Pub Date : 2023-12-28DOI: 10.1108/ijaim-03-2023-0058
Nur Asni, Wiwiek Dianawati
Purpose The study has practical implications for decision-makers in that increasing board competence and expertise through training on environmental issues will promote green policy-making. Design/methodology/approach This study included 655 firm-year observations from companies listed on the Indonesia Stock Exchange between 2017 and 2021. Panel data regression analysis is used to investigate the hypotheses. Additionally, a robustness test is conducted to validate the consistency of the primary test results. Findings The results demonstrate that green theme training from the board of directors, board of commissioners and independent commissioners has a positive and significant impact on the implementation of green innovation at each level of the board. This result is aligned with the robustness test performed. Research limitations/implications This study is restricted by the fact that the only data sources used to examine the board’s green training are publication reports and other reports that disclose the board’s training activities. Therefore, future research can be done by considering other methods, such as surveys to trace green training followed by the board. Additional research may also examine green theme training in the corporate governance structure from a different theoretical angle, such as agency theory and human capital theory. Practical implications In practice, the study has implications for decision-makers in that increasing board competence and expertise through training on environmental issues will be able to promote green policy-making. Originality/value This study concentrates on Indonesia with two-board governance characteristics: the board of directors and the board of commissioners. Several scholars have examined the board of directors in light of resource dependence theory. To the best of the authors’ knowledge, no research has explained the supervisory board within the context of two-board governance. In addition, the authors have not found research that analyzes board training activities related to the environment.
{"title":"Does board’s green theme training promote green innovation? A view from resource dependence perspective: Indonesian evidence","authors":"Nur Asni, Wiwiek Dianawati","doi":"10.1108/ijaim-03-2023-0058","DOIUrl":"https://doi.org/10.1108/ijaim-03-2023-0058","url":null,"abstract":"Purpose The study has practical implications for decision-makers in that increasing board competence and expertise through training on environmental issues will promote green policy-making. Design/methodology/approach This study included 655 firm-year observations from companies listed on the Indonesia Stock Exchange between 2017 and 2021. Panel data regression analysis is used to investigate the hypotheses. Additionally, a robustness test is conducted to validate the consistency of the primary test results. Findings The results demonstrate that green theme training from the board of directors, board of commissioners and independent commissioners has a positive and significant impact on the implementation of green innovation at each level of the board. This result is aligned with the robustness test performed. Research limitations/implications This study is restricted by the fact that the only data sources used to examine the board’s green training are publication reports and other reports that disclose the board’s training activities. Therefore, future research can be done by considering other methods, such as surveys to trace green training followed by the board. Additional research may also examine green theme training in the corporate governance structure from a different theoretical angle, such as agency theory and human capital theory. Practical implications In practice, the study has implications for decision-makers in that increasing board competence and expertise through training on environmental issues will be able to promote green policy-making. Originality/value This study concentrates on Indonesia with two-board governance characteristics: the board of directors and the board of commissioners. Several scholars have examined the board of directors in light of resource dependence theory. To the best of the authors’ knowledge, no research has explained the supervisory board within the context of two-board governance. In addition, the authors have not found research that analyzes board training activities related to the environment.","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":"10 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139148434","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: 10.1108/ijaim-01-2023-0007
Corina Joseph, Fitra Roman Cahaya, S. Yusuf, A. Probohudono, Estetika Mutiaranisa Kurniawati
Purpose This paper aims to examine the extent of ethical values information disclosure on the top 100 Malaysian and Indonesian companies’ annual reports using coercive isomorphism under the institutional theory. Design/methodology/approach Using the content analysis, the presence or exclusion of ethical values information disclosed on 100 Malaysian and Indonesian companies’ annual reports using a newly developed Ethical Values Disclosure Index is carried out. Findings The results of the analysis found that Indonesian companies on average disclosed 31 items under study compared to 27 items disclosed by the companies in Malaysia. The results suggest that Indonesian companies are more vigilant in the code of ethics, companies policy on ethical issues, monitoring program and accountability, ethical performance, ethical infrastructure and organizational responsibility aspects, whereas their Malaysian counterparts are better in reporting governance and integrity committee or board of directors. Research limitations/implications The findings may not be applicable to other countries in the same region, nevertheless, revealed the importance of adequate ethical values disclosure in determining the level of ethical behavior. Practical implications Companies in Indonesia are coercively pressed by various influential stakeholder groups to address ethical issues. The less disclosure regarding corporate ethical behavior may indicate that unethical practices continue to be a problem in the Malaysian corporate sector. Originality/value This paper adds to the literature by examining the elements of ethical values adapted mainly from the professional bodies that regulate the accounting profession and other organizations using the institutional theory, particularly in two countries.
{"title":"Corporate ethical values disclosure: evidence from Malaysian and Indonesian top companies","authors":"Corina Joseph, Fitra Roman Cahaya, S. Yusuf, A. Probohudono, Estetika Mutiaranisa Kurniawati","doi":"10.1108/ijaim-01-2023-0007","DOIUrl":"https://doi.org/10.1108/ijaim-01-2023-0007","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the extent of ethical values information disclosure on the top 100 Malaysian and Indonesian companies’ annual reports using coercive isomorphism under the institutional theory.\u0000\u0000\u0000Design/methodology/approach\u0000Using the content analysis, the presence or exclusion of ethical values information disclosed on 100 Malaysian and Indonesian companies’ annual reports using a newly developed Ethical Values Disclosure Index is carried out.\u0000\u0000\u0000Findings\u0000The results of the analysis found that Indonesian companies on average disclosed 31 items under study compared to 27 items disclosed by the companies in Malaysia. The results suggest that Indonesian companies are more vigilant in the code of ethics, companies policy on ethical issues, monitoring program and accountability, ethical performance, ethical infrastructure and organizational responsibility aspects, whereas their Malaysian counterparts are better in reporting governance and integrity committee or board of directors.\u0000\u0000\u0000Research limitations/implications\u0000The findings may not be applicable to other countries in the same region, nevertheless, revealed the importance of adequate ethical values disclosure in determining the level of ethical behavior.\u0000\u0000\u0000Practical implications\u0000Companies in Indonesia are coercively pressed by various influential stakeholder groups to address ethical issues. The less disclosure regarding corporate ethical behavior may indicate that unethical practices continue to be a problem in the Malaysian corporate sector.\u0000\u0000\u0000Originality/value\u0000This paper adds to the literature by examining the elements of ethical values adapted mainly from the professional bodies that regulate the accounting profession and other organizations using the institutional theory, particularly in two countries.\u0000","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":"43 5","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138633163","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 : 2023-12-08DOI: 10.1108/ijaim-02-2023-0040
Ummya Salma, Md. Borhan Uddin Bhuiyan
Purpose This study aims to examine whether the presence of advisory directors affects firm discretionary accruals (DACC), a widely used proxy for financial reporting quality. The authors argue that the advisory director weakens the board monitoring role and impairs the firm financial reporting quality by increasing DACC. Design/methodology/approach The sample consists of listed firms on the Australian Stock Exchange from 2001 to 2015 using 7,649 firm-year observations. The authors perform descriptive statistics, regression and propensity score matching analyses to examine the research hypothesis. Findings The research evidence that firms with a higher presence of advisory directors have more DACC, indicating poor financial reporting quality. Furthermore, the authors categorize the DACC and find that the firm has higher income-increasing DACC in the presence of higher advisory directors. The findings are robust concerning endogeneity issues. Research limitations/implications The research evidence that firms with a higher presence of advisory directors have more DACC, indicating poor financial reporting quality. Furthermore, the authors categorize the DACC and find that the firm has higher income-increasing DACC in the presence of higher advisory directors. The findings are robust concerning endogeneity issues. Practical implications The research contributes valuable insights for regulators and policymakers seeking to comprehend the implications of firms using more advisory directors. Additionally, the authors recognize the potential significance of the findings for the institution of directors, as they can provide a nuanced understanding of the specific roles played by advisory directors in organizational dynamics. Originality/value While the extensive body of literature on corporate governance and financial reporting quality has been well-established, a noticeable void exists in academic research delving into the relationship between advisory directors and DACC management. This study seeks to fill this gap, making a distinctive and original contribution to the existing literature on corporate governance.
{"title":"Do advisory directors increase discretionary accruals?","authors":"Ummya Salma, Md. Borhan Uddin Bhuiyan","doi":"10.1108/ijaim-02-2023-0040","DOIUrl":"https://doi.org/10.1108/ijaim-02-2023-0040","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine whether the presence of advisory directors affects firm discretionary accruals (DACC), a widely used proxy for financial reporting quality. The authors argue that the advisory director weakens the board monitoring role and impairs the firm financial reporting quality by increasing DACC.\u0000\u0000\u0000Design/methodology/approach\u0000The sample consists of listed firms on the Australian Stock Exchange from 2001 to 2015 using 7,649 firm-year observations. The authors perform descriptive statistics, regression and propensity score matching analyses to examine the research hypothesis.\u0000\u0000\u0000Findings\u0000The research evidence that firms with a higher presence of advisory directors have more DACC, indicating poor financial reporting quality. Furthermore, the authors categorize the DACC and find that the firm has higher income-increasing DACC in the presence of higher advisory directors. The findings are robust concerning endogeneity issues.\u0000\u0000\u0000Research limitations/implications\u0000The research evidence that firms with a higher presence of advisory directors have more DACC, indicating poor financial reporting quality. Furthermore, the authors categorize the DACC and find that the firm has higher income-increasing DACC in the presence of higher advisory directors. The findings are robust concerning endogeneity issues.\u0000\u0000\u0000Practical implications\u0000The research contributes valuable insights for regulators and policymakers seeking to comprehend the implications of firms using more advisory directors. Additionally, the authors recognize the potential significance of the findings for the institution of directors, as they can provide a nuanced understanding of the specific roles played by advisory directors in organizational dynamics.\u0000\u0000\u0000Originality/value\u0000While the extensive body of literature on corporate governance and financial reporting quality has been well-established, a noticeable void exists in academic research delving into the relationship between advisory directors and DACC management. This study seeks to fill this gap, making a distinctive and original contribution to the existing literature on corporate governance.\u0000","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":"27 2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138589609","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 : 2023-12-05DOI: 10.1108/ijaim-08-2023-0211
Musa Ghazwani, Ibrahim Alamir, Rami Ibrahim A. Salem, Nedal Sawan
Purpose This study aims to examine the impact of corporate governance (CG) on anti-corruption disclosure (A-CD), paying particular attention to the FTSE 100. Notably, it examines how board and audit committees’ characteristics affect the quantity and quality of anti-corruption disclosure. Design/methodology/approach Data from FTSE 100 firms, spanning the period from 2014 to 2020, were analysed using the regression of the Poisson fixed effect and GEE analyses. Findings The findings show that gender diversity, audit committee expertise and the independence of the audit committee are positively associated with both quantity and quality of anti-corruption disclosure. Notably, no statistically significant relationships were identified between anti-corruption disclosure and factors such as board size, role duality or board meetings. Research limitations/implications The findings provide valuable insights for decision-makers and regulatory bodies, shedding light on the elements that compel UK companies to enhance their anti-corruption disclosure and governance protocols to alleviate corruption and propel efforts towards ethical behaviour. Originality/value This study makes a notable contribution to the sparse body of evidence by examining the influence of board and audit committee attributes on anti-corruption disclosure subsequent to the implementation of the UK Bribery Act in 2010. Specifically, to the best of the authors’ knowledge, this study assesses for the first time the impact of board and audit committee mechanisms on both the quantity and quality of anti-corruption disclosure.
{"title":"Anti-corruption disclosure and corporate governance mechanisms: insights from FTSE 100","authors":"Musa Ghazwani, Ibrahim Alamir, Rami Ibrahim A. Salem, Nedal Sawan","doi":"10.1108/ijaim-08-2023-0211","DOIUrl":"https://doi.org/10.1108/ijaim-08-2023-0211","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the impact of corporate governance (CG) on anti-corruption disclosure (A-CD), paying particular attention to the FTSE 100. Notably, it examines how board and audit committees’ characteristics affect the quantity and quality of anti-corruption disclosure.\u0000\u0000\u0000Design/methodology/approach\u0000Data from FTSE 100 firms, spanning the period from 2014 to 2020, were analysed using the regression of the Poisson fixed effect and GEE analyses.\u0000\u0000\u0000Findings\u0000The findings show that gender diversity, audit committee expertise and the independence of the audit committee are positively associated with both quantity and quality of anti-corruption disclosure. Notably, no statistically significant relationships were identified between anti-corruption disclosure and factors such as board size, role duality or board meetings.\u0000\u0000\u0000Research limitations/implications\u0000The findings provide valuable insights for decision-makers and regulatory bodies, shedding light on the elements that compel UK companies to enhance their anti-corruption disclosure and governance protocols to alleviate corruption and propel efforts towards ethical behaviour.\u0000\u0000\u0000Originality/value\u0000This study makes a notable contribution to the sparse body of evidence by examining the influence of board and audit committee attributes on anti-corruption disclosure subsequent to the implementation of the UK Bribery Act in 2010. Specifically, to the best of the authors’ knowledge, this study assesses for the first time the impact of board and audit committee mechanisms on both the quantity and quality of anti-corruption disclosure.\u0000","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":"55 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138600601","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 : 2023-12-01DOI: 10.1108/ijaim-02-2023-0047
Paula Gomes dos Santos, Fábio Albuquerque
Purpose This paper aims to assess the factors that may explain the International Public Sector Accounting Standards (IPSAS) convergence, considering Hofstede’s cultural dimensions as the theoretical reference for the cultural approach proposed. Additional factors include countries’ contextual and macroeconomic characteristics. Design/methodology/approach Logistic and probit regression models were used to identify the factors that may explain the IPSAS (fully or adapted) use by countries, including 166 countries in this assessment (59 for those whose cultural dimensions are available). Findings The findings consistently indicate collectivism and indebtedness levels as explanatory factors, providing insights into cultural dimensions along with macroeconomic characteristics as a relevant factor of countries’ convergence to IPSAS. Research limitations/implications There are different levels of IPSAS convergence by countries that were not considered. This aspect may hide different countries’ characteristics that may explain those options, which could not be distinguished in this paper. Practical implications As a result of this paper, the International Public Sector Accounting Standards Board may gain insights that can be applied within the IPSAS due process to overcome the main challenges when collaborating with national authorities to achieve a high level of convergence. This analysis may include how to accommodate countries’ cultural differences as well as their contextual and macroeconomic characteristics. Social implications There is a trend of moving toward accrual-based accounting standards by countries. Because the public sector embraces a new culture following the IPSAS path, it is relevant to assess if there are cultural factors, besides contextual and macroeconomic characteristics, that may explain the countries’ convergence to those standards. Originality/value To the best of the authors’ knowledge, this is the first cross-country analysis on the likely influence of cultural dimensions on IPSAS convergence as far as the authors’ knowledge.
{"title":"Assessing the countries’ convergence to IPSAS from a cultural perspective","authors":"Paula Gomes dos Santos, Fábio Albuquerque","doi":"10.1108/ijaim-02-2023-0047","DOIUrl":"https://doi.org/10.1108/ijaim-02-2023-0047","url":null,"abstract":"\u0000Purpose\u0000This paper aims to assess the factors that may explain the International Public Sector Accounting Standards (IPSAS) convergence, considering Hofstede’s cultural dimensions as the theoretical reference for the cultural approach proposed. Additional factors include countries’ contextual and macroeconomic characteristics.\u0000\u0000\u0000Design/methodology/approach\u0000Logistic and probit regression models were used to identify the factors that may explain the IPSAS (fully or adapted) use by countries, including 166 countries in this assessment (59 for those whose cultural dimensions are available).\u0000\u0000\u0000Findings\u0000The findings consistently indicate collectivism and indebtedness levels as explanatory factors, providing insights into cultural dimensions along with macroeconomic characteristics as a relevant factor of countries’ convergence to IPSAS.\u0000\u0000\u0000Research limitations/implications\u0000There are different levels of IPSAS convergence by countries that were not considered. This aspect may hide different countries’ characteristics that may explain those options, which could not be distinguished in this paper.\u0000\u0000\u0000Practical implications\u0000As a result of this paper, the International Public Sector Accounting Standards Board may gain insights that can be applied within the IPSAS due process to overcome the main challenges when collaborating with national authorities to achieve a high level of convergence. This analysis may include how to accommodate countries’ cultural differences as well as their contextual and macroeconomic characteristics.\u0000\u0000\u0000Social implications\u0000There is a trend of moving toward accrual-based accounting standards by countries. Because the public sector embraces a new culture following the IPSAS path, it is relevant to assess if there are cultural factors, besides contextual and macroeconomic characteristics, that may explain the countries’ convergence to those standards.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first cross-country analysis on the likely influence of cultural dimensions on IPSAS convergence as far as the authors’ knowledge.\u0000","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":"2 ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138611167","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 : 2023-12-01DOI: 10.1108/ijaim-03-2023-0070
Romildo Silva, Rui Pedro Marques, H. Inácio
Purpose The purpose of this study is to identify the possible efficiency gains in using tokenization for the execution of public expenditure on governmental investments. Design/methodology/approach Through design science research methodology, the exploratory research produced a tokenized prototype in the blockchain, through the Ernst and Young OpsChain traceability solution, allowing automated processes in the stages of public expense. A focus group composed of auditors from the public sector evaluated the possibility of improving the quality of information available in the audited entities, where the tokens created represent and register the actions of public agents in the blockchain Polygon. Findings The consensus of the experts in the focus group indicated that the use of tokenization could improve the quality of the information, since the possibility of recording the activities of public agents in the metadata of the tokens at each stage of the execution of the expenditure allows the audited entities the advantages of the information recorded on the blockchain, according to the following ranking: first the immutability of audited data, followed by reliability, transparency, accessibility and efficiency of data structures. Originality/value This research makes an empirical contribution to the real use of tokenization in blockchain technology to the public sector through a value chain in which tokens were created and moved between the wallets of public agents to represent, register and track the operations regarding public expense execution.
{"title":"A design for tokenization in governmental investment","authors":"Romildo Silva, Rui Pedro Marques, H. Inácio","doi":"10.1108/ijaim-03-2023-0070","DOIUrl":"https://doi.org/10.1108/ijaim-03-2023-0070","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to identify the possible efficiency gains in using tokenization for the execution of public expenditure on governmental investments.\u0000\u0000\u0000Design/methodology/approach\u0000Through design science research methodology, the exploratory research produced a tokenized prototype in the blockchain, through the Ernst and Young OpsChain traceability solution, allowing automated processes in the stages of public expense. A focus group composed of auditors from the public sector evaluated the possibility of improving the quality of information available in the audited entities, where the tokens created represent and register the actions of public agents in the blockchain Polygon.\u0000\u0000\u0000Findings\u0000The consensus of the experts in the focus group indicated that the use of tokenization could improve the quality of the information, since the possibility of recording the activities of public agents in the metadata of the tokens at each stage of the execution of the expenditure allows the audited entities the advantages of the information recorded on the blockchain, according to the following ranking: first the immutability of audited data, followed by reliability, transparency, accessibility and efficiency of data structures.\u0000\u0000\u0000Originality/value\u0000This research makes an empirical contribution to the real use of tokenization in blockchain technology to the public sector through a value chain in which tokens were created and moved between the wallets of public agents to represent, register and track the operations regarding public expense execution.\u0000","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":" 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138613920","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 : 2023-11-30DOI: 10.1108/ijaim-06-2023-0160
Elisa Roncagliolo
Purpose This study aims to contribute to the debate on goodwill accounting by examining the information content of impairment losses recognized in half-yearly reports. Half-yearly reports provide a suitable context to examine the effectiveness of the impairment process. Due to IFRIC 10 requirements, indeed, managers may have incentives to avoid recognizing impairment losses at the interim reporting date. Design/methodology/approach The study adopts an archival approach. Based on the traditional Ohlson’s model (1995), it explores the information content of half-yearly impairment losses in the European context over the period 2007–2017. Findings Findings confirm the relevance of half-yearly reports and suggest that half-yearly impairment losses are significantly associated with stock prices. In particular, investors positively value companies that recognized goodwill impairment losses at the interim reporting date. Research limitations/implications The study contributes to the academic debate on goodwill and the effectiveness of the impairment procedure. In particular, it provides empirical evidence on the recognition of goodwill write-offs when it is possible to avoid the impairment test in the absence of indications of impairment. Practical implications Findings of this study can support the current debate on accounting for goodwill also in the light of the recent proposals of the IASB on the need to improve the effectiveness of the impairment test. Originality/value This study provides original empirical evidence on the goodwill impairment test in half-yearly reports, extending previous research that typically examines this issue in annual reports.
{"title":"The information content of half-yearly goodwill impairment losses: analysis of the European context","authors":"Elisa Roncagliolo","doi":"10.1108/ijaim-06-2023-0160","DOIUrl":"https://doi.org/10.1108/ijaim-06-2023-0160","url":null,"abstract":"Purpose This study aims to contribute to the debate on goodwill accounting by examining the information content of impairment losses recognized in half-yearly reports. Half-yearly reports provide a suitable context to examine the effectiveness of the impairment process. Due to IFRIC 10 requirements, indeed, managers may have incentives to avoid recognizing impairment losses at the interim reporting date. Design/methodology/approach The study adopts an archival approach. Based on the traditional Ohlson’s model (1995), it explores the information content of half-yearly impairment losses in the European context over the period 2007–2017. Findings Findings confirm the relevance of half-yearly reports and suggest that half-yearly impairment losses are significantly associated with stock prices. In particular, investors positively value companies that recognized goodwill impairment losses at the interim reporting date. Research limitations/implications The study contributes to the academic debate on goodwill and the effectiveness of the impairment procedure. In particular, it provides empirical evidence on the recognition of goodwill write-offs when it is possible to avoid the impairment test in the absence of indications of impairment. Practical implications Findings of this study can support the current debate on accounting for goodwill also in the light of the recent proposals of the IASB on the need to improve the effectiveness of the impairment test. Originality/value This study provides original empirical evidence on the goodwill impairment test in half-yearly reports, extending previous research that typically examines this issue in annual reports.","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":"119 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139198709","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 : 2023-11-30DOI: 10.1108/ijaim-01-2023-0001
Hesham Bassyouny, Michael Machokoto
Purpose This paper aims to investigate the association between negative tone in annual report narratives and future performance in the UK context. Under the principle-based approach in the UK, managers tend to bias the tone of narrative reports upward, as the reporting regime is more flexible than the rule-based approach in the USA. Consequently, any negative disclosure not mandated by regulators conveys credible information about a firm’s prospects. Design/methodology/approach This paper uses a sample of UK FTSE all-share non-financial companies from 2010 to 2019. The authors use the textual-analysis approach based on Loughran and McDonald (2011)’s wordlist (LM) to measure the negative tone in UK annual reports. Findings The results show a significant negative association between negative tone and future performance. Moreover, our further analyses suggest that only the negativity in the executive section of the annual disclosures correlates significantly with future performance. In summary, this study suggests that negativity does matter under the principle-based approach and can be used as an indicator of future performance. Originality/value In contrast to the literature arguing that only positivity has the power to affect a firm’s outcomes under the principle-based approach, the authors provide new empirical evidence suggesting that negativity also matters within the UK context and can be used as an indicator for future performance. Also, to the best of the authors’ knowledge, this is the first study to identify which section of the annual report is more informative about a firm’s future performance.
{"title":"Does negativity matter under the principle-based approach? Evidence from narrative reporting in the UK","authors":"Hesham Bassyouny, Michael Machokoto","doi":"10.1108/ijaim-01-2023-0001","DOIUrl":"https://doi.org/10.1108/ijaim-01-2023-0001","url":null,"abstract":"Purpose This paper aims to investigate the association between negative tone in annual report narratives and future performance in the UK context. Under the principle-based approach in the UK, managers tend to bias the tone of narrative reports upward, as the reporting regime is more flexible than the rule-based approach in the USA. Consequently, any negative disclosure not mandated by regulators conveys credible information about a firm’s prospects. Design/methodology/approach This paper uses a sample of UK FTSE all-share non-financial companies from 2010 to 2019. The authors use the textual-analysis approach based on Loughran and McDonald (2011)’s wordlist (LM) to measure the negative tone in UK annual reports. Findings The results show a significant negative association between negative tone and future performance. Moreover, our further analyses suggest that only the negativity in the executive section of the annual disclosures correlates significantly with future performance. In summary, this study suggests that negativity does matter under the principle-based approach and can be used as an indicator of future performance. Originality/value In contrast to the literature arguing that only positivity has the power to affect a firm’s outcomes under the principle-based approach, the authors provide new empirical evidence suggesting that negativity also matters within the UK context and can be used as an indicator for future performance. Also, to the best of the authors’ knowledge, this is the first study to identify which section of the annual report is more informative about a firm’s future performance.","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":"15 2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139205435","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}
Purpose This study aims to examine the factors that influence the relationship between sustainability and financial performance (FP) of the European listed companies. Design/methodology/approach This study analyzed data from 795 companies in 21 European countries by applying linear mixed-effects multilevel regressions, a two steps system generalized method of moments and quantile regression models to uncover the links between sustainability and FP. Findings The past four decades have witnessed abundant research to determine the relationship between corporate sustainability and FP. Thus, conducting further research in 2023 could be seen as “reinventing the wheel.” Yet, earlier research considered firms as isolated entities with sustainability and FP being dependent only on that firm’s actions. By contrast, with the help of network governance theory, this study shows that a firm’s sustainability and FP depend on an interplay among interorganizational actors, such as institutional qualities, macroeconomic factors and an embrace of sustainability. Here, large firms play an essential role. Three significant findings are drawn. First, sustainability performance has a significant impact on FP in the European context. Second, the institutional quality (IQ) of the rule of law and control of corruption plays a crucial role in enhancing sustainability and FP, and finally the interaction of IQ and economic growth helps to increase companies’ market value (Tobin’s Q). The consistent and empirically robust findings offer key lessons to policymakers and practitioners on the interplay among multiple actors in corporate sustainability and FP. Practical implications A synergetic multifaced relationship between governmental institutions and corporations is inevitable for ensuring sustainable development. The degree of intimacy in the relationship, of course, will be determined by the macroeconomic environment. Originality/value In this research, this study theoretically and empirically identified that corporate sustainability and FP are not solely dependent on corporate operation. Rather, it is transformed, modified and shaped through an interaction of multiple actors’ trajectories in the macro business environment.
{"title":"Reinventing the wheel? Factors influencing relationship: links between sustainability and financial performance. European evidence","authors":"Abm Fazle Rahi, Jeaneth Johansson, Catherine Lions","doi":"10.1108/ijaim-02-2023-0023","DOIUrl":"https://doi.org/10.1108/ijaim-02-2023-0023","url":null,"abstract":"Purpose This study aims to examine the factors that influence the relationship between sustainability and financial performance (FP) of the European listed companies. Design/methodology/approach This study analyzed data from 795 companies in 21 European countries by applying linear mixed-effects multilevel regressions, a two steps system generalized method of moments and quantile regression models to uncover the links between sustainability and FP. Findings The past four decades have witnessed abundant research to determine the relationship between corporate sustainability and FP. Thus, conducting further research in 2023 could be seen as “reinventing the wheel.” Yet, earlier research considered firms as isolated entities with sustainability and FP being dependent only on that firm’s actions. By contrast, with the help of network governance theory, this study shows that a firm’s sustainability and FP depend on an interplay among interorganizational actors, such as institutional qualities, macroeconomic factors and an embrace of sustainability. Here, large firms play an essential role. Three significant findings are drawn. First, sustainability performance has a significant impact on FP in the European context. Second, the institutional quality (IQ) of the rule of law and control of corruption plays a crucial role in enhancing sustainability and FP, and finally the interaction of IQ and economic growth helps to increase companies’ market value (Tobin’s Q). The consistent and empirically robust findings offer key lessons to policymakers and practitioners on the interplay among multiple actors in corporate sustainability and FP. Practical implications A synergetic multifaced relationship between governmental institutions and corporations is inevitable for ensuring sustainable development. The degree of intimacy in the relationship, of course, will be determined by the macroeconomic environment. Originality/value In this research, this study theoretically and empirically identified that corporate sustainability and FP are not solely dependent on corporate operation. Rather, it is transformed, modified and shaped through an interaction of multiple actors’ trajectories in the macro business environment.","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":"333 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139218347","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 : 2023-11-28DOI: 10.1108/ijaim-04-2023-0084
Neef F. Alwadani, H. Al‐Shaer, Khaldoon Albitar
Purpose This study aims to explore whether firms that have a sustainability committee operating on the board, publish separate sustainability reports that are externally assured by an independent external audit and have large and active boards are more likely to be engaged in environmental practices and have better environmental performance. Design/methodology/approach Based on a sample of firms listed on the Saudi Stock Exchange, covering the period 2014–2021, this study applies panel data models to examine the research hypotheses. Findings The findings show significant positive associations between the existence of a sustainability committee, the publication of separate sustainability reports and the independent external assurance of these reports and environmental performance. This study also finds that the composite internal governance index is significant and positively associated with environmental performance. Practical implications Policymakers should support the creation of a sustainability committee on the boards of Saudi firms and review its role and responsibilities. The findings of this study inform regulators of the importance of the existence of independent external assurance of the sustainability reports of Saudi firms to enhance the credibility and reliability of these reports. Managers need to establish devoted committees committed to sustainability-related tasks that help coordinate communications between the firm and stakeholders. Originality/value The Saudi Arabian Government has implemented a range of policies and initiatives aimed at improving environmental performance, which is a main focus of Saudi Vision 2030 to achieve environmental sustainability. Therefore, this study provides unique evidence and new insights on the impact of internal governance on corporate environmental performance in the Saudi context.
{"title":"The impact of internal governance mechanisms on environmental performance of Saudi firms","authors":"Neef F. Alwadani, H. Al‐Shaer, Khaldoon Albitar","doi":"10.1108/ijaim-04-2023-0084","DOIUrl":"https://doi.org/10.1108/ijaim-04-2023-0084","url":null,"abstract":"Purpose This study aims to explore whether firms that have a sustainability committee operating on the board, publish separate sustainability reports that are externally assured by an independent external audit and have large and active boards are more likely to be engaged in environmental practices and have better environmental performance. Design/methodology/approach Based on a sample of firms listed on the Saudi Stock Exchange, covering the period 2014–2021, this study applies panel data models to examine the research hypotheses. Findings The findings show significant positive associations between the existence of a sustainability committee, the publication of separate sustainability reports and the independent external assurance of these reports and environmental performance. This study also finds that the composite internal governance index is significant and positively associated with environmental performance. Practical implications Policymakers should support the creation of a sustainability committee on the boards of Saudi firms and review its role and responsibilities. The findings of this study inform regulators of the importance of the existence of independent external assurance of the sustainability reports of Saudi firms to enhance the credibility and reliability of these reports. Managers need to establish devoted committees committed to sustainability-related tasks that help coordinate communications between the firm and stakeholders. Originality/value The Saudi Arabian Government has implemented a range of policies and initiatives aimed at improving environmental performance, which is a main focus of Saudi Vision 2030 to achieve environmental sustainability. Therefore, this study provides unique evidence and new insights on the impact of internal governance on corporate environmental performance in the Saudi context.","PeriodicalId":229587,"journal":{"name":"International Journal of Accounting & Information Management","volume":"57 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139216505","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}
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