Subjects -> BUSINESS AND ECONOMICS (Total: 3570 journals)
    - ACCOUNTING (132 journals)
    - BANKING AND FINANCE (306 journals)
    - BUSINESS AND ECONOMICS (1248 journals)
    - CONSUMER EDUCATION AND PROTECTION (20 journals)
    - COOPERATIVES (4 journals)
    - ECONOMIC SCIENCES: GENERAL (212 journals)
    - ECONOMIC SYSTEMS, THEORIES AND HISTORY (235 journals)
    - FASHION AND CONSUMER TRENDS (20 journals)
    - HUMAN RESOURCES (103 journals)
    - INSURANCE (26 journals)
    - INTERNATIONAL COMMERCE (145 journals)
    - INTERNATIONAL DEVELOPMENT AND AID (103 journals)
    - INVESTMENTS (22 journals)
    - LABOR AND INDUSTRIAL RELATIONS (61 journals)
    - MACROECONOMICS (17 journals)
    - MANAGEMENT (595 journals)
    - MARKETING AND PURCHASING (116 journals)
    - MICROECONOMICS (23 journals)
    - PRODUCTION OF GOODS AND SERVICES (143 journals)
    - PUBLIC FINANCE, TAXATION (37 journals)
    - TRADE AND INDUSTRIAL DIRECTORIES (2 journals)

ACCOUNTING (132 journals)                     

Showing 1 - 126 of 126 Journals sorted alphabetically
Accountancy     Partially Free   (Followers: 3)
Accounting Analysis Journal     Open Access   (Followers: 4)
Accounting and Finance Research     Open Access   (Followers: 23)
Accounting and Financial Control     Open Access   (Followers: 4)
Accounting Global Journal     Open Access   (Followers: 3)
Accounting History     Hybrid Journal   (Followers: 10)
Accounting History Review     Hybrid Journal   (Followers: 15)
Accounting in Europe     Hybrid Journal   (Followers: 8)
Accounting Research Journal     Hybrid Journal   (Followers: 19)
Accounting Theory and Practice     Open Access   (Followers: 6)
Accounting, Accountability & Performance     Full-text available via subscription   (Followers: 12)
Accounting, Auditing and Accountability Journal     Hybrid Journal   (Followers: 24)
Acta Marisiensis : Seria Oeconomica     Open Access  
Activos     Open Access  
Actualidad Contable Faces     Open Access   (Followers: 1)
Advances in Accounting     Hybrid Journal   (Followers: 10)
Advances in Accounting Education     Hybrid Journal   (Followers: 12)
African Journal of Accounting, Auditing and Finance     Hybrid Journal   (Followers: 12)
Al-Mal : Jurnal Akuntansi dan Keuangan Islam     Open Access  
Applied Finance and Accounting     Open Access   (Followers: 8)
Apuntes Contables     Open Access  
Asia-Pacific Journal of Accounting & Economics     Hybrid Journal   (Followers: 6)
Asian Journal of Accounting Research     Open Access  
Asian Journal of Economics, Business and Accounting     Open Access  
Asian Journal of Finance & Accounting     Open Access   (Followers: 8)
Berkala Akuntansi dan Keuangan Indonesia     Open Access  
Bulletin of Accounting and Finance Reviews     Open Access   (Followers: 1)
China Journal of Accounting Research     Open Access   (Followers: 3)
China Journal of Accounting Studies     Hybrid Journal  
Chulalongkorn Business Review     Open Access  
Cofin Habana     Open Access  
Comptabilité - Contrôle - Audit     Full-text available via subscription  
Comptabilités     Open Access  
Contabilidad y Negocios     Open Access  
Contabilidade, Gestão e Governança     Open Access  
Contaduría y Administración     Open Access  
Copernican Journal of Finance & Accounting     Open Access   (Followers: 2)
Cuadernos de Administración (Universidad del Valle)     Open Access   (Followers: 1)
Cuadernos de Contabilidad     Open Access  
Current Issues in Auditing     Full-text available via subscription   (Followers: 4)
E-Jurnal Akuntansi     Open Access  
ECA Sinergia : Revista Especializada en Economía, Contabilidad y Administración     Open Access  
EL-MUHASABA     Open Access  
Estudios Gerenciales     Open Access  
Financial Reporting     Full-text available via subscription   (Followers: 4)
Fokus Bisnis : Media Pengkajian Manajemen dan Akuntansi     Open Access  
Indonesian Accounting Review     Open Access  
International Journal of Accounting & Finance Review     Open Access  
International Journal of Accounting and Financial Reporting     Open Access   (Followers: 8)
International Journal of Accounting and Information Management     Hybrid Journal   (Followers: 5)
International Journal of Accounting, Auditing and Performance Evaluation     Hybrid Journal   (Followers: 9)
International Journal of Auditing Technology     Hybrid Journal   (Followers: 4)
International Journal of Business Reflections     Open Access   (Followers: 2)
International Journal of Finance and Accounting     Open Access   (Followers: 7)
International Journal of Finance and Accounting Studies     Open Access   (Followers: 7)
Journal of Accounting and Business Education     Open Access   (Followers: 1)
Journal of Accounting and Investment     Open Access  
Journal of Accounting and Management     Open Access   (Followers: 11)
Journal of Accounting in Emerging Economies     Hybrid Journal   (Followers: 2)
Journal of Accounting Literature     Hybrid Journal   (Followers: 5)
Journal of Applied Accounting and Taxation     Open Access   (Followers: 1)
Journal of Applied Accounting Research     Hybrid Journal   (Followers: 15)
Journal of Applied Sciences in Accounting, Finance, and Tax     Open Access  
Journal of Auditing, Finance and Forensic Accounting     Open Access   (Followers: 5)
Journal of Banking and Financial Technology     Hybrid Journal   (Followers: 1)
Journal of Cost Analysis and Parametrics     Hybrid Journal   (Followers: 5)
Journal of Economics Finance and Accounting     Open Access   (Followers: 1)
Journal of Economics, Business, & Accountancy Ventura     Open Access  
Journal of Economics, Finance and Accounting Studies     Open Access  
Journal of Empirical Research in Accounting     Open Access   (Followers: 1)
Journal of Federation of Accounting Professions     Open Access  
Journal of Finance and Accounting     Open Access   (Followers: 7)
Journal of Finance and Accounting Research     Open Access   (Followers: 1)
Journal of Financial Reporting and Accounting     Hybrid Journal   (Followers: 12)
Journal of Islamic Accounting and Business Research     Hybrid Journal   (Followers: 5)
Journal of Management Accounting Research     Full-text available via subscription   (Followers: 24)
Journal of Public Budgeting, Accounting & Financial Management     Hybrid Journal   (Followers: 3)
Journal Syariah and Accounting Public     Open Access  
Jurnal Akuntansi & Keuangan Unja     Open Access  
Jurnal Akuntansi Aktual     Open Access  
Jurnal Akuntansi dan Keuangan     Open Access  
Jurnal Akuntansi dan Perpajakan     Open Access  
Jurnal Akuntansi Indonesia     Open Access  
Jurnal ASET (Akuntansi Riset)     Open Access  
Jurnal Dinamika Akuntansi     Open Access  
Jurnal Ekonomi KIAT     Open Access  
Jurnal Ilmiah Akuntansi dan Bisnis     Open Access  
Jurnal Ilmiah Akuntansi dan Keuangan     Open Access  
Jurnal Kajian Akuntansi     Open Access  
Krisna : Kumpulan Riset Akuntansi     Open Access  
Maandblad Voor Accountancy en Bedrijfseconomie (MAB)     Open Access  
Management & Economics Research Journal     Open Access   (Followers: 1)
Meditari Accountancy Research     Hybrid Journal   (Followers: 2)
North American Actuarial Journal     Hybrid Journal   (Followers: 1)
Open Journal of Accounting     Open Access   (Followers: 2)
PEKA : Jurnal Pendidikan Ekonomi Akuntansi     Open Access  
Point of View Research Accounting and Auditing     Open Access   (Followers: 1)
Prawo Budżetowe Państwa i Samorządu     Open Access  
Profita : Komunikasi Ilmiah Akuntansi dan Perpajakan     Open Access  
Quipukamayoc     Open Access   (Followers: 1)
RACE - Revista de Administração, Contabilidade e Economia     Open Access  
Research Journal of Finance and Accounting     Open Access   (Followers: 10)
REUNIR: Revista de Administracao, Contabilidade e Sustentabilidade     Open Access  
Revista Catarinense da Ciência Contábil     Open Access  
Revista Contemporânea de Contabilidade     Open Access  
Revista de Administração, Contabilidade e Economia da Fundace     Open Access  
Revista de Análisis Económico y Financiero     Open Access  
Revista de Contabilidad : Spanish Accounting Review     Open Access  
Revista de Contabilidade do Mestrado em Ciências Contábeis da UERJ     Open Access  
Revista de Contabilidade e Organizações     Open Access  
Revista de Derecho Fiscal     Open Access  
Revista de Finanças Públicas, Tributação e Desenvolvimento     Open Access  
Revista de Gestão, Finanças e Contabilidade     Open Access  
Revista Evidenciação Contábil & Finanças     Open Access  
Revista Mineira de Contabilidade     Open Access  
Revista Universo Contábil     Open Access  
Riset Akuntansi dan Keuangan Indonesia     Open Access  
Risk Governance and Control : Financial Markets & Institutions     Open Access  
Science and Studies of Accounting and Finance : Problems and Perspectives     Open Access  
Social and Environmental Accountability Journal     Hybrid Journal   (Followers: 3)
South African Journal of Accounting Research     Hybrid Journal   (Followers: 1)
Spanish Journal of Finance and Accounting / Revista Española de Financiación y Contabilidad     Hybrid Journal   (Followers: 1)
Studia Universitatis Babes-Bolyai Oeconomica     Open Access   (Followers: 2)
Sustainability Accounting, Management and Policy Journal     Hybrid Journal   (Followers: 12)
The Accounting Review     Full-text available via subscription   (Followers: 49)
Universal Journal of Accounting and Finance     Open Access   (Followers: 3)

           

Similar Journals
Journal Cover
Journal of Financial Reporting and Accounting
Number of Followers: 12  
 
  Hybrid Journal Hybrid journal (It can contain Open Access articles)
ISSN (Print) 1985-2517 - ISSN (Online) 2042-5856
Published by Emerald Homepage  [360 journals]
  • Blockchain technology acceptance by investment professionals: a decomposed
           TPB model

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      Authors: Anitha Kumari , N. Chitra Devi
      Abstract: The rapid emergence and acceptance of blockchain applications by investment professionals has made this study significant. The study aims to examine the degree of trust and acceptance of blockchain technology in the Indian financial services industry. The decomposed theory of planned behaviour (DTPB) model is investigated using responses from 200 investment professionals to an online survey on blockchain technology adoption, and partial least squares structural equation modelling using SmartPLS 3.0 is used to analyse the results. In general, the results support a DTPB and offer the best fit to the data. This study may have significant drawbacks in predicting blockchain technology’s acceptance by investment professionals. Furthermore, the findings suggest that the research instruments used in this study, which engage users in business settings, are equally successful in the context of investment professionals. In predicting blockchain acceptance by investing experts, this study may have significant drawbacks. As a result of TAM studies, it has been determined that perceived usefulness is more essential than perceived ease of use. Therefore, investment professionals may have discovered significant subjective normative impacts on behavioural intention. Management must devise techniques for implementing blockchain technology in digital financial services that are compatible with users’ workplaces. Users may benefit from this research by concentrating on blockchain acceptance to improve digital banking services.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-05-26
      DOI: 10.1108/JFRA-12-2021-0466
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Does intellectual capital efficiency improve the corporate social
           responsibility of Egyptian firms'

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      Authors: Ahmed Elsayed Awad Bakry
      Abstract: Corporate social responsibility (CSR) has been one of the main subjects for companies’ sustainability in contemporary years. Engaging in CSR practices has been recognized to be beneficial for firms since it might create value for firm in the market. The process of creating value in recent era has been controlled by firms’ hidden resources and simultaneously the concept of value added intellectual capital (VAIC). This paper aims to determine whether intellectual capital (IC) and each of its three constituents (human capital efficiency [HCE], capital employed efficiency [CEE] and structural capital efficiency [SCE]) can generate improvements in CSR in an emerging market. Using the Egyptian Corporate Responsibility (S&P/EGX ESG) index and extracting accounting data from the annual reports of companies listed on this index, an empirical analysis that considers VAIC and its elements was accomplished on a sample of 267 firm-year observations for a nine-year period beginning in 2010. The empirical results of the multivariate regression indicated that Egyptian companies active in using IC have more tendency to engage in CSR practices. In addition, it is shown that HCE positively influences CSR practices, while SCE has a negative association with such social activities, and CEE has no significant relationship with CSR activities. The results of the research have some implications through offering an enhanced understanding of using IC and CSR practices that might be in favor of several investors, regulatory bodies and scholars concerned with firms’ social activities. Besides, it provides empirical evidence that the efficient use of IC provides advantages not only for the stockholders but also for the community. To the best of the authors’ knowledge, this study is one of the first studies to investigate Egyptian firms for IC and CSR topics. In addition, this study provides empirical evidence on this relationship from the Egyptian environment that is different from other cultural and institutional environments in which previous studies were conducted.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-05-23
      DOI: 10.1108/JFRA-09-2020-0269
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Does earnings quality impact firms’ performance' The case of
           Portuguese SMEs from the mold sector

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      Authors: Ana Filipa Duarte , Inês Lisboa , Pedro Carreira
      Abstract: This study aims to study the impact of earnings quality on firms’ financial performance. An unbalanced panel data of 237 small- and medium-sized Portuguese companies from the mold industry, using 2010–2018 yearly data was analyzed. While most studies focus only on earnings management when assessing earnings quality, in this study six proxies for earnings quality are used, namely, accruals quality (a proxy for earnings management), earnings persistence, earnings predictability, earnings smoothness, earnings timeliness and earnings conservatism. Moreover, two proxies of financial performance are considered, the return on assets and the economic value added. An econometric model was estimated using either a fixed-effects or a random-effects specification to account for the individual firm-specific effects and ensure heteroscedasticity corrected estimates. The results show that managers must be concerned with the quality of reported earnings, as it can affect positively firms’ financial performance, especially regarding accruals quality. Persistence, predictability, smoothness, timeliness and conservatism are shown not to exert significant influence on financial performance in the sample. This work contributes not only as a literature review on these thematic but also to firms’ managers and stakeholders, who have information that helps them select strategies that guarantee earnings quality and improve firms’ financial performance. This study proposed an econometric model that studies the relationship between earnings quality (using several proxies for it) and financial performance that can be applied to all companies.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-05-23
      DOI: 10.1108/JFRA-12-2021-0444
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Earnings management and tone management: evidence from FTSE 350 companies

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      Authors: Salah Kayed , Rasmi Meqbel
      Abstract: This paper aims to examine whether firms meeting or just beating an earnings benchmark engage in tone management in earnings conference calls to complement earnings management in the UK context. It also investigates whether the audience tone in beating or just meeting earnings fails to predict future performance. This study was performed using a sample of non-financial UK firms listed in the FTSE 350 index over the period 2010–2015. The findings show that firms that exercise more earnings management to meet or just beat earnings are positively associated with the abnormal tone during earnings conference calls. The outcomes also reveal that the audience’s tone of firms meeting or just beating an earnings benchmark fails to predict future performance. This confirms the effectiveness of the tone management in managing the perception of audience. This study highlights the need for increased accountability by firms on earnings conference call. It also supports academics and practitioners in understanding the management discretion used in reporting and communication during the earnings conference call. Overall, the results of this study are beneficial for regulators, policymakers and professionals, regarding confirming the need for the earnings conference calls to be regulated. To the best of the authors’ knowledge, this is the first study that examines the association between earnings management and tone management in the UK earnings conference calls. It adds to the existing literature by examining the self-serving behaviour of managerial tone during earnings conference calls within a sitting in which meeting or just beating a benchmark is used. Unlike several studies that explain the behaviour of tone as a signalling strategy, this study reveals that the tendency of impression management behaviour can explain the tone management.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-05-19
      DOI: 10.1108/JFRA-10-2021-0373
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The relationship between compliance level and value creation: evidence
           from integrated reports in Turkey

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      Authors: B. Esra Aslanertik , Bengü Yardımcı
      Abstract: This study aims to investigate the level of reporting compliance in terms of content elements, measure to what extent each content element of the integrated reporting (IR) framework is linked to value creation and demonstrate the relationship between the level of compliance and value creation linkages. The sample for this study consists of 12 companies, 11 of which are public and 1 is non-public. The data is obtained from the Integrated Reporting Turkey Network founded in 2015 in Turkey. This study applies a holistic approach integrating two different content analysis methods. First, a multi-weighted scoring system is constructed by using the IR content elements and the previously developed indexes in the literature. Second, in-depth, sentence-by-sentence content analysis is used to determine the relation between the content elements and value creation. The results of the multi-weighted scoring system indicate a high level of compliance in the banking sector. On the other hand, the scores of the content analysis demonstrate higher scores in the disclosures of “basis of preparation and presentation”, “organizational overview and external environment”, “strategy and resource allocation”, “performance” and “business model” elements, while lower scores in the elements of “risk and opportunities” and “outlook.” The lowest compliance level associated with lower content analysis scores may indicate a low level of value creation potential. Consequently, this two-stage scoring is critical, as it clarifies the relation between compliance level and the explanatory power of each content element from a value creation perspective. This study aims to support the policymakers and regulators in highlighting the importance of measuring and reporting value. Furthermore, it intends to encourage companies to produce reports that increase the value relevance of accounting information to contribute to the development of capital markets. The current literature includes research that mainly concentrates only on the quality or extent of IR disclosure practices. This study offers a combined analysis that helps to determine at what level a company has accomplished the expectations of the International Integrated Reporting Council in terms of both the content and the value creation potential.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-05-17
      DOI: 10.1108/JFRA-01-2022-0016
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The combined impact of IFRS mandatory adoption and institutional quality
           on the IPO companies’ underpricing

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      Authors: Fouad Jamaani , Manal Alidarous , Esraa Alharasis
      Abstract: This study aims to examine the impact of the International Financial Reporting Standards (IFRS) mandate and differences in national institutional quality on the underpricing of Initial Public Offering (IPO) companies. Multiple Difference-in-Differences (DiD) ordinary least squares estimations were conducted for 100 corporations listed on the Saudi Arabian stock market using country-level institutional quality data from 2005 to 2017. IFRS requirements and improvements in institutional quality have a combined effect on minimizing IPO underpricing. The analysis of the combined impact of IFRS requirements and differences in transparency revealed that IPO vendors leave $5 on average for IPO investors to cash out post the IFRS mandate, compared to $29 previously. Thus, IFRS serves as a quality certification instrument that alleviates IPO investors’ ex ante uncertainties, even in nations with undeveloped institutions. The findings may be beneficial to researchers and policymakers. The results suggest that institutional quality enhancements and obligatory IFRS implementation highlight IFRS’s synergistic influence on the IPO market. While European harmonization efforts drove the adoption of IFRS in Europe in 2005, Saudi Arabia’s adoption of IFRS is not being driven by such initiatives (Daske et al., 2008; Persakis and Iatridis 2017). In reality, when IFRS was officially imposed in Saudi Arabia in 2008, it, like many other emerging market nations, made considerable reforms to its formal institutions. However, research on the combined impact of IFRS and disparities in institutional quality in emerging IPO markets remains sparse. Emerging markets represent more than half of economies that use IFRS. Therefore, to the best of the authors’ knowledge, this study is the first to conduct an empirical investigation to identify this combined effect in emerging countries using the DiD analytical technique. Equity market legislators remain concerned regarding IPO underpricing, as it has a detrimental influence on economic growth (Bova and Pereira, 2012; Jamaani and Ahmed, 2021; Mehmood et al., 2021). Depending on the degree of information asymmetry in national stock markets, underpricing costs increase the cost of going public for entrepreneurs. Consequently, prospective private firms are discouraged from accessing equity financing through the stock markets. This is likely to impede private sector development plans, causing a negative effect on economic growth. Emerging countries represent over 50% of the IFRS mandating economies. However, there is insufficient research on the combined effect of IFRS requirements and improvements in institutional quality in developing IPO markets. To the best of the authors’ knowledge, this study is the first empirical attempt to identify this combined effect in one of the largest developing countries. The results may aid academics and policymakers in better understanding the interaction between these two variables.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-05-17
      DOI: 10.1108/JFRA-07-2021-0199
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Effect of corporate governance on corporate social responsibility in
           Vietnam: state-ownership as the moderating role

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      Authors: Ho Xuan Thuy , Nguyen Vinh Khuong , Le Huu Tuan Anh , Pham Nhat Quyen
      Abstract: This study aims to investigate the association between corporate governance (CG) and the corporate social responsibility (CSR) information disclosure as well as the moderating role of state-ownership between CG and CSR disclosure. To examine the relationship between CG and CSR disclosure, this study used the feasible general least squares and generalized method of moments method on a sample of 165 non-financial quoted companies over the 2015–2018 period, which account for about three-fourths of the Vietnamese stock exchange. The findings suggest that enterprises with smaller board size consisting mainly of independent directors have a higher CSR disclosure level. Moreover, when the chief executive officer is concurrently the chairman of the board, the level of CSR disclosure falls. Additionally, the moderating role of state ownership enhances CSR disclosure. The empirical results of this study form a solid foundation for policymakers and other stakeholders’ decisions in investing or establishing policies. This study provides empirical evidence on the relationship between CG and CSR disclosure in Vietnam – a developing country with no legal requirement on CSR disclosure. Moreover, this study emphasizes the moderating role of state ownership between CG and CSR disclosure, which clarifies the role of state ownership in establishing CG mechanisms.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-05-17
      DOI: 10.1108/JFRA-10-2021-0367
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The Machiavellianism of Tunisian accountants and whistleblowing of
           fraudulent acts

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      Authors: Saida Dammak , Sonia Mbarek , Manel Jmal
      Abstract: This study aims to examine the influence of accounting professionals’ Machiavellian behavior and ethical judgments on their intention to report fraudulent acts and also to examine the moderating effect of Machiavellianism on the relationship between professionals’ ethical judgments and whistleblowing intention, as well as the mediating effect of personal responsibility, personal costs/benefits and the seriousness of the questionable act on this relationship. The data were collected via a survey sent to 201 Tunisian accounting professionals and analyzed using the structural equation method. The results indicate that ethical judgments support the whistleblowing intentions among Tunisian accountants. However, this relationship is affected by Machiavellian behavior that minimizes whistleblowing. Furthermore, the results show that Machiavellianism is negatively associated with whistleblowing intention and has an indirect effect on whistleblowing through perceived personal benefit and the seriousness of the questionable act. Examining the ethical ideologies that may affect whistleblowing, including Machiavellianism and ethical judgment, in the Tunisian context contributes to the literature on the accounting profession in the Middle East and North Africa. The results of this study could raise awareness among policymakers and regulators in developing countries, particularly in Tunisia, to value whistleblowing as a mechanism for detecting and controlling organizational misconduct and enact regulations that encourage accounting professionals to report fraudulent acts while protecting them.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-05-03
      DOI: 10.1108/JFRA-09-2021-0296
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The impact of Tier 1 sukuk (Islamic bonds) on the profitability of UAE
           Islamic banks

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      Authors: Alaa Salhani , Sulaiman Mouselli
      Abstract: The choice between different financing sources is governed by a number of finance theories, particularly, trade-off theory and pecking order theory. However, the special characteristics of Islamic finance, which forces the exclusion of conventional bonds, leave Islamic banks with limited number of alternatives. Tier 1 sukuk are distinguished type of sukuk that combines the features of conventional bonds and stocks. This paper aims to answer the following question: Does the issuance of Tier 1 sukuk positively affect Islamic banks’ profitability or is their impact concentrated on enhancing Islamic banks’ capital adequacy ratios' The data set used in this study consists of all United Arab Emirates (UAE) Islamic banks that issued Tier 1 sukuk over the period 2010–2020. Pooled and fixed effects panel regressions of Tier 1 sukuk and other control variables on three proxies of Islamic banks’ profitability were run. The selection of fixed-effect model is based on Hausman test, redundant fixed effects and likelihood ratio test. This study reveals novel findings. Tier 1 sukuk increases both earnings per share (EPS) and capital adequacy ratios. That is, this study finds that there is a positive significant impact of Tier 1 sukuk on EPS, which indicates that issuing more Tier 1 sukuk will generate more return to shareholders in terms of higher EPS because of the lower cost of Tier 1 sukuk compared to equity. However, this study finds that there is an insignificant impact of Tier on sukuk on both return on assets and return on equity. Hence, it is concluded that Tier 1 sukuk does not increase the risk appetite of UAE Islamic banks. Tier 1 sukuk is a niche instrument that has been recently used by Islamic banks. Hence, there are a limited number of Islamic banks that have issued this type of sukuk and consequently limited number of observations. Therefore, with the increased use of this instrument, a larger set of data will be available for examination. In addition, future research could examine the relationship between issuing Tier 1 sukuk and profitability in other countries where such sukuk have loss absorption feature. The impact of other types of sukuk, such as liability sukuk, on Islamic banks’ profitability could also be an interesting field of study. This study recommends Islamic banks to issue more Tier 1 sukuk to enhance their profitability indicators while meeting Basel III accord. This study also recommends investors to purchase the stocks of Islamic banks that issue Tier 1 sukuk because they are able to offer them higher EPS. The authors advise the UAE regulators to allow Islamic banks to issue Tier 1 sukuk with loss absorption feature to enable Islamic banks engage in more risky activities that usually provide larger profits. This study also suggests that the Islamic Financial Services Board (IFSB) reclassifies Tier 1 sukuk, with loss absorption feature, within the highest quality of capital, common equity Tier 1, to encourage Islamic banks to issue this type of sukuk, especially Basel III accord and IFSB 15 require higher ratios of common equity Tier 1 to risk-weighted assets. This research contributes to the existing literature in two ways. First, it adds to the existing literature on the impact of sukuk on Islamic banks profitability. That is, contrary to prior studies that merely investigate the impact of issuing ordinary sukuk on profitability, this study explores a distinguished type of sukuk, that is Tier 1 sukuk, that has been surprisingly ignored so far. Second, this study shows that it is not only capital adequacy ratios that have improved as a result of issuing Tier 1 sukuk but also Tier 1 sukuk reduce the cost of capital of UAE Islamic banks which has been reflected in a higher profitability proxied by EPS. Hence, these sukuk serve a dual function for Islamic banks by improving both capital adequacy and profitability ratios.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-04-28
      DOI: 10.1108/JFRA-12-2021-0461
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Nonfinancial value creation of integrated reporting

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      Authors: Cintia de Melo de Albuquerque Ribeiro , Flavio Ezequiel , Luis Perez Zotes , Julio Vieira Neto
      Abstract: This paper aims to explore the nonfinancial drivers of value creation that influence an investment decision and present a set of drivers that contribute with a useful integrated reporting to its providers of financial capital using evidence from Brazil. This paper is based on a systematic literature review in the Scopus, Web of Science and Google Scholar databases in the period from 2005 to 2020. Interpretive content analysis is used in 42 documents identified to explore nonfinancial drivers to demand by providers of financial capital, which are classified according to the capitals nonfinancial suggested by the integrated report (IR). Then, the results are evaluated by Brazilian professional investors in a focus group. The members of the focus group do not consider the IR relevant to investment decision and neither the information about natural capital nor social capital. They highlighted two nonfinancial drivers of value not identified in the previous literature. The focus group is limited by subjects’ availability and by the participants’ number. But its results represent initial discussions on the subject in the Brazilian context. The results of this study have value, principally, to investors, target audience of IR, because it aligns your demands with the IRs content, improving its usefulness. To the best of the authors’ knowledge, this manuscript is the first study to investigate the perception of Brazilian professional investors about the importance of the IR in investment decision-making and to identify content relevant to the financial capital provider’s investment decision, which can improve the usefulness of IR.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-04-20
      DOI: 10.1108/JFRA-10-2021-0332
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Impact of corporate governance on corporate social responsibility
           disclosure of the UAE listed banks

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      Authors: Fatima Al Maeeni , Nejla Ould Daoud Ellili , Haitham Nobanee
      Abstract: This study aims to investigate the extent and trend of corporate social responsibility (CSR) disclosure by UAE listed banks and the impact of corporate governance mechanisms on this disclosure. Content analysis of banks’ annual reports from 2009 to 2019 was applied to investigate the CSR disclosure level by constructing a disclosure index. Panel data regressions were applied to analyze the impact of corporate governance mechanisms on CSR disclosure. UAE banks show an improving trend in the CSR disclosures. In addition, the board of directors and ownership structure are significantly and positively associated with the CSR disclosures. The results vary across the banking systems. This study considers the extent of the CSR disclosure in UAE banks’ annual reports, and future research should consider more industries and communication channels. This study sheds light on the extent of the CSR disclosure of UAE listed banks and assists UAE policymakers in implementing appropriate corporate governance mechanisms. The findings provide banks with a better understanding of the benefits of strengthening corporate governance to improve their CSR disclosure. This study contributes to the literature by constructing a more comprehensive disclosure index and examining the impact of corporate governance mechanisms on CSR disclosure by considering both the conventional and Islamic banking systems.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-04-18
      DOI: 10.1108/JFRA-11-2021-0424
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Does the CEO’s financial and accounting expertise affect the financial
           reporting quality' Evidence from an emerging economy

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      Authors: Diem Nhat Phuong Ngo , Cong Van Nguyen
      Abstract: This study aims to analyse the role of the financial and accounting expertise of the chief executive officer (CEO) on financial reporting quality (FRQ) in an emerging economy. This study is based on data collected from a large sample of all non-financial companies listed on Vietnamese stock exchanges during the period 2016–2020 with 2,435 observations. FEM-ROBUST standard errors regression model is used to examine the relationship between the financial, accounting expertise of CEOs and FRQ through earnings management by discretionary accruals. The results show that CEOs with financial and accounting expertise have more influence and intervention on earnings management and thus adversely affect FRQ. This behaviour is explained by the fact that CEOs not only have a firm grasp of financial and accounting policies but also know the tricks to interfere with earnings management. Moreover, in the context of emerging economies, CEOs’ awareness and management level are still limited and legal sanctions are not yet strict, so when they have power in their hands, CEOs immediately find ways to build a reputation to enhance the power and earnings for the CEOs themselves. The limitation of this study is first of all that the research data are not complete and rich because the companies are prohibited from disclosing information and the cooperation relationship is not close. Next is the new research in only one emerging market – Vietnam – so the generalizability is not high. To the best of the authors’ knowledge, this is the first study to examine the impact of CEOs’ accounting and finance expertise on FRQ in an emerging economy, contributing to the existing literature regarding the scientific debates about CEOs, CEO characteristics, earnings management and FRQ.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-04-13
      DOI: 10.1108/JFRA-09-2021-0301
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Challenges and prospects in reporting practices in Malaysia

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      Authors: Muhammad Iqmal Hisham Kamaruddin , Mustafa Mohd Hanefah , Rosnia Masruki
      Abstract: This study aims to explain the justification behind the current weak waqf reporting practices in waqf institutions in Malaysia and also investigates the factors affecting the good waqf reporting practices. A series of interviews with four waqf officers who are involved with waqf reporting process from four different waqf institutions in Malaysia were conducted. The findings show a number of reasons for the current weak waqf reporting practices including the absence of standardised waqf reporting standards, no reporting or disclosure awareness by the waqf management, limited reporting channels from the state authorities to the national authorities, diversification in the governance structure and reluctance of waqf administration to disclose waqf reporting. The findings also identified several factors contributing to good waqf reporting practices. This includes leadership, good cultural setting within the institution, political will as a push factor, limited qualified personnel as well as sustainability issues and finally, the visibility of the waqf report itself. The study findings and recommendations are useful for the State Islamic Religious Councils and waqf institutions in Malaysia to enhance the waqf reporting practices in Malaysia. This study is among the few studies that identify the reasons and factors affecting the good waqf reporting practices in Malaysia.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-04-12
      DOI: 10.1108/JFRA-01-2022-0018
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Financial statement fraud in Indonesia: a longitudinal study of financial
           misstatement in the pre- and post-establishment of financial services
           authority

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      Authors: Jaswadi Jaswadi , Hari Purnomo , Sumiadji Sumiadji
      Abstract: This study aims to investigate cases of fraudulent financial statements that have occurred in Indonesia and explore the similarities of cases that existed in the period before and after the establishment of the Financial Services Authority. This paper provides a descriptive examination of financial misstatements issued by different regimes by listed companies of the capital market and financial institution supervisory agency and the introduction of new financial service authority; among 93 listed companies that were subject to an official investigation arising from the publication of financial misstatements, these assessments were facilitated by mean of content analysis of annual reports following the announcement of an investigation. The findings indicate that each regime has a specific pattern of financial statement fraud. It is found that senior management is responsible for most fraud, and recording a fictitious sale is the most common method of falsifying financial statements. Under the new regime, the publication of cases is limited since the introduction of risk-based supervision. Financial Services Authority is likely to fine and prosecute the director of a company as a perpetrator rather than a corporation as a legal entity. This study contributes to the literature on the incidence of financial statement fraud in public companies and provides a detailed descriptive comparison of cases scrutinized by securities exchange commission in an emerging country.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-04-11
      DOI: 10.1108/JFRA-10-2021-0336
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Intangible investment and non-financial performance of Egyptian firms: the
           moderating role of the COVID-19 pandemic

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      Authors: Emad Sayed , Karim Mansour , Khaled Hussainey
      Abstract: This study aims to examine the impact of intangible investment on non-financial performance. This study also examines the moderating effect of the COVID-19 pandemic on this relationship. This study extracted data from annual reports for a sample of Egyptian firms from 2012 to 2020. This study used the generalized method of moment for testing research. This study finds that intangible investment positively affects non-financial performance and the COVID-19 pandemic has weakened this positive effect. A small sample size is one of the limitations of this study. Furthermore, because of the lack of data in Egypt, the analysis does not include other measures of intangible investment. Finally, the sectoral analysis does not include all sectors because of the lack of observations in some sectors. This study offers practical and social implications. It would help policymakers, regulators and shareholders to realize the importance of the intangible investment and also shed light on the consequences of the COVID-19 pandemic. It also offers managerial implications. It motivates managers to invest more in intangible investment as an important resource to increase customer satisfaction and loyalty, enhance the internal operating performance and improve learning and growth, which result in creating sustainable competitive advantage. This study provides new empirical evidence on the impact of intangible investment on different dimensions of non-financial performance. To the best of the authors’ knowledge, this paper offers the first empirical evidence on the moderating role of the COVID-19 pandemic in the relationship between intangible investment and non-financial performance.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-04-11
      DOI: 10.1108/JFRA-10-2021-0362
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The effect of IFRS 8 on segments disclosure practices in South East Asia

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      Authors: Khurram Ashfaq , Shafique Ur Rehman , Nhat Tan Nguyen , Adil Riaz
      Abstract: This paper analyzes and compares segments disclosure practices of listed companies of Pakistan and Bangladesh under International Financial Reporting Standard (IFRS) 8 with companies from India under Accounting Standard 17 over three-year period from 2013 to 2015. Furthermore, the purpose of this paper was to investigate that how the selection of chief operating decision-maker (CODM) by management, industry type, governance and firm characteristics affects segments disclosure practices in South East Asia. Finally, how the relationship among segment disclosure, firm characteristics and corporate governance is moderated through the big 4 audit firm. To achieve these objectives, data were collected from annual reports of the top 100 companies of each country and selected based on market capitalization for three years period 2013–2015. Results state that majority of companies in South East Asia are using business class for defining operating/primary segments. Regarding reporting of operating/primary segments and geographic/secondary segments along with geographic fineness score, Indian companies are continuously on the lower side as compared to companies from Pakistan and Bangladesh. Furthermore, it was found that industry type and selection of CODM have a highly significant effect on segments disclosure practices. Finally, results of regression analysis found that the application of IFRS 8 in Pakistan and Bangladesh has a significant positive effect on disclosure of operating/primary as well as geographic/secondary segments as compared to India. Further, the role of corporate governance mechanism in influencing segments disclosure was found as least in South East Asia. Further appointment of big 4 audit firm as external auditor has only significant positive effect on disclosure of segments items. Finally, based on additional analysis, it was found that big 4 auditor moderates the relationship only in the case of reporting of operating/primary segments. Based on these results, the performance of Indian companies regarding disclosure of operating/primary segments, geographic/secondary segments along geographic fineness score is quite low despite the fastest growing economy in the world. This raises concerns about the quality of segment reporting in India, the world’s fastest expanding economy. These results imply that there is a need of an effective role by the external auditor to improve the quality of segment reporting in developing countries, which is principle based.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-04-07
      DOI: 10.1108/JFRA-02-2021-0058
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Blockchain adoption in accounting by an extended UTAUT model: empirical
           evidence from an emerging economy

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      Authors: Malik Muneer Abu Afifa , Hien Vo Van , Trang Le Hoang Van
      Abstract: The purpose of this study is to use an extended Unified Theory of Acceptance and Use of Technology (UTAUT) model to investigate the intention to use blockchain from the accountant's point of view. The proposed model is expected to provide the necessary incentives for accountants to adopt blockchain. The authors build external constructs based on discussions of blockchain properties for accounting such as accounting information quality, job relevance and trust. In addition, the study also considers computer self-efficacy and compatibility as factors related to practitioners’ blockchain acceptance. By using the developed online-questionnaire, the data is collected from the responses of 317 accountants working in listed enterprises in Vietnam. The main analyzes are performed by Smart partial least squares structural equation modeling technique to present both direct and indirect effects on the intention to use blockchain. Experimental results provide many interesting and valuable things. First, performance and effort expectancy have a positive influence on intention to use blockchain, while social influence has a lower influence. Second, trust has a direct and positive effect on effort and performance expectancy, as well as intention to use blockchain. Quite surprisingly, accounting information quality has a positive effect on performance expectancy, while job relevance has a negative effect. Fourth, computer self-efficacy and compatibility have a positive effect on effort expectancy. It is more interesting that the intention to use blockchain has nothing to do with compatibility. The results of this study also show that performance and effort expectancy play a mediating role in the indirect effects of trust, computer self-efficacy and compatibility on intention to use blockchain. The study shows that accountants in Vietnam have a high intention to use blockchain. This implies that the Vietnamese Government and the professional association should design training programs or open training sessions on blockchain. Accountants can clearly understand the importance of blockchain in their work as well as the positive effect of blockchain on performance. They are consulted on how to use blockchain. They also perceive that using blockchain is not too difficult, and the acceptance of this technology will be higher. Additionally, universities should put triple-entry accounting into their teaching, so accounting students can improve their skills and knowledge relevant to blockchain to meet their career needs in the future. The study proposes an extended UTAUT model with external constructs built on blockchain's effects on accounting. The model makes more sense in promoting the use of blockchain in accounting.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-03-31
      DOI: 10.1108/JFRA-12-2021-0434
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The relationship between corporate sustainability performance and earnings
           management: evidence from emerging East Asian economies

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      Authors: Linh-TX Nguyen
      Abstract: This study aims to investigate the relationship between corporate sustainability performance and earnings management in emerging East Asian economies. The authors base on the triple bottom line approach to measure corporate sustainability performance. In terms of earnings management, two models are applied to detect real activities manipulation and discretionary accruals. The authors use panel data analysis of 410 listed non-financial firms in emerging East Asian economies from 2016 to 2020 that are collected from the Thomson Reuters Eikon database. The authors find a negative influence of corporate sustainability performance on real activities manipulation and discretionary accruals. The findings highlight the long-term perspective of sustainable development strategies in relation to earnings management. The authors conclude that sustainable firms in emerging East Asia are less likely to engage in earnings management. The study would be of interest to investors who need more detailed assessments of financial reporting quality to facilitate their investment decision-making and to policymakers who need more understanding of business practices and reporting behaviors of East Asian firms. The study has shed light on the role of corporate sustainability performance in constraining earnings management and the role of corporate ethics in providing transparent and reliable financial reporting in emerging East Asian economies.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-03-29
      DOI: 10.1108/JFRA-09-2021-0302
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The development of Islamic accounting education in the UAE and its
           challenges: an institutional perspective

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      Authors: Rihab Grassa , Hichem Khlif , Imen Khelil
      Abstract: This paper aims to examine the development of Islamic accounting education and discuss the main challenges facing this specific type of accounting education in the United Arab Emirates (UAE). The paper uses institutional theory to analyze the development of Islamic accounting education in the UAE. The collection of information in this study is based on secondary data available from published sources and websites. This study identifies three types of institutional pressures. First, coercive pressures that were directed by the government, the UAE's Central Bank and other professional bodies [e.g. Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI)] involved in the Islamic banking industry have contributed to the development of Islamic accounting education in the UAE. Second, mimetic pressures exerted by other countries that have already established Islamic accounting training and programs (e.g. Indonesia, Iran, Kingdom of Saudi Arabia and Pakistan) have incentivized the UAE business schools to implement Islamic accounting training and programs to meet Emirati Islamic banking industry expectations. Third, normative pressures are exerted by Big 4 auditors who have an active position as faculty members, influencing status in AAOIFI and a dominant position in the Islamic banking industry’s audit market. The paper also discusses the main challenges facing Islamic accounting education in this country. This paper contributes to accounting literature in general and accounting education literature in particular in the following two ways. First, this study applies an institutional analysis to Islamic accounting education in the UAE to gain more understanding about the current status of the development of Islamic accounting education in the UAE. Second, by identifying the factors that may constrain the development of Islamic accounting education in the UAE, this study provides recommendations to financial and higher education authorities to undertake proactive actions to position the UAE as a leading center in Islamic accounting education and training.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-03-17
      DOI: 10.1108/JFRA-08-2021-0215
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The effect of XBRL adoption on corporate tax avoidance: empirical evidence
           from an emerging country

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      Authors: Arfah Habib Saragih , Syaiful Ali
      Abstract: This paper aims to study the impact of the adoption of eXtensible Business Reporting Language (XBRL) on corporate tax avoidance. This paper used a quantitative method with panel data regression models using a sample of firms listed on the Indonesia Stock Exchange from 2011 to 2018. The regression results demonstrate that XBRL implementation does not have any impact on corporate tax avoidance. The results indicate that tax avoidance is not reduced following XBRL adoption. This report shows unexpected and unfavourable outcomes of XBRL financial reporting in a developing country. This study employs a sample of firms from one emerging country only. The study proposes several implications for using XBRL in tax reporting, which may help the tax authorities reduce tax avoidance. Regulators need to develop adequate taxonomies with standardized extensions related to tax information in the XBRL format. They include tax tags from financial statements and tax tags from the disclosure section, to gain more comprehensive corporate tax information. This study proposes and tests an explanation for the effect of XBRL adoption on corporate tax avoidance in the context of a developing country.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-03-17
      DOI: 10.1108/JFRA-09-2021-0281
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Does audit firm governance matter to audit quality' Evidence from
           Turkey

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      Authors: Murat Ocak
      Abstract: This paper aims to examine the effect of audit firm governance on audit quality. Audit firm governance is broken down into two categories, namely, board ownership and engagement partner ownership. Audit firms from Borsa Istanbul and their clients who are quoted there as well were used to test the hypotheses. The final sample covers 1,291 observations at the client level between 2013 and 2019. Ordinary least square was conducted to test the hypotheses. Heckman selection model and instrument variable regression with two-stage least square (IVREG with 2SLS) were also used to control the self-selection and endogeneity problems, respectively. To enhance the validity of the main results, alternative audit quality measures were used. The empirical findings show that board ownership and engagement partner ownership have an impact on audit quality. The results indicate that engagement partners with high shares enhance audit quality only in Big4 audit firms. The positive effect of higher board ownership on audit quality is more prominent in non-Big4 firms. The Heckman two-stage procedure and IVREG with 2SLS were conducted, both of which were consistent with the main results. The results regarding alternative audit quality measures are in accordance with the main estimation results. To the best of the author’s knowledge, this is the first study examining the impact of audit firm board ownership on audit quality. In addition, this paper further advances the literature by investigating the effects of ownership at engagement partner levels on audit quality in the context of an emerging market, Turkey.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-03-08
      DOI: 10.1108/JFRA-09-2021-0274
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The impact of corporate governance on forward-looking CSR disclosure

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      Authors: Husam Ananzeh , Hashem Alshurafat , Abdullah Bugshan , Khaled Hussainey
      Abstract: This paper aims to examine the impact of corporate governance mechanisms on forward-looking corporate social responsibility (CSR) disclosure (FCSRD). The authors use the manual content analysis to measure FCSRD for a sample of 94 companies listed on the Amman Stock Exchange from 2010 to 2016. Data on companies' FCSRD are manually collected from annual reports. The authors also use regression analyses to test the research hypotheses. The authors find that board size positively affects FCSRD, while CEO duality and family ownership negatively impact FCSRD. To the best of the authors’ knowledge, this is the first evidence of how governance mechanisms affect FCSR information in corporate annual reports in a developing country.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-03-08
      DOI: 10.1108/JFRA-10-2021-0379
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Determinants of the extent and quality of corporate social responsibility
           disclosure in the industrial and services sectors: the case of Jordan

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      Authors: Hani Alkayed , Bilal Fayiz Omar
      Abstract: This study aims to investigate the determinants of the extent and quality of corporate social responsibility disclosure (CSRD) in Jordan. The study examines a number of factors that influence the extent and quality of CSR disclosure, such as corporate characteristics, corporate governance and ownership structure. A quantitative approach and a content analysis technique is used to measure the extent and quality of CSRD from annual reports. The sample is drawn from the annual reports of 118 Jordanian companies between 2010 and 2015. A CSRD index is constructed, which includes the disclosures of the following categories: environmental, human resources, product and consumers, and community involvement. This is the first study that presents a new measurement for CSR disclosure quality by using images and charts in a seven-point scale measurement. The result reveals that the extent of CSRD is higher than quality in Jordan. Regarding the determinants of CSR disclosures, the following factors were found to have a significant relationship with both the extent and quality of CSRD: board size, non-executive directors, age of firm, foreign members on the board, number of boards meetings, the presence of audit committees, big 4, government ownership, size of firm and industry type. Non-executive directors was found to have a significant correlation with the extent of CSRD. The current study has some limitations; first, the study findings are limited to the Jordanian environment. Second, the study adopted a purely quantitative method, and future research could include interviews and questionnaires to gather data from financial managers and chief executive officers (CEOs). Third, the potential influences on the level and quality of CSR are not limited to the variables tested in this study. Future research can be done on new determinants, such as CEO interlocking and profitability. Finally, the sample included companies from two main sectors – the services and industrial sectors; thus, this limited the results to these two main sectors. Practitioners, as firms, should develop new strategies and ensure that CSR is included in their reports. Thus, companies can achieve legitimacy for their products and activities. Policymakers must consider introducing new laws that mandate CSRDs since it has many advantages for companies and society. In addition, this research suggests amending the law to require companies to have 33% of their directors be non-executives since this will remove the negative effect on CSR disclosure. Investors must pay attention to the social activities of the companies they invest in, as CSR could have a positive effect on their market value. The study has indicated that Jordanian companies became increasingly more involved in CSR activities, as this growth in CSRD is linked with global increases in CSR. Moreover, the study has revealed that the highest category of CSR disclosures is related to products or services and employee information. On the other hand, the lowest category of CSR disclosures is related to community and other disclosures (extent) and environmental disclosures (quality). Furthermore, the results show that the services sector was found to have more disclosures regarding employees and community, whereas the industrial sector was more concerned about environmental and product information. To the best of the authors’ knowledge, this is the first study that presents a new measurement for CSR disclosure quality by using images and charts in a seven-point scale measurement. This new seven-point scale will be adopted to distinguish between poor and excellent disclosures. In addition, to the best of the authors’ knowledge, this is the first study in Jordan which examines the determinants of the extent and the quality of CSR for three categories, namely, corporate characteristics, corporate governance and ownership structure.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-03-02
      DOI: 10.1108/JFRA-05-2021-0133
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Impact of analyst report on the behavior of retail investors: a study
           during COVID-19 in India

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      Authors: Bijitaswa Chakraborty , Manali Chatterjee , Titas Bhattacharjee
      Abstract: One of the adverse effects of COVID-19 is on poor economic and financial performance. Such economic underperformance, less demand from the consumer side and supply chain disruption is leading to stock market volatility. In such a backdrop, this paper aims to find the impact of COVID-19 on the Indian stock market by analyzing the analyst’s report. The sample includes a cross-sectional data set on selected Indian firms that are indexed in BSE 100. The authors calculate the score of disclosure tone by using a textual analysis tool based on the analyst report of selected BSE 100 firms' approach in tackling COVID-19’s impact. The relationship between the tone of the analyst report and stock market performance is examined. This empirical model also survives robustness analysis to establish the consistency of the findings. This study uses both frequentist statistics and Bayesian statistics approach. The empirical result shows that tone has negative and significant influence on stock market performance. This study indicates that either analysts are not providing value-relevant and incremental information, which can reduce the stock market volatility during this pandemic situation or investors are not able to recognize the optimism of the information. This study provides an interesting insight regarding retail investors' stock purchasing behavior during the crisis period. Hence, this study also lays out crucial managerial implications that can be followed by preparers while preparing corporate disclosure. In the concern on pandemic and its impact on the stock market, this study sheds light on investors' preferences during the crisis period. This study uniquely focuses on analyst reports and investors' preference which has not been studied widely. To the best of the authors’ knowledge, this is the first study in the Indian context, which aims to understand retail investors’ investment preferences during a pandemic.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-03-01
      DOI: 10.1108/JFRA-10-2021-0310
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The impact of real earnings management on corporate credit risk

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      Authors: Ahmed Imran Hunjra , Fazal Muhammad , Saber Sebai
      Abstract: Earnings management (EM) plays a vital role in risk management. This paper aims to investigate the impact of real earning management (REM) on credit risk. This paper measures the credit risk by the expected default frequency of Kealhofer, McQuown and Vasicek model. This paper uses data from 2011 to 2020 of Pakistani manufacturing listed firms. This paper applies the fixed effect to analyze the results and generalized methods of moments to handle the heterogeneity issue. This paper finds that the impact of REM on corporate credit risk is positive and significant and that of sales manipulation is negative and significant. This paper also reports similar outcomes of the robustness test using dynamic panel regression. The findings of this study may help managers to modify the EM strategy to minimize corporate credit risk. Furthermore, the findings of this study are important for investors to enhance their understanding of firms’ accounting information, REM activities and cash flow patterns. It further suggests the manager should consider credit risk as an important factor while practicing REM.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-02-23
      DOI: 10.1108/JFRA-12-2021-0441
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The impact of intellectual capital formation and knowledge economy on
           banking performance: a case study of GCC’s conventional and Islamic
           banks

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      Authors: Erhan Akkas , Mehmet Asutay
      Abstract: This paper aims to evaluate the impact of intellectual capital in terms of human capital, structural capital and capital employed on the financial performance of Islamic and conventional banks in the Gulf Cooperation Council (GCC) countries. Along with the measurement discussion, the empirical analysis examines the relationship between intellectual capital measured through value-added intellectual coefficient (VAIC) and the financial performance of banks in the GCC states by conducting a panel of six GCC countries, including 24 Islamic banks and 32 conventional banks covering 2012–2020 period. This paper shows that while Islamic banks have similar VAIC, human capital efficiency and capital employed efficiency results to conventional banks, Islamic banks have lagged behind conventional banks regarding the impact of structural capital on financial performance. It is argued that this is in contradiction with Islamic ontology and epistemology, which essentialises intellectual capital formation. Islamic banks should promote research and development for their intellectual capital at the product, operational and institutional levels, as Islamic banking is considered an alternative financing method, incorporating a new form of knowledge-based institutions inspired by capitalist institutions. This study conducts a comparative examination of the intellectual capital performance and its impact on financial performance by using interaction variables to capture any differences between Islamic banks and conventional banks in the GCC countries. The paper also considers the knowledge economy impact as a novelty, which is prominent for the GCC countries. In addition, Islamic ontology’s essentialisation of knowledge and its articulation in the form of intellectual capital within modern understanding is widely discussed, as part of originality. Finally, the findings are located within Islamic ontology and epistemology.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-02-10
      DOI: 10.1108/JFRA-08-2021-0251
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Key audit matters and big4 auditors in Oman: a quantile approach analysis

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      Authors: Saeed Rabea Baatwah
      Abstract: In response to the users of financial statements’ need for better communication value from audit reports, auditors are required to expand the format and content of their reports. This paper aims to investigate the heterogeneity of key audit matters (KAM) for big4 audit firms. Using a pool of 273 year-observations from the Omani capital market for the period 2016–2019, a quantile regression approach is adopted to achieve this purpose because it can provide a broader picture of this heterogeneity. The results indicate that all types of big4 audit firms are associated with lower numbers of KAM. However, each big4 audit firm reports these KAM differently. Also, the results indicate heterogeneity in the number of KAM among the partners of each firm. Specifically, partners in some big4 audit firms show a significant association with fewer KAM while others are insignificant. Some partners of Ernst and Young show a positive association with a higher number of KAM. Overall, the results confirm the heterogeneity among auditors in styling their KAM disclosure. There are crucial implications for various policymakers. This paper is the first to analyse KAM aspects at the partner level and use quantile regression to detect the effect of audit firms on KAM.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-02-08
      DOI: 10.1108/JFRA-09-2021-0289
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Audit committee effectiveness, internal audit function, firm-specific
           attributes and internet financial reporting: a managerial perception-based
           evidence

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      Authors: Juma Bananuka , Stephen Korutaro Nkundabanyanga
      Abstract: This study aims to examine the contribution of audit committee effectiveness (ACE), internal audit function (IAF) and firm-specific attributes to internet financial reporting (IFR). It also seeks to understand which ACE and IAF attributes contribute to variances in IFR. Data are collected through a questionnaire survey of 40 financial services firms. The analysis shows that ACE and IAF significantly contribute to positive variances in IFR. It also shows that among the firm-specific attributes, only capital structure significantly contributes to positive variances in IFR. Audit committee meetings and authority contribute significantly to positive variances in IFR unlike audit committee expertise and independence. In terms of the IAF attributes, the risk management role and the regulatory compliance role contribute significantly to positive variances in IFR as compared to the governance processes role and evaluation of the internal control role. This study enhances our understanding of the relationship between ACE, IAF, firm-specific attributes and IFR in an environment where IFR is not mandated and where corporate governance practices are very much in infancy. This is especially so given that for the first time, to the best of the authors’ knowledge, the contribution made by ACE, IAF and firm-specific attributes in IFR using evidence from an African developing country (Uganda) is now documented in a single study.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-02-07
      DOI: 10.1108/JFRA-07-2021-0198
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Does political connection affect corporate financial performance' The
           moderating role of directors’ financial expertise

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      Authors: Anis EL Ammari
      Abstract: This paper aims to examine the effects of political connections (PCs) on corporate financial performance (CFP) in an emerging economy. It also investigates the moderating influence of the directors’ financial expertise (DFE) on the relationship between politically connected firms and their financial performance. The study sample includes 304 firm-year observations from non-financial Tunisian listed firms covered over 2012–2019. Financial data are from various sources: financial statements, annual reports, official bulletins of the Tunisian Stock Exchange (TSE) and the Financial Market Council. PCs and DFE data are manually collected from the TSE and companies’ websites. Multivariate regression analyses are used to test the research hypotheses. The results show that PCs negatively affect CFP and the DFE is a moderator variable that exacerbates this negative relationship. These results could be explained on the one hand by the fact that politicians often lack management, professionalism and know-how. On the other hand, political members on boards focus mainly on their political agendas and prioritize their interests rather than firm performance. Furthermore, board directors are more inclined towards the grabbing-hand approach to create personal linkages with these politicians and take personal benefits rather than protect the interests of minority shareholders and effectively use firm resources. The most important limitation of the study is the small number of non-financial TSE-listed firms. Indeed, the small sample size prevents us from considering industry specificities and working in a homogeneous environment. This study recommends that external investors pay particular attention to politically connected firms as PCs tend to weaken corporate governance. Also, it helps policymakers better assess the need to harmonize and develop corporate governance standards and practices that account for the specific conditions in Tunisia to mitigate the lobbying of political parties and supervise their abuse of power. Furthermore, the negative relationship between PCs and CFP in a poorly regulated and governed country could be used by financial institutions in their credit scoring. The findings suggest that the nexus between politics and business draws attention to corruption post-revolution. The originality and the relevance of this study consist in studying the moderating effect of the DFE on the association between PCs and CFP. To the best of the author’s knowledge, this study pioneers assessing the role of the DFE as a moderating variable. It also supplements prior literature by examining the combined factors, such as PCs and DFE, on CFP in an emerging market.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-01-31
      DOI: 10.1108/JFRA-08-2021-0257
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The relationship between corporate governance and financial reporting
           transparency

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      Authors: Mahdi Salehi , Raed Ammar Ajel , Grzegorz Zimon
      Abstract: The present study aims to examine the relationship between corporate governance factors and financial reporting transparency pre and post of ISIS. A multivariate regression model was used to test the hypotheses for this purpose. The research hypotheses were tested on a sample of 35 companies listed on the Iraqi Stock Exchange from 2012 to 2018 using a multivariate regression model based on panel data technique. The results indicate a negative and significant correlation between the board independence, audit committee independence, management team stability and remuneration of the board of directors and financial reporting transparency. In contrast, there is a positive and significant correlation between the board expertise, audit committee expertise and managerial ownership, with financial reporting transparency. Moreover, ISIS has had a direct and significant impact on the correlation between the board of directors’ independence and remuneration with financial reporting transparency. The present study also tested research models using additional methods (such as feasible generalised least squares, ordinary least squares, random effects and T + 1) to obtain better results. The results of these different methods were entirely in line with the main results of the research. The political and economic instability resulting from the entry of ISIS into Iraq has created severe problems for society’s economic, political, security and performance dimensions. Macroeconomic uncertainty driven by terrorist activities can negatively affect managers’ perceptions of firms’ future performance and result in poor judgments and estimations, significantly impacting business units' financial reporting transparency. Because no study has examined the relationship between corporate governance and financial reporting transparency on the Iraq stock exchange before and after the presence of ISIS, this study examines such a relationship. Although the economic and political situation in Iraq may not be identical to that in other nations, much of the experience in Iraq is anticipated to apply to other countries in the region.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-01-21
      DOI: 10.1108/JFRA-04-2021-0102
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Pushing a balloon: does corporate risk disclosure matter for investment
           efficiency'

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      Authors: Mubashir Ali Khan , Josephine Tan Hwang Yau , Asri Marsidi , Zeeshan Ahmed
      Abstract: This study aims to examine the effect of corporate risk disclosure on investment efficiency. This study also seeks to contribute to existing literature of corporate risk disclosure by investigating voluntary and mandatory risk disclosure and its effect on the investment efficiency. This study used two measures of corporate risk disclosure, level and quantity of corporate risk disclosure. A content analysis approach is adopted for non-financial Malaysian firms over the period 2010–2018. The empirical results show that level of corporate risk disclosure leads toward efficient investment, whereas quantity of corporate risk disclosure causes inefficient investment when firms disclose more voluntary risks. Further, categorizing corporate risk disclosure into mandatory and voluntary risk disclosure, this study finds that voluntary risk disclosure tends to have higher investment inefficiency, while no evidence was found for mandatory risk disclosure. This paper contributes to narrow stream of research investigating corporate risk disclosure through level and quantity contributing to the understanding of the level and quantity of risk disclosure in determining organizational investment efficiency.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-01-21
      DOI: 10.1108/JFRA-08-2021-0253
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Risk management and bank performance: evidence from the MENA region

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      Authors: Etienne Harb , Rim El Khoury , Nadia Mansour , Rima Daou
      Abstract: The credit crunch of 2008 and recent COVID-19 influences underscored the importance of liquidity and credit risk management in businesses and financial institutions. The purpose of this study is to investigate the impact of liquidity risk and credit risk management on accounting and market performances of banks operating in the Middle East and North Africa (MENA) region. This study uses a panel data regression analysis on a sample of 51 listed commercial banks operating in 10 MENA countries during the period 2010–2018. The results show that credit risk management does not affect the accounting performance of banks, while it has a non-linear, convex relationship with market performance. Surprisingly, liquidity risk management is not a significant driver for either performance measure in studied banks. However, when a bank combines credit risk management with liquidity risk management efforts, liquidity risk management actions return significant results on both performances, illustrated by an inverted U-shaped relationship. In addition, this study examines the joint impact of both risks on bank performance. This study reveals that accounting and market performances are differently affected by joint risk management efforts. Their impact depends on the combination of risk management ratios upon which banks choose to focus their efforts. The findings help bankers and regulators further consider non-linearities and offer them new tools for managing the impact of credit and liquidity risk interactions towards achieving more financial stability. These results contribute to traditional banking in offering bankers and regulators new tools for managing the impact of credit and liquidity risk interactions on bank performance.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-01-20
      DOI: 10.1108/JFRA-07-2021-0189
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Weaknesses of Malaysian public procurement: a review of auditor
           general’s reports

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      Authors: Siti Maryam Mohamad Azmi , Suhaiza Ismail
      Abstract: This paper aims to systematically analyze the weaknesses of public procurement in Malaysia as reported in the Auditor General’s Reports from 2011 until 2018. Specifically, the study examines the types of weaknesses, the modes of public procurement involved with the weaknesses, the procurement categories involved with the weaknesses and the key recommendations to mitigate the weaknesses in public procurement. A document analysis was adopted in achieving the objective. The Auditor General’s reports and the reports of activities of federal ministries/departments published by the National Audit Department, Malaysia from the year 2011 until 2018 are the main documents used in this study. The data gathered were analyzed using frequency distribution and displayed with descriptive statistics and relevant graphs. The findings of the study revealed that the top five reported are non-compliance to scope, specifications and terms of contracts; delayed completion/non-completion of project; poor documentation; low quality of products, service and work; and little or no prior planning. It is also found that direct negotiation mode was reported with the highest issues of public procurement, while the procurement mode with the least public procurement weaknesses is direct purchase. Moreover, it was found that work category is the highest with public procurement issues reported compared to supplies and services. The top recommendations given by the Auditor General were to improve internal control, to enhance monitoring, to establish planning in details, to improve assets management and to take appropriate actions toward contractors and procurement officers when needed. This is among a few studies that attempted to systematically examine the main issues regarding the public procurement activities in Malaysia. This study highlighted pertinent aspects of the public procurement activities, which need close attention by the relevant authorities to ensure efficient and effective public procurement.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-01-18
      DOI: 10.1108/JFRA-05-2021-0132
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • R&D expenditure and managerial ownership: evidence from firms of
           high-vs-low R&D intensity

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      Authors: Ahmed Hassanein , Jamal Ali Al-Khasawneh , Hany Elzahar
      Abstract: Corporate managers spend on research and development (R&D) for reasons of growth and survival. However, they may be less willing to invest in R&D because of its long-term horizon, high failure rate and uncertain outcomes. This study aims to explore the extent to which managerial ownership influences R&D expenditure decisions. Apart from the linear regression models, this study uses a semi-parametric quantile regression analysis for a sample of German non-financial firms throughout 2009–2018. This study finds a nonmonotonic sensitivity of R&D spending to the level of managerial ownership over various quantiles of R&D distribution. That is, managerial ownership increases the expenditure on R&D at low R&D intensity firms. However, it decreases the expenditure on R&D at high R&D intensity firms. These results suggest the presence of a maximum level of R&D expenditure, after which owner-managers would be unwilling to spend on R&D. The results confirm the importance of corporate ownership structure for firm R&D and innovation activities. It provides an implication for corporate policymakers to reform the corporate ownership structures to encourage corporate managers and owners to invest in R&D projects. This study offers two distinct contributions study. First, it provides the first German shred of evidence on the nonlinear relationship between managerial ownership and R&D expenditure decisions by distinguishing between high and low R&D intensity firms. Second, unlike prior research, it uses a semi-parametric quantile regression analysis. This method is more efficient than least-squares estimators and produces robust estimators to heteroscedasticity of the residuals.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-01-07
      DOI: 10.1108/JFRA-07-2021-0205
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • The impact of qualified audit opinion on stock returns: an empirical study
           at Amman stock exchange

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      Authors: Rana Bayo Flees , Sulaiman Mouselli
      Abstract: This paper aims to investigate the impact of qualified audit opinions on the returns of stocks listed at Amman Stock Exchange (ASE) after the introduction of the recent amendments by the International Auditing and Assurance Standard Board (IAASB) on audits reporting and conclusions. It further investigates if results differ between first time qualified and sequenced qualifications, and between plain qualified opinion and qualifications with going concern. Audit opinions’ announcements and stock returns data are collected from companies’ annual reports for the fiscal years 2016 to 2019 while stock returns are computed from stock closing prices published at ASE website. The authors apply the event study approach and use the market model to calculate normal returns. Cumulative abnormal returns (CARs) and average abnormal returns (AARs) are computed for all qualified audit opinions’ announcements. The empirical evidence suggests that investors at ASE do not react to qualified audit opinions announcements. That is, the authors find an insignificant impact of qualified audit opinion announcements on stock returns using both CAR and AAR estimates. The results are robust to first time and sequenced qualifications, and for qualifications with going concern. Results are also robust to the use of risk adjusted market model. The insignificant impact of qualified audit opinions on stock returns have two potential conflicting research implications. First, the new amendments introduced to auditors’ report made them more informative and reduce the negative signals contained in the qualified opinions. That is, investors are now aware of the real causes of qualifications and not overreacting to the qualified opinion. Second, the documented insignificant impact confirms that ASE is not a semi-strong form efficient. The apparent excessive use of qualifications should ring the bell on whether auditors misuse their power or companies are really in trouble. Hence, the Jordanian regulatory bodies need to warn auditors against the excessive use of qualifications on the one hand, and to raise the awareness of investors on the implications of auditors’ opinions on the other hand. This study is innovative in twofold. First, it explores the impact of qualified audit opinions on stock returns after the introduction of new amendments by IAASB at ASE. In addition, it uses event study approach and distinguishes between first time qualified and sequenced qualifications, and between plain qualified opinion and qualifications with going concern. The results are consistent with efficient market theory and behavioral finance explanations.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-01-03
      DOI: 10.1108/JFRA-02-2021-0056
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
       
  • Higher education challenges: accounting and finance academia in a
           research-led teaching universities

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      Authors: Nevine El-Tawy , Magdy Abdel-Kader
      Abstract: This paper aims to explore problems facing the recruitment of accounting and finance staff in research-led universities. “University accounting and finance (A&F) departments are experiencing difficulty in attracting and retaining suitably qualified staff” (Duff and Monk, 2006, p. 194). The literature identifies a number of reasons for the shortage of A&F phenomenon (Duff and Monk, 2006; Smith and Urquhart, 2018), including, the wide salary gap between academe and industry profession, difficulty in achieving publications in highly rated journal, high workload in teaching and marking due the limited number of A&F staff. The paper provides new insights for the use of the grounded theory and how the theory has been generated from the semi-structured interviews. This study has resulted in eight main challenges emerged, and a final theory has been generated. Implications of this research on business schools are valuable in research-led universities, the A&F staff recruitment strategies and the A&F research strategies in research-led universities. The novelty of this research is based on the induction of the challenges that a business school faces, as a case study for a research-intensive teaching-led UK university, in recruiting new A and F appointees and retaining existing members of staff.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2022-02-03
      DOI: 10.1108/JFRA-01-2020-0007
      Issue No: Vol. 20 , No. 2 (2022)
       
  • Predictive view of the value relevance of earnings in India

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      Authors: Hajam Abid Bashir , Manish Bansal , Dilip Kumar
      Abstract: This study aims to examine the value relevance of earnings in terms of predicting the value variables such as cash flow, capital investment (CI), dividend and stock return under the Indian institutional settings. The study used panel Granger causality tests to examine causality relationships among variables and panel data regression models to check the statistical associations between earnings and value variables. Based on a data set of 7,280 Bombay Stock Exchange-listed firm-years spanning over ten years from March 2009 to March 2018, the results show higher sensitivity of earnings toward cash flows, CI, divided and stock return and vice-versa. Further, the findings deduced from the empirical results demonstrate that earnings are positively related to value variables. Overall, the results established that earnings are value-relevant and have predictive ability to forecast the value variables that facilitate investors in portfolio valuation. The results are consistent with the predictive view of the value relevance of earnings. Several robustness checks confirm these results. This study brings new empirical evidence from a distinct capital market, India, and provides a new facet to the value relevance debate in terms of its prediction view. The study is among earlier attempts that jointly measure the ability of earnings in forecasting different value variables by taking a uniform sample of firms at the same period. Hence, the study provides a comprehensive view of the predictive ability of reported earnings.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-31
      DOI: 10.1108/JFRA-08-2021-0219
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • How does ownership structure affect the financing and dividend decisions
           of firm'

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      Authors: Tahar Tayachi , Ahmed Imran Hunjra , Kirsten Jones , Rashid Mehmood , Mamdouh Abdulaziz Saleh Al-Faryan
      Abstract: Ownership structure deals with internal corporate governance mechanism, which plays important role in minimizing conflict of interests between shareholders and management Ownership structure is an important mechanism that influences the value of firm, financing and dividend decisions. This paper aims to examine the impact of the ownership structures, i.e. managerial ownership, institutional ownership on financing and dividend policy. The authors use panel data of manufacturing firms from both developed and developing countries, and the generalized method of moments (GMM) is applied to analyze the results. The authors collect the data from DataStream for the period of 2010 to 2019. The authors find that managerial ownership and ownership concentration have significant and positive effects on debt financing, but they have significant and negative effects on dividend policy. Institutional ownership shows a positive impact on financing decisions and dividend policy for sample firms. This study fills the gap by proving the policy implications for both firms and investors, as managers prefer debt financing, but at the same time try to ignore dividend payment. Therefore, investors may not invest in firms with a higher proportion of managerial ownership and may choose to invest more in institutional ownership, which lowers the agency cost.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-31
      DOI: 10.1108/JFRA-09-2021-0291
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Factors influencing stakeholder’s judgment on internal audit
           function’s effectiveness and reliance

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      Authors: Khurram Ashfaq , Shafique Ur Rehman , Moeez Ul Haq , Muhammad Usman
      Abstract: This study aims to explore the effectiveness and reliability of the performance of internal auditor by the stakeholders for their decision making. The absence of rules and regulations generates the debate that the non-standard reporting of the assessment of the internal controls system’s assessment by internal auditor and reliance by the external auditor. The study used the mixed-method (triangulation) for the analysis quantitative data was used for regression with Smart PLS 3.2.8, and the qualitative data was used to prove and strengthen the results. The data is collected for five IVs (Objectivity of IAF, Work Performance, Competence, Internal Control System’s Assessment and Sourcing of IAF) and their impact on two DVs (Effectiveness and Reliance). This study used five areas as the target audience (Internal Auditor, External Auditor, Professional bodies, Shareholders, SECP and SBP). A total of 150 respondents were approached and received a valid response of 98 respondents. The study explores the positive relationship between Objectivity of IAF, Work Performance, Competence, Sourcing of IAF on Effectiveness and Reliance. Internal Control System’s Assessment having significant relation with Effectiveness and non-significant with reliance because the absence of rules makes it unreliable for stakeholders. The study found that the system for reporting the internal control needs rules and regulations advancement on the immediate basis for the betterment and safeguard of stakeholders to avoid the events like WorldCom and ENRON.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-30
      DOI: 10.1108/JFRA-12-2020-0371
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • The impact of audit quality on earnings management and cost of equity
           capital: evidence from a developing market

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      Authors: Ben Le , Paula Hearn Moore
      Abstract: This study aims to examine the effects of audit quality on earnings management and cost of equity capital (COE) considering the impact of two owner types: government ownership and foreign ownership. The study uses a panel data set of 236 Vietnamese firms covering the period 2007 to 2017. Because the two main dependent variables of the COE capital and the absolute value of discretionary accruals receive fractional values between zero and one, the paper uses the generalised linear model (GLM) with a logit link and the binomial family in regression analyses. The paper uses numerous audit quality measures, including hiring Big 4 auditors or the industry-leading Big 4 auditor, changing from non-Big 4 auditors to Big 4 auditors or the industry-leading Big 4 auditor, and the length of Big 4 auditor tenure. Big 4 companies include KPMG, Deloitte, EY and PwC, whereas the non-big 4 are the other audit companies. The study finds a negative relationship between audit quality and both the COE capital and income-increasing discretionary accruals. The effects of audit quality on discretionary accruals and the COE capital depend on the ownership levels of two important shareholders: the government and foreign investors. Foreign ownership is negatively associated with discretionary accruals; however, the effect is more pronounced in the sub-sample of state-owned enterprises (SOEs), the firms where the government owns 50% or more equity, than in the sub-sample of Non-SOEs. To the best of the knowledge, no prior similar study exists that used the GLM with a logit link and the binomial family regression. Global investors may be interested in understanding how unique institutional settings and capital markets of each country impact the financial reporting quality and cost of capital. Further, policymakers of developing markets may have incentives to improve the quality of financial reporting and reduce the cost of capital which should result in attracting more foreign investments.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-28
      DOI: 10.1108/JFRA-09-2021-0284
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Does earnings management mediate the relationship between audit quality
           and company performance' Evidence from Jordan

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      Authors: Malik Muneer Abu Afifa , Isam Hamad Saleh , Fadi Fouad Haniah
      Abstract: The purpose of this study is to look at the direct relationship between audit quality, earnings management (EM) practices and company performance, as well as the indirect influence (mediation) of EM practices in the relationship between audit quality and company performance. It offers empirical evidence from the Jordanian market, which is considered an emerging market. The population of this study is represented in Jordanian service companies listed on the Amman Stock Exchange (ASE), with a total of 344 company-year observations. Furthermore, panel data analysis was used in this study, and data for the study were acquired from yearly reports as well as the ASE’s database. Based on generalized method of moments model, the present findings demonstrate that the size of the audit firm and the tenure of the audit firm have a positive and negative influence on EM practices, respectively, but that industry-specialist audit firm has a negative and insignificant effect. EM practices have a negative impact on two company performance proxies (ROA and ROE), but have no effect on earnings per share (EPS). Furthermore, the size of the audit firm has a positive and significant influence on the performance proxies of the company [i.e. return on assets (ROA) and return on equity (ROE)]. The presence of an industry-specialist audit firm has a positive and significant influence on two proxies of company performance (ROE and EPS), but a negative and significant impact on ROA. An audit firm’s tenure has a negative and significant impact on two performance proxies (ROA and EPS), but a positive and significant impact on ROE. Then, EM practices either fully or partially mediate the relationship between audit quality proxies and company performance as assessed by ROA, ROE and EPS. The current study’s limitation is that it only searched in Jordanian service companies listed on ASE from 2012 to 2019 to meet the study’s objectives; thus, the authors recommend that future work investigate the study model for other sectors, whether in Jordan or other emerging markets such as the Middle East and North Africa. Another limitation of this study is that the study models lack important variables, which may affect EM and company performance, such as corporate governance and ownership structure characteristics; as a result, the authors recommend that future work includes such variables in future research models to have more explanations in this context. Analysts, investors and other strategic decision makers may use the findings of this study to improve the efficiency and efficacy of Jordan’s financial market. These findings will enhance policymakers’ willingness to establish appropriate regulations, which might improve Jordan’s financial market performance and efficacy. These findings may help investors make better judgments by using audit quality proxies and EM indicators, which can forecast business success. First, this study distinguishes itself from prior studies through establishing a new research model, by investigating the mediating effect of EM in the relationship between audit quality and company performance. It provides empirical evidence from the Jordanian market; hence, it increases the body of the knowledge in this context. Second, to the best of the authors’ knowledge, this is the first study to look into the link between audit quality, EM and company performance together; hence, the model of this study is developed using agency theory and information asymmetry theory. Third, the current study adds new evidence to the role of audit quality and EM in companies, as well as how audit quality and EM practices affect company performance in emerging markets such as Jordan.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-22
      DOI: 10.1108/JFRA-08-2021-0245
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Board gender diversity, board compensation and firm performance. Evidence
           from Jordan

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      Authors: Taha Almarayeh
      Abstract: This study aims to analyze the relationship between board gender diversity, board compensation and firm financial performance in the developing country, Jordan, whose cultural, economic and institutional context is very different from most previously analyzed countries’ context. Ordinary least squares regression was used to examine the association between board gender diversity, board compensation and firm financial performance in a sample of 510 firm-year observations during the years 2009–2018. Generalized least squares estimation method was used to confirm that the results are robust. The author provides new evidence that board gender diversity does not contribute to firm financial performance. The author also detects that there is a positive relationship between board compensation on firm financial performance. This paper examines the under-researched relationship between board gender diversity, board compensation and firm financial performance. In so doing, the author tries to provide new insights into this relationship within the developing context, the case of Jordan that has a different environment from that of advanced markets. To the best of the researcher’s knowledge, this is almost certainly the first research to investigate the impact of board gender diversity and board compensation on firm financial performance in the Jordanian market. This manuscript is expected to be used as a reference by the regulators and policymakers – both in Jordan and other countries with a similar institutional, cultural setting – to provide a deep understanding of the impact of board gender diversity and board compensation on the firm performance.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-21
      DOI: 10.1108/JFRA-05-2021-0138
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Earnings management and issue characteristics: an empirical analysis of
           IPOs in India

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      Authors: Deepa Mangala , Mamta Dhanda
      Abstract: This study aims to examine earnings management around initial public offerings (IPOs) in India. It also explores the influence of issue characteristics on earnings management around the IPOs. A sample of 511 IPOs that came during April 2003-March 2019 is studied for calculating earnings management for pre-issue, issue and post-issue years. Using Cross-Sectional Modified Jones Model, the paper presents earnings management on the basis of three proxies i.e. discretionary accruals, discretionary current accruals and discretionary long-term accruals. The influence of issue characteristics on earnings management practised around the IPOs is also observed through correlation and multiple regression analysis. The paper finds that earnings management is abnormally high during the issue year compared with pre-issue and post-issue years. It also unveils that profitability, premium, age, and size of the issuer significantly determine the level of pre-issue and issue year earnings management practised by Indian IPO issuers. The findings are useful to stakeholders (potential investors, analysts and regulators) to observe, assess and understand the quality of financial numbers that are based on fallacious disclosure of accounting figures. It provides insight into the possibilities of managed earnings around the issue that could influence investors’ decision-making. Further, the study reflects the efficacy of Indian regulatory norms for IPOs. To the authors’ knowledge, it is the only Indian study that had used an extensive data set of about two decades to calculate earnings management during pre-issue, issue and post-issue years. The uniqueness of the study further lies in three proxies of earnings management representing short-term and long-term accruals. Moreover, it is the first study to observe the influence of IPO issue characteristics on earnings management.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-17
      DOI: 10.1108/JFRA-01-2021-0006
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Impact of Sarbanes Oxley Act on initial public offerings: new evidence
           from reverse leveraged buyouts

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      Authors: Nischala P. Reddy , Ben Le , Donna L. Paul
      Abstract: This paper aims to investigate how the passage of the Sarbanes Oxley Act (SOX) impacted the likelihood and timing of the decision of leveraged buyout (LBO) firms to exit via initial public offering (IPO) (reverse-LBO) and the mediating effect of reputed private equity (PE) firms. The sample comprises firms that went private via LBO between 1990 and 2018. The authors use logistic and ordinary least square regression models to compare the effect of SOX on the re-listing decision and the time taken to re-list. LBO firms were less likely to exit via public offering after SOX, and the time from LBO to IPO was significantly longer for exiting firms post-SOX. PE firm reputation partially reversed the reluctance to exit via IPO and shortened the time to exit. The primary focus is RLBOs; the authors do not directly examine other methods of LBO exit. The findings have policy implications for unintended impacts of SOX. Despite the benefits of increasing transparency and protecting investors, SOX reduced the likelihood of going public and increased the time to IPO, potentially reducing product market competition. RLBOs present a unique experimental setting as the authors can test the impact of SOX on both the likelihood and time to go public, whereas prior literature using first-time IPO samples are able to test only the likelihood. The authors also show that the reputation of the advising PE firm attenuates the reluctance and time taken for RLBOs to re-list. The authors are, thus, able to provide a new perspective on the impact of SOX on the going public decision.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-15
      DOI: 10.1108/JFRA-08-2021-0237
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Transparency level of the electronic procurement system in Malaysia

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      Authors: Hawa Ahmad , Sitti Hasinah Abul Hassan , Suhaiza Ismail
      Abstract: This paper aims to examine the level of transparency of the electronic procurement (e-procurement) system in Malaysia. Using the content analysis method, 23 transparency disclosure items from the Website Attribute Evaluation System (WAES) checklist were used to evaluate the transparency level of the e-procurement system. The data gathered from the WAES were analysed using frequency and percentage based on the various categories of transparency. The study reveals that the e-procurement system disclosed 17 out of the 23 WAES transparency disclosure items, which represents a transparency disclosure level of 73.91%. Of the five categories of disclosure, i.e. ownership, contact information, organizational information, citizen consequences and freshness, the detailed results show that the items are fully disclosed for only two categories, and for three categories, i.e. ownership, contact information and organizational information, the items are not fully disclosed. The findings of the present research offer a positive indication that the government is moving in the right direction, particularly in efforts to reduce the corruption level in procurement activities and to improve the accountability level of the government. The present study is among the few studies that attempts to address a fundamental issue of transparency in the public procurement system that has an important relationship with the occurrence of corruption in procurement activities.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-13
      DOI: 10.1108/JFRA-07-2021-0181
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Integrated reporting disclosure in Malaysia: regulations and practice

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      Authors: Sumaia Ayesh Qaderi , Sitraselvi Chandren , Zaimah Abdullah
      Abstract: Integrated reporting (IR) is a new trend in corporate reporting that has spread rapidly in recent years for disclosing financial and non-financial information. This study aims to assess the status of the current regulations and the trends in IR disclosure practice in an emerging market, Malaysia, by providing a comparative analysis of the IR disclosure level (IRDL) and IR disclosure quality (IRDQ). The current study has developed a comprehensive IR disclosure index based on the international integrated reporting framework (IIRF), which comprises 100 items divided into four categories (background, assurance and reliability, content and form). The data were collected from annual reports of companies listed on the Bursa Malaysia over the three years 2017 to 2019, based on 267 observations. Content analysis technique was used to evaluate and measure IRDL and IRDQ. Descriptive analysis was performed to provide the background statistics of the variables examined. IR regulations are at an early stage, and IR adoption is still voluntary in the Malaysian market. Only 267 Malaysian company-year observations during the years 2017–2019 have adopted IR techniques. However, descriptive analysis results showed that Malaysian companies have moved towards the preparation of IR consistent with the IIRF. The findings indicate a significant increase in both IRDL and IRDQ over this period, after the recent recommendation by the Malaysian code of corporate governance (2017) on adopting IR. Further, the results show statistically significant differences in the mean of IRDL and IRDQ between large and small companies. These results are important for regulators and policymakers in articulating new IR legislation in an emerging market and for corporate entities and investors in shaping their understanding of IR disclosure practice in the Malaysian institutional context. To the best of the researchers’ knowledge, the study is among the first to address the IR regulation status and practice in Malaysian companies. It also established a comprehensive index for measuring IRDL and IRDQ based on the IIRF. The results add to the meagre descriptive literature on IR practice by providing comprehensive insights into IR practice from the perspective of an emerging country.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-12-02
      DOI: 10.1108/JFRA-06-2021-0158
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Do corporate governance practices restrain earnings management in banking
           industry' Lessons from India

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      Authors: Deepa Mangala , Neha Singla
      Abstract: This study aims to investigate the role of corporate governance practices in restraining earnings management in Indian commercial banks. Estimation of earnings management is based on discretionary loan loss provision and discretionary realised security gains and losses using Beatty et al. (2002) model. The effect of corporate governance on earnings management is examined by performing two-way least square dummy variable regression. Data for a period of five years (2016–2020) is collected from the Centre for Monitoring Indian Economy ProwessIQ database, Reserve Bank of India website, annual report of banks, National Stock Exchange and bank’s website. Regression results exhibit that number of board committees, size and independence of audit committee and joint audit are significantly effective in curbing earnings management. Other board-related variables (size, independence, meetings and diligence) and audit committee variables (meetings and diligence) are not effective in restraining earnings management in Indian banks. The findings may prove to be helpful to regulators, board of directors and investors. It shows the weak area of corporate governance in India that is lack of autonomy to independent directors, which needs regulators attention and it also suggests that the number of independent auditors should be adequate for audit purposes. The board of directors must ensure the formulation of an adequate number of committees, which perform their own super specialised functions. This study brings an alarm to investors not to rely on reported earnings alone as they may be manipulated. This paper substantiates the scant literature on the role of corporate governance practices in restraining earnings management in banks of emerging markets and to the best of the authors’ knowledge impact of joint audits on earnings management is previously unexplored in Indian banks, which are examined in this study.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-10-18
      DOI: 10.1108/JFRA-02-2021-0060
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • The impact of internet financial reporting on Egyptian company’s
           performance

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      Authors: Amani Hussein , Ghadir Nounou
      Abstract: This study aims to examine the impact of internet financial reporting (IFR) on companies’ performances as measured by three performance indicators, namely, stock price, stock returns and company value. A sample of 139 non-financial companies listed in the Egyptian stock exchange is used and classified as 108 IFR companies and 31 non-IFR companies. To test the research hypotheses, an independent t-test and multiple linear regression analyses are used. The results indicate that there are no significant differences between IFR companies and non-IFR companies for both stock price and stock return variables. Conversely, there is a significant difference between IFR companies and non-IFR companies in the company value variable. These results imply rejecting hypotheses H1 and H4 and accepting the hypothesis of H7 that the presence of IFR has an impact on company value. The multiple regression analyses results indicate a significant relation between the scope of IFR and stock price. Likewise, between the degree of IFR and company value. Both degree and scope of IFR have an insignificant impact on stock return, which infer that applying different performance measures can reveal different conclusions. This research is a snapshot of IFR limited to a cross-sectional study and could not study the longitudinal data of internet reporting. Second, Marston and Polei (2004) contend that “weights contain an element of subjectivity, which cannot be completely avoided in the composition of such a score” (p. 297) and a variation in the disclosure index can lead to a modification in the results (Kaur and Kaur, 2020). This research applied a weighted index to measure the degree of IFR, which may affect the results and may change it if other indexes are applied. Moreover, the scores of the degree and scope of information disclosure are assumed to be similar every year due to the lack of information regarding the variations in content and presentation in the companies’ websites. Finally, the absence of a complete data set and stock prices for some companies in the sample. To enhance the quantity and quality of IFR could be implemented through setting regulations and standards to govern IFR practices companies in Egypt. Moreover, the trade-off of the requirement of the Egyptian Financial Supervisory Authority for Egyptian companies make information available online and the secrecy culture profound in the Egyptian society (Ahmed et al., 2015) involve assigning a regulatory body for monitoring the IFR practices to ensure disseminating timely and accurate information that helps investors make rational decisions. The researchers recommend the suggestion to have an external assurance conducted by external auditors to enhance the accuracy and credibility of the IFR information. Based on prior literature, no studies in Egypt compare between IFR companies and non-IFR companies concerning stock price and company value as measured by Tobin’s Q. Moreover, few research studies in Egypt covered the degree of IFR disclosure whilst not addressing the impact on the stock price. In addition, no prior study examined the scope of IFR disclosure in Egypt. Therefore, the research findings attribute to literature.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-10-18
      DOI: 10.1108/JFRA-10-2020-0293
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • The impact of institutional ownership on the value relevance of accounting
           information: evidence from Egypt

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      Authors: Ahmed Diab , Samir Ibrahim Abdelazim , Abdelmoneim Bahyeldin Mohamed Metwally
      Abstract: This paper aims to examine the value relevance (VR) of accounting information (AI) presented by Egyptian listed non-financial companies. Further, the study investigates the influence of institutional ownership on the value relevance of AI in a developing market, namely, the Egyptian market. The study uses data from 2014 to 2017 with a total of 248 observations and analyses the data using regression analysis. Data are collected from the nonfinancial companies listed on the Egyptian Stock Exchange. The authors found that the AI reported by the Egyptian listed non-financial companies is value relevant. Regarding the influence of institutional ownership, it is found to significantly impact the VR of AI reported by the sample companies. This model investigated the effect of corporate size and financial leverage as controlling variables and found that they have an insignificant influence on the VR of AI. The current study findings enrich the literature by enhancing the understanding regarding institutional owners’ impact on corporate value. Further, bringing evidence from an emerging market can have implications for accounting researchers interested in addressing other emerging markets with similar contextual and institutional environments.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-10-11
      DOI: 10.1108/JFRA-05-2021-0130
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Exploring the link between institutional pressures and the timeliness of
           corporate internet reporting: the case of an emerging economy

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      Authors: Mahade Hasan , Shah Md Taha Islam
      Abstract: The purpose of this study is to examine the role played by coercive, normative and mimetic pressures in stimulating timeliness of corporate internet reporting (TCIR). This study uses content analysis technique to track the TCIR practices of top 100 non-financial companies listed on the Dhaka Stock Exchange. A disclosure index of 14 items is developed to capture the extent of TCIR. The authors collected the relevant data from multiple sources, such as corporate websites, monthly review reports and corporate annual reports for the year-end 2019. This study uses Poisson regression models to explore the association between institutional pressures and TCIR. Consistent with the predictions of institutional isomorphism theory, the authors find that coercive isomorphic pressures through ownership by foreign investors, government, general public and connection with parent multinational corporations have positive associations with TCIR. The authors also find that normative pressures resulting from cross-directorships have positive influence on TCIR. The authors provide evidence of mimetic pressures through industry memberships (i.e. companies operating in technology-based industry) positively impacting TCIR. The additional analysis suggests that institutional pressures are rather associated with the extent of voluntary TICR and to a lesser extent to regulatory TICR. To the best of the authors’ knowledge, this study is the first to show the positive impacts of coercive, normative and mimetic isomorphic pressures on TCIR in an emerging economy characterized by weak institutional environment and mixed prospects for TCIR.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-10-11
      DOI: 10.1108/JFRA-10-2020-0309
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Top management team heterogeneity, corporate social responsibility and
           firm risk: an emerging country perspective

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      Authors: Mohammad Hassan Shakil , Nor Shaipah Abdul Wahab
      Abstract: This study aims to examine the effects of top management team (TMT) heterogeneity and corporate social responsibility (CSR) on the firm risk of Bursa Malaysia listed firms. Also, this study examines the moderating effect of CSR between TMT heterogeneity and firm risk. This study uses panel regression models to test the hypotheses. The sample of this study is Bursa Malaysia non-financial listed firms from 2013 to 2017 with 3,055 observations. This study finds significant effects of TMT age and tenure heterogeneities on total risk. Effects on idiosyncratic risk are evident only within age heterogeneity. Further, this study finds negative effects of CSR on total and idiosyncratic risks. CSR significantly moderates the relationship between total TMT heterogeneity and firm systematic risk. This study reduces the literature gap by providing useful insights on the effects of CSR activities and TMT heterogeneity on firm risk. The findings can also provide hints to investors to assist them in assessing firm risk based on TMT heterogeneity and firms’ CSR. This study can also benefit shareholders in their attempts to mitigate the risk of their portfolio by investing in firms that are socially responsible as firms with high CSR suffer lower total and idiosyncratic risks. Previous studies have emphasised on the influence of TMT characteristics and CSR on firm performance. However, studies that investigate the effects of TMT heterogeneity and CSR on firm risk are limited in the context of Malaysia.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-10-04
      DOI: 10.1108/JFRA-02-2021-0036
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Information risk, cost of equity and stock returns: evidence from Iranian
           firms

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      Authors: Ahmad Abdollahi , Mehdi Safari Gerayli , Yasser Rezaei Pitenoei , Kamran Mohammad Hasani , Fatemeh Riahi
      Abstract: A long history of literature has considered the role of information risk in determining the cost of equity. The question that has remained unanswered is whether information risk plays any systematic role in determining the cost of equity. One of the fundamental decisions that every business needs to make is to assess where to invest its funds and to re-evaluate, at regular intervals, the quality of its existing investments. The cost of capital is the most important yardstick to evaluate such decisions. Greater information is associated with the lower cost of capital via mitigating transaction costs and/or reducing estimation risk and stock returns. This study aims to investigate the impact of information risk on the cost of equity and corporate stock returns. The research sample consists of 960 firm-year observations for companies listed on the Tehran Stock Exchange from 2009 to 2018. The research hypotheses were tested using multivariate regression models based on panel data. The results reveal that information risk has a significant positive impact on the firm’s cost of equity. However, the impact of information risk on stock returns is not statistically significant. To the best of the knowledge, the current study is almost the first of its kind in the Iranian literature which investigates the subject matter; therefore, the findings of the study not only extend the extant theoretical literature concerning the information risk in developing countries including the emerging capital market of Iran but also help investors, capital market regulators and accounting standard setters to make timely decisions.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-09-24
      DOI: 10.1108/JFRA-01-2021-0025
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • The effect of business uncertainty on IT governance

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      Authors: Sylvia Veronica Siregar , Siti Nurwahyuningsih Harahap
      Abstract: The purpose of this study is to examine the effect of business uncertainty on the information technology (IT) governance of listed firms in Indonesia. The samples are listed firms in Indonesia Stock Exchange for the years 2015–2018. Total observations are 1,215 firm years. The authors used the random effect panel regression to test the hypotheses. The authors find that business uncertainty has a significant positive association with IT governance, consistent with the prediction. Companies with higher business uncertainty are in higher demand for implementing IT governance. The authors have not found previous studies that examine business uncertainty as to the determinant of IT governance. The authors also examined the IT governance in Indonesia, one of the emerging countries. Most previous studies on IT governance were conducted in developed countries, which results may not be generalized to emerging countries.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-09-22
      DOI: 10.1108/JFRA-12-2020-0364
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Financial reporting quality and the effects of CFO gender and board gender
           diversity

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      Authors: Justin G. Davis , Miguel Garcia-Cestona
      Abstract: The purpose of this study is to examine the effects of chief financial officer (CFO) gender, board gender diversity and the interaction of both factors on financial reporting quality (FRQ) proxied by restatements. Restatements indicate inaccurate financial reporting. The authors use fixed effects conditional logistic regression models to compare firms with and without restatements matched by size, industry and year. The authors’ unique matched–pair sample consists of 546 listed US firms from the period 2005–2016. The authors’ results provide evidence that restatements are less likely when the CFO is a woman and when a higher proportion of women serve on the board of directors (BOD). Considering the interaction effects, the authors find evidence that women on the BOD are more effective at reducing restatement likelihood when the CFO is also a woman. And that although female CFOs reduce restatement likelihood generally, they have no statistically significant effect on restatement likelihood when the BOD is all-male. To the best of the authors’ knowledge, this study is the first that the authors know of to consider how FRQ is affected by the interaction effects of CFO gender and board gender diversity. The findings corroborate upper echelons theory and extend the understanding of the effects of managerial gender diversity at a time when firms face growing pressure to increase gender diversity at the highest levels. The unique sample, methodology and findings provide new insights into the impact of gender on FRQ that has important policy implications.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-09-16
      DOI: 10.1108/JFRA-12-2020-0360
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Association between restrictive covenants and accounting conservatism:
           evidence from US public debt

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      Authors: Amira Houaneb , amira Houaneb , Rim Ben Hassen , Dorra Talbi
      Abstract: The purpose of this paper is to investigate the relationship between restrictive covenants and accounting conservatism. More specially, the authors try to explain how the use of restrictive covenants of public debt may affect accounting conservatism. The sample is composed of non-financial firms and for each firm one debt contract is considered. The authors have used the Ball and Shivakumar (2005) models to test the relationships. All variables were retrieved from Mergent Fixed Investment Securities and COMPUSTAT Databases. The findings of this study show that the more the firm relies on bond covenants, the higher is the degree of conservatism. The authors found also that these firms also exhibited a widely significantly increased level of conservatism in the years following the issuance of debt. The results should be interpreted with caution because the use of covenants does not take into consideration the tightness of their inclusion in the public debt contract. This paper makes a timely contribution to the debate of timely loss recognition by confirming the complementarity between the inclusion of restrictive covenants in the debt agreement and the accounting conservatism before and after the emission of public debt.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-09-13
      DOI: 10.1108/JFRA-11-2020-0320
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Corporate social responsibility (CSR) and tax incentives: the case of
           Tunisian companies

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      Authors: Henda Kacem , Mohamed Ali Brahim Omri
      Abstract: This paper aims to investigate the question concerning whether tax incentives motivate companies to be socially responsible. This study, specifically, examines the impact of tax incentives for corporate social responsibility (CSR) on the societal practices of Tunisian companies. This study uses multiple regression models to assess the effectiveness of tax incentives for companies to take responsible actions. The study was conducted on 71 Tunisian companies operating in different sectors. The results reveal that there is a negative and significant association between tax incentives and CSR practices. Therefore, there is an inefficient use of these types of incentives. The results of the study have important implications for investors and regulatory basis wishing to enhance CSR by giving tax incentives. Investment in social responsibility may improve the corporate culture and reduce the conflict in companies. The theoretical contributions relate mainly to the originality of the conceptual model developed, to the literature review and to the theoretical foundations mobilized. In fact, the originality of this research is justified by the scarcity of previous study dealing with the relationship between tax incentives and CSR. Thus, to the best of the authors’ knowledge, this study is one of the first to investigate the impact of tax incentives for CSR on CSR practices.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-09-10
      DOI: 10.1108/JFRA-07-2020-0213
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Investor sentiment and accounting conservatism: evidence from Iran

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      Authors: Saeid Aliahmadi
      Abstract: The main purpose of this study is to investigate the effect of investor sentiment on accounting conservatism in listed companies in the Tehran Stock Exchange (TSE). In this paper, two models of Ball and Shivakumar (2006) and Basu (1997) have been used for measuring conditional conservatism in accounting. To measure investor sentiment, the author uses the Baker and Wurgler (2006, 2007) index. The research sample consists of 1,820 observations and 182 firms listed on TSE over a ten-year period between 2011 and 2020. This study uses panel data and multivariate regression analysis to test it hypotheses. Consistent with this hypothesis that accounting conservatism will increase with investor sentiment, the results showed that Iranian firms recognize economic losses and bad news in a more timely manner during high sentiment periods than during low sentiment periods. This implies that Iranian managers recognize economic losses and bad news in earnings in a more timely manner during periods of high investor sentiment. This finding provides significant evidence for investors and financial reporting standard-setters in Iran because by removing accounting conservatism from the conceptual framework, managers are not able to present conservative financial reports, and this can intensify the negative impact of investors sentiment in the Iranian capital market. Managers of Iranian companies can reduce information asymmetry and increase capital market efficiency by accelerating the disclosure of bad news. Thus, managers can strategically recognize losses and prevent investors from making emotional decisions that reduce their wealth. To the best of the authors’ knowledge, this is the first study to empirically examine the impact of investor sentiment on accounting conservatism in a developing market called Iran. This study contributes to the corporate disclosure literature. Also, the result of this study contributes to standard-setters of accounting standards to improve the mandatory disclosure literature on more conservative accounting earnings.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-09-06
      DOI: 10.1108/JFRA-04-2021-0094
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Determining the managerial perception on triple bottom line performance

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      Authors: Parul Munjal , Deergha Sharma
      Abstract: The purpose of this paper is to determine managerial perception on social and environmental performance and its effect on financial performance in the Indian banking industry. In addition, the study tests moderating role of gender and experience of bank managers in influencing the association between the constructs. The empirical study is conducted using survey methodology. Responses were collected from 182 bank managers covering the private sector, public sector, foreign, regional rural and cooperative banks. Structural equation modelling technique was used to test hypothesized relationships between the constructs using Smart partial least squares software (3.3.2 version). Results of the study endorse the stakeholder perspective. Bank managers perceive that involvement in socially responsible practices strengthens the relationship between stakeholders and banks, which eventually improves financial performance. Conversely, results indicate that environmental practices by banks do not influence financial performance, thereby sustaining shareholder perspective. Further, results suggest that gender and experience of bank managers are not effective moderators in determining the relationship between the constructs. Findings would be valuable for investors to better assimilate social and environmental performance along with its effect on the financial performance of banks. The study would also facilitate policymakers and regulators to outline pertinent policies and rules to uphold financial strength and integrity in the banking industry. Further, bank managers’ perception would have a marked influence on customers’ understanding of social and environmental activities that might shape customer satisfaction, trust, engagement and loyalty. The study underscores the eminence of endorsing socially responsible practices in the banks. This would facilitate in improving the sustainability in the Indian banking industry.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-28
      DOI: 10.1108/JFRA-03-2021-0084
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Factors influencing corporate sustainability disclosure practices:
           empirical evidence from Indian National Stock Exchange

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      Authors: Kishore Kumar , Ranjita Kumari , Archana Poonia , Rakesh Kumar
      Abstract: This study aims to evaluate the nature and extent of sustainability disclosure practices of publicly listed companies in India. Further, it investigates the impact of potential determinants on the sustainability disclosure of companies. The study analyzes data of 75 top listed nonbanking companies operating in India included in NIFTY100 Index for the years 2014-2015 to 2018-2019. In the present study, environment, social and governance disclosure dimensions were considered to evaluate the sustainability reporting performance of companies using content analysis. Panel data analysis was conducted to investigate the impact of various factors on the extent of sustainability information disclosure. Results indicate that environmentally polluting industries disclose significantly higher sustainability information than non-polluting industries in India. The empirical findings suggest that determinants such as company size, age, free cash flow capacity, government ownership and global reporting initiative (GRI) usage positively related to the extent of corporate sustainability disclosure. Contrary to the expectations, financial leverage and profitability were found to be negatively related to the sustainability disclosure of companies in India. This study provides empirical evidence for regulators, practitioners and corporate strategists to assess the progress in the sustainability reporting landscape in India. The finding implies that large and established companies can reduce legitimacy costs through higher sustainability information disclosure. Interestingly, this premise did not hold in the case of high leveraged and profitable companies. Overall findings can also help policymakers to incorporate necessary reforms to improve sustainability reporting in India. This study is one of the first studies to investigate the nature, extent and potential determinants of corporate sustainability disclosure in India. The paper adds to the existing literature on sustainability reporting by providing empirical evidence on the relationship between sustainability reporting and potential determinants such as government ownership, size, leverage, profitability, age, free cash flow capacity, industry and GRI usage.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-24
      DOI: 10.1108/JFRA-01-2021-0023
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • The short- and long-lived effects of IFRS mandate on IPO firms in emerging
           market economies

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      Authors: Fouad Jamaani , Manal Alidarous
      Abstract: This study aims to examine the short- and long-lived effects of the International Financial Reporting Standards (IFRS) mandate on the quality of reporting information of initial public offering (IPO) firms in emerging market economies. The study used several difference-in-differences models for a sample comprising 102 Saudi Arabian IPO firms for 2003–2017. It found that mandating the application of the IFRS had a significant short-lived but no long-lived effect on IPO firms’ information asymmetry. When information asymmetry was high such as in the primary market, the IFRS succeeded in alleviating the underpricing of IPO firms. Conversely, in the secondary market, with negligible information asymmetry, the IFRS was not beneficial for the long-term performance of companies in the IPO market. This study is the first of its kind in the emerging market context and has important implications for IPO investors and analysts, IFRS-IPO researchers and policymakers in emerging economies. The results empirically confirmed that the IFRS mandate had solely a short-lived effect and no long-lasting impact, on the problem of asymmetric information in the IPO market. The effectiveness of the IFRS in producing quality financial reporting is contingent upon large-scale information asymmetry and vanishes when investors and analysts have abundant information about listed firms, even for emerging economies such as Saudi Arabia.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-19
      DOI: 10.1108/JFRA-11-2020-0324
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Formal and informal sustainability reporting: an insight from a mining
           company’s subsidiary in Ghana

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      Authors: Kwame Oduro Amoako , Isaac Oduro Amoako , James Tuffour , Emmanuel Opoku Marfo
      Abstract: Using a subsidiary of a multinational mining company in Ghana as a case, the purpose of this study is to examine the formal and informal forms and channels of sustainability reporting in the emerging economy’s context. Semi-structured interviews were conducted amongst managers and employees of the mining company and members of their host community. Based on the interview themes, archival data were extracted from the 2020 Integrated Annual Report of the case company to corroborate the results from the interviews. The authors found that most of the stakeholders from the host community interviewed were not aware and, to an extent, not interested in formal sustainability reports. In place of that, the management of the mining subsidiary uses informal channels of communication, including meetings and durbars, to verbally engage the local community and their representatives on sustainability matters. Whilst the formal sustainability reports met the internal requirements set by the parent company, the informal engagements were critical for gaining external legitimacy from the host community and other interest groups. Hence, the authors argue that mining companies and their subsidiaries, particularly in developing economies, need to consider informal forms of sustainability reporting alongside the formal channels to engage local communities to address sustainability issues and avert disruptions to their operations. Sustainability reporting studies have focussed mainly on annual reports published in print or corporate websites, ignoring informal forms of sustainability reporting. This study sheds light on the informal forms of sustainability reporting. This is important as formal forms of sustainability reporting may be less useful for engaging local mining communities in developing economy contexts.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-17
      DOI: 10.1108/JFRA-12-2020-0368
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Analyzing earnings management preferences from business strategies

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      Authors: Golrida Karyawati Purba , Cornelia Fransisca , Prem Lal Joshi
      Abstract: This study aims to examine the preference for earnings management (EM) strategies according to business strategies, namely, cost leadership strategies and differentiation strategies, This study analyzed 262 samples of manufacturing and service companies listed on the Indonesia Stock Exchange for the period 2019. Logistic regression analysis is used to test the company’s EM strategy preferences based on the applied business strategy. The results prove that business strategy has a significant effect on EM strategy preferences. Companies that implement a cost leadership strategy tend to use an accrual form of EM rather than a real form of EM. Conversely, companies that implement a differentiation strategy tend to use a real form of EM. Theoretically, this study confirms that contingency theory can explain EM practice preferences based on business strategy. Practically, this study helps auditors and financial statement analysts in assessing the quality of financial statements, as well as the risk of financial misstatement based on the business strategy adopted by the companies. Based on prior literature, research studies on the analysis of EM strategy preferences based on business strategy have been limited.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-16
      DOI: 10.1108/JFRA-04-2021-0103
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Drivers of corporate voluntary disclosure: a systematic review

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      Authors: Izdihar Abdullah Zamil , Suresh Ramakrishnan , Noriza Mohd Jamal , Majeed Abdulhussein Hatif , Saleh F.A. Khatib
      Abstract: The purpose of this paper is to provide a systematic and comprehensive review of the existing literature on the determinants of firms reporting practices. Following a systematic method, the sample literature of 135 studies was collected from the Scopus database. These studies were evaluated in terms of the theoretical lenses applied in the literature, yearly trend, regional distribution, research settings and prior studies finding to provide some recommendations for further research. The investigation revealed that the literature was more interested in the agency theory in investigating the drivers of voluntary reporting such as company size, age, leverage, liquidity, profitability, corporate governance and ownership structure. Although firm-specific determinants were the most examined in the previous studies, however, the result is still inconclusive. Also, limited work was found on the country-related factors, while internal audit impact has yet to be explored. Being the first of its kind, this research provides a comprehensive review of the current research landscape on the drivers of environmental or social disclosure and highlights several interesting opportunities for future research.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-11
      DOI: 10.1108/JFRA-04-2021-0110
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Factors associated with the voluntary disclosure of the integrated report
           in Brazil

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      Authors: Ruhama Bezerra Fernandes , Alexandro Barbosa
      Abstract: This paper aims to investigate the factors associated with the voluntary disclosure of integrated reporting (IR) in Brazil of the companies listed on the stock exchange – Brasil, Bolsa, Balcão. The cultural dimensions of a nation reflect different priorities in accounting practices. The Brazilian case, therefore, becomes significant, as Brazil is increasingly important in world markets. As an explanatory econometric model, multinomial logistic regression was used (Y = 2 to describe the probability of the IR disclosure; Y = 1 to describe the occurrence of reports with practices similar to the IR and Y = 0 to describe the occurrence of non-disclosure of non-financial reports). Applied to panel data with random effects (chosen for best performance) in the period from 2016 to 2019. Reveals the positive association of the company’s profitability and market-to-book with the probability of the IR disclosure. Regarding the board composition, it is suggested that size does not make a difference, with the greater participation of women and independence of directors associated with better probabilities of adopting the IR in Brazil. This work is the first to characterize the Brazilian reality of voluntary disclosure, specifying the implementation of IR, compared to publishing reports similar to the IR and not reporting structured non-financial statements. It can also be considered the first study on the relevance of the board structure in the disclosure of IR by Brazilian companies. Finally, it contributes to the literature on IR adoption, bringing practical results in understanding the most favorable conditions in which the IR framework will be fully implemented.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-11
      DOI: 10.1108/JFRA-07-2020-0220
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • An exploratory study of US acquirers’ market performance: pre- versus
           post-Sarbanes–Oxley act of 2002

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      Authors: Samah El Hajjar , Elie Menassa , Talie Kassamany
      Abstract: Motivated by the findings of Bhabra and Hossain (2017) that highlight an improvement in US market performance in the post-Sarbanes–Oxley (SOX) period, this paper aims to investigate how this change varies with the methods of payment used for the deals. Deductive in nature and using an event study approach, this paper uses a sample of 675 deals between 1999 and 2006 to test three research hypotheses in a pre-post setting. Results show that at the aggregate level, there is a significant improvement in the market performance of US acquirers around the announcement day in the aftermath of the passage of SOX 2002. Considered separately, both US stock acquirers and cash acquirers did not experience any significant improvement in market performance in the post-Sarbanes–Oxley period. These results are robust to controlling for governance, firm and deal variables, as well as industry and year fixed effects. Exploratory in nature, the results are to be interpreted in light of the sample size and the period under investigation. The results provide evidence for regulators and legislators on the contribution of SOX 2002 to curbing managerial misconduct. Significant improvement in the market performance also signals more confidence in managerial decisions and a reduction in agency problems. The insignificant change in stock acquirers’ market performance can be an indication that policymakers should exert more efforts to improve shareholders' confidence in the quality of disclosure. This investigation provides unique insights on whether SOX has been effective in mitigating mispricing concerns associated with stock-financed acquisitions and whether it was effective in moderating the governance mechanism associated with cash-financed acquisitions.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-11
      DOI: 10.1108/JFRA-08-2020-0246
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Agency and institutional-related factors and the heterogeneity of
           sustainability and integrated report information disclosures in Kenya

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      Authors: Geoffrey Injeni , Musa Mangena , David Mathuva , Robert Mudida
      Abstract: This paper aims to examine the factors influencing the level of disclosures of sustainability (SR) and integrated report (IR) information in a developing country context, with particular reference to Kenya. The study uses a panel data set of 419 firm-year observations of listed companies in Kenya covering the period 2010 through 2018. Data are collected from the annual reports and analysed using a generalized estimations equation model. The results reveal that there is momentum towards newer reporting frameworks in Kenya with substantial IR and SR disclosures in their annual reports. The results also show that level of SR and IR disclosures is influenced by both agency-related factors (board gender diversity, audit committee independence, block ownership and the presence of foreign ownership). Additionally, institutional-related factors (regulatory pressure and promotional efforts of regulatory and professional bodies [reporting excellence awards]) influence the disclosures. The results highlight that initiatives such as those led by the regulatory and professional bodies in Kenya are effective in motivating companies to enhance disclosures. Thus, regulators and professional bodies might need to continue and even intensify their efforts. These results have implications for further research as they show that SR and IR disclosures are influenced by similar factors. The study has the potential to contribute to the ongoing initiatives and discussions on the adoption of IR by firms in Africa as spearheaded by the African Integrated Reporting Council. To the best of the knowledge, the study is, perhaps, the first to examine both SR and IR disclosures at the same study allowing comparison of the extent and drivers of the two disclosures. Moreover, examining the institutional-related factors in a single country has not been done in prior literature, and so this is an innovation.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-11
      DOI: 10.1108/JFRA-10-2020-0305
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • CEO duality, earnings quality and board independence

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      Authors: Sandra Alves
      Abstract: This study draws on agency, theory to evaluate the relationship between chief executive officer (CEO) duality and earnings quality, proxied by discretionary accruals. Additionally, this study aims to examine whether board independence moderates the relationship between CEO duality and earnings quality. This study uses a fixed-effects regression model to examine the effect of CEO duality on earnings quality and to test whether board independence moderates that relationship for a sample of non-financial listed Portuguese firms-year from 2002 to 2016. Consistent with agency theory, this study suggests that CEO duality decreases earnings quality. Further, the results also suggest that the earnings quality reduction associated with CEO duality is attenuated when the board of directors has a higher proportion of independent directors. The findings based on this study provide useful information to investors and regulators in evaluating the impact of CEO duality on earnings quality and the effect of board independence on the role of CEO duality, especially under concentrated ownership. To the knowledge, this study is the first to investigate the role of board independence on the association between CEO duality and earnings quality. In addition, this paper is the first empirical study to investigate the direct and indirect effect of CEO duality on earnings quality in Portugal.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-09
      DOI: 10.1108/JFRA-07-2020-0191
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Fair value accounting impact on decision-usefulness of accounting
           information: evidence from accounting standards update 2016–01 on the
           USinsurance industry

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      Authors: Scott McGregor
      Abstract: The purpose of this study is to evaluate the impact of ASU 2016–01 on the predictive value, the confirmatory value and the value relevance of earnings. One of the key provisions of ASU 2016–01 is the requirement that all changes in unrealized gains and losses on all equity securities are recognized in income instead of other comprehensive income (OCI) as under prior guidance (SFAS 115). Because many companies in the insurance industry are large holders of equity securities, the sample for this study consists of firms from the insurance industry. The author compares the change in earnings volatility and analysts’ forecast error for the periods before and after adoption of ASU 2016–01, and the relationship between the percentages of assets invested in equity securities for both earnings volatility and analysts’ forecast error. Further, the author tests the price reaction at the time of the release of earnings using an event study. The author also tests the value reliance of earnings measured by the correlation of earnings and stock prices, as well as the change in earnings and stock returns. The association between investment gain/loss components of earnings, and OCI, with stock prices and returns is tested for value relevance. The findings of this study show that earnings volatility and analysts’ forecast errors increased in the period after adopting ASU 2016–01 and an initial overreaction to earnings releases. Further, the investment gain/loss components of earnings and OCI are not value-relevant in this study and including unrealized gains/losses on equity securities in income decreased value relevance of earnings in the post-adoption period, particularly for firms with large equity investment portfolios. This study is limited to one industry and only represents the impact of ASU 2016–01 on that industry. Thus, there are opportunities to extend the research to other industries. Furthermore, the time-period of study since adopting ASU 2016–01 is limited to only two years and with the passage of time, a greater sample of post-ASU 2016–01 will be available for testing. Standard setters considering recognizing fair value changes on all investment securities in income should consider the findings of this study. Further, industry participants affected by ASU 2016–01 should consider improving explanation of earnings to mitigate the initial misunderstanding of earning announcements found in this study. To the best of the author’s knowledge, this is the first study on the effects of ASU 2016–01 on volatility of earnings, earnings forecast errors, market reactions to earnings releases and the value relevance of earnings. This paper fills a gap in prior research by studying the effects of fair value on reported earnings, which is limited in prior research. This study contributes to the growing field of research on fair value accounting.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-09
      DOI: 10.1108/JFRA-12-2020-0352
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • The association between accountant’s competences, organisational culture
           and integrated reporting practices

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      Authors: Laura Orobia , Racheal Nturaninshaba , Juma Bananuka , Kasmwakat Reuel Dakung
      Abstract: This study aims to investigate the association between accountant’s competences, organisational culture and integrated reporting practices. A questionnaire survey of 43 manufacturing firms in Mbarara district (South Western Uganda) was undertaken. The unit of inquiry was senior staff in the accounts office while the unit of analysis was the manufacturing firm. The study hypotheses were tested using regression analysis with the aid of Statistical Package for Social Sciences software version 21. The findings revealed that while there is a positive and significant association between accountant’s competences and integrated reporting practices, the association between organisational culture and integrated reporting practices is insignificant. In the additional analysis, this study finds that accountant’s competences are significantly associated with all the content elements of an integrated report as enshrined in the International Integrated Reporting Framework of 2013. Surprisingly, organisational culture is not significantly associated with any of the content elements of an integrated report as enshrined in the International Integrated Reporting Framework of 2013. To the academia, this study expands on the understanding of what matters for improvement in integrated reporting practices in an emerging economy such as Uganda whose history is characterised by civil wars and political unrest. Those in practice may use this study results to promote better reporting practices through the attraction of professional accountants with the necessary proficiencies in corporate reporting practices. The policymakers may also opt to mandate integrated reporting among manufacturing firms. This study provides a first-time and in-depth understanding of the association between the accountant’s competences, organisational culture and integrated reporting practices using evidence from a developing African Country – Uganda.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-04
      DOI: 10.1108/JFRA-01-2021-0027
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Web-based financial reporting, social media and information asymmetry: the
           case of Saudi Arabia

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      Authors: Foued Khlifi
      Abstract: This paper aims to examine the effect of Web-based financial reporting and social media platforms on the proxies of information asymmetry in the Saudi Stock Exchange. The sample of this paper consists of 133 Saudi listed non-financial companies for the year 2019. Web-based disclosure level was measured using 25 items, and the social media platforms examined in this study are Facebook, Twitter and LinkedIn. The information asymmetry proxies are measured using the relative spread and the time-weighted average bid-ask spread. The empirical results have shown that there is a negative and significant relation between Web-based financial reporting and the adoption of social media platforms and the proxies of information asymmetry. Indeed, the relative spread and the time-weighted average bid-ask spread decreased with increased Web-based reporting levels. Among three platforms (Facebook, Twitter and LinkedIn), the results show that only the use of Twitter as a channel for information disclosure has a negative and significant effect on information asymmetry proxies. Consequently, in the Saudi context, the authors demonstrate that the assumptions of the agency, stewardship and signaling theories are supported. Also, results reveal that the effect of information disclosure through websites and social media on reducing information asymmetry is stronger for large companies than small companies. The paper provides new insights into the role played by websites and social media platforms in the reduction of the information asymmetry in the stock market. Consequently, investors and regulatory authorities in the Saudi financial market must give great importance to online information disclosure and its implications for lowering information asymmetry. This empirical study informs regulators in Saudi Arabia to conduct the better practice of Web-based and social media financial reporting and to regulate the current practice of information disclosure. Besides, the obtained results have the potential to convince firms’ managers to improve online information disclosure to benefit from the reduction in information asymmetry. Unlike previous studies, this study investigates, simultaneously, the effect of Web-based and social media information disclosure on the proxies of information asymmetry in a developing economy. In addition, the hypotheses of this study are developed based on a set of theories (the agency, signaling and stewardship theories), to verify the applicability of these three theories in the Saudi context.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-03
      DOI: 10.1108/JFRA-01-2021-0008
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Corporate governance and firm performance: empirical evidence from Jordan

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      Authors: Ahmad Yuosef Alodat , Zalailah Salleh , Hafiza Aishah Hashim , Farizah Sulong
      Abstract: This study aims to assess the effect of director board and audit committee attributes and ownership structure on firm performance. In general, resource dependency and agency theories have underlined the superior performance of firms equipped with stronger Corporate Governance (CG) versus those of deficient governance. Concurrently, the study delineated the provisions of ownership structure provision, specifically foreign ownership and institutional ownerships, thus describing the component denoting the structural significance in explicating firm performance. The current study implemented an empirical approach involving the construction of extensive CG measures thus, subjected to 81 non-financial firms listed on the Amman Stock Exchange spanning the period of 2014–2018. The current study identified the positive and significant relationship between the board of directors and audit committee characteristics with the firm performance measures tested, namely, return on equity (ROE) and Tobin’s Q. In terms of ownership structure, both foreign and institutional ownerships yielded a significant and positive relationship with ROE. Meanwhile, Tobin’s Q led to an insignificant and negative relationship between both ownership types and firm performance measures. The analytical outcomes substantiate the possibility of enhanced performance shown by growing global firms because of the implementation of CG mechanisms, specifically because of the practices resulting in minimised agency costs. The current study offers novel evidence detailing the impact of CG effectiveness towards performance and its implementation in emerging markets following the minimal amount of scholarly efforts on the topic. It is a timely contribution towards the current understanding of the relationship linking governance and performance for the purpose of ensuring the adoption and imposition of a strong corporate governance code by the government.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-03
      DOI: 10.1108/JFRA-12-2020-0361
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • An empirical study on company’s perception of integrated reporting
           in India

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      Authors: Nandita Mishra , Mohamed Nurullah , Adel Sarea
      Abstract: International Integrated Reporting Council is in its 10th year of establishment and the integrated reporting (IR) framework released in 2013 was under revision in the year, 2020. Despite some significant developments in the past 10 years, the authors know very little about the perception of preparers towards IR. This paper aims to study the perception of the preparers and to understand the current status of the adoption of IR in India. The top 500 companies from ET 500 list have been analysed. Banks and financial institutions (a total of 69) have been excluded for the study. Out of 431 companies, the status of IR has been checked by the questionnaire-based survey. Principle component analysis, a dimensionality reduction technique was performed on the responses to understand the important components impacting the perception of companies. Also, a case study methodology has been adopted to compare and analyse the IR trends in the manufacturing and industrial sector. The result shows that the majority of companies have a positive opinion about IR and the three major components impacting their perception are – concise reporting, effective and transparent reporting and finally, better decision-making. The result of this study will be useful for the policymakers, regulators, companies who have or will adopt IR. Paper gives a relevant view to academicians for assessing the effectiveness and perception of IR. Very few studies can be found in India which focusses on analysing the perception of preparers towards the IR. Specially after the circular of SEBI in 2017, it becomes even more important to analyse the insight and awareness of the companies who have adopted IR. The paper is a timely and relevant contribution to the literature by providing insight over the opinion of preparers in India.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-07-12
      DOI: 10.1108/JFRA-03-2020-0081
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Stock market reactions to voluntary integrated reporting

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      Authors: Yuzuka Nakajima , Yushi Inaba
      Abstract: This study aims to examine the impact of voluntary adoption of integrated reporting on the stock prices of firms in Japan. The event study methodology was used to analyze the stock market reactions to voluntary integrated report (IR) publication. Abnormal returns were estimated for 1,602 observations of 490 firms publishing IRs in Japan using the market model. The t-test, the Boehmer et al., 1991 test and the generalized sign test examined the significance of the cumulative average abnormal returns (CAARs). The study reveals that the stock market reacts positively to voluntary IR publication by firms, especially in 2019 and 2015. Additionally, it reveals a tendency for higher CAARs around IR publication dates than around corporate social responsibility report publication dates, especially in 2016 and 2015. The limitations of this study include the possibility of self-selection bias and omitted variable bias. This study suggests that firms can earn higher abnormal returns in the stock market through environmental, social and governance (ESG) disclosure in IRs, corroborating the recently rising investor interest in voluntary integrated reporting in Japan. This study contributes to the literature on the value relevance of voluntary adoption of integrated reporting by providing evidence of firms achieving significantly positive abnormal returns around voluntary IR publication dates. There is no published analysis on this topic using multitudes of sample firms using the event study methodology.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-07-12
      DOI: 10.1108/JFRA-07-2020-0217
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Corporate governance and integrated reporting: evidence of French
           companies

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      Authors: Abir Hichri
      Abstract: This paper aims to draw on the agency theory to examine the relationship between corporate governance and integrated reporting on a sample of 120 listed French companies making up the SBF 120 Index during the period 2016–2019. The methodology adopted in the present study consists of the hypothetico-deductive approach. Thus, as part of this quantitative approach, the authors aim at investigating the hypotheses concerning the impact of corporate governance mechanisms on integrated reporting. Moreover, the applied data are analyzed using the multiple linear regressions. The finding of this study is that the cognitive diversity and audit committees have a positive and significant effect on integrated reporting. However, the chief executive officer’s duality and the board’s size have a positive and non-significant effect on integrated reporting. In fact, this study contributes to the literature on the practices of integrated reporting. Faced with the rarity of studies linking the corporate governance mechanisms and the integrated reporting, this study makes a huge contribution to the determinants of integrated reporting.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-07-12
      DOI: 10.1108/JFRA-09-2020-0261
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Sustainability reporting and market value growth of quoted companies in
           Nigeria

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      Authors: Oluwasikemi Janet Taiwo , Babatunde Ayodeji Owowlabi , Yemisi Adedokun , Grace Ogundajo
      Abstract: This study aims to examine the effect of sustainability reporting on market value growth (MVG) of quoted companies in Nigeria. The corporate reporting system has evolved, and this study examined how it influences the perception of investors. This study adopted an ex post facto research design with 167 listed firms as the population. A total of 28 quoted firms were chosen with the use of purposive sampling. Data from 2009 to 2018 were obtained from secondary sources. Content analysis was used as a tool to analyse the disclosures in sustainability reports. The model was estimated using pooled ordinary least square (multivariate regression). Company age and financial leverage were used as control variables. This study found that the compliance level of the sampled firms with sustainability reporting requirements for the four dimensions are below average, and sustainability reporting does not have a significant effect on MVG with Prob. (F-stat) of 0.7212 > 0.05. Therefore, this study recommends that management should intensify efforts in ensuring maximum compliance with the sustainability reporting guideline of Global Reporting Initiative to reflect in their market value and ensure its growth. To the best of the authors’ knowledge, this study is the original idea of the authors, although references were made to previous related study but it is a unique research work of its own. The work contained in this paper (in full and part) has not been previously submitted to any other journal for publication.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-07-09
      DOI: 10.1108/JFRA-05-2020-0143
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Corporate social responsibility and tax avoidance: the case of French
           companies

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      Authors: Souhir Abid , Saîda Dammak
      Abstract: The purpose of this paper is to shed light on the effect of tax avoidance on corporate social responsibility performance. It also investigates whether audit quality affects tax avoidance practices by socially responsible performance. Based on a sample of French non-financial companies over the period 2005 to 2016, this paper uses panel data regressions. The authors apply generalized least square panel regression to overcome autocorrelation and heteroscedasticity problems. For further robustness, this paper runs instrumental variable regressions using the three-stage instrument variable method (three-stage least square). The results show that firms with high CSR scores are more likely to engage in aggressive tax avoidance. The findings also show that firms audited by high-quality auditors are more likely to get involved in CSR for hedging against the potential consequences of aggressive tax avoidance practices. The findings are consistent with risk management theory, which suggests that firm’s hedge against any reputational risks that might arise from avoiding taxes by engaging more in CSR. Results have implications for policymakers in that CSR firms audited by high-quality auditors may engage in CSR to overcome any negative reactions that could be caused as a result of tax avoidance. Thus, they need to be cautious about managers’ opportunistic behavior and enhance monitoring to enforce social compliance and to be tax compliant. This paper extends the existing literature by examining the effect of audit quality on the relationship between CSR performance and corporate tax avoidance. Audit quality is deemed to be an important governance feature that is likely to constraint managerial opportunistic behaviors. Audit quality, along with CSR performance, are associated with a higher level of tax avoidance.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-07-08
      DOI: 10.1108/JFRA-04-2020-0119
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Do socially responsible managers forecast sales more accurately'

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      Authors: Panagiotis Chronopoulos
      Abstract: This paper aims to examine whether corporate social responsibility (CSR) is related to management sales forecast accuracy. Use KLD measures of corporate responsibility combined with forecast accuracy regression model, including controls for management skills and expertise. Socially responsible firms commit forecast errors of lower magnitude and sales forecast accuracy is positively related to the level of CSR. A strong motive for research on the field of CSR topic under the scope of reporting quality. Future research could focus on alternative measures of CSR; such as announcements included into the financial statements or separately disclosed expenses. Examine the magnitude of confirmed relation, among different economies worldwide. CSR effect on manager sales forecasting activity, highlight the impact of brand awareness and customer loyalty, as created by implementing CSR strategies, on firm growth and sales expansion. The research enhances the era towards more socially responsible firms, presenting evidence of such an adoption on corporate fundamentals. To the knowledge there is no prior research examining the implications of CSR on sales forecast accuracy.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-07-01
      DOI: 10.1108/JFRA-07-2020-0206
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Systematic review of integrated reporting: recent trend and future
           research agenda

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      Authors: Chijioke Nwachukwu
      Abstract: Integrated reporting ( ) promotes transparency in corporate reporting and communicate detailed information on how a firm creates value in the short, medium and long-term. The purpose of this paper is to systematically review to provide insights into theories, determinants, consequences, contingent variables and methods that have been used in previous studies. The study was based on a systematic review of 17 articles published between 2017 and 2020. Nine theories were used in prior studies. Board size, diversity, independence, level of activity of the board, the establishment of Higher Education Institutions (before or after 1992), adoption of IR framework, size, institutional ownership, sustainability committee and the use of non-financial performance measures in executives’ compensation contracts and separate risk management committees are determinants of . Further, the positive impact of on information asymmetry, market valuation of environmental, social and governance performance, financial performance, intellectual capital, sustainability embeddedness and organisational change, external sense of legitimacy and reputation, revenue growth, corporate environmental performance and circular economy-related information, with mixed findings for analyst earnings forecast accuracy, company value and market value. Only three studies used moderating and mediating variables to examine . Quantitative research approach and secondary data are most preferred by scholars. Some papers may have been omitted unintentionally, although the author did his best to include most of the prior published articles using a rigorous methodology. This paper set out future research agenda on how research could be enhanced. Contrary to prior systematic reviews that consider individual constructs/concept, the review herein adopts a comprehensive approach and considers moderating and mediating variables aside from theories, effects and determinants of integrated reporting.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-06-14
      DOI: 10.1108/JFRA-10-2020-0308
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Impact of environmental, social and governance disclosures on market
           reaction: an evidence of Top50 companies listed from Thailand

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      Authors: Muttanachai Suttipun , Thanyaorn Yordudom
      Abstract: This study aims to survey the extent, level and trend of environmental, social and governance (ESG) disclosures of top50 listed companies from Thailand, to test the different level of ESG disclosures of the companies between high profile industry and low profile industries and to examine the impact of ESG disclosures on the market reaction of top50 listed companies in Thailand. Population and sample were top50 listed companies from the Stock Exchange of Thailand. Using corporate annual reports from 2015 to 2019, content analysis by word counting was used to quantify the extent, level and trend of ESG disclosures, while the market reaction was collected by the average stock price. Descriptive analysis, independent sample t-test, correlation matrix and multiple regression were used to analyze the data. There was an increased level of ESG disclosures during the period being study. The most common ESG disclosures were social disclosure following by governance and environmental disclosures. Moreover, there were different levels of environmental disclosure of top50 listed companies between high and low profile industries, while no different levels of social and governance disclosures between high and low profile industries were found. Finally, the study found that environmental and social disclosures had a positive impact on market reaction, while there was a negative impact of governance disclosure on market reaction. Thai investors can use ESG disclosures for their decision-making on investment.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-06-14
      DOI: 10.1108/JFRA-12-2020-0377
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Do corporate attributes impact integrated reporting quality' An
           empirical evidence

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      Authors: Olayinka Erin , Alex Adegboye
      Abstract: This study aims to examine the impact of corporate attributes on integrated reporting quality of top 100 listed firms in South Africa. With a sample of the top 100 listed firms in South Africa, this paper drew insights from the legitimacy and stakeholder theory to examine the impact of corporate attributes on integrated reporting quality. This paper measured integrated reporting quality based on the International Integrated Reporting Council framework of 2013. Corporate attributes were determined taking into consideration three broad perspectives (board committee attributes, firm attributes and audit committee attributes). This paper analyzed the data using content analysis, ordered probit regression and logistic regression method. Results indicate that board committee attributes, firm attributes and audit committee attributes have a positive and significant relationship with integrated reporting quality. Additional analysis reveals that external assurance contributes to the quality of integrated reporting. The findings empirically revealed that most South African firms have intensified efforts toward the quality and full disclosure of integrated reporting framework. The study was limited to a sample size of 100 firms, which is country-specific, however, it sets the tone for future empirical research on the subject matter. This study provides an avenue for future research in the area of corporate attributes and integrated reporting quality in other emerging countries, especially other African countries. The result of this study provides practical implications in the areas of good corporate governance, corporate reporting and integrated reporting. The empirical approach used in this study emphasizes the need for corporate organizations to introduce integrated reporting practices into their reporting cycle. The finding implies that non-compliance with integrated reporting by corporate organizations may have an adverse effect on corporate growth, corporate sustainability and corporate reputation in the long run. The work extends prior research on the subject of integrated reporting in South Africa. Also, this study broadens the application of legitimacy and stakeholder theory in influencing corporate organizations to disclose relevant information that could aids stakeholders’ interest.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-06-10
      DOI: 10.1108/JFRA-04-2020-0117
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Pay-performance sensitivity and corporate governance mechanisms: evidence
           from Tunisia

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      Authors: Meriem Ghrab , Marjène Gana , Mejda Dakhlaoui
      Abstract: The purpose of this study is to analyze the CEO compensation sensitivity to firm performance, termed as the pay-for-performance sensitivity (PPS) in the Tunisian context and to test the robustness of this relationship when corporate governance (CG) mechanisms are considered. The consideration of past executive pay as one of the explanatory variables makes this estimation model a dynamic one. Furthermore, to avoid the problem of endogeneity, this study uses the system-GMM estimator developed by Blundell and Bond (1998). For robustness check, this study aims to use a simultaneous equation approach (three-stage least squares [3SLS]) to estimate the link between performance and CEO pay with a set of CG mechanisms to control for possible simultaneous interdependencies. Using a sample of 336 firm-years from Tunisia over the 2009–2015 periods, this study finds strong evidence that the pay-performance relationship is insignificant and negative, and it becomes more negative or remains insignificant after introducing CG mechanisms consistently with the managerial power approach. The findings are robust to the use of alternative performance measures. This study provides new empirical evidence that CEOs of Tunisian firms abuse extracting rents independently of firm performance. This study contributes to the unexamined research on PPS in a frontier market. This study also shows the ineffectiveness of the Tunisian CG structure and thus recommends for the legislator to impose a mandatory CG guide.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-06-03
      DOI: 10.1108/JFRA-06-2020-0152
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • CSR or social impression management' Tone management in CSR reports

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      Authors: Sourour Hamza , Anis Jarboui
      Abstract: The purpose of this paper is to investigate to what extent corporate social responsibility (CSR) is used as a symbolic strategy of greenwashing. Analyses focus on the relationship between CSR and disclosure tone management practice in sustainable reports derived from social impression management incentives. This study is based on a sample of French listed firms (SBF 120) over a seven-year period (2010–2016), i.e. 539 firm-year observations. Multivariate analysis indicates a significant relationship between CSR and disclosure tone management. The obtained results show that firms that are less concerned with tone management in sustainable reporting process consider more socially responsible issues. Findings support the socially substantive initiatives and the transparency perspective of CSR. The negative association between CSR and tone management highlights the firm’s transparency. However, there could be other discretionary practices which may determine impression management strategies. Thus, future research may consider other discretionary behavior associated with CSR to mislead users. All actors (government, green-association, investors, etc.) interested in CSR and greenwashing issues have to bring initiatives to reinforce the monitoring and reporting procedures. This study investigates the association between CSR and disclosure tone management for the French context since the specificity of its regulatory framework of CSR disclosure. Thus, corporate narrative reporting users may be required to consider impression management practices (i.e. tone management) and read between the lines.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-05-12
      DOI: 10.1108/JFRA-04-2020-0115
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Do firm characteristics and ownership structure affect corporate
           philanthropic contributions in Jordan'

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      Authors: Husam Ananzeh , Hashem Alshurafat , Khaled Hussainey
      Abstract: This paper aims to examine the drivers of corporate donations in Jordan. In particular, to examine whether firm-specific characteristics and ownership types affect corporate donations. The analysis is based on a sample of 94 Jordanian listed companies, drawn from the manufacturing and service sectors, over the period 2010–2016. This paper uses ordinary least square regression with a year and industry fixed effects to test the research hypotheses. This paper finds that corporate philanthropic contributions are positively associated with company size, age, profitability, media exposure and governmental ownership. This paper also finds that corporate philanthropic contributions are negatively associated with financial leverage and family ownership. The paper provides new evidence on the determinants of corporate philanthropic contributions in a developing country.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-04-05
      DOI: 10.1108/JFRA-08-2020-0249
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Post-regulation effects on driving factors (no) environmental disclosures
           about greenhouse gas emissions in Italian companies

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      Authors: Fabricia Silva Rosa , Alessio Bartolacelli , Rogério J. Lunkes
      Abstract: The purpose of this study is to analyze the simultaneous effect of the regulation (non-financial information (NFI)- 254/2016) and the factors driving in (no)environmental disclosure (ED) and the reduction of greenhouse gases (GHG) of Italian companies. The study is supported by the theory of legitimacy. The level of ED regarding GHG was measured for 125 Italian companies in 2018, the companies were selected from Commissione Nazionale per le Società e la Borsa di Itália, because those included in the list of companies in the Dichiarazione Non Finanziaria all date back to December 31, 2019. Using a scoring system and content analysis of their annual reports, through 20 criteria supported by the literature. The study explores variables of the current legislation, the effect of disclosure and no disclosure, and the influence of the shareholding structure, managerial shareholding, economic power and industry classification at the ED level. The analyses were carried out using structural equation modeling because the authors seek to understand the cause-effect relationship between aspects of legitimacy with dissemination on GHG emissions. This study finds that NFI. The study is limited to understanding the effect of legislation on the level of mandatory disclosure in non-financial reports, and the Paris Agreement (voluntary) disclosure on GHG, so the choice of companies analyzed and the study variables are limited to companies that are required to publish non-financial reports, and the variables considered in the study take into account normative aspects and voluntary guidelines of the Paris Agreement. As implications, the results show that adherence to the Paris Agreement contributes more to the quality and comprehensiveness of the information than adherence to the European and Italian legislation (mandatory), which reinforces the understanding that even if the legislation has advanced, it is still soft regarding the quality of information on companies' practices regarding the reduction of GHG emissions. The findings suggest that non-financial reports are being adopted by listed Italian companies, however, there is variation in the scope of the reports, especially on GHG. For companies listed in Italy, non-financial reports comply with Italian Legislative Decree 254/2016 (mandatory), however, the quality of information on GHG is improved when companies' reports have greater adherence to the Paris Agreement (voluntary). The results can encourage companies listed in Italy to incorporate NFI in annual reports based on the Paris Agreement, the global pact to reduce GHG emissions, thus building confidence in the capital market and society in general. The findings contribute to the literature on non-financial reporting, the level of compliance with legal basis and international best practices, such as the Paris Agreement, providing empirical analyzes of non-financial disclosures in publicly available reports in Italy.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-03-12
      DOI: 10.1108/JFRA-07-2020-0211
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • A systematic literature review on integrated reporting from 2011 to 2020

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      Authors: Sushila Soriya , Parthvi Rastogi
      Abstract: This study aims to furnish the systematic literature review on integrated reporting (IR) and answer three research questions: How has the IR concept been developed recently across the different countries' How can the literature of IR be allocated among different focus areas/themes' What are the future opportunities available for IR' The methodology involves selection, classification and categorization of 110 articles on IR into their focus areas, journals, time distribution, continent-wise distribution, research methodologies and keywords analysis. The findings of the study suggest that there is a need of the following: increasing the case studies and empirical research in developing assurance models, analysis of the perception of shareholders in Asian countries, harmonization of financial and non-financial standards, research on the IR of non-listed companies. It provides insights to practitioners regarding the challenges faced by the economies and internal organization. It might help researchers and academics to focus on developments of IR in different countries. It might also help regulators to develop some policies, models and frameworks for its future implementation. It furnishes the outline of 110 articles published in eminent journals from the year 2011 to beginning of 2020.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-02-22
      DOI: 10.1108/JFRA-09-2020-0266
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Adoption of integrated reporting in Sri Lanka: coverage and trend

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      Authors: Thilini Cooray , Samanthi Senaratne , Nuwan Gunarathne , Roshan Herath , Dileepa Neelangi Samudrage
      Abstract: This paper aims to examine the coverage of and trends in reporting content elements in the integrated reports of the Sri Lankan companies following the International Integrated Reporting Framework (IIRF). Based on a comprehensive checklist developed on the content elements of the IIRF, 171 corporate integrated reports were content-analyzed over a period of three years. The results were theorized subsequently using the legitimacy theory. The study identifies that the extent of and trend in the coverage of content elements of the IIRF have increased during the period under consideration despite some under-addressed areas. It indicates that Sri Lankan companies are making progress in the preparation of integrated reports in line with the IIRF, which provides evidence in support of both strategic and institutional perspectives of the legitimacy theory because of the proactive actions taken by managers to acquire legitimacy along with the other normative and mimetic pressures available in the IR landscape. This is one of the first studies that evaluate the compliance of IR adopters with the IIRF overtime in the entirety of a single country. It also develops a comprehensive index to capture the disclosure requirements of IR and extends the analysis to a voluntary context using both strategic and institutional perspectives of the legitimacy theory.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-02-12
      DOI: 10.1108/JFRA-04-2020-0116
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Determinants of corporate social and environmental voluntary disclosure in
           Saudi listed firms

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      Authors: Helmi A. Boshnak
      Abstract: This paper aims to examine firm characteristics and ownership structure determinants of corporate social and environmental voluntary disclosure (CSEVD) practices in Saudi Arabia to address the paucity of research in this field for Saudi listed firms. The paper uses manual content and regression analyses for online annual report data for Saudi non-financial listed firms over the period 2016–2018 using CSEVD items drawing on global reporting initiative-G4 guidelines. Models show that Saudi firm CSEVD has increased over time compared to previous studies to an average of 68% disclosure due to new corporate governance regulations and IFRS implementation. The models show that firm size, leverage, manufacturing industry type and government ownership are positive determinants of CSEVD, while family ownership is the negative driver of CSEVD. However, firm profitability, audit firm size, firm age and institutional ownership have no impact on the level of CSEVD. Using legitimacy and stakeholder theories, the paper determines the influence of firm characteristics and ownership structure on CSEVD, identifying implications for firm stakeholders and providing some evidence on the impact of corporate governance regulation and IFRS implementation on such disclosure. The paper provides additional evidence on progress towards Saudi’s Vision 2030.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-02-01
      DOI: 10.1108/JFRA-05-2020-0129
      Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
       
  • Non-financial performance measures and pay-performance sensitivity

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      Authors: MyoJung Cho , Salma Ibrahim
      Abstract: This study aims to examine whether chief executive officer (CEO) pay-performance sensitivity to shareholder wealth is related to the use of non-financial performance measures in incentive contracts. Using hand-collected performance measure data in a sample of S&P 500 firms across the period 1994–2010, this study investigates the sensitivity of CEO bonus and cash pay to shareholder wealth of firms that use non-financial performance (NFPM) measures of varying types and contractual weights in their bonus contracts along with financial measures (NFPM firms) in comparison to that of firms using financial measures only (FPM firms). This study finds evidence that the pay-performance sensitivity is stronger in NFPM firms than in FPM firms. These results are driven by the use of CEO individual goals and operational efficiency. Furthermore, when using environmental, social and governance factors, the pay-performance sensitivity is stronger in terms of accounting performance only. This study also finds that using NFPM enhances pay-performance sensitivity more as their contractual weights increase and as financial risk increases. These findings are important to stakeholders, and especially regulators in understanding incentive effects of alternative performance measures. This study also sheds light on what types of non-financial measures are better in helping firms align CEOs’ incentives to shareholders’ interests. This study contributes to prior research on benefits of non-financial information within the context of executive compensation. This study presents original results about the effects of contractual weights of non-financial measures and financial risk on CEO pay-performance sensitivity. This study also presents new insights regarding how different types of non-financial measures affect CEO pay-performance sensitivity.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-10-11
      DOI: 10.1108/JFRA-01-2021-0018
      Issue No: Vol. 20 , No. 2 (2021)
       
  • Product market competition, board gender diversity and corporate
           sustainability performance: international evidence

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      Authors: Khairul Anuar Kamarudin , Akmalia M. Ariff , Wan Adibah Wan Ismail
      Abstract: This study aims to investigate whether board gender diversity is associated with corporate sustainability performance and whether industry-level product market competition moderates the effect of board gender diversity on corporate sustainability performance. This study uses international data extracted from global ESG data set from Thomson Reuters (Refinitiv) database. Using data of 23,137 firm-year observations from 37 countries, the authors perform regression analyses to examine the hypotheses. The findings show that firms with high board gender diversity exhibit high corporate sustainability performance. The authors also find firms in highly competitive industries to have low corporate sustainability performance. In highly competitive industries, the positive relationship between board gender diversity and corporate sustainability performance is weakened. The results are robust to various specification tests such as alternative measures for corporate sustainability performance, board gender diversity, product market competition and also the use of propensity score matching to address endogeneity issue. Overall, the results support the prediction that board diversity and product market competition play a substitutive role in influencing corporate sustainability performance. This study offers empirical evidence that the appointment of female directors is a useful way to improve a firm’s corporate sustainability performance, hence, providing significant benefits in terms of stakeholders’ values and corporate reputation. This study provides useful insights to investors and policymakers that intense industry competition might mitigate the role of board governance, particularly board gender diversity, in enhancing corporate sustainability performance. Using an international data set, where the observations operate in various market and institutional differences, this study is able to extricate the positive impact of board gender diversity and product market competition on corporate sustainability performance. This study corroborates evidence that sustainability strategy and initiatives are reflections of integrated factors, including corporate governance as internal driver and market forces faced by firms as external driver.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-08-27
      DOI: 10.1108/JFRA-01-2021-0020
      Issue No: Vol. 20 , No. 2 (2021)
       
  • Completeness of the qualitative characteristics using Foucauldian critical
           discourse analysis and content analysis paradigms: towards a revised
           conceptual framework

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      Authors: Gareth Evans , Joanne Lusher , Stephen Day
      Abstract: The qualitative characteristics of decision-useful financial information (as set out in the revised March 2018 Conceptual Framework for financial reporting of the International Accounting Standards Board [IASB]) are fundamental for standard setting relied on by companies when making accounting policy changes and choices. However, there has not been an overarching universally agreed conceptual context of the qualitative characteristics. This paper aims to study the completeness of the qualitative characteristics towards suggesting a revision of the Conceptual Framework. The present study evaluated the completeness of these qualitative characteristics using Foucauldian critical discourse analysis and content analysis paradigms to elucidate the inclusion conundrum. Foucauldian analysis allowed focus on power relationships, governmentality and subjectification in accounting society, as expressed through language and practices of the IASB who ultimately decide on the qualitative characteristics. Content analysis was used to analyse data collected via interviews with preparers and users of banks’ accounts, changes in banks’ accounting policies after the conceptual framework was published and comment letters from banks who wrote to the IASB. Novel findings from this study revealed the potential significant omissions of the constraints of “materiality”, “transparency” and “regulatory/supervisory framework”. Also, surrounding the qualitative characteristics having been shown to be valid and includable, the adjective “decision-useful” reinstated in the chapter title and the IASB project team technical writers needing to show completeness of attention to all comments. From these findings, a freshly formulated chapter in the conceptual framework on the qualitative characteristics can now be submitted for consideration by the IASB, with potential for international post-implementation review.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-07-19
      DOI: 10.1108/JFRA-11-2020-0313
      Issue No: Vol. 20 , No. 2 (2021)
       
  • Tax aggressiveness and the proportion of quantitative information in
           income tax footnotes

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      Authors: Hanni Liu
      Abstract: This paper aims to analyse the determinants of the proportion of quantitative data in financial statement footnote disclosures. Quantitative data represents “hard” information and has been considered to be more persuasive than qualitative data. The primary focus is on income tax footnotes because revenue agents use them as a reference in tax audits, and citizen groups use them to analyse tax inequalities. This study posits that firms with lower effective tax rates (“tax aggressive” firms) disclose less quantitative data in their income tax footnotes. The multivariate analysis uses data from the contents of income tax footnotes extracted from 10-K filings in eXtensible Business Reporting Language (XBRL). It uses the alphanumeric characters identified in the income tax footnotes to calculate the proportion of quantitative data relative to the entire footnote disclosure as the dependent variable in a multivariate regression analysis. The findings show that firms which avoid more taxes disclose less quantitative data in income tax footnotes after controlling for the readability of the income tax footnotes and the entire annual report. Therefore, firms seem to reduce the publication of measurable data accessible to revenue agencies and citizen groups. This analysis provides evidence that firms weigh the financial reporting requirements and tax audit risks when they disclose quantitative income tax data. Also, it supports the Financial Accounting Standards Board’s (FASB’s) proposal to require more disaggregated income tax disclosure. To the researcher’s knowledge, this is the first analysis that focuses on the determinants of disclosing quantitative data in income tax footnotes.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-07-12
      DOI: 10.1108/JFRA-08-2020-0233
      Issue No: Vol. 20 , No. 2 (2021)
       
  • Big 4 auditors, bank earnings management and financial crisis in Africa

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      Authors: Peterson K. Ozili
      Abstract: This paper aims to examine whether African banks audited by a Big 4 auditor use loan loss provisions (LLPs) for earnings management purposes before, during and after the global financial crisis. It focuses on income smoothing as a type of earnings management. The study analyzed banks in 21 African countries from 2002 to 2014. The estimation techniques used are the fixed effect regression technique, descriptive statistic and Pearson correlation statistic. The model used in the study expresses LLPs as a function of its discretionary and non-discretionary determinants. African banks audited by Big 4 auditors use LLPs to smooth income and the incentive to smooth income is greater during an economic downturn or recession. Also, African banks audited by a Big 4 auditor use income smoothing to lower high earnings during the financial crisis and in the pre-financial crisis period but not in the post-financial crisis period. The literature shows that the presence of Big 4 auditors improves earnings quality. The direct impact of Big 4 auditors on earnings management in African banks has received little attention in the literature, and the impact of audit quality on bank earnings smoothing particularly in Africa is yet to be known.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-07-01
      DOI: 10.1108/JFRA-10-2020-0306
      Issue No: Vol. 20 , No. 2 (2021)
       
  • Board governance, ownership structure and foreign investment in the Saudi
           capital market

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      Authors: Mohammed Bajaher , Murya Habbash , Adel Alborr
      Abstract: This paper aims to examine whether board governance mechanisms and ownership structure play a role in foreign investors’ decisions when buying shares in Saudi listed companies Foreign investment in the Saudi capital market started in 2015 and reached a peak in 2019, with corporate governance regulations having been updated in 2017. The authors tested the proposed relationships using hand collected data for all Saudi non-financial firms in 2019. This study found that it does not play a role in attracting foreign investment in the Saudi capital market. Foreign investors also seem to avoid firms with concentrated ownership that either have high government or director ownership; however, accounting and market variables show significant impact on foreign investors' decisions. The outcomes of this study provide empirical evidence that current foreign investors in the Saudi stock market do not place enough merit on board governance and their investment decisions tend to depend on share performance. Thus, the results show that the current governance changes and capital market regulations in Saudi Arabia may not have been sufficient to stimulate the inflow of institutional foreign investment to the country to date, but rather they have attracted individual retail foreign investors. This empirical study is one of only a small number of studies to investigate the impact of internal corporate governance on foreign ownership in developing countries and the first in the Saudi context. In fact, most previous governance research in Saudi Arabia focused on how board governance and ownership structure influences firm performance. A review of the prior studies found that only Badawi et al. (2019) examined the determinants of foreign ownership among Saudi listed firms. Thus, the present investigation extends that study by examining the role of board governance in attracting foreign investors.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-06-30
      DOI: 10.1108/JFRA-11-2020-0329
      Issue No: Vol. 20 , No. 2 (2021)
       
  • Corporate governance and investment efficiency in Indonesia: the
           moderating role of industry competition

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      Authors: Irenius Dwinanto Bimo , Engelbertha Evrantine Silalahi , Ni Luh Gde Lydia Kusumadewi
      Abstract: This study aims to analyse the effect of corporate governance on investment efficiency and the moderating impact of industry competition on the relationship between corporate governance and investment efficiency. The research sample includes a total of 36 publicly listed companies assessed by the Indonesian Institute for Corporate Directorship from 2012 to 2018. Testing is performed on full sample and overinvestment and underinvestment subsamples. Additional testing is further carried out using the generalized method of moments to address endogeneity problems and a robustness test is performed to assess the estimated investment efficiency. Corporate governance can increase investment efficiency and the effectiveness of corporate governance is found to drop when the level of industry competition is higher. The results of the present study corroborate the suggestion that companies need to implement corporate governance mechanisms. Furthermore, designing a corporate governance mechanism requires the scrutiny of the external environment, including industry competition. The present study adds the profitability factor in the calculation of investment efficiency levels. This study also considers external factors that can influence the effectiveness of corporate governance in determining investment efficiency.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-06-22
      DOI: 10.1108/JFRA-12-2020-0351
      Issue No: Vol. 20 , No. 2 (2021)
       
  • Improving board diversity around the world: the role of institutional
           investors

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      Authors: Badar Alshabibi
      Abstract: This study aims to examine the role of institutional investors in improving board diversity for the companies in which they invest (investee companies) using evidence from corporate board characteristics across the globe. Additionally, this study also investigates the association between institutional investors and board diversity under various institutional settings, including varying economic conditions (pre-crisis, crisis and post-crisis), legal systems and ownership structures. Using a sample collected from 15 countries for the period 2006 to 2012, the paper uses panel data analysis to examine the association between institutional investors and board diversity. The study provides evidence that institutional investors do not promote board diversity and show that in general there is no association between institutional ownership and various board diversity attributes such as gender, age, nationality and education. However, the study finds that institutional investors are positively associated with the educational diversity of boards during times of crisis and are negatively associated with board age diversity during pre-crisis and post-crisis periods. Furthermore, while in common law countries institutional investors are found to be negatively associated with board age diversity, they do not influence board diversity outcomes (i.e. gender, age, nationality and education) in civil law countries. The results also show that the associations between institutional investors and board diversity are mixed and insignificant according to different ownership structures (family and non-family owned firms). The main findings of the study are robust and apply to various estimation methods. This study provides a unique perspective on the impact of institutional investors on board diversity using a sample collected from 15 countries. Furthermore, the study provides an insight that the institutional settings should be considered when investigating the activism of institutional investors in improving governance practices.
      Citation: Journal of Financial Reporting and Accounting
      PubDate: 2021-06-21
      DOI: 10.1108/JFRA-03-2021-0076
      Issue No: Vol. 20 , No. 2 (2021)
       
  • Journal of Financial Reporting and Accounting

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