Accounting & Marketing

Reflecting on Accounting Research in Derivatives and Prospects for Future Endeavors

Abstract

Fauler Land*

Derivatives have been integral financial instruments in global markets for several decades, with accounting research playing a pivotal role in unravelling their intricacies and consequences. This article offers an overview of historical accounting research pertaining to derivatives and provides recommendations for future investigations aimed at addressing evolving challenges and innovations. The realms of accounting research discussed encompass financial accounting, managerial accounting, auditing and assurance, taxation, accounting information systems, and ethics and professionalism. Valuation and measurement have emerged as central themes in research endeavours, with studies probing the realms of fair value measurement, hedge accounting standards, and disclosure practices. Moreover, research initiatives have delved into the ramifications of derivatives on financial reporting quality and fluctuations in earnings. In the wake of changing financial landscapes, future research should shift its focus towards emerging financial instruments, such as crypto currency derivatives and carbon emission derivatives. Simultaneously, there's a need to scrutinize the efficacy of hedge accounting models and evaluate the systemic risk implications associated with derivatives.