Accruals quality and efficient investing: Cross-country evidence

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Abstract

This study examines whether the effect of firm-level financial reporting quality − measured in the form of the quality of accruals − on corporate investment efficiency differs across jurisdictions with different strengths of institutional and regulatory enforcement. Institutional enforcement effectiveness relates to operating in jurisdictions with lower vs. higher informational uncertainty about actual firm performance, and where institutions secure the correct function of markets, with limited concerns about the extraction of any unlawful benefits by insiders. This effectiveness should mitigate adverse selection and moral hazard concerns driving inefficient investment, in the way that firm-specific financial reporting quality has been shown to do within single-country settings. Using a sample from 25 countries, accruals quality is positively associated with efficient investing, regardless of any country-level institutional characteristics. This association becomes more pronounced when the country-level strength of institutional enforcement is weaker, consistent with firm-specific reporting quality increasing in importance when country level institutional enforcement worsens. This evidence indicates that, when the effectiveness of institutional enforcement in a country does not successfully alleviate information asymmetries or secure efficient monitoring of corporate insiders by capital providers, there is greater need for firm-specific accounting quality to perform this function and promote efficient firm-level investing.
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应计质量和有效投资:跨国证据
本研究探讨了公司层面的财务报告质量(以应计项目质量的形式衡量)对企业投资效率的影响在制度和监管执行力度不同的司法管辖区是否存在差异。制度执行的有效性与公司实际业绩的信息不确定性较低与较高的司法管辖区有关,在这些司法管辖区,制度确保了市场的正确功能,对内部人员攫取任何非法利益的担忧有限。这种有效性应能减轻导致投资效率低下的逆向选择和道德风险问题,就像特定公司的财务报告质量在单一国家环境下所起到的作用一样。在 25 个国家的样本中,应计项目质量与有效投资呈正相关,与任何国家层面的制度特征无关。当国家层面的制度执行力度较弱时,这种关联就会变得更加明显,这与当国家层面的制度执行力度恶化时,特定公司报告质量的重要性增加是一致的。这一证据表明,当一个国家的制度执行效力不能成功缓解信息不对称或确保资本提供者对公司内部人的有效监督时,就更需要特定公司的会计质量来履行这一职能,并促进公司层面的有效投资。
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来源期刊
CiteScore
4.50
自引率
3.80%
发文量
31
期刊介绍: The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.
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