39
  • UGM Initiated Double Degree with TIAR Australia

    Tuesday,13 July 2010 - 20:47
  • Encouraging Good University Governance, UGM Applies on-line Accountability Report

    Thursday,03 March 2011 - 12:11

News Releases

  • UGM Researchers Selected for 2022 Science Leadership Collaborative 01 July 2022
    Antonia Morita Iswari Saktiawati, MD, Ph.D. (Faculty of Me
    Salma
  • UGM Lecturer Attends TPNW Meeting in Vienna 30 June 2022
    International Relations lecturer Muhadi Sugiono was among
    Salma
  • UGM Students Represent Indonesia at Youth Ecosperity Dialogue 2022 28 June 2022
    Five UGM students took part in this year’s Youth Eco
    Salma
  • UGM Medical Students Win 2022 RespiQuizz 27 June 2022
    UGM medical students Azaria Evan Trie Tana and Wisnu Pinan
    Salma
  • UGM Ready for 2022 Formula Student Netherlands 22 June 2022
    The UGM formula team Bimasakti is set to compete at
    Salma

Info

  • Install Fest Windows
    29 September 2017
  • Streaming Author Workshop Writing and Publishing
    14 July 2017
  • Hokkaido University Short Term Exchange Program HUSTEP
    08 January 2016
  • 2016 Amgen Scholars Program in Japan
    08 January 2016
  • Jardine Foundation Scholarship for Postgraduate Studies at University of Oxford and University of Cambridge
    01 July 2015

Event

  • 21Jul The International Conference on Sustainable Environment, Agriculture, and Tourism (ICOSEAT)...
  • 07Sep The 8th International Conference on Science and Technology (ICST 2022)...
Universitas Gadjah Mada
UNIVERSITAS GADJAH MADA
Bulaksumur Yogyakarta 55281
   info@ugm.ac.id
   +62 (274) 588688
   +62 (274) 565223
   +62 811 2869 988

PARTNERSHIP

  • Alumni
  • International Affairs

ABOUT UGM

  • Rector's Welcome
  • History
  • Vission and Mission
  • The Board of Executive
  • Management

VISIT UGM

  • Campus Map
  • Event

REGISTRATION

  • Undergraduate
  • Graduate
  • Vocational School
  • Professional Program
  • International Program

© 2022 Universitas Gadjah Mada

PRIVACY POLICYCONTACT