Journal of Corporate Accounting and Finance最新文献

Numerous managerial and corporate finance perspectives suggest mutual tax advantages when depreciation is transferred from an asset's user to a lessor, creating a perceived loss of tax revenue for the government. This study delves deeper into the lease versus buy decision and its ramifications on government tax revenue. It goes beyond tax rate discrepancies, exploring how factors like lessor-lessee borrowing rate differences, asset lifespan, depreciation, and lease payment schedules impact tax revenues, both analytically and numerically. The paper establishes a strong theoretical foundation, emphasizing positive-sum games involving lessees, lessors, and governments in individual deals. Government benefits from leasing vary across asset classes, market structures, depreciation timelines, credit quality, tax credits, and business cycles. The proposal is that the aggregate impact at the federal level could be positive, negative, or neutral across all leasing deals. These insights surpass conventional knowledge, offering valuable perspectives for finance and accounting educators, students, practitioners, and policymakers.

This study examines how the length, content, and tone attributes of risk disclosures in a firm's 10-K annual report relate to its default risk in the subsequent fiscal year. We find a significant association between specific attributes of risk disclosures and the default risk in the subsequent period. Using the 2008 financial crisis as a shock to firms’ risk environment, we further find that the documented association is more pronounced in the post-financial crisis era. Our cross-sectional analyses reveal that the documented relationship is particularly prominent for firms undergoing substantial shifts in default risk, facing significant financial distress, operating in industries with lower litigation risk, or subject to heightened scrutiny from external monitors. Overall, our findings suggest that risk disclosures in firms’ annual reports offer valuable insights for investors assessing financial distress and default risk.

We examine whether improved cross-border regulatory cooperation and information exchange affect corporate tax avoidance. We find that the improvement in the regulators’ capacity to access to information in foreign countries through their entrance into the Multilateral Memorandum of Understanding (MMoU) effectively reduces corporate tax avoidance. Moreover, the effect of the MMoU on corporate tax avoidance is stronger for firms that are less income mobile and have no significant subsidiaries in tax havens. Collectively, these findings support the conjecture that the strengthened cross-border regulatory cooperation and information exchange provided by the MMoU creates a positive externality in reducing corporate tax avoidance behavior.

The paper explores the concept of cash refund capital reductions (CRCR) in the context of firms listed on the Taiwan Stock Exchange Corporation (TSEC) and GreTai Securities Market (GTSM). CRCR is a distinct and increasingly vital financial tool used by these firms. Taiwan stands alone in adopting CRCR, making it a challenge to establish both a theoretical framework and gather empirical evidence on this subject. In this study, we examined 205 CRCR announcements made between 2002 and 2022, delving into their impact on both bull and bear markets. Our investigation reveals that the market responses to CRCR announcements were more significant during bull markets compared to bear markets. Additionally, we delve into the crucial factors influencing market responses in these varying market conditions. The findings underscore the importance for firms announcing CRCR to carefully consider the prevailing market conditions.

This study analyzes the impact of the characteristics of sustainable boards and NGO directors on biodiversity disclosures. This research uses data from 481 US companies that are taken from Standard & Poor's 500 (S&P), ASSET4, for the period 2009–2020 (5616 company-year observations). Data on NGO directors is provided by MSCI's GMI Rankings database. A panel data analysis with fixed effects models is used to estimate the results. The results also indicate that a sustainable board structure (proxied by Chief Sustainability Officers (CSOs) and Sustainability-related executive compensation) is positively correlated with biodiversity disclosure. Our empirical results also show that the moderating role of NGO directors has a greater interaction effect with the characteristics of sustainable boards and biodiversity information disclosure initiatives. The results are also consistent for exploitative and nonexploitative industries, as well as for the pre- and post SDG (14–15) of the agenda 2030. In addition, the framework of SDG (14-15) and the strategic plan of partnership with the Agenda of 2030 show a positive relationship with biodiversity disclosure. We then develop a causal relationship through the positive impact of NGO directors serving on the board of directors on a strategy of partnerships, onboarding, and increase/decrease of NGO directors—possible mechanisms by which NGO directors can influence biodiversity disclosure. Overall, our findings suggest that while NGO directors can potentially be appointed to a company's board of directors for legitimization reasons, these directors are associated with better biodiversity disclosure. The study has valuable implications for enduring board members, practitioners, and scholars. The results are supported by theories of legitimacy, stakeholders and resource dependence. However, evidence on this research question is still unknown and critical, especially in the context of stakeholder-emphasized governance systems (continental Europe, Japan) and developing countries where there is a lack of knowledge application of regulations related to the disclosure of biodiversity.

Opinion shopping is an essential indication of audit collusion. Hence, it is crucial to explore the driving factors of audit uopinion shopping to better control and address this issue. Drawing upon signaling theory, this paper explores the relationship between international expansion and audit opinion shopping and the moderating roles of internal control quality and auditors’ quality. We find that the higher the level of international expansion of an enterprise, the greater the likelihood of audit opinion shopping. Furthermore, we also find that high internal control quality and high auditor quality can weaken the positive relationship between international expansion and audit opinion shopping. Besides, heterogeneity analysis shows that the impact of international expansion on audit opinion shopping is more pronounced in non-SOEs and firms which stay in the growth and maturity stage. This paper contributes to the antecedent research of audit opinion shopping and exposes the possible “dark side” of international expansion. Finally, this study may provide practical implications to help the authorities better regulate internationalized enterprises as well as contribute to the healthy development of the auditing market.

The Securities and Exchange Commission (SEC) adopted new rules mandating that firms disclose cybersecurity incidents and risk management procedures for inline XBRL reporting, highlighting the regulator's concern about firms’ response to data breaches. In this study, we examine whether firms use XBRL strategically to hinder external stakeholders from understanding the impact of announced data breaches. We find that firm XBRL filing complexity increases following data breaches. Further investigation suggests that the increased XBRL complexity is concentrated on financial statement note tags instead of financial statement tags. The findings imply that firms with data breach incidents are likely to increase XBRL reporting complexity to mitigate stock market reactions. We also find that analysts following moderate the relationship between the data breach and XBRL reporting timeliness. These findings provide empirical evidence about XBRL reporting changes after data breach incidents and contribute to cybersecurity literature and XBRL filing regulation.

This study examines the effect of Dodd Frank's Act of 2010 (Dodd's Act) on the duration of the auditor-client relationship. One of the provisions of Dodd's Act was to permanently exempt nonaccelerated filers from mandatory internal control audits and to maintain the internal control requirement for accelerated filers. The results indicate that average audit firm tenure has increased significantly in the post-Dodd period, and there is a post-Dodd increase (decrease) in long and medium (short) tenure. Furthermore, the increase is more pronounced for nonaccelerated filers on average, and varies across big4 and non-big4 auditors. The inferences are robust to the inclusion of various controls, and to the exclusion of the financial crisis period (2008–2010). Collectively, the findings suggest that Dodd's Act permanent exemption has resulted in lower margins for auditors, and thus motivated audit firms, particularly non-big4 auditors, to extend their tenure with clients.

This research study provides insights on how activist hedge funds perform valuation analyses of target firms. Relevant data was hand-collected from a sample of activist hedge fund presentations. Based on the hedge funds’ valuation analyses, the undervaluation of the target firms amounts to approximately 30%, compared to the targets’ current share price. Besides, activist investors derive a value enhancement potential from their proposed strategies of approximately 70% to the targets’ current share price. These valuation results rely predominately on trading multiples. The dominant multiples are Enterprise value/EBITDA (EV/EBITDA) and Price/Earnings (P/E). Further, applied multiples are mainly forward-looking, and the predicted performance measures are primarily consensus estimates. Besides, hedge funds sometimes adjust multiples arbitrarily to increase the comparability. Our results confirm that short-term investors rely predominately on pricing analyses in their valuations.

This study explores the link between R&D investment variability and CEO turnover across the eras surrounding the Sarbanes-Oxley Act (SOX). It posits that, after SOX, R&D expenditure hikes not matched by sales growth may trigger more frequent CEO turnover, driven by a perceived increase in risk. Data from 1996 to 2010 reveal that, before SOX, R&D increases positively correlate with CEO job stability. In contrast, after SOX, a rise in R&D spending is linked to a higher rate of CEO turnover, particularly involuntary dismissals. The study further identifies that post-SOX, the negative impact of R&D spikes on CEO turnover is significantly mitigated when such investment aligns with sales growth. The findings suggest a significant influence of R&D investments on CEO turnover, underscoring the need for boards to deliberate the consequences of R&D spending and CEO turnover to better align shareholders and CEO interests.