Pub Date : 2024-05-14DOI: 10.1142/s1094406024500070
Paul A. Griffin, Estelle Y. Sun
Synopsis The research problem This paper provides a semisystematic review of the literature on climate-related financial risk, with particular emphasis on whether that risk is adequately priced by financial markets and the implications of that risk assessment for financial reporting. Motivation This paper was motivated by a strong perception that financial markets have become increasingly exposed to the perils of climate change, and a concern for whether the rapid expansion of the literature on this topic sufficiently addresses financial markets’ correct pricing of the uncertainties inherent in these perils. Our particular goals were to understand the expansion of this literature, identify the originating and influential works that may have spurred this expansion, and provide new directions for research. The research question Our paper reviews the research on whether climate-related financial risk is adequately priced by the financial markets. Target population We examined a comprehensive sample of articles on climate-related financial risk published in the Financial Times’ Top 50 (FT50) accounting, finance, management, and business ethics journals over three decades, ending in 2022. Our analysis of the evolution of knowledge on climate-related financial risk also includes studies in non-FT50 journals (prior works) that may have spurred subsequent work in FT50 journals; non-FT50 journals (derivative works) that are inspired by the studies in FT50 journals; and set of studies that are similar to those in FT50 journals in terms of the topic (similar works) published in an array of non-FT50 journals. Adopted methodology We conducted a semisystematic review of knowledge flow based on bibliographic coupling, cocitation, and direct citation. Analyses We reviewed FT50 articles to examine the topics, methods, samples, and results. We compared FT50 articles with non-FT50 articles to explore their respective number of publications and average citations over time. We also examined the extent to which the FT50 and non-FT50 journals included accounting papers and the extent to which the top 20 papers, based on their impact (defined as the number of times a paper was considered an influential work by the FT50 journal papers), included accounting papers. Findings Compared to non-FT50 journals, we find that FT50 journals largely ignored climate-related financial risk until about 2010, and that the average citation of an FT50 publication was lower than a non-FT50 publication until around 2017. The fraction of FT50 and non-FT50 accounting journals publishing on climate-related financial risk remained low across all years. Moreover, the top 20 studies, based on their impact, included very few accounting papers. Our review of the content of the FT50 studies identifies traits of the literature that limit its generalizability, namely, a heavy emphasis on samples of U.S. corporations and the extensive use of association tests to develop the findings. Our review of the
{"title":"Climate-Related Financial Risk: Insights from a Semisystematic Review of the Literature and Implications for Financial Reporting","authors":"Paul A. Griffin, Estelle Y. Sun","doi":"10.1142/s1094406024500070","DOIUrl":"https://doi.org/10.1142/s1094406024500070","url":null,"abstract":"Synopsis The research problem This paper provides a semisystematic review of the literature on climate-related financial risk, with particular emphasis on whether that risk is adequately priced by financial markets and the implications of that risk assessment for financial reporting. Motivation This paper was motivated by a strong perception that financial markets have become increasingly exposed to the perils of climate change, and a concern for whether the rapid expansion of the literature on this topic sufficiently addresses financial markets’ correct pricing of the uncertainties inherent in these perils. Our particular goals were to understand the expansion of this literature, identify the originating and influential works that may have spurred this expansion, and provide new directions for research. The research question Our paper reviews the research on whether climate-related financial risk is adequately priced by the financial markets. Target population We examined a comprehensive sample of articles on climate-related financial risk published in the Financial Times’ Top 50 (FT50) accounting, finance, management, and business ethics journals over three decades, ending in 2022. Our analysis of the evolution of knowledge on climate-related financial risk also includes studies in non-FT50 journals (prior works) that may have spurred subsequent work in FT50 journals; non-FT50 journals (derivative works) that are inspired by the studies in FT50 journals; and set of studies that are similar to those in FT50 journals in terms of the topic (similar works) published in an array of non-FT50 journals. Adopted methodology We conducted a semisystematic review of knowledge flow based on bibliographic coupling, cocitation, and direct citation. Analyses We reviewed FT50 articles to examine the topics, methods, samples, and results. We compared FT50 articles with non-FT50 articles to explore their respective number of publications and average citations over time. We also examined the extent to which the FT50 and non-FT50 journals included accounting papers and the extent to which the top 20 papers, based on their impact (defined as the number of times a paper was considered an influential work by the FT50 journal papers), included accounting papers. Findings Compared to non-FT50 journals, we find that FT50 journals largely ignored climate-related financial risk until about 2010, and that the average citation of an FT50 publication was lower than a non-FT50 publication until around 2017. The fraction of FT50 and non-FT50 accounting journals publishing on climate-related financial risk remained low across all years. Moreover, the top 20 studies, based on their impact, included very few accounting papers. Our review of the content of the FT50 studies identifies traits of the literature that limit its generalizability, namely, a heavy emphasis on samples of U.S. corporations and the extensive use of association tests to develop the findings. Our review of the ","PeriodicalId":101232,"journal":{"name":"The International Journal of Accounting","volume":"3 4","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140980011","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-14DOI: 10.1142/s1094406024500094
Diogenis Baboukardos, Anastasia Kopita
Synopsis The research problem The purpose of this study was to examine the market reaction to sell-side analyst recommendation revisions issued under an integrated reporting (IR) approach. Motivation Advocates of this corporate reporting approach argue that IR enhances capital markets’ information environment by rendering investors better able to assess the value creation process of a firm. Recent empirical studies corroborate this argument. Considering the central role of financial intermediaries, we investigated whether the informativeness of analyst recommendation revisions is associated with the adoption of IR and the quality of integrated reports. The test hypotheses We tested whether the informativeness of analyst recommendation revisions decreases or increases after the mandatory adoption of an IR approach. Furthermore, we tested whether the informativeness is negatively or positively related to the quality of the released integrated report after the mandatory adoption of an IR approach. Target population We focused on the South African capital market, which is the only setting where IR is mandated. We utilized a sample of 3,201 recommendation revisions made within a 3-year window around the mandatory IR adoption. Adopted methodology This study used ordinary least square (OLS) regressions and applied difference-in-differences as well as instrumental variable approaches. Analyses We modeled the market reaction to the recommendation revisions as a function of the period in which the recommendations are announced (i.e., pre- or post-adoption), along with other factors affecting market reaction. In subsequent tests, we also modeled the market reaction to the recommendation revisions as a function of the quality of a firm’s integrated report. Findings We found strong evidence that analysts’ revisions exhibited economically and statistically significantly lower information content under IR. Moreover, we found that upgrades and downgrades issued in the post-adoption period were less informative when issued for firms with high-quality integrated reports. Overall, results showed that the benefit of acquiring advice from analysts became more marginal under an IR approach.
{"title":"Integrated Reporting and the Informativeness of Financial Analysts’ Stock Recommendations","authors":"Diogenis Baboukardos, Anastasia Kopita","doi":"10.1142/s1094406024500094","DOIUrl":"https://doi.org/10.1142/s1094406024500094","url":null,"abstract":"Synopsis The research problem The purpose of this study was to examine the market reaction to sell-side analyst recommendation revisions issued under an integrated reporting (IR) approach. Motivation Advocates of this corporate reporting approach argue that IR enhances capital markets’ information environment by rendering investors better able to assess the value creation process of a firm. Recent empirical studies corroborate this argument. Considering the central role of financial intermediaries, we investigated whether the informativeness of analyst recommendation revisions is associated with the adoption of IR and the quality of integrated reports. The test hypotheses We tested whether the informativeness of analyst recommendation revisions decreases or increases after the mandatory adoption of an IR approach. Furthermore, we tested whether the informativeness is negatively or positively related to the quality of the released integrated report after the mandatory adoption of an IR approach. Target population We focused on the South African capital market, which is the only setting where IR is mandated. We utilized a sample of 3,201 recommendation revisions made within a 3-year window around the mandatory IR adoption. Adopted methodology This study used ordinary least square (OLS) regressions and applied difference-in-differences as well as instrumental variable approaches. Analyses We modeled the market reaction to the recommendation revisions as a function of the period in which the recommendations are announced (i.e., pre- or post-adoption), along with other factors affecting market reaction. In subsequent tests, we also modeled the market reaction to the recommendation revisions as a function of the quality of a firm’s integrated report. Findings We found strong evidence that analysts’ revisions exhibited economically and statistically significantly lower information content under IR. Moreover, we found that upgrades and downgrades issued in the post-adoption period were less informative when issued for firms with high-quality integrated reports. Overall, results showed that the benefit of acquiring advice from analysts became more marginal under an IR approach.","PeriodicalId":101232,"journal":{"name":"The International Journal of Accounting","volume":"93 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140978583","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-04DOI: 10.1142/s1094406024500082
Ammar Ali Gull, Muhammad Atif, Muhammad Usman
Synopsis The research problem In this study, we examined the effect of an important informal institution, namely, national culture, on audit fees in an international context. Motivation In recent years, extant literature has increasingly focused on country-level differences in the audit environment, as these might have a significant influence on how financial statement audits are conducted across the globe. We contribute to this stream of literature by investigating the impact of national culture on audit fees. The test hypotheses Based on the demand- and supply-side perspectives of audit fees, we hypothesized that national culture dimensions — namely, uncertainty avoidance, power distance, individualism versus collectivism, and masculinity versus femininity — affect audit fees. Target population We used a sample of 27,670 firm-year observations across 22 countries over the 2002–2019 period. Adopted methodology We used ordinary least squares (OLS) regressions as baseline technique and entropy-balanced method (EBM) and system-generalized method of moments (GMM) to address endogeneity concerns. Analyses We examined the impact of Hofstede’s four national culture dimensions — uncertainty avoidance, power distance, individualism versus collectivism, and masculinity versus femininity — on audit fees. We also tested the robustness of results using alternative measures of national culture, subsample analyses, and additional firm-level factors. Findings Consistent with our hypotheses, we find that audit fees are higher (lower) in countries with higher uncertainty avoidance, individualism, and masculinity (power distance) scores. Our further analyses reveal that earnings management proxied by abnormal accruals does not impact the relationship; however, country-level creditor rights influence audit fees in high power distance and masculine cultures. We also note that national culture influences auditor choice and audit opinion. Our main findings are robust to alternate proxies and subsample analysis, as well as to address potential endogeneity concerns. Overall, our findings offer important implications for firms operating in global markets and for the audit profession.
{"title":"Informal Institutions and Audit Pricing: Cross-Country Evidence of National Culture and Audit Fees","authors":"Ammar Ali Gull, Muhammad Atif, Muhammad Usman","doi":"10.1142/s1094406024500082","DOIUrl":"https://doi.org/10.1142/s1094406024500082","url":null,"abstract":"Synopsis The research problem In this study, we examined the effect of an important informal institution, namely, national culture, on audit fees in an international context. Motivation In recent years, extant literature has increasingly focused on country-level differences in the audit environment, as these might have a significant influence on how financial statement audits are conducted across the globe. We contribute to this stream of literature by investigating the impact of national culture on audit fees. The test hypotheses Based on the demand- and supply-side perspectives of audit fees, we hypothesized that national culture dimensions — namely, uncertainty avoidance, power distance, individualism versus collectivism, and masculinity versus femininity — affect audit fees. Target population We used a sample of 27,670 firm-year observations across 22 countries over the 2002–2019 period. Adopted methodology We used ordinary least squares (OLS) regressions as baseline technique and entropy-balanced method (EBM) and system-generalized method of moments (GMM) to address endogeneity concerns. Analyses We examined the impact of Hofstede’s four national culture dimensions — uncertainty avoidance, power distance, individualism versus collectivism, and masculinity versus femininity — on audit fees. We also tested the robustness of results using alternative measures of national culture, subsample analyses, and additional firm-level factors. Findings Consistent with our hypotheses, we find that audit fees are higher (lower) in countries with higher uncertainty avoidance, individualism, and masculinity (power distance) scores. Our further analyses reveal that earnings management proxied by abnormal accruals does not impact the relationship; however, country-level creditor rights influence audit fees in high power distance and masculine cultures. We also note that national culture influences auditor choice and audit opinion. Our main findings are robust to alternate proxies and subsample analysis, as well as to address potential endogeneity concerns. Overall, our findings offer important implications for firms operating in global markets and for the audit profession.","PeriodicalId":101232,"journal":{"name":"The International Journal of Accounting","volume":"161 2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141013169","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-04-09DOI: 10.1142/s1094406024800015
Simon Dekeyser
In this discussion of Griffith and Sun [( 2024 ), Climate-related Financial Risk: Insights from a Semisystematic Review of the Literature and Implications for Financial Reporting” the International Journal of Accounting, this issue], I examine both the incremental contribution of their work and its limitations. Furthermore, I delve into the limitations inherent in the chosen research design strategy and discuss how these limitations may affect some of the documented findings, particularly those related to accounting research.
{"title":"Discussion of “Climate-Related Financial Risk: Insights from a Semisystematic Review of the Literature and Implications for Financial Reporting”","authors":"Simon Dekeyser","doi":"10.1142/s1094406024800015","DOIUrl":"https://doi.org/10.1142/s1094406024800015","url":null,"abstract":"In this discussion of Griffith and Sun [( 2024 ), Climate-related Financial Risk: Insights from a Semisystematic Review of the Literature and Implications for Financial Reporting” the International Journal of Accounting, this issue], I examine both the incremental contribution of their work and its limitations. Furthermore, I delve into the limitations inherent in the chosen research design strategy and discuss how these limitations may affect some of the documented findings, particularly those related to accounting research.","PeriodicalId":101232,"journal":{"name":"The International Journal of Accounting","volume":"1 4","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140721988","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-12-12DOI: 10.1142/s109440602450001x
Martin Gäumann, Michael Dobler
Synopsis The research problem Prior empirical research on constituents’ participation in setting international accounting standards has focused on their decision whether or not to participate directly in the standard setter’s due process. However, because that focus neglects constituents’ choice between direct participation and indirect participation via an intermediary, we investigated the determinants of using an indirect method of participation as a substitute for, or in complement to, direct participation. Institutional setting We exploited the European institutional setting, where the European Financial Reporting Advisory Group (EFRAG) serves as an intermediary for indirect participation in the due process of the International Accounting Standards Board (IASB). The test hypotheses Based on rational choice theory, we hypothesized that constituents from EFRAG’s inner circle and from countries with smaller capital markets, lower English-language proficiency, and/or an accounting value profile more different from that embodied in International Financial Reporting Standards (IFRS) have a higher probability of choosing to use indirect participation. Adopted methodology Using a sample of 7,766 comment letters (CLs) from 2005–2017, we focused on individual constituents and traced their use of indirect participation (i.e., sending CLs to EFRAG) versus direct participation (i.e., sending CLs to the IASB). We employed logistic regression models using the methods of participation as dependent variable to test our hypotheses. Controlling for factors used in prior research on direct participation, we estimated a primary model for the full sample of constituents and a secondary model with firm-specific variables for the subsample of constituents classified as corporate preparers. Findings and implications We found strong evidence that the constituents’ membership in EFRAG’s inner circle is positively related, and capital market size in the constituents’ home countries is negatively related, to choosing to use indirect participation. Country-level English-language proficiency and differences in the accounting value profile in relation to IFRS also determine the choice of participation method. Our findings suggest that a preference for indirect participation relates to the barriers to using direct participation. We provide initial evidence of a neglected aspect of Sutton’ s ( 1984 ) rational choice model and implications for EFRAG’s role as an intermediary.
{"title":"Choice of Participation Method in Setting International Accounting Standards: Evidence from EFRAG as an Intermediary for Indirect Participation","authors":"Martin Gäumann, Michael Dobler","doi":"10.1142/s109440602450001x","DOIUrl":"https://doi.org/10.1142/s109440602450001x","url":null,"abstract":"Synopsis The research problem Prior empirical research on constituents’ participation in setting international accounting standards has focused on their decision whether or not to participate directly in the standard setter’s due process. However, because that focus neglects constituents’ choice between direct participation and indirect participation via an intermediary, we investigated the determinants of using an indirect method of participation as a substitute for, or in complement to, direct participation. Institutional setting We exploited the European institutional setting, where the European Financial Reporting Advisory Group (EFRAG) serves as an intermediary for indirect participation in the due process of the International Accounting Standards Board (IASB). The test hypotheses Based on rational choice theory, we hypothesized that constituents from EFRAG’s inner circle and from countries with smaller capital markets, lower English-language proficiency, and/or an accounting value profile more different from that embodied in International Financial Reporting Standards (IFRS) have a higher probability of choosing to use indirect participation. Adopted methodology Using a sample of 7,766 comment letters (CLs) from 2005–2017, we focused on individual constituents and traced their use of indirect participation (i.e., sending CLs to EFRAG) versus direct participation (i.e., sending CLs to the IASB). We employed logistic regression models using the methods of participation as dependent variable to test our hypotheses. Controlling for factors used in prior research on direct participation, we estimated a primary model for the full sample of constituents and a secondary model with firm-specific variables for the subsample of constituents classified as corporate preparers. Findings and implications We found strong evidence that the constituents’ membership in EFRAG’s inner circle is positively related, and capital market size in the constituents’ home countries is negatively related, to choosing to use indirect participation. Country-level English-language proficiency and differences in the accounting value profile in relation to IFRS also determine the choice of participation method. Our findings suggest that a preference for indirect participation relates to the barriers to using direct participation. We provide initial evidence of a neglected aspect of Sutton’ s ( 1984 ) rational choice model and implications for EFRAG’s role as an intermediary.","PeriodicalId":101232,"journal":{"name":"The International Journal of Accounting","volume":"52 S1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139009752","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-29DOI: 10.1142/s1094406023500117
Ahmad Alshehabi, Hussein Halabi, Godfred Afrifa
Synopsis The research problem In this study, we investigated the relationship between future-time reference (FTR) in languages and goodwill impairment. Motivation Previous studies on goodwill have focused mainly on firms’ economic and reporting incentives in single-country settings using economic theories. There have been recent calls for more research on goodwill accounting across countries (d’Arcy and Tarca, 2018), and greater use of behavioral theories in goodwill accounting studies (Amel-Zadeh et al., 2021). In response, we applied the linguistic relativity hypothesis to a new and highly significant area of future-oriented behavior (impairment decision) to explain cross-country variations in goodwill impairment reporting. The test hypotheses We hypothesized that firms in countries that use weak-FTR languages have higher levels of (and greater quality) goodwill impairment than those in countries that use strong-FTR languages. Target population We used a sample of 15,179 firm-year observations taken from firms reporting under IFRS across 21 countries for the fiscal years 2005–2018. Adopted methodology We used Tobit regressions, logit regressions, mixed-effects modeling, and propensity score-matching analyses for robustness. Analyses We tested the relationship between FTR in languages and (a) goodwill impairment decisions, (b) goodwill impairment amounts, and (c) abnormal goodwill impairments. We repeated our main analyses using several subsamples, different measures of FTR, and alternative regression specifications. Findings In line with the linguistic relativity hypothesis, our findings indicate that managers who speak weak-FTR languages are more willing to bear the costs of their impairment decisions in the present and are less motivated to shift current impairment into future accounting periods. In contrast, speakers of strong-FTR languages tend to delay the recognition of current impairments to future periods to reduce their anxiety about the negative effects of current impairment decisions. Findings from further analyses indicate that firms in weak-FTR countries report lower abnormal goodwill impairment, thereby bringing impairment levels closer to their normal optimal levels. Our inferences are robust to alternative samples, different measures of FTR, and alternative model specifications.
{"title":"The Effect of Time Orientation in Languages on the Recognition of Goodwill Impairment Losses","authors":"Ahmad Alshehabi, Hussein Halabi, Godfred Afrifa","doi":"10.1142/s1094406023500117","DOIUrl":"https://doi.org/10.1142/s1094406023500117","url":null,"abstract":"Synopsis The research problem In this study, we investigated the relationship between future-time reference (FTR) in languages and goodwill impairment. Motivation Previous studies on goodwill have focused mainly on firms’ economic and reporting incentives in single-country settings using economic theories. There have been recent calls for more research on goodwill accounting across countries (d’Arcy and Tarca, 2018), and greater use of behavioral theories in goodwill accounting studies (Amel-Zadeh et al., 2021). In response, we applied the linguistic relativity hypothesis to a new and highly significant area of future-oriented behavior (impairment decision) to explain cross-country variations in goodwill impairment reporting. The test hypotheses We hypothesized that firms in countries that use weak-FTR languages have higher levels of (and greater quality) goodwill impairment than those in countries that use strong-FTR languages. Target population We used a sample of 15,179 firm-year observations taken from firms reporting under IFRS across 21 countries for the fiscal years 2005–2018. Adopted methodology We used Tobit regressions, logit regressions, mixed-effects modeling, and propensity score-matching analyses for robustness. Analyses We tested the relationship between FTR in languages and (a) goodwill impairment decisions, (b) goodwill impairment amounts, and (c) abnormal goodwill impairments. We repeated our main analyses using several subsamples, different measures of FTR, and alternative regression specifications. Findings In line with the linguistic relativity hypothesis, our findings indicate that managers who speak weak-FTR languages are more willing to bear the costs of their impairment decisions in the present and are less motivated to shift current impairment into future accounting periods. In contrast, speakers of strong-FTR languages tend to delay the recognition of current impairments to future periods to reduce their anxiety about the negative effects of current impairment decisions. Findings from further analyses indicate that firms in weak-FTR countries report lower abnormal goodwill impairment, thereby bringing impairment levels closer to their normal optimal levels. Our inferences are robust to alternative samples, different measures of FTR, and alternative model specifications.","PeriodicalId":101232,"journal":{"name":"The International Journal of Accounting","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135131273","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-11DOI: 10.1142/s1094406023010011
{"title":"An Announcement from The International Journal of Accounting (TIJA) Editors","authors":"","doi":"10.1142/s1094406023010011","DOIUrl":"https://doi.org/10.1142/s1094406023010011","url":null,"abstract":"","PeriodicalId":101232,"journal":{"name":"The International Journal of Accounting","volume":"151 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136023702","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-11DOI: 10.1142/s1094406023500105
Kung-Cheng Ho, Yiling Chen, Dezhu Ye, Cheng Yan
Synopsis The research problem This paper assesses whether and how people’s perceptions of time — strong future time reference (FTR) versus weak FTR — affect corporate default risk. Motivation or theoretical reasoning Studies have shown that default risk varies across firms, regions, and countries, highlighting the need for a comprehensive understanding of the contributing factors. Traditional studies focus on how firm-level, industry-level, national and international economic and financial variables shape corporate default risk, but they fail to explain cross-country and cross-regional differences in corporate default risk from the perspective of informal institutions, particularly, language. This study takes the first step to examine whether and how future-oriented language shapes corporate default risk. The test hypotheses We first tested whether strong-FTR language decreases corporate default risk. We further tested whether the effect of strong-FTR language on default risk depends on firms’ level of information transparency. In addition, we tested whether the effect of strong-FTR language on default risk depends on a country’s disclosure requirements. Lastly, we tested whether the effect of strong-FTR language on default risk depends on a country’s control of corruption. Target population We find that corporate default risk is significantly higher in regions dominated by speakers of weak-FTR languages, using a comprehensive sample of firms in 36 countries with 180,013 observations spanning from 1988 to 2017. Adopted methodology Ordinary least square regressions were used in this study. Analyses Corporate default risk is measured by two proxies of firm probability of default, following Merton [(1974) Journal of Finance, 29(2), 449–470] and Lee and Lin [(2012) Journal of International Financial Markets, Institutions, and Money, 22(4), 973–989]. Our independent variable is Strong FTR, which equals 1 if a language belongs to the strong-FTR language family, as defined by the European Science Foundation’s Typology of Languages in Europe (EUROTYP) project. If a language does not require “obligatory [FTR] use in (main clause) prediction-based contexts” [Dahl (2000)Tense and Aspect in the Languages of Europe, O. Dahl (Ed.), pp. 309–328], then we put this language into the weak-FTR group. On the other hand, if a language does have the above-mentioned requirement, then it belongs to the strong-FTR group. Findings We found that corporate default risk is significantly higher in regions dominated by speakers of weak-FTR languages. Furthermore, the FTR effect on default risk is weakened in countries with stronger formal institutions (e.g., high disclosure quality, greater transparency, and less corruption). Our results introduce a new explanation for heterogeneity in corporate default risk, provide insights about whether language is an economic institution, and adds to research on the effects of languages on economic and financial outcomes.
本文评估了人们对时间的感知——强未来时间参考(FTR)和弱未来时间参考(FTR)——是否以及如何影响公司违约风险。动机或理论推理研究表明，违约风险因公司、地区和国家而异，这突出了全面了解促成因素的必要性。传统研究关注企业层面、行业层面、国家层面和国际层面的经济金融变量如何影响企业违约风险，但未能从非正式制度尤其是语言的角度解释企业违约风险的跨国、跨地区差异。本研究首先考察了面向未来的语言是否以及如何塑造企业违约风险。我们首先测试了强ftr语言是否会降低公司违约风险。我们进一步检验了强ftr语言对违约风险的影响是否取决于企业的信息透明度水平。此外，我们测试了强ftr语言对违约风险的影响是否取决于一个国家的披露要求。最后，我们检验了强ftr语言对违约风险的影响是否取决于一个国家对腐败的控制。我们发现，在以使用弱ftr语言的人为主的地区，企业违约风险明显更高，我们对36个国家的公司进行了全面抽样，从1988年到2017年进行了180,013次观察。本研究采用普通最小二乘回归。分析了Merton [(1974) Journal of Finance, 29(2)， 449-470]和Lee and Lin [(2012) Journal of International Financial Markets, Institutions and Money, 22(4)， 973-989]用企业违约概率的两个代理度量企业违约风险。我们的自变量是强FTR，如果一种语言属于强FTR语族，它等于1，这是由欧洲科学基金会的欧洲语言类型学(EUROTYP)项目定义的。如果一种语言不需要“在基于预测的上下文(主句)中强制使用[FTR]”[Dahl(2000)《欧洲语言中的时态和方面》，O. Dahl(主编)，第309-328页]，那么我们将这种语言放入弱FTR组。另一方面，如果一种语言确实具备上述要求，那么它就属于强ftr组。我们发现，在使用弱ftr语言的地区，企业违约风险明显更高。此外，在正式制度较强的国家(如披露质量高、透明度高、腐败较少)，FTR对违约风险的影响减弱。我们的研究结果为企业违约风险的异质性提供了一种新的解释，提供了关于语言是否是一种经济制度的见解，并增加了语言对经济和金融结果影响的研究。
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Pub Date : 2023-09-06DOI: 10.1142/s1094406023500129
Sudi Apak, Mikail Erol, Masum Türker, M. Hanifi Ayboğa
Synopsis The research problem This paper aims to reveal the transformations that the Turkish accounting profession has gone through since 1839 when the modernization efforts of the Ottoman Empire started. At this point, the transformation covers the final period of the Ottoman Empire governed by the sultanate (1299–1923), and the Turkish Republic that adopts a democratic governance style (1923–present). Having a static economic structure, the Ottomans tried to gradually adapt to western style governance and practices, and they decided to quit the Stairs method that used to be a state accounting method in the accounting system (750–1879) and transit to the double-entry bookkeeping method (1879). Within the framework of westernization efforts in the republic period, the accounting systems were based on the double-entry bookkeeping method, and they adopted tax-based accounting approaches previously. They moved toward development, professional organization, and international system integration in the process. Motivation The study aims to present the changes in the Turkish accounting profession in the last 200 years. The Ottomans had governmental and economic changeovers with the Tanzimat Reform. We deemed it to be a basic need to reveal the influences of demolishing a feudal state and founding a new state on the accounting profession and practices, and the developments of the accounting profession in the republic period. This study examines the period between 1879 and 2022 by dividing it into terms on the basis of significant changes in accountancy and the accounting profession. Target Population Accountant historians, finance analysts, shareholders of companies engaging in stock exchange deals, finance managers of companies, independent auditors and shareholders. Adopted Methodology Accounting historians’ documents, score matching analyses for robustness. Analyses All documentary analyses are composed to the results in different periods. The development of the accounting profession has been evaluated within economic and political processes. The effect of wars in Turkey and in the world on the accounting profession has been analyzed. The standards required for the merger of the accounting profession with the international practices in Turkish republic period were mentioned. They were analyzed by comparing the international and domestic companies. The international standards are required to evaluate the stock exchange movements of the public companies. Findings The trials for Fabrika-i Hümayun factory at the Ottomans in the 1840s showed that the economic structure and the accounting systems must be consistent; otherwise, the accounting, which is the decision support system, would not be utilized well enough. At this point, the need to transit to the double-entry bookkeeping and reporting systems compatible with the capital and profit motivated commercial and industrial operations arose, and the Ottomans quit the accounting method (Stairs) that had bee
本文旨在揭示土耳其会计行业自1839年奥斯曼帝国现代化努力开始以来所经历的转变。在这一点上，转变涵盖了由苏丹国统治的奥斯曼帝国(1299-1923)和采用民主治理风格的土耳其共和国(1923年至今)的最后时期。由于经济结构是静态的，奥斯曼人试图逐渐适应西方的治理和做法，他们决定放弃会计制度中曾经是国家会计方法的阶梯法(750-1879)，转而采用复式记账法(1879)。在民国时期西化的框架下，会计制度以复式记账法为基础，以前采用的是税基会计方法。在这个过程中，他们走向了发展、专业组织和国际系统集成。本研究旨在介绍土耳其会计行业在过去200年的变化。随着坦济马特改革，奥斯曼人进行了政府和经济上的变革。我们认为，揭示民国时期破除封建国家、建立新国家对会计职业和实务的影响，以及会计职业的发展，是一种基本需要。本研究考察了1879年至2022年期间，根据会计和会计专业的重大变化将其划分为术语。目标人群会计历史学家、金融分析师、从事证券交易的公司股东、公司财务经理、独立审计师和股东。采用会计史家文献，评分匹配分析稳健性。所有文献分析都是由不同时期的结果组成的。会计职业的发展已经在经济和政治进程中进行了评估。分析了土耳其和世界战争对会计行业的影响。提到了土耳其共和国时期会计专业与国际惯例合并所需的标准。通过比较国际企业和国内企业，对其进行了分析。评价上市公司的股票交易动向需要国际标准。19世纪40年代奥斯曼帝国Fabrika-i h mayun工厂的试验表明，经济结构和会计制度必须一致;否则，作为决策支持系统的会计就不能得到很好的利用。在这一点上，需要过渡到与资本和利润驱动的商业和工业经营相适应的复式簿记和报告系统，奥斯曼人放弃了直到1879年才使用的会计方法(阶梯)，他们过渡到复式簿记方法。为了克服在这个过渡过程中出现的问题，需要建立几个不同的组织和机构，一个新的共和国从一个被拆除的国家被建立起来。在民国时期，这些变化被专业利益相关者所接受，并通过实现其法律组织而在制度化方面得到了显着改善(TÜRMOB)。会计行业从过去只专注于记账，到现在增加了报告、专业组织、国际合作和一体化、适应独立审计问题和全球体系，已经取得了长足的进步。纪念哈尼菲·艾博加先生
{"title":"A Chronological Study of the Evolution of the Turkish Accounting Profession from the Ottoman Period to the Present","authors":"Sudi Apak, Mikail Erol, Masum Türker, M. Hanifi Ayboğa","doi":"10.1142/s1094406023500129","DOIUrl":"https://doi.org/10.1142/s1094406023500129","url":null,"abstract":"Synopsis The research problem This paper aims to reveal the transformations that the Turkish accounting profession has gone through since 1839 when the modernization efforts of the Ottoman Empire started. At this point, the transformation covers the final period of the Ottoman Empire governed by the sultanate (1299–1923), and the Turkish Republic that adopts a democratic governance style (1923–present). Having a static economic structure, the Ottomans tried to gradually adapt to western style governance and practices, and they decided to quit the Stairs method that used to be a state accounting method in the accounting system (750–1879) and transit to the double-entry bookkeeping method (1879). Within the framework of westernization efforts in the republic period, the accounting systems were based on the double-entry bookkeeping method, and they adopted tax-based accounting approaches previously. They moved toward development, professional organization, and international system integration in the process. Motivation The study aims to present the changes in the Turkish accounting profession in the last 200 years. The Ottomans had governmental and economic changeovers with the Tanzimat Reform. We deemed it to be a basic need to reveal the influences of demolishing a feudal state and founding a new state on the accounting profession and practices, and the developments of the accounting profession in the republic period. This study examines the period between 1879 and 2022 by dividing it into terms on the basis of significant changes in accountancy and the accounting profession. Target Population Accountant historians, finance analysts, shareholders of companies engaging in stock exchange deals, finance managers of companies, independent auditors and shareholders. Adopted Methodology Accounting historians’ documents, score matching analyses for robustness. Analyses All documentary analyses are composed to the results in different periods. The development of the accounting profession has been evaluated within economic and political processes. The effect of wars in Turkey and in the world on the accounting profession has been analyzed. The standards required for the merger of the accounting profession with the international practices in Turkish republic period were mentioned. They were analyzed by comparing the international and domestic companies. The international standards are required to evaluate the stock exchange movements of the public companies. Findings The trials for Fabrika-i Hümayun factory at the Ottomans in the 1840s showed that the economic structure and the accounting systems must be consistent; otherwise, the accounting, which is the decision support system, would not be utilized well enough. At this point, the need to transit to the double-entry bookkeeping and reporting systems compatible with the capital and profit motivated commercial and industrial operations arose, and the Ottomans quit the accounting method (Stairs) that had bee","PeriodicalId":101232,"journal":{"name":"The International Journal of Accounting","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135204039","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines how top management team (TMT) knowledge and average tenure affect accrual-based earnings management by investigating 4791 Taiwanese listed companies from 2006 to 2010. TMT members with more knowledge (higher education level, more accounting expertise, and greater prior top management experience) and longer average tenure have better performances and higher reputations, and are more aware of the litigation costs of earnings manipulations; therefore, they reduce managers' incentives to manage earnings (incentive-reduction effect). On the other hand, these TMT members are also likely to become entrenched and engage in more earnings manipulations (entrenchment-enhancing effect). The empirical results show that firms' TMT knowledge and average tenure are negatively associated with discretionary accruals, suggesting that the incentive-reduction effect is stronger than the entrenchment-enhancing effect, which makes TMT members less likely to engage in earnings management. Moreover, the above results are robust when employing different earnings management measures and suspect firm analyses, as well as considering endogeneity issues. Finally, the study suggests that the presence of a founding family may reduce the influences of TMT knowledge and average tenure on earnings management.
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