**Meet the editors**

Dr. Asma Salman is an Associate Professor of Finance at the College of Business Administration, at the American University in the Emirates. She completed her MBA in Finance & Accounting and earned a Ph.D from the School of Management at the Harbin Institute of Technology, Harbin, China. With research credentials from Brunel University, London, she has been actively

engaged in scientific research and has published credible articles in international journals and conferences. She also serves as an editor for various international journals and as the Dubai cohort supervisor for students under the Nottingham Business School DBA program. Her research has won her several awards and honors around the globe and she is a recipient of research grants for macro level projects. Her research interests include: Accounting, International Finance and Digital Currencies.

Professor Muthanna G. Abdul Razzaq is a Professor of Accounting. His constant drive to excel inspired him to establish the American University in the Emirates (UAE) in 2006, where he also serves as the President and CEO. Prof. Muthanna received his Bachelor's Degree in Accounting and Postgraduate Diploma in Cost Accounting from Baghdad University, Iraq. He then moved to

the UK to pursue his Ph.D in Management Accounting from University of Manchester. During his career spanning 4 decades, he has served in various roles as the Acting Chair of the Department of Accounting, Deputy Dean of Faculty of Business Administration, Chairman of Academic Committee, Vice President for Scientific Research, Member of the Board of the Governors, Vice Chancellor for Administrative and Financial Affairs and Member of the Board of Trustees.

Contents

**Preface VII**

**Section 1 The Matching Principle 1**

**Section 2 Ethics in Accounting 27**

Nida Türegün

**Section 3 Insurance Contracts 71**

**Section 4 Green Accounting 91**

M N Murty

Frank Xuyan Wang

**Literature Review 51**

Chapter 1 **A Renewed Interest on the Fundamentals of Accounting: The**

Chapter 2 **Ethical Awareness, Ethical Decision Making, and Transparency:**

Chapter 4 **An Inequality for Reinsurance Contract Annual Loss Standard**

**Deviation and Its Application 73**

Chapter 5 **Accounting and Measuring Well-being 93**

**A Study on Turkish CPAs in Istanbul 29**

Chapter 3 **Theoretical Perspectives on Sustainability Reporting: A**

Pietro Fera, Nicola Moscariello and Ettore Cinque

**Impact of the Matching 'Principle' on Earning Attributes 3**

Maria da Conceição da Costa Tavares and Alcina Portugal Dias

## Contents

**Preface XI**


#### **Section 5 Financial Instruments 107**

Chapter 6 **Financial Instruments: Islamic Versus Conventional 109** Sani Kabiru Saidu, Abubakar Sambo Junaidu and Rabiu Saminu Jibril

Preface

with the developed ones.

a topic of major concern for standard setters.

Accounting from a cross-cultural perspective shows the differences and the synergy of ac‐ counting principles and their implementation from a diverse standpoint. The many years of teaching, learning and consulting have taught us how the accounting concepts are similar but different in approaches in management accounting and decision making. Contemporary perspectives devise diverse regulations yet the financial accounting policies, capital asset treatments and standards remain the same. This presents both opportunities and challenges for the current day organizations and accounting professionals alike. It is also a well-known fact that emerging markets do not always share the same financial management challenges

This book intends to feature the journey from the double-entry bookkeeping developed in medieval Europe to the changing dynamics of present-day accounting. It is divided into five main sections: The Matching Principle, Ethics in Accounting, Insurance Contracts, Green Accounting, and Financial Instruments. This book shows many different aspects of the same accounting principles but from a cross-cultural perspective. The diversity of the authors who contributed to this book signify the importance of accounting from various dimensions while ensuring that standards are adhered to, and principles are followed and applied.

The first section is titled "**The Matching Principle"** and is authored by Pietro Fera, Nicola Moscariello and Ettore Cinque from Ital. This section examines the renewed interest in the fundamentals of accounting and focuses primarily on the role of the matching principle as a determinant of earnings quality. The authors have performed an extensive and systematic literature review on the determinants and consequences of the matching process, examining

Section 2 deals with the "**Ethics in Accounting"** and contains two chapters. Nida Türegün from Turkey aimed to reveal the connections among ethical awareness, ethical decision mak‐ ing, and transparency from the perspective of certified public accountants (CPAs) in Istanbul. Data was collected from Turkish CPAs' survey responses and analyzed using explanatory factor analysis. As highlighted during the study, the results show that CPAs are affected mainly by the level of their ethical awareness in decision making about an ethical issue or transparency of financial reports. Maria da Conceição da Costa Tavares and Alcina Portugal Dias from Portugal discuss and devise a literature review on the theoretical considerations and empirical research on sustainability reporting. This chapter analyzes each theory and the relationship between them. The authors conclude that, although the legitimacy theory is the dominant theory used in accounting and sustainability reporting studies, it is related to the

other theories. The selection and application will depend on the focus of the study.

## Preface

**Section 5 Financial Instruments 107**

Jibril

**VI** Contents

Chapter 6 **Financial Instruments: Islamic Versus Conventional 109**

Sani Kabiru Saidu, Abubakar Sambo Junaidu and Rabiu Saminu

Accounting from a cross-cultural perspective shows the differences and the synergy of ac‐ counting principles and their implementation from a diverse standpoint. The many years of teaching, learning and consulting have taught us how the accounting concepts are similar but different in approaches in management accounting and decision making. Contemporary perspectives devise diverse regulations yet the financial accounting policies, capital asset treatments and standards remain the same. This presents both opportunities and challenges for the current day organizations and accounting professionals alike. It is also a well-known fact that emerging markets do not always share the same financial management challenges with the developed ones.

This book intends to feature the journey from the double-entry bookkeeping developed in medieval Europe to the changing dynamics of present-day accounting. It is divided into five main sections: The Matching Principle, Ethics in Accounting, Insurance Contracts, Green Accounting, and Financial Instruments. This book shows many different aspects of the same accounting principles but from a cross-cultural perspective. The diversity of the authors who contributed to this book signify the importance of accounting from various dimensions while ensuring that standards are adhered to, and principles are followed and applied.

The first section is titled "**The Matching Principle"** and is authored by Pietro Fera, Nicola Moscariello and Ettore Cinque from Ital. This section examines the renewed interest in the fundamentals of accounting and focuses primarily on the role of the matching principle as a determinant of earnings quality. The authors have performed an extensive and systematic literature review on the determinants and consequences of the matching process, examining a topic of major concern for standard setters.

Section 2 deals with the "**Ethics in Accounting"** and contains two chapters. Nida Türegün from Turkey aimed to reveal the connections among ethical awareness, ethical decision mak‐ ing, and transparency from the perspective of certified public accountants (CPAs) in Istanbul. Data was collected from Turkish CPAs' survey responses and analyzed using explanatory factor analysis. As highlighted during the study, the results show that CPAs are affected mainly by the level of their ethical awareness in decision making about an ethical issue or transparency of financial reports. Maria da Conceição da Costa Tavares and Alcina Portugal Dias from Portugal discuss and devise a literature review on the theoretical considerations and empirical research on sustainability reporting. This chapter analyzes each theory and the relationship between them. The authors conclude that, although the legitimacy theory is the dominant theory used in accounting and sustainability reporting studies, it is related to the other theories. The selection and application will depend on the focus of the study.

Section 3 deals with **"Insurance Contracts"** where Frank Xuyan Wang from Canada analy‐ ses the inequality for reinsurance contract, annual loss standard deviation and its applica‐ tion. As direct application of this inequality bounds for other risk measures of reinsurance contract, the TVaR (average of the annual losses that are larger than a given loss), the proba‐ bility of attaching (greater than a given attachment loss), and the probability of exceeding (the annual loss limit) are obtained, which in turn reveals the capability upper limit of the simulation approach.

Section 4 is a relatively contemporary topic, **"Green Accounting".** M. N. Murty measures the relationship between Genuine Savings and Green GDP. The recent literature on the measure‐ ment of sustainable income has developed in two important ways for accounting of contribu‐ tion of natural resource stocks. This chapter describes the methodology of measuring genuine savings for a country and reviews the estimates available for different countries. It also sug‐ gests a way forward for measuring genuine saving for India, where the study is based.

Section 5 deals with "**Financial Instruments**". Sani Kabiru Saidu from Nigeria and Huma Nawaz from Malaysia present a simple and precise narration on the meaning of financial instruments, their forms and characteristics, fundamental principles of Islamic finance as well as the similarities and differences between conventional and Islamic financial instru‐ ments. A case study reflecting the core merits and pitfalls of financial instruments is present‐ ed to further emphasize the understanding of the topic. This piece is intended to provide readers with a basic understanding of issues raised.

The successful completion of this book has been the result of various "behind-the-scene" members who have supported the book right from its inception until the publication proc‐ ess. We would like to express our sincere gratitude to all the authors for their diverse contri‐ butions. Last but certainly not the least, our Author Service Manager Ms. Marijana Francetic for her endless support during the publishing process.

> **Dr. Asma Salman** Department Chair – Accounting, Finance and Economics College of Business Administration American University in the Emirates United Arab Emirates

#### **Professor Muthanna G. Abdul Razzaq**

President and CEO American University in the Emirates United Arab Emirates **Section 1**

**The Matching Principle**
