Pub Date : 2021-12-24DOI: 10.1108/arj-02-2020-0037
Khaled Hosny, Adel Elgharbawy
Purpose This study aims to investigate the relationship between board diversity and financial performance from a wide perspective, including multiple dimensions of board diversity. Design/methodology/approach The cross-sectional design of the FTSE 350 companies in the period of 2013–2019 was adopted in this study. Data were collected using the Thomson Reuters Eikon and BoardEx databases and analyzed via ordinary least Squares (OLS) regression. Findings Both gender and skill diversity positively affect financial performance. However, other dimensions of diversity, including board tenure, education and network, have no significant influence on financial performance. On the other hand, nationality diversity negatively affects financial performance, and the gender diversity of executive directors negatively affects market-based performance. The results remain unchanged after considering endogeneity concerns and using alternative measures of financial performance. Practical implications This study provides useful insights into the importance of board diversity and its implications for firm performance, which can help in the development of future regulations and policies, such as female representation on the board. The findings can also guide companies toward the best way of diversifying their boardrooms in different aspects. Originality/value This study extensively investigates board diversity, including gender, tenure, skill and education, network and nationality, using the lens of the resource dependency theory. It also extends the scope of the study to examine some characteristics of executive directors, including gender and age. The evidence is provided from one of the leading countries in regulating corporate governance (CG), i.e. the UK.
{"title":"Board diversity and financial performance: empirical evidence from the United Kingdom","authors":"Khaled Hosny, Adel Elgharbawy","doi":"10.1108/arj-02-2020-0037","DOIUrl":"https://doi.org/10.1108/arj-02-2020-0037","url":null,"abstract":"Purpose This study aims to investigate the relationship between board diversity and financial performance from a wide perspective, including multiple dimensions of board diversity. Design/methodology/approach The cross-sectional design of the FTSE 350 companies in the period of 2013–2019 was adopted in this study. Data were collected using the Thomson Reuters Eikon and BoardEx databases and analyzed via ordinary least Squares (OLS) regression. Findings Both gender and skill diversity positively affect financial performance. However, other dimensions of diversity, including board tenure, education and network, have no significant influence on financial performance. On the other hand, nationality diversity negatively affects financial performance, and the gender diversity of executive directors negatively affects market-based performance. The results remain unchanged after considering endogeneity concerns and using alternative measures of financial performance. Practical implications This study provides useful insights into the importance of board diversity and its implications for firm performance, which can help in the development of future regulations and policies, such as female representation on the board. The findings can also guide companies toward the best way of diversifying their boardrooms in different aspects. Originality/value This study extensively investigates board diversity, including gender, tenure, skill and education, network and nationality, using the lens of the resource dependency theory. It also extends the scope of the study to examine some characteristics of executive directors, including gender and age. The evidence is provided from one of the leading countries in regulating corporate governance (CG), i.e. the UK.","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-12-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46238142","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 : 2021-12-20DOI: 10.1108/arj-07-2021-0209
Shreeya Jugnandan, G. Willows
Purpose The purpose of this paper is to investigate whether companies listed on the Johannesburg Stock Exchange use impression management techniques to obscure financial performance across the corporate reporting suite. Design/methodology/approach Mixed-effect linear regression models were used to examine whether there is a relationship between the financial performance of a company and the length or complexity of the reports produced. Findings Consistent with trends examined internationally, companies with lower financial performance tend to present lengthier disclosures throughout the reporting complement. However, there is limited evidence to suggest a definitive relationship between report complexity and performance. Corporate reports have maintained a consistent level of complexity and are not easily readable. Social implications This paper is unique as it simultaneously considers multiple corporate reports, including the annual financial statements, integrated reports and market announcements. The paper contributes to the limited body of literature on impression management from emerging economies. Originality/value A comparison of the complexity measures to the average education level of South Africans indicates that most corporate reports are not readable to the layman investor. Thus, despite there being no definitive relationship between complexity and performance, there is impetus to simplify corporate reporting.
{"title":"“It’s a long story…” – impression management in South African corporate reporting","authors":"Shreeya Jugnandan, G. Willows","doi":"10.1108/arj-07-2021-0209","DOIUrl":"https://doi.org/10.1108/arj-07-2021-0209","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to investigate whether companies listed on the Johannesburg Stock Exchange use impression management techniques to obscure financial performance across the corporate reporting suite.\u0000\u0000\u0000Design/methodology/approach\u0000Mixed-effect linear regression models were used to examine whether there is a relationship between the financial performance of a company and the length or complexity of the reports produced.\u0000\u0000\u0000Findings\u0000Consistent with trends examined internationally, companies with lower financial performance tend to present lengthier disclosures throughout the reporting complement. However, there is limited evidence to suggest a definitive relationship between report complexity and performance. Corporate reports have maintained a consistent level of complexity and are not easily readable.\u0000\u0000\u0000Social implications\u0000This paper is unique as it simultaneously considers multiple corporate reports, including the annual financial statements, integrated reports and market announcements. The paper contributes to the limited body of literature on impression management from emerging economies.\u0000\u0000\u0000Originality/value\u0000A comparison of the complexity measures to the average education level of South Africans indicates that most corporate reports are not readable to the layman investor. Thus, despite there being no definitive relationship between complexity and performance, there is impetus to simplify corporate reporting.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49054702","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 : 2021-12-20DOI: 10.1108/arj-04-2021-0135
Matthew Strickett, D. Hay, David Lau
Purpose The purpose of this study is to examine the relationship between going-concern (GC) opinions issued by the Big 4 audit firms and adverse credit ratings from the two largest credit rating agencies (CRAs) – Standard & Poor’s (S&P) and Moody’s. This question is relevant because there have been suggestions that auditors and CRAs should become more similar to each other, and because the two largest CRAs have different ownership structures that could affect their ratings. Design/methodology/approach Univariate and multivariate analyses are performed using a sample of firms that filed for bankruptcy between January 1, 2002 and December 31, 2013 that also had an audit opinion signed during the 12 months prior to bankruptcy, along with a credit rating issued by either or both S&P and Moody’s. Both influence each other. The likelihood of an auditor issuing a GC opinion is related to the credit rating issued by both S&P and Moody’s in the month prior to the audit report signing. The results also show differences between the CRAs. S&P reacted in the month after an auditor issued a GC opinion by downgrading its ratings 68% of the time. However, Moody’s did not react as strongly as S&P, downgrading its ratings only 24% of the time. Findings Both audit reports and credit ratings influence each other. The likelihood of an auditor issuing a GC opinion is related to the credit rating issued by both S&P and Moody’s in the month prior to the audit report signing. The results also show differences between the CRAs. S&P reacted in the month after an auditor issued a GC opinion by downgrading its ratings 68% of the time. However, Moody’s did not react as strongly as S&P, downgrading its ratings only 24% of the time. Originality/value Auditors are more likely to issue GC opinions when there is a downgrade to the credit rating, and CRAs are more likely to downgrade their ratings when there is a GC opinion. The study highlights that CRAs with different ownership structures provide different credit rating outcomes.
{"title":"The going-concern opinion and the adverse credit rating: an analysis of their relationship","authors":"Matthew Strickett, D. Hay, David Lau","doi":"10.1108/arj-04-2021-0135","DOIUrl":"https://doi.org/10.1108/arj-04-2021-0135","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to examine the relationship between going-concern (GC) opinions issued by the Big 4 audit firms and adverse credit ratings from the two largest credit rating agencies (CRAs) – Standard & Poor’s (S&P) and Moody’s. This question is relevant because there have been suggestions that auditors and CRAs should become more similar to each other, and because the two largest CRAs have different ownership structures that could affect their ratings.\u0000\u0000\u0000Design/methodology/approach\u0000Univariate and multivariate analyses are performed using a sample of firms that filed for bankruptcy between January 1, 2002 and December 31, 2013 that also had an audit opinion signed during the 12 months prior to bankruptcy, along with a credit rating issued by either or both S&P and Moody’s. Both influence each other. The likelihood of an auditor issuing a GC opinion is related to the credit rating issued by both S&P and Moody’s in the month prior to the audit report signing. The results also show differences between the CRAs. S&P reacted in the month after an auditor issued a GC opinion by downgrading its ratings 68% of the time. However, Moody’s did not react as strongly as S&P, downgrading its ratings only 24% of the time.\u0000\u0000\u0000Findings\u0000Both audit reports and credit ratings influence each other. The likelihood of an auditor issuing a GC opinion is related to the credit rating issued by both S&P and Moody’s in the month prior to the audit report signing. The results also show differences between the CRAs. S&P reacted in the month after an auditor issued a GC opinion by downgrading its ratings 68% of the time. However, Moody’s did not react as strongly as S&P, downgrading its ratings only 24% of the time.\u0000\u0000\u0000Originality/value\u0000Auditors are more likely to issue GC opinions when there is a downgrade to the credit rating, and CRAs are more likely to downgrade their ratings when there is a GC opinion. The study highlights that CRAs with different ownership structures provide different credit rating outcomes.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46474791","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 : 2021-12-16DOI: 10.1108/arj-05-2021-0144
Harmandeep Singh, Arwinder Singh
Purpose This study aims to investigate the awareness of extensible business reporting language (XBRL) and the perception of chartered accountants of India concerning the inhibitors of XBRL adoption, namely, environmental, organizational and innovation factors developed by Troshani and Rao (2007) from Rogers’ innovation diffusion theory. In addition, the analysis also investigated the relationship between the perception of issues regarding XBRL adoption and individual characteristics (training, age, gender and professional experience). Design/methodology/approach A Web-based questionnaire was circulated through e-mail to chartered accountants registered with the Institute of Chartered Accountants India (ICAI) and 233 chartered accountants responded to the questionnaire. The data was analyzed using reliability statistics and multivariate regression analyses. Findings The results indicate that accountants perceived that environmental, organizational and innovational factors were challenging in adopting XBRL. Interestingly, training and experience were significant factors in explaining respondents’ perceptions. Practical implications From a practical panorama, the significance of issues implies that associations such as XBRL International, XBRL India, ICAI and the Ministry of Corporate Affairs should collectively take the appropriate steps to sustain and ameliorate the reliability and adoption of XBRL. Social implications The results can motivate ICAI/Institute of Company Secretaries of India (ICSI) courses to teach academic content about XBRL. Originality/value The present study differs from previous research because it examines the inhibitors in adopting XBRL, namely, environmental, organizational and innovation factors, in an empirical setting. Moreover, to the best of the author’s knowledge, this is the first study to analyze the influence of individual factors on accountants’ perceptions about inhibitors of XBRL adoption.
{"title":"Understanding inhibitors to XBRL adoption: an empirical investigation","authors":"Harmandeep Singh, Arwinder Singh","doi":"10.1108/arj-05-2021-0144","DOIUrl":"https://doi.org/10.1108/arj-05-2021-0144","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate the awareness of extensible business reporting language (XBRL) and the perception of chartered accountants of India concerning the inhibitors of XBRL adoption, namely, environmental, organizational and innovation factors developed by Troshani and Rao (2007) from Rogers’ innovation diffusion theory. In addition, the analysis also investigated the relationship between the perception of issues regarding XBRL adoption and individual characteristics (training, age, gender and professional experience).\u0000\u0000\u0000Design/methodology/approach\u0000A Web-based questionnaire was circulated through e-mail to chartered accountants registered with the Institute of Chartered Accountants India (ICAI) and 233 chartered accountants responded to the questionnaire. The data was analyzed using reliability statistics and multivariate regression analyses.\u0000\u0000\u0000Findings\u0000The results indicate that accountants perceived that environmental, organizational and innovational factors were challenging in adopting XBRL. Interestingly, training and experience were significant factors in explaining respondents’ perceptions.\u0000\u0000\u0000Practical implications\u0000From a practical panorama, the significance of issues implies that associations such as XBRL International, XBRL India, ICAI and the Ministry of Corporate Affairs should collectively take the appropriate steps to sustain and ameliorate the reliability and adoption of XBRL.\u0000\u0000\u0000Social implications\u0000The results can motivate ICAI/Institute of Company Secretaries of India (ICSI) courses to teach academic content about XBRL.\u0000\u0000\u0000Originality/value\u0000The present study differs from previous research because it examines the inhibitors in adopting XBRL, namely, environmental, organizational and innovation factors, in an empirical setting. Moreover, to the best of the author’s knowledge, this is the first study to analyze the influence of individual factors on accountants’ perceptions about inhibitors of XBRL adoption.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-12-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42745814","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 : 2021-12-14DOI: 10.1108/arj-08-2020-0221
Dieu Thuong Ha, T. Le, G. Fisher, Thanh Truc Nguyen
Purpose This study empirically examines factors affecting the extent of balanced scorecard (BSC) adoption in Vietnamese small- and medium-sized enterprises (SMEs) such as top management involvement, an innovative culture, a product innovation strategy, organisational resources, a competitive environment and business network support. This study aims to gain an improved understanding and draw important lessons on BSC adoption for SMEs. Design/methodology/approach Using primary data obtained from a survey of top managers of SMEs that have experienced some forms of BSC adoption, the authors conduct their analysis using exploratory factor analysis and regression analysis methods. Findings The authors find that top management involvement, an innovative culture, organisational resources and business network support are essential factors impacting the extent of BSC adoption in Vietnamese SMEs. Besides confirming literature findings on these variables, the authors identify support of business networks as another important factor affecting the extent of BSC adoption, alongside location and business owners’ experience. However, the impacts of a product innovation strategy and a competitive environment are not significant. Research limitations/implications This study adapts scales previously designed for large enterprises in developed countries to fit into the context of Vietnamese SMEs. Future research can take advantage of this new set of scales and data to obtain further research results. Practical implications This study will serve as guidance for SMEs considering BSC adoption to have a clear vision of what factors are likely to affect BSC adoption, how they affect it and in what direction. Social implications Lessons learned can be extended not only to Vietnamese SMEs that have not yet adopted the BSC but also to firms in other countries with similar economic conditions. Originality/value This study is among pioneering studies on BSC in SMEs and within the context of Vietnam.
{"title":"Factors affecting the adoption extent of the balanced scorecard by Vietnamese small- and medium-sized enterprises","authors":"Dieu Thuong Ha, T. Le, G. Fisher, Thanh Truc Nguyen","doi":"10.1108/arj-08-2020-0221","DOIUrl":"https://doi.org/10.1108/arj-08-2020-0221","url":null,"abstract":"\u0000Purpose\u0000This study empirically examines factors affecting the extent of balanced scorecard (BSC) adoption in Vietnamese small- and medium-sized enterprises (SMEs) such as top management involvement, an innovative culture, a product innovation strategy, organisational resources, a competitive environment and business network support. This study aims to gain an improved understanding and draw important lessons on BSC adoption for SMEs.\u0000\u0000\u0000Design/methodology/approach\u0000Using primary data obtained from a survey of top managers of SMEs that have experienced some forms of BSC adoption, the authors conduct their analysis using exploratory factor analysis and regression analysis methods.\u0000\u0000\u0000Findings\u0000The authors find that top management involvement, an innovative culture, organisational resources and business network support are essential factors impacting the extent of BSC adoption in Vietnamese SMEs. Besides confirming literature findings on these variables, the authors identify support of business networks as another important factor affecting the extent of BSC adoption, alongside location and business owners’ experience. However, the impacts of a product innovation strategy and a competitive environment are not significant.\u0000\u0000\u0000Research limitations/implications\u0000This study adapts scales previously designed for large enterprises in developed countries to fit into the context of Vietnamese SMEs. Future research can take advantage of this new set of scales and data to obtain further research results.\u0000\u0000\u0000Practical implications\u0000This study will serve as guidance for SMEs considering BSC adoption to have a clear vision of what factors are likely to affect BSC adoption, how they affect it and in what direction.\u0000\u0000\u0000Social implications\u0000Lessons learned can be extended not only to Vietnamese SMEs that have not yet adopted the BSC but also to firms in other countries with similar economic conditions.\u0000\u0000\u0000Originality/value\u0000This study is among pioneering studies on BSC in SMEs and within the context of Vietnam.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44046966","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 : 2021-12-10DOI: 10.1108/arj-01-2021-0016
Bishal Bc, Bo Liu
Purpose This paper aims to investigate whether the non-generally accepted accounting principles (GAAP) performance measures (NGMs) disclosure by high-tech initial public offering (IPO) firms signal firms’ efforts to maintain relatively high stock price levels before the expiration of the lock-up period to benefit insider selling. Design/methodology/approach The authors perform ordinary least squares and logit regressions using financial statement data and hand collected data on NGM disclosures for high-tech firms during the IPO process. Findings The authors find that the top executives of high-tech IPO firms with NGM disclosures are significantly more likely to sell and sell significantly more insider shares at the lock-up expiration than those of high-tech IPO firms without NGM disclosures. At the same time, while high-tech NGM firms have stock returns similar to their counterparts without NGMs for the period before the lock-up expiration, their stock returns are substantially lower after insider selling following the lock-up expiration. Practical implications By documenting the negative association between NGM disclosures and post-lockup expiration stock performance, the study highlights managerial deliberate optimism about the firm’s prospects which may not materialize. Hence, investors should take the NGM disclosures with a grain of salt. Originality/value This paper fills a notable void in the non-GAAP reporting literature by documenting a statistically and economically significant positive association between managerial equity trading incentives and NGM disclosures by high-tech IPO firms.
{"title":"Non-GAAP measure disclosure and insider trading incentives in high-tech IPO firms","authors":"Bishal Bc, Bo Liu","doi":"10.1108/arj-01-2021-0016","DOIUrl":"https://doi.org/10.1108/arj-01-2021-0016","url":null,"abstract":"\u0000Purpose\u0000This paper aims to investigate whether the non-generally accepted accounting principles (GAAP) performance measures (NGMs) disclosure by high-tech initial public offering (IPO) firms signal firms’ efforts to maintain relatively high stock price levels before the expiration of the lock-up period to benefit insider selling.\u0000\u0000\u0000Design/methodology/approach\u0000The authors perform ordinary least squares and logit regressions using financial statement data and hand collected data on NGM disclosures for high-tech firms during the IPO process.\u0000\u0000\u0000Findings\u0000The authors find that the top executives of high-tech IPO firms with NGM disclosures are significantly more likely to sell and sell significantly more insider shares at the lock-up expiration than those of high-tech IPO firms without NGM disclosures. At the same time, while high-tech NGM firms have stock returns similar to their counterparts without NGMs for the period before the lock-up expiration, their stock returns are substantially lower after insider selling following the lock-up expiration.\u0000\u0000\u0000Practical implications\u0000By documenting the negative association between NGM disclosures and post-lockup expiration stock performance, the study highlights managerial deliberate optimism about the firm’s prospects which may not materialize. Hence, investors should take the NGM disclosures with a grain of salt.\u0000\u0000\u0000Originality/value\u0000This paper fills a notable void in the non-GAAP reporting literature by documenting a statistically and economically significant positive association between managerial equity trading incentives and NGM disclosures by high-tech IPO firms.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42444277","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}
We are delighted to announce that the August and September issue of LRR is released now. As you are aware, the papers in LRR have been published in Persian for 11 years, and from the previous issue onward, two issues a year will be published in English and French as well. Since 2012, LRR has been indexed in Scopus. The 2021 index of SCOPUS is Q2 (SJR: 0.2), and in the latest evaluation by the Iranian Ministry of Science, Research and Technology (MSRT), LRR has received an “International” ranking. We appreciate you all for being part of this academic journey.
{"title":"Editorial","authors":"R. Monem","doi":"10.1108/arj-12-2021-379","DOIUrl":"https://doi.org/10.1108/arj-12-2021-379","url":null,"abstract":"We are delighted to announce that the August and September issue of LRR is released now. As you are aware, the papers in LRR have been published in Persian for 11 years, and from the previous issue onward, two issues a year will be published in English and French as well. Since 2012, LRR has been indexed in Scopus. The 2021 index of SCOPUS is Q2 (SJR: 0.2), and in the latest evaluation by the Iranian Ministry of Science, Research and Technology (MSRT), LRR has received an “International” ranking. We appreciate you all for being part of this academic journey.","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47267584","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 : 2021-11-17DOI: 10.1108/arj-07-2020-0196
C. Ştefănescu
Purpose This study aims to explore the linkages between sustainable development and sustainability reporting by approaching the UN’s 2030 Agenda in connection with the Integrated Reporting (IR) and Global Reporting Initiative (GRI) frameworks. It aims to outline a theoretical model able to support the achievement of sustainable development goals (SDGs) through appropriate reporting. Design/methodology/approach The research methodology follows a qualitative approach, combining content and benchmarking analyses of the official documents in question. It aims to provide a better understanding of the conceptual matches between the “5 Ps” of sustainable development and the two sustainability reporting frameworks (IR and GRI) by breaking them down into components and overlapping their constituents to highlight the connections. Findings The results reveal that both sustainability reporting frameworks provide prerequisites to ensure SDGs achievement due to the embedded sustainability issues. As there are more matches between SDGs and the capitals implied in the pursuit of value creation, IR better fits to become part of the sustainable development strategy as a valuable option for reporting on SDGs. Practical implications The study addresses academia through a better understanding of the connections between SDGs and sustainability reporting. It might help regulators to improve their latest efforts to enhance transparency and comparability through the enactment of Directive 2014/95, as long as it has not imposed a standardised report yet. It could guide practitioners to face future challenges and support their steps towards standardised reporting practices. Originality/value This paper approaches the newsworthy topic of sustainable development, outlining a conceptual model meant to support the SDGs achievement through appropriate standardised reporting. It might also fill the gap of the Directive 2014/95 on non-financial information disclosure as it identifies the most suitable type of reporting to enhance the harmonisation at the European level.
{"title":"Linking sustainability reporting frameworks and sustainable development goals","authors":"C. Ştefănescu","doi":"10.1108/arj-07-2020-0196","DOIUrl":"https://doi.org/10.1108/arj-07-2020-0196","url":null,"abstract":"\u0000Purpose\u0000This study aims to explore the linkages between sustainable development and sustainability reporting by approaching the UN’s 2030 Agenda in connection with the Integrated Reporting (IR) and Global Reporting Initiative (GRI) frameworks. It aims to outline a theoretical model able to support the achievement of sustainable development goals (SDGs) through appropriate reporting.\u0000\u0000\u0000Design/methodology/approach\u0000The research methodology follows a qualitative approach, combining content and benchmarking analyses of the official documents in question. It aims to provide a better understanding of the conceptual matches between the “5 Ps” of sustainable development and the two sustainability reporting frameworks (IR and GRI) by breaking them down into components and overlapping their constituents to highlight the connections.\u0000\u0000\u0000Findings\u0000The results reveal that both sustainability reporting frameworks provide prerequisites to ensure SDGs achievement due to the embedded sustainability issues. As there are more matches between SDGs and the capitals implied in the pursuit of value creation, IR better fits to become part of the sustainable development strategy as a valuable option for reporting on SDGs.\u0000\u0000\u0000Practical implications\u0000The study addresses academia through a better understanding of the connections between SDGs and sustainability reporting. It might help regulators to improve their latest efforts to enhance transparency and comparability through the enactment of Directive 2014/95, as long as it has not imposed a standardised report yet. It could guide practitioners to face future challenges and support their steps towards standardised reporting practices.\u0000\u0000\u0000Originality/value\u0000This paper approaches the newsworthy topic of sustainable development, outlining a conceptual model meant to support the SDGs achievement through appropriate standardised reporting. It might also fill the gap of the Directive 2014/95 on non-financial information disclosure as it identifies the most suitable type of reporting to enhance the harmonisation at the European level.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41533389","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 : 2021-10-25DOI: 10.1108/arj-10-2020-0333
Afroditi Papadaki, Olga-Chara Pavlopoulou-Lelaki
Purpose The purpose of this study is to examine the sophistication (accuracy, bias, informativeness for changes in accruals) and market pricing of analysts’ cash flow forecasts for Eurozone listed firms and the effects of financial distress and auditor quality. Design/methodology/approach Accuracy/bias is investigated using analysts’ cash flow forecast errors. The naïve extrapolation model is used to examine the forecasts’ informativeness for working capital changes. A total return model is used to examine value-relevance. This study controls for the forecast horizon, using the Altman z-score and a BigN/industry specialization auditor indicator to proxy for distress and auditor quality, respectively. Findings Analysts efficiently adjust earnings forecasts for depreciation during cash flow forecast formation but fail to efficiently incorporate working capital changes. Findings indicate cash flow forecasts’ accuracy improves for distressed firms and firms of high auditor quality, attributed to analyst conservatism and accounting choices and more accurate earnings forecasts, respectively. Cash flow forecasts’ value-relevance increases for distressed firms, particularly those of high auditor quality and timely forecasts. Originality/value To the best of the authors’ knowledge, this study is the first to examine analysts’ cash flow forecasts taking into consideration financial distress and auditor quality, controlling for the analyst forecast horizon.
{"title":"Analysts’ cash flow forecasts informativeness, financial distress and auditor quality","authors":"Afroditi Papadaki, Olga-Chara Pavlopoulou-Lelaki","doi":"10.1108/arj-10-2020-0333","DOIUrl":"https://doi.org/10.1108/arj-10-2020-0333","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to examine the sophistication (accuracy, bias, informativeness for changes in accruals) and market pricing of analysts’ cash flow forecasts for Eurozone listed firms and the effects of financial distress and auditor quality.\u0000\u0000\u0000Design/methodology/approach\u0000Accuracy/bias is investigated using analysts’ cash flow forecast errors. The naïve extrapolation model is used to examine the forecasts’ informativeness for working capital changes. A total return model is used to examine value-relevance. This study controls for the forecast horizon, using the Altman z-score and a BigN/industry specialization auditor indicator to proxy for distress and auditor quality, respectively.\u0000\u0000\u0000Findings\u0000Analysts efficiently adjust earnings forecasts for depreciation during cash flow forecast formation but fail to efficiently incorporate working capital changes. Findings indicate cash flow forecasts’ accuracy improves for distressed firms and firms of high auditor quality, attributed to analyst conservatism and accounting choices and more accurate earnings forecasts, respectively. Cash flow forecasts’ value-relevance increases for distressed firms, particularly those of high auditor quality and timely forecasts.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this study is the first to examine analysts’ cash flow forecasts taking into consideration financial distress and auditor quality, controlling for the analyst forecast horizon.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45592059","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 : 2021-10-25DOI: 10.1108/arj-09-2018-0138
Benson Igboke, R. Raj
Purpose Accounting literature is definite about the content and presentation of traditional financial statements, but the basic information to be provided in the narrative reports of public sector entities remains unsettled. This paper aims to investigate the needs and expectations of stakeholders (primary users and preparers) regarding the content and presentation of narrative reports in the public sector of Nigeria. Design/methodology/approach The research used a qualitative approach that draws on stakeholder and contingency theories to collect primary data through in-depth individual interviews using semi-structured questionnaires. Data were analysed by a thematic method using the NVivo 11 Pro software package. Findings The study reveals that financial statements constitute the statutory financial reports of public sector entities in Nigeria as narrative reporting is undeveloped, both as a concept and in practice. Stakeholders believe that narrative reporting is required to enhance the accountability usefulness of the annual financial reports published by the government and public agencies. Data analysis further reveals that public perception about the management of government financial resources influences the information needs of stakeholders regarding financial reporting. In addition, stakeholders consider the approved budget as the cornerstone of public financial reporting. Accordingly, users and other stakeholders expect public sector narrative reports to provide budget-based performance information that relates the accounting data presented in the financial statements to the key budgetary provisions, in both financial outlays and service delivery achievements. Stakeholders also expect narrative reports to be presented in plain language and provide information about the impact of financial decisions and actions on the basic socioeconomic variables that signpost citizens’ well-being, such as education, health care, employment and security. Practical implications The study suggests that the inclusion of narrative information in the statutory financial reports of public entities in Nigeria is imperative and should engage the attention of policymakers and relevant regulatory authorities. In addition, a more elaborate systematic investigation of the information needs of stakeholders in Nigeria should be undertaken by relevant units of government. Originality/value To the best of the authors’ knowledge, this is the first documented research on narrative reporting and the information needs of a broad range of stakeholders in the public sector of Nigeria. The paper identifies the approved budget as the focal point of governmental financial reporting, and a clear linkage between budget provisions, accounting results and service delivery achievements as the basic content of a narrative report in developing countries.
{"title":"Content requirements for narrative reporting in the public sector: a contextual perspective","authors":"Benson Igboke, R. Raj","doi":"10.1108/arj-09-2018-0138","DOIUrl":"https://doi.org/10.1108/arj-09-2018-0138","url":null,"abstract":"\u0000Purpose\u0000Accounting literature is definite about the content and presentation of traditional financial statements, but the basic information to be provided in the narrative reports of public sector entities remains unsettled. This paper aims to investigate the needs and expectations of stakeholders (primary users and preparers) regarding the content and presentation of narrative reports in the public sector of Nigeria.\u0000\u0000\u0000Design/methodology/approach\u0000The research used a qualitative approach that draws on stakeholder and contingency theories to collect primary data through in-depth individual interviews using semi-structured questionnaires. Data were analysed by a thematic method using the NVivo 11 Pro software package.\u0000\u0000\u0000Findings\u0000The study reveals that financial statements constitute the statutory financial reports of public sector entities in Nigeria as narrative reporting is undeveloped, both as a concept and in practice. Stakeholders believe that narrative reporting is required to enhance the accountability usefulness of the annual financial reports published by the government and public agencies. Data analysis further reveals that public perception about the management of government financial resources influences the information needs of stakeholders regarding financial reporting. In addition, stakeholders consider the approved budget as the cornerstone of public financial reporting. Accordingly, users and other stakeholders expect public sector narrative reports to provide budget-based performance information that relates the accounting data presented in the financial statements to the key budgetary provisions, in both financial outlays and service delivery achievements. Stakeholders also expect narrative reports to be presented in plain language and provide information about the impact of financial decisions and actions on the basic socioeconomic variables that signpost citizens’ well-being, such as education, health care, employment and security.\u0000\u0000\u0000Practical implications\u0000The study suggests that the inclusion of narrative information in the statutory financial reports of public entities in Nigeria is imperative and should engage the attention of policymakers and relevant regulatory authorities. In addition, a more elaborate systematic investigation of the information needs of stakeholders in Nigeria should be undertaken by relevant units of government.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first documented research on narrative reporting and the information needs of a broad range of stakeholders in the public sector of Nigeria. The paper identifies the approved budget as the focal point of governmental financial reporting, and a clear linkage between budget provisions, accounting results and service delivery achievements as the basic content of a narrative report in developing countries.\u0000","PeriodicalId":45591,"journal":{"name":"Accounting Research Journal","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2021-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44111181","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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